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Third Time Unlucky for Hot Joker EU Trade Mark Application

In Novomatic AG v EUIPO (1), the EU General Court upheld a decision of EUIPO’s Second Board of Appeal that there was a likelihood of confusion between a “hot joker” figurative sign and an earlier “joker” figurative mark in the gambling and gaming sector. The decision, which concerned an opposition brought by leading soft drinks company Granini France, will be of particular interest to gambling and gaming businesses for its analysis of the similarity between “hardware and software” in Class 9 and “games” in Class 28 and comment on the effects of changes to recent editions of the Nice Classification. As electronic-based gambling games are effectively a regulated subset of video games with a cash wager at stake, computer and video games businesses more generally should also take note of the decision.

Background

Granini France has sold fruit juice drinks in France for a number of decades. Its products include the well-known “Joker” range. While Granini’s trade mark portfolio generally relates to fruit juice drinks in Class 32, it also has a word mark for JOKER from 1984 and a figurative “Joker” mark from1989, each registered in France for a broad range of goods and services across many classes. In 1999, the French national lottery operator, Française des Jeux (FDJ), updated its national lottery add-on game called Joker to a new version named Joker+. FDJ discovered from its clearance searches that Granini’s1984 and 1989 “Joker” registrations already covered “entertainment” and “lotteries”, among other things. FDJ contacted Granini who agreed to file a “Joker+ ”figurative mark and license it to FDJ. In 2006, FDJ rebranded Joker+ and Granini registered the figurative mark shown below (the Joker+ Mark) in France for “games and toys” in Class 28 and “Entertainment; entertainment by means of radio or television; services of organisation of lotteries or gambling; organising of competitions for entertainment” in Class 41: Novomatic AG is an international gambling and gaming company headquartered in Austria with an extensive trade mark portfolio in the gambling and gaming sector. On 14 December 2010, Novomatic filed an application at EUIPO for a figurative device mark (the Hot Joker Sign) in the following classes:

Class 9:

Hardware and software, in particular for casino and amusement arcade games, for gaming machines, slot machines or video lottery gaming machines, with or without prize pay-outs, or games of chance via telecommunications networks and/or the Internet, with or without prize pay-outs.

Class 28:

Casino fittings, namely roulette tables, roulette wheels; casino games with or without prize pay-outs, gaming machines and games machines, in particular for commercial use in casinos and amusement arcades, or games of chance, with or without prize pay-outs, via the Internet and via telecommunications networks, games of chance, with or without prize pay-outs, for use in telecommunications apparatus; Slot machines and/or electronic money-based gaming apparatus with or without prizes; housings for slot machines and gaming machines; electronic or electrotechnical gaming apparatus, gaming machines and automatic gaming machines

It appears that Novomatic intended to use the Hot Joker Sign primarily for either physical slot machines or their virtual counterparts, often known as “video slots”. Novomatic appears to offer other video slot games with the “Joker” theme and imagery, including “Mega Joker”, “Joker Fruits” and “Power Joker”, which feature similar versions of the jester’s face from the Hot Joker Sign as the slot machine symbol that awards the most prize money.

In May 2011, Granini filed opposition proceedings against the Hot Joker Sign based on a likelihood of confusion with its earlier marks on the part of the French public, as a relative ground of opposition under the EUTM Regulationart.8(1)(b).(2) For reasons of “procedural economy”, EUIPO’s Opposition Division only considered the Joker+ Mark out of the marks that Granini cited because it had been registered for less than five years and was thus not subject to proof of genuine use by Granini or FDJ.

EUIPO’s Opposition Division upheld Granini’s opposition. That decision was approved by EUIPO’s Second Board of Appeal, although the Board found that the relevant public was limited to “professionals in casinos, amusement arcades, bingo halls and the like in France”, who have a higher level of attention than the general public. Novomatic appealed again to the General Court.

Decision of the General Court

Novomatic canvassed various grounds of appeal for its case based on breaches of the Regulation by the Board of Appeal, but its position was essentially that the Board had wrongly concluded that there was a likelihood of confusion among the relevant public after the Board had incorrectly carried out the comparison of the overlapping goods and the respective signs.

Comparison of the goods

The Board of Appeal had held that the overlapping goods were “games and gaming devices”. It had decided that Granini’s “games” in Class 28 were similar to Novomatic’s “hardware and software” in Class 9 to the extent that they “include computer games programs and amusement apparatus adapted for use with an external, display screen or monitor”. The Board further held that Granini’s “games” in Class 28 were identical to the majority of Novomatic’s goods in Class 28 and similar to the remainder. Novomatic’s first argument was that Granini’s registration for “jeux et jouets” or “games and toys” in Class 28 had to be read in combination as a narrower scope of registration than “games” alone would be. Novomatic argued that its goods in Class 9 and 28 could not be “played with”, whereas “games and toys” were aimed only at children, who were prohibited by French legislation from gambling activities, and were a different relevant public from Novomatic’s gambling professionals. The General Court rejected Novomatic’s arguments and agreed with the Board’s definition of “games” based on the New Shorter English Dictionary, which states that “games” is “so general that it can cover everything from ‘amusements’, ‘sports’ and ‘pastimes’ to ‘games of chance for money’”. The court also agreed with the Board that this assessment was supported by the explanatory note to Class 28 in the Eighth Edition of the Nice Classification, which was the relevant edition for the Joker+ Mark as it was filed in 2006. While the note specifically excluded “amusement apparatus adapted for use with television receivers only” from Class 28, it did not specifically exclude games played on a monitor or “games of chance, hand held devises [sic] or on-line games”. The court decided that, because these types of game were not expressly excluded from Class 28, such games should be included in Class 28 and hence be considered within the definition of “games” for the Joker+ Mark. The General Court concluded that “games” was a broad definition that included “electronic or on-line games of chance, such as bingo or various other card games” and was not narrowed by the addition of “and toys”. Novomatic’s second argument was that the Board of Appeal wrongly carried out its assessment of the similarity of the respective goods, claiming that:

  • the Board had solely relied upon the explanatory note to the Ninth Edition of the Nice Classification, which supported the similarity between Novomatic’s “hardware and software” in Class 9 and Granini’s “games” in Class 28 because the note specifically included “amusement and game apparatus adapted for use with an external display screen or monitor” in
  • Class 9 and thus contradicted Novomatic’s argument that “hardware and software ”could not be “played with” and were thus dissimilar to “games”;• the Board wrongly interpreted the use of the words “in particular” in the specification applied for in Class 9 to restrict “hardware and software” to gaming devices, when these words were only illustrative; and
  • Its goods in Class 28 were not similar or identical to “games” owing to the “reality of the markets”, for example, “housings for slot machines” could not be obtained in toy shops. Again, the General Court disagreed, holding that:
  • the Board had been correct to state that the Hot Joker Sign’s specification was subject to the Ninth Edition rather than the Tenth Edition of the Nice Classification as the Hot Joker Sign was filed in 2010; the Tenth Edition provides that “amusement and game apparatus adapted for use with an external display screen or monitor” are specifically included in Class 28 and excluded from Class 9—the opposite position from the Ninth Edition. Moreover, it was clear to the court from the Board’s decision that it had taken into account all relevant factors and had not solely relied upon the Nice Classification in reaching its decision on Novomatic’s Class 9 goods;
  • the Board of Appeal had not read the phrase “in particular” as restrictive rather than illustrative, although the court did not support this finding with detailed reasoning; and
  • only the description of the goods applied for could be taken into account, not the “reality of the markets”. On that basis, the General Court entirely agreed with the Board’s conclusions on Novomatic’s goods in Class 9, noting that “hardware and software” are similar to computer games, including electronic or online games of chance, because they are “essential to their functioning” and thus “complementary”. The General Court also agreed with the Board’s conclusions regarding Class 28, save that it held “casino fittings, namely roulette tables, roulette wheels” were similar rather than identical goods to Granini’s “games”.

Comparison of the signs

The Board had found that the Hot Joker Sign and the Joker+ Mark had:

  • a low degree of visual similarity because of the different figurative and graphical elements;
  • an average degree of phonetic similarity because of the verbal “joker” element likely to be recalled by the relevant public; and
  • an average degree of conceptual similarity because of the common idea of a “joker” with connotations of card games and the Batman films. Novomatic did not dispute this analysis before the General Court, but it repeated its arguments that the “Joker” verbal element must not be taken into account because:
  • “Joker” was not distinctive for games of chance; and
  • the remaining elements of the two signs were clearly not similar. In support, Novomatic cited the co-existence of many “Joker” signs in the sectors of entertainment, lotteries and games of chance in the European Union. By contrast, Novomatic’s own additional “hot” verbal element gave the Hot Joker Sign the distinctiveness required because it had no meaning in the French language, it was placed at the beginning of the Hot Joker Sign, and it was illustrated by flames.

Once more, the General Court did not agree, holding that Novomatic had failed to discharge its burden of proof to show that the word element “Joker” was descriptive for games. Further, even if the General Court had decided that “Joker” were descriptive, the court could not have completely excluded it from the comparison because only elements that are entirely negligible can be so excluded. The court also held that completely excluding “Joker” would have effectively deprived the Joker+ Mark of any scope of protection, as the remaining elements were merely decorative or laudatory, but EU case law has established that such invalidation of an earlier national mark could only take place through cancellation proceedings in a Member State and not before the EU courts. In respect of Novomatic’s “hot” element, the General Court simply stated that it was “obvious” that this did not create the “unique impression of the mark applied for” by itself.

Likelihood of confusion

Based on the similarity of the goods and the signs, the General Court concluded that the Board was correct to find a likelihood of confusion between the two signs, despite “the high level of attention of the professionals in the casinos and amusement arcades sector”.

Comment

Novomatic does appear to have been somewhat unfortunate in the timing of its application. Had Novomatic waited another nine months before applying for the Hot Joker Sign, the Joker+ Mark’s registration for the very broadly defined “games” would have been subject to proof of genuine use and limited to the type of “games” for which Granini could prove that its licensor, the FDJ, actually used the Joker+ Mark. While the Joker+ lottery add-on may still have been considered to be a form of a “game of chance”, it might have also been regarded as sufficiently dissimilar to Novomatic’s application for “hardware”, “software” and various gaming devices to eliminate the likelihood of confusion and permit the registration for some or all of those goods. The timing of the changes to the Nice Classification also worked against Novomatic. On the one hand, the court found that Granini’s “games” in Class 28 could include electronic games on an external display screen because the explanatory note to the Eighth Edition only specifically excluded game apparatus that used a “television receiver” and not other external display screens. While evolving gaming technology meant that this note was changed in the Ninth Edition to cover any “external display screen or monitor”, the court did not take this change into account and only looked at the Eighth Edition in isolation for these purposes. On the other hand, the court relied on the Ninth Edition to determine the similarity between Novomatic’s “hardware and software” and Granini’s “games” because Class 9 specifically included “amusement and game apparatus adapted for use with an external display screen or monitor”, even though this position was reversed in the Tenth Edition. As a result, Novomatic was effectively caught both coming and going by the changes to the Nice Classification. Gambling and gaming companies, but also video gaming companies, should be aware of these alterations in recent years to the Nice Classification and consider them when carrying out clearance searches, filing trade mark applications or contesting oppositions. Gaming companies should also be aware of the limitations and potential confusion around the meaning of the inclusion or exclusion of “amusement and game apparatus adapted for use with an external display screen or monitor”. As the Japan Patent Office pointed out in 2008 at the 27th Session of WIPO’s Preparatory Working Group before the changes to the Tenth Edition, this creates an artificial difference between modern gaming consoles or handheld gaming machines depending on whether or not they have an integrated or external display screen, but its sensible recommendations were not fully adopted. The General Court’s judgment is also another demonstration of the power of national trade mark rights since the decision in P Formula One Licensing v OHIM (3) which removed the risk to opponents in an EUIPO opposition of losing their national trade mark rights through a challenge to their validity based on lack of distinctive character. More generally, this case is a reminder to businesses in the electronic gaming sector of the similarity of goods in Class 9 and Class 28, as the General Court held that “hardware and software” can be considered complementary to “games” on the basis that they are essential for their functioning. Given the overlap, video gaming and gambling businesses should generally seek to obtain registrations in Class 9, Class 28 and Class 41 for their goods and services as a starting point.

1 Novomatic AG v EUIPO (T-326/14) EU:T:2016:221.

2 Regulation 207/2009 on the Community trade mark [2009] OJ L78/1.

3 P Formula One Licensing v OHIM (C-196/11) EU:C:2012:314.