The matter at hand
MEGA Brands applied the sign MAGNEXT for registration as a Community trade mark for essentially ‘toys’. Diset opposed against registration of this mark on the basis of its Spanish word mark MAGNET 4, registered for inter alia 'toys’.
The GC dismissed the appeal of MEGA Brands against the OHIM’s decision to uphold Diset’s opposition. Its finding was, in essence, that: ‘magnet’ must be considered to be the dominant element in MAGNET 4; MAGNEXT differs from this dominant element only by the capital letter “X”; and there was a likelihood of confusion given the identity of the goods covered by them and in spite of the weak distinctive character of the earlier mark.
The judgment of the ECJ
It its appeal before the ECJ, MEGA Brands essentially argued that the GC distorted the facts and infringed the principles established by case-law, first, by categorising ‘MAGNET’ as the dominant element of MAGNET 4, even though it had found that that element is descriptive, and, second, by failing to take into consideration the figure ‘4’ which is a component of that mark.
With reference to its order in Muñoz Arraiza (C‑388/10 P), the ECJ considers that “even if a verbal element should be considered to have a purely descriptive character, that character does not preclude that element from being acknowledged as dominant for the purposes of assessing the similarity of the signs at issue” (paragraph 34). However, it concludes that “the General Court has not provided any reasoning, not even implicitly, which makes it possible to understand why it categorised the element ‘magnet’ as dominant”(paragraph 57) and that ”the General Court has failed to provide any reasoning, even if only implicit reasoning, for its decision not to include the figure ‘4’ in its assessment of the similarity of the signs at issue” (paragraph 60 ). As a consequence, this part of the General Court judgment is set aside and the matter is referred back to the General Court.