In Case T‑398/16, the General Court annulled the decision of the Board of the Appeal (BoA) which rejected the opposition brought by Starbucks Corp. against EUTM application filed by Mr. Nersesyan on the basis of Article 8(1) (b) and 8(5) of the EUTMR.

Starbucks based the opposition on nine EU trade marks, one national UK  mark and one Spanish mark. Consequently, the relevant territory was the EU, including the UK and Spain and the relevant public is the average consumer.

The marks and services which were compared by the EUIPO are as follows:

Firstly, it was not disputed by the parties that the services are identical since they overlap with each other at least partially.

Second, as regards the comparison of the marks, without addressing the issue of the colour green, the BoA stated that the marks consisted of :

1) a black circular device with a stylised picture of a mermaid/ coffee bean-shaped musical notes in the centre surrounded by a white circle;

2) the word ‘starbucks’ above that central element and the word ‘coffee’ were both written in the same white, font letters;

3) there were two small white stars/coffee beans at the right- and left-hand sides and that there was another white circle around those elements;

4) moreover, the word ‘starbucks’ formed a distinctive and dominant element  and the figurative element depicting a mermaid are distinctive and co-dominant within the overall impression of the signs,

5) the word ‘coffee’ is  descriptive in respect of the goods and services concerned and the other figurative elements would be perceived as decorative and were therefore non-distinctive.

Consequently, the BoA found that those marks completely differed in their distinctive and dominant elements and that they only resembled each other in the word ‘coffee’, which was placed in a different position, and the fact that they represented black circular devices with white elements, and in the letter type used for the respective word elements. However, as those elements were descriptive or non-distinctive, the BoA found that those similarities could not render the marks similar from a visual point of view.

From a phonetic standpoint, the marks were also found to be dissimilar because they only resemble each other in the word ‘coffee’, if that word were pronounced. The elements ‘rocks’ ‘starbucks’ may have similar endings but overall, the pronunciation of those two words is therefore different.

From a conceptual standpoint, the earlier marks conveyed the concept of a mermaid whereas the mark applied for conveyed the concept of musical notes and ‘rock’ in the sense of ‘moving or swinging to and fro’. Therefore  the marks were  conceptually dissimilar and given the descriptive meaning of the word ‘coffee’, even if  the marks have that word in common it did not create any relevant conceptual similarity.

Therefore the marks were found to be dissimilar.

The GC disagreed with the assessment of the BoA and reasoned as follows:

1) according to case-law, two marks are similar when, from the point of view of the relevant public, they are at least partially identical as regards one or more relevant aspects  (see Matratzen Concord, T‑526/14). In this case, even if marks completely differ in their distinctive and dominant elements, namely the word “rocks” + "coffee bean-shaped musical notes" on one hand and the word “starbucks” + " mermaid "on the other hand’, it cannot be found that  other elements are negligible in the overall impression which those marks. In particular,  the presence of the word ‘coffee’ in the expressions ‘starbucks coffee’ and ‘coffee rocks’ is a factor which has to be taken into consideration, even though that word is descriptive of the goods and services, for which Starbucks, moreover, claimed that some of its earlier marks have a reputation.

2) Although descriptive elements of a trade mark are not generally regarded by the relevant public as being dominant in the overall impression conveyed by that mark, that does not, however, mean that those descriptive elements are necessarily negligible in that overall impression (see  TRIDENT PURE, T‑491/13).

3) even though the word elements in a trade mark are, in principle, more distinctive than its figurative elements, because the average consumer will more readily refer to the goods or services by quoting their name than by describing the figurative element of the trade marks, that is not the situation in the present case:

• visually, the signs at issue have the same general appearance in common and are based on the use of the same structure and word in common ‘coffee’. Consequently, the signs are partially identical as regards one or more of their relevant aspects.
• As regards the phonetic comparison,  even though there are differences in the way in which the words ‘starbucks coffee’ and ‘coffee rocks’ are pronounced, as Starbucks submits and in contrast to EUIPO’s assessment, the ending ‘rocks’ may be regarded as phonetically similar to the ending ‘bucks’ on account of the relevant English-speaking public’s pronunciation of the letters ‘o’ and ‘u’.
• Conceptually, it cannot be ruled out that on account of the general appearance of the marks at issue and the presence of the word ‘coffee’ in both of those marks, the relevant public will associate the earlier marks and the mark applied for with the concept of a ‘coffee house’. 
• Therefore the BoA erred in ruling out any similarity — even a low degree of similarity — between the marks, and therefore erred in not carrying out an overall assessment of the likelihood of confusion as well as refusing to assess the grounds set out in Article 8(5) of EUTMR because the marks at issue were dissimilar and annulled the contested decision.