The matter at hand

In 2013, the French company L’Oréal sought to register the EU trade marks ‘MASTER PRECISE’, ‘MASTER SMOKY’, ‘MASTER SHAPE’, ‘MASTER DRAMA’ and ‘MASTER DUO’ for goods in class 3 (‘products for eye makeup’). The applications were opposed by the French company Guinot, on the basis of the earlier French national figurative mark containing the word elements ‘Masters Colors Paris’ registered for (similar) goods.

The opposition division of EUIPO upheld the oppositions, considering that the word element ‘Masters’ was the most distinctive element in the earlier French mark, due to the figurative element having little distinctive character and the elements ‘Colors’ and ‘Paris’ being either descriptive or not distinctive. This decision was upheld by the Fifth Board of Appeal.

The General Court confirmed the Board of Appeal’s findings, by simply citing the Board’s assessment that the relevant public would only pay attention to the element ‘Masters’ in the earlier French mark, due to the other elements lacking distinctiveness. In addition, the General Court dismissed L’Oréal’s argument that the term ‘Masters’ possessed a low level of distinctiveness for the goods at issue, considering that ‘it sufficed to state that L’Oréal had not contested the elements other than ‘Masters’ lacking distinctiveness’ and that it had therefore not submitted any argument challenging the Board of Appeal’s assessment of ‘Masters’ being the most distinctive element of the earlier French mark.

L’Oréal appealed to the ECJ, essentially relying on the plea that the reasoning given by the General Court was insufficient and unclear, as it was unclear why it sufficed to state that L’Oréal had not disputed that the other word elements lacked distinctive character. EUIPO (and Guinot, as intervening party), on the other hand, argued that the reasoning given by the General Court was comprehensible, as in the absence of any distinctive character of the other elements of the trade mark, the element ‘Masters’ had to be the sole element the relevant public would pay attention to.

The judgment of the ECJ

The ECJ reiterates that, according to settled case law, a decision of the General Court must show clearly and unequivocally the reasoning upon which it is based in order to enable the parties concerned to understand the justifications for the decision and also to enable the ECJ to exercise judicial review.

The ECJ notes that while the General Court cited the Board of Appeal’s assessment of the element ‘Masters’ being the only element the relevant public would pay attention to, it failed to specify  why or whether this assessment was well-founded.

The ECJ further observes that General Court did not elaborate on why it sufficed to state that L’Oréal had not contested the elements other than ‘Masters’ lacking distinctiveness. Accordingly, the General Court did not properly reply to L’Oréal’s claim that the element ‘Masters’ possessed low distinctiveness.

Due the lack of clarity on the one hand and the unclear reasoning provided by the General Court on the other, the ECJ rules that the decision does not meet the requisite legal standards. According to the ECJ, the interpretation given by EUIPO and Guinot cannot be deduced from the General Court’s decision or from other case law that would support such interpretation. The ECJ notes that, on the contrary, case law of the General Court points in a different direction and suggests that a low degree of distinctiveness of the similar element of two sings leads to the weight of that element in the overall assessment of the distinctive character to be low as well.

Concluding that that the reasoning of the General Court was equivocal and incomplete, the ECJ annuls the decision and refers the appeals back to the General Court.