One of the key points to note from this case concerns Brexit. It should be remembered that in EUIPO appeal proceedings for a declaration of invalidity based on an earlier mark, the owner of that earlier mark must show that they can prohibit the use of the subsequent mark, not only on the filing/priority date, but also on the date on which EUIPO ruled on the invalidity declaration application, i.e. the date of the EUIPO decision under appeal. In this case, the owner of the earlier mark was trying to prove that its mark had acquired distinctiveness through use. They had submitted evidence of use in the UK (as well as in other EU countries) as at the filing date of the contested mark and beyond, but the decision it was appealing was dated after the UK had left the EU, at which point EU trade mark legislation no longer applied to the UK. Therefore, none of the evidence relating to the UK could be considered.

Facts

In March 2019, Shoppify Inc applied for a declaration of invalidity of the following EU trade mark registered in Classes 9, 35 and 38:

The application was based on an earlier EU word mark for SHOPIFY covering goods and services in Class 9 (Computer software for e-commerce etc), Class 35 (Provision of websites and mobile platforms featuring information in the fields of shopping, retailing, electronic commerce and order fulfilment), Class 36 (Providing electronic processing of credit card transactions and electronic payments online for the retail industry) and Class 42 (Online services that allow users to create hosted online stores to sell their goods and services etc.).

The Cancellation Division granted the declaration of invalidity, but the Board of Appeal subsequently overturned that decision, finding that there was no likelihood of confusion under Article 8(1)(b) of the Trade Mark Regulation (2017/1001/EU). Shoppify appealed to the General Court (GC).

Decision

Level of attention of relevant public

The GC found that the computer goods and services in question related to commercial spaces and creating online interactive commercial platforms. They were not intended for everyday consumers. Therefore, contrary to Shopify’s contention, the BoA had been correct to find that the level of attention of the average consumer for such specialised computer goods and services was higher than for everyday consumer goods and services, albeit not particularly high.

Similarly, the GC found that the BoA had been correct to hold that “telecommunications services” in Class 38 were not aimed at everyday consumers, but at the professional public who would have a heightened level of attention in respect of those services.

Distinctive and dominant elements of the marks

The GC found that, contrary to Shopify’s claim, the word SHOP in both marks was descriptive, whether the goods or services were sold in physical stores or online.

As for the dominance of SHOP in both marks, the GC said that the suffix IFY in the earlier mark evoked the concept of transformation to the English-speaking public. Together with the word SHOP, it meant “making something become a shop”. Therefore, the BoA had correctly found that SHOPIFY, taken as a whole, was highly indicative of the mark’s goods and services, which were aimed at creating e-commerce platforms or shopping sites for the English-speaking public. In contrast, for the non-English-speaking public, the IFY suffix had no meaning and therefore had only an average distinctive character. Consequently, in both cases the IFY element was not negligible and the SHOP element was therefore not dominant.

As for the word element PI in Shoppi’s mark, this had no meaning for either the English-speaking or the non-English-speaking public and therefore had an only average distinctive character. However, it was incorrect to say that all elements other than the SHOP element (i.e. the figurative elements and the PI element) were negligible.

The BoA had therefore been correct to find that SHOP was not dominant in either of the marks.

Visual comparison of the marks

Given that neither mark had a dominant element, the assessment of their similarity had to be based on the marks as a whole. The GC noted that the descriptiveness of an element common to two signs considerably reduces the relative weight of that element when comparing the signs, although its presence must still be considered. In this case, the similarity in the use of SHOP at the beginning of both marks was considerably lessened. By contrast, the differences between IFY and PI at the end of the marks was important.

In addition, contrary to Shopify’s argument, although the figurative elements in the SHOPPI mark were not particularly distinctive, they contributed to creating an overall visual impression that was different from SHOPIFY, or at most, only vaguely similar to it.

Accordingly, the GC said, the BoA had been correct to find that the marks had only a low degree of visual similarity.

Phonetic comparison of the marks

The GC also agreed with the BoA that the descriptive character of SHOP in both marks was significant, such that the difference between the additional syllables FY and PI was not without importance. The BoA had therefore been right to find that the marks were phonetically similar only to an average degree.

Conceptual similarity,

The GC agreed with the BoA that, according to case law, where the marks only have a descriptive element in common (in this case, SHOP), the conceptual similarity must be considered as low. Case law also states that even if such conceptual similarity is regarded as high, where it is based on a weakly distinctive or descriptive element it will have less impact on the assessment of likelihood of confusion. The BoA had therefore been correct to find that there was only a low degree of conceptual similarity, which had little bearing on the likelihood of confusion assessment.

Inherent distinctiveness of SHOPIFY

The GC also upheld the BoA’s conclusion that SHOPIFY had a low distinctive character for the English-speaking public and a “slightly higher than minimum level” distinctive character for the non-English-speaking public, given: (i) the descriptive nature of the word SHOP for the whole of the relevant public; (ii) the finding that SHOPIFY was highly indicative to the English-speaking public; and (iii) the fact that the IFY element could not confer on the mark a level of distinctiveness higher than the minimum level required for registration. For the non-English-speaking public, the GC said that any distinctiveness in SHOPIFY that was greater than the minimum distinctiveness was due to the additional element IFY. Given the brevity of IFY, the visual, phonetic and conceptual characteristics of the mark were not such as to enhance its distinctiveness beyond a slightly higher than minimum level.

Enhanced distinctiveness of SHOPIFY acquired through use

The GC noted that the more a mark is recognised by the target public, the more the distinctive character of that mark is strengthened.

Shopify had submitted evidence of SHOPIFY’s acquired distinctiveness as at the filing date of SHOPPI, which was 8 May 2017. The BoA had found that the evidence of enhanced distinctiveness relating to the UK could no longer sustain or contribute to the protection of an EU trade mark from 1 January 2021, even if the evidence predated that date, as the UK had left the EU by then. The BoA said that the earlier mark had to be reputed or possess enhanced distinctiveness “in the EU” at the moment that the BoA decision was made.

The GC agreed. According to case law the owner of an earlier mark, must show that he/she can prohibit the use of a subsequent mark, not only on its filing/priority date, but also on the date on which EUIPO rules. In other words, for evidence of use in the UK to be relevant, that use still has to be capable of being relied on at the date of EUIPO’s ruling. Given that the BoA’s decision was adopted on 18 February 2021 (i.e. after the end of the Brexit transition period when EU trade mark legislation no longer applied to the UK, which occurred at midnight on 31 December 2020) the BoA had been obliged not to take the evidence of use in the UK into account.

As for the other evidence, the GC agreed with the BoA that it was insufficient to show enhanced distinctiveness acquired through use.

Likelihood of confusion

The GC noted that where the earlier mark and the contested mark coincide in an element that is weakly distinctive, the global assessment of the likelihood of confusion does not often lead to a finding that such likelihood exists.

Shopify’s appeal on was based on the errors that it said the BoA had made on the level of attention of the relevant public, the degree of similarity between the marks and the distinctive character of the earlier mark. Given that the GC had found that the BoA had committed no such errors, the appeal necessarily failed.

In any event, the GC said, given the low visual and average phonetic and conceptual similarity between the marks, the weak distinctive character of SHOPPIFY and the relatively high or higher than average level of attention of the relevant public (notwithstanding its imperfect memory and the identity or similarity of the goods and services), no likelihood of confusion could exist. Therefore, the BoA had not erred.

The appeal was dismissed. (T-222/21 Shopify Inc v EUIPO EU:T:2022:633 (12 October 2022) — to read the judgment in full, click here).