Case C-147/14, Loutfi – Arabic words in Arabic and Latin scripts under EU trade mark law [judgment 2015, ECLI:EU:C:2015:420]

Arabic words transcribed in Arabic or Latin scripts can be used in Community Trade Marks. However, when assessing the likelihood of confusion between one Community trade mark in which an Arabic word is dominant and an allegedly infringing sign where a visually similar Arabic word is used, should account be taken of the fact that the sign sounds quite different, and has a very different meaning? Or should the confusion assessment be conducted without paying any attention to the words in Arabic – after all,  Arabic is not an official language either of the EU or in the Member States. But if attention should focus only on the Latin script at the expense of the Arabic script, then would that assessment not infringe the EU Charter rights that protect against non-discrimination and ensure diversity?

Facts
Loutfi is a company in Belgium which holds the rights to several Community marks covering goods in Class 29 (meat), and 30 (sugar, bread, cakes and honey). The marks consist of words from the Arabic language. Some of the Arabic words are transcribed in both Latin and Arabic scripts, whereas other elements consist solely of Arabic words transcribed in the Arabic script.

Loutfi works together with two other companies, which trade respectively in the export and the wholesale of fresh-and-frozen halal meat products. The companies have been active in the French, Spanish and Italian markets since 2004 and they sell their goods under the name of ‘El Benna’. From 2011, they started selling their goods under the name of ‘El Bnina’.

Of course, Loutfi is not the only company to sell halal products. In 2011, a Belgian company in Hasselt, Belgium applied for a Benelux trade mark on the word ‘El Baina’. The application similarly covered Classes 29 and 30, and was intended to cover meat and sweets ‘prepared according to the ways of Islam’. This company was already selling its meats to an Italian company on an exclusive basis.

Loutfi opposed the Benelux trade mark application, claiming that the mark/sign ‘El Baina’ would infringe its own Community marks on ‘El Benna’ and ‘El Bnina’. The Benelux application was withdrawn.

Loutfi continued to press its point. In 2012, it sought and obtained a seizure and confiscation order from the Brussels Commercial District Court in relation to any documentation or goods sold in packaging that bore the words/signs of ‘El Baina’, at two company addresses in Hasselt.

At the Brussels Court of Appeal
The litigation eventually ended up at the Brussels Court of Appeal. The judge, sitting alone, recognised that the dispute turned on EU legislation, including Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (codified version)(OJ [2009] L78/1).

The pertinent provisions of the Regulation are: Section 2, which governs the ‘Effects of Community trade marks’; and Article 9, which deals with the ‘Rights conferred by a Community trade mark’.

For Loutfi’s claim to be successful, it would have to satisfy the four cumulative requirements embedded in Article 9(1)(b), which states:

1. A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
…
(b) any sign where, because of its identity with, or similarity to, the Community trade mark and the identity or similarity of the goods or services covered by the Community trade mark and the sign, there exists a likelihood of confusion on the part of the public; the likelihood of confusion includes the likelihood of association between the sign and the trade mark;

The judge noted that the goods for which the mark had been registered were the same or similar, namely, halal products. The products produced by Loutfi and sold under its registered mark were in competition with those sold under the Benelux mark of its rivals in Hasselt. Hence, the allegedly infringing mark/sign being used by the rival companies were identical or at least similar to those goods for which Loutfi’s mark had been registered.

Was there a likelihood of confusion between Loutfi’s mark and the allegedly infringing mark/sign? The CJEU’s case law required a global assessment that took into account all the relevant circumstances of the particular case. In that context, the judge recalled one particular plank of reasoning from the CJEU’s judgment in Case C-361/04, Picasso.

At para 40 of Picasso, the CJEU had reasoned:

Where it is established in fact that the objective characteristics of a given product mean that the average consumer purchases it only after a particularly careful examination, it is important in law to take into account that such a fact may reduce the likelihood of confusion between marks relating to such goods at the crucial moment when the choice between those goods and marks is made.

Who was the average consumer? How careful would they be?
With ‘Picasso 40′ in mind, the judge turned her attention to the relevant public and the careful examination. The judge noted that the parties disagreed as to who should form the relevant public and the requisite level of attention which a consumer would pay before purchasing the product.

On the one hand, Loutfi claimed that the relevant public should be understood as being the public at large, and the consumer should be the average EU consumer. The average EU consumer might include consumers of halal products. The EU was home to many Muslims from countries such as Indonesia, Afghanistan, Pakistan, Algeria, or the Berber speaking parts of Morocco. These Muslims did not necessarily read or speak Arabic. ‘The multicultural society was specific to the West’, according to Loutfi, and in that context referred the judge to the fact that the EU consumer need not be a Muslim. A range of halal products could be purchased by a broad public from the major superstores in Belgium. In so far as the requisite level of attention and careful examination was concerned, this, they submitted, should be set at a low level. Its products were everyday items. These were not products with a high commercial value or purchased for particular uses. Therefore, it should be sufficient for the consumer to show an average level of attention on examination of the mark.

On the other hand, Loutfi’s rivals disagreed. They pointed out that halal products were used by Muslims, who observed the rules of the Koran. In Italy, where most of their goods were sold, the Muslims were of Arab origin, and they would have at least a basic knowledge of Arabic. The rivals submitted that these consumers should constitute the relevant public. Given the overriding importance of observing religious and dietary laws, the average consumer of halal products would only buy goods after a particularly careful examination of them.

On hearing this, the judge held that the goods traded under the marks were food products intended for Muslims, particularly those whose foodstuffs were proscribed by religious rules. The products were being targeted at Arab Muslims. When it came to looking at the mark, and the sign, she noted that the rival’s sign of El Baina contained Arabic word elements including elements using Arabic script. Equally, she noted that the word elements in Loutfi’s marks were in Arabic and used both Arabic and Latin scripts.

The judge did disagree with one aspect of Loutfi’s submissions, however. She explained that Loutfi’s assertion that Muslims in the EU no longer had a basic knowledge of Arabic was not a submission which had been supported by any evidence. In that context, the judge even remarked that languages link culture; in this particular case there was moreover a religious link which needed to be taken into account for it was common knowledge that the Koran was written in Arabic.

Accordingly, the judge held that the relevant public in this case was comprised of the average informed, careful and alert normal Muslim consumer of halal goods in the EU who would have at least a basic knowledge of Arabic and written Arabic. They were purchasing everyday consumer goods which were easily accessible to them, and so a normal level of attention was appropriate. Loutfi’s sales channels were identical to those of the rival mark. The goods were sold either in specialised shops, or in shops with specific departments, or on specific shelving. Goods sold in these sales channels did not require any heightened awareness or greater attention on the part of the average consumer in this particular case.

The likelihood of confusion between the marks
As to the likelihood of confusion between Loutfi’s marks and the allegedly infringing sign, both marks contained word elements which were dominant, namely, El Bnina and El Benna. The words written in Arabic script were slightly less dominant. The same was true for the rival’s sign of El Baina.

Where the parties disagreed was whether account should taken of what the words actually meant. Loutfi thought there was a likelihood of confusion between the marks. This was because no account should be taken of the meaning of the words in Arabic since Arabic was not an official language of the EU. Consequently, it was irrelevant to determine whether there was a conceptual correspondence between the marks. In that context, it referred the judge to decisions of OHIM.

In so far as aural similarity was concerned, Loutfi submitted that attention should be directed to those words which were written in the Latin script since the Latin script words dominated both Loutfi’s mark and the allegedly infringing marks. It bolstered its submission to focus on the Latin script not only by pointing out that in all but Greece and Bulgaria, Latin was the only script but also by mentioning that consumers would perceive Arabic words written in Arabic script only as pictorial image elements and they would not articulate them verbally.

On the contrary, contended the rival companies, the words in Arabic should be taken into account. In this case, the Arabic words used in the marks had different meanings. In so far as aural similarity was concerned, the words were also pronounced in different ways. Thus, there was no danger of any confusion between the marks.

Before addressing those particular points, the judge duly made the visual comparison of the marks. She noted that the word elements El Benna and El Bnina played a dominant role in Loutfi’s marks. Equally, in the rivals’ mark, the word elements ‘El Baina’ were dominant. The element El was common to each of the marks. A capital letter B was common to each. And the last three word elements were primarily comprised of the three letters A, N and A. When it came to those words in Arabic which had been transcribed in Arabic script; again, she thought that they displayed a certain degree of visual similarity. The judge therefore held that visually, there was a degree of correspondence between the mark as registered by Loutfi and the mark/sign used by the rival.

The judge then turned to making a comparison of the aural and conceptual qualities of the marks. She noted that the elements had no significance in any EU language. However, that was not the case when the elements were considered in Arabic. She recalled that the rival companies had submitted there was a great distinction between the Arabic words which had been used in the various marks. Thus, she held that Loutfi’s word elements written in Latin meant: ‘the taste’ [El Benna], and ‘the tenderness’ [El Bnina]; whereas the rival’s word element [El Baina], meant ‘the look’. She also adduced evidence from the parties on how each of the words was to be pronounced in Arabic.

That said, the judge could only arrive at one conclusion after her investigation into the correspondence between the marks (or lack thereof), and determining whether there was a risk of confusion and association between the marks. That is to say, it all depended on what could be taken into account, namely, a knowledge of what those Arabic word elements meant, how they were spoken and sounded, and how they could be transcribed in Latin script.

Whether Arabic could be taken into account was also not clear as a matter of law. When it came to the decisions of OHIM it appeared that OHIM would only take into account official languages of the EU. But if the practices of OHIM did not correspond to those used in the national courts, then when it came to determining whether there was a degree of similarity between the mark and the sign, and the risk of confusion and association, then this could impede harmonising trade mark law in the EU.

In that context, it was pertinent to recall that in this case, the Community Trade Marks were registered for products whose relevant public was the average Muslim consumer of halal foodstuffs in the EU, who would have at least a basic knowledge of Arabic. The question must arise therefore as to whether national courts, when making an assessment under Article 9 of the CTM Regulation, would be acting in accordance with EU law if they were to apply a restriction on whether a language was an official language of the EU. Could such a restriction be reconciled with the fundamental rights enshrined in Articles 21 and 22 of the EU Charter when those provisions stipulated, inter alia, that cultural, religious and linguistic diversity must be respected?

Article 21 of the EU Charter deals with ‘Non-discrimination’ and provides:

1. Any discrimination based on any ground such as sex, race, colour, ethnic or social origin, genetic features, language, religion or belief, political or any other opinion, membership of a national minority, property, birth, disability, age or sexual orientation shall be prohibited.
2. Within the scope of application of the Treaty establishing the European Community and of the Treaty on European Union, and without prejudice to the special provisions of those Treaties, any discrimination on grounds of nationality shall be prohibited.

Article 22 of the EU Charter protects ‘Cultural, religious and linguistic diversity’ and provides: ‘The Union shall respect cultural, religious and linguistic diversity’.

The judge admitted that the CJEU had already handed down a judgment in which it discussed the role of linguistic diversity in the EU when it was assessing the distinctive characteristic of a mark in the language of a Member State and which was registered in another Member State (C-421/04, Matratzen Concord), but she noted to date the CJEU had not dealt with the issue which was currently before her.

In light of the above, the judge suspended the proceedings and decided to ask a question of the CJEU.

Question Referred
According to the website of the UK IPO, the Brussels Court of Appeal has asked:

1. In view of, inter alia, Articles 21 and 22 of the Charter of Fundamental Rights of the European Union, must Article 9(1)(b) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark be interpreted as meaning that, in the assessment of the likelihood of confusion between a Community trade mark in which an Arabic word is dominant and a sign in which a different, but visually similar, Arabic word is dominant, the difference in pronunciation and meaning between those words may, or even must, be examined and taken into account by the competent courts of the Member States, even though Arabic is not an official language of the European Union or of the Member States?