CODE-X: Likelihood of confusion between trademarks for beverages

Many aspects are involved in the question of the likelihood of confusion between similar marks. If - as in the present case CODE-X v. Cody's - it concerns trademarks for beverages, the question arises whether the phonetic similarity is particularly significant. After all, drinks are often ordered verbally in bars and restaurants - but are also often perceived primarily visually, namely in the menus or drinks menus and in supermarkets.

In the present case, CODE-X v. Cody's, both marks claimed the field of "beverages". The owner of the earlier mark Cody's is Cody's Drinks International GmbH (Germany), and the applicant for the contested younger mark CODE-X is Ancor Group GmbH (Germany). In the course of the opposition proceedings against the CODE-X mark, the Board of Appeal upheld the opposition of the proprietor of the earlier Cody's mark. The Board of Appeal had found that the pronunciation of the mark applied for was 'kodiks' or 'kodex' and that of the earlier word mark 'kodis', there was a high degree of phonetic similarity. And in assessing the likelihood of confusion, particular importance was attached to the degree of phonetic similarity, so the Board of Appeal found a likelihood of confusion in all the marks relied on. Ancor Group appealed against this decision before the European Court of Justice (Court of First Instance (CFI)).

The Court found, first of all, that the signs at issue had only a low, if not average, degree of visual similarity and an average degree of phonetic similarity and were conceptually different. Unlike the Board of Appeal, the CFI did not find a high degree of phonetic similarity between the marks at issue. The hyphen of the CODE-X mark affected pronunciation so that consumers would pause in their speech, the court explained. On the other hand, the earlier mark Cody's would be understood by consumers as a reference to a proper name, in the possessive form, i.e. in the genitive of the proper name.
But whether it is appropriate, in the case of trademarks for beverages, to attach paramount importance to the phonetic perception of the marks when assessing the likelihood of confusion - this was the question the CFI dealt with in particular.

In principle, the CFI found that for an assessment of the likelihood of confusion, the weight to be given to visual, phonetic, or conceptual aspects may vary depending on the objective circumstances in which the marks appear on the market. However, the circumstances in which the categories of goods designated by the marks in question are likely to be found must always be taken into account.

And although the phonetic perception of marks in the context of beverages was accorded particular importance, this could not be appropriate in all cases, the court explained.

In the present case, at any rate, no evidence had been adduced to show that the goods in question were mainly ordered orally. The opposite was the case. This is because when the relevant goods are ordered orally in bars and restaurants, this generally occurs after the goods have been seen on drinks or menu, i.e. they have been perceived visually.

The CFI, therefore, concluded that there was no likelihood of confusion, annulled the decision of the Board of Appeal, and, exercising its power to amend decisions, dismissed the opposition of Cody's Drinks International (T 198/21).

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