What's your party drink? - Asolo v Red Bull

Energy drinks and alcoholic drinks might be consumed together, but does that make them similar goods for the purposes of establishing likelihood of confusion in trade mark infringement? This was considered by the Court of Justice of the European Union earlier this month in an appeal involving Red Bull and Asolo.

Background

On 24 September 1997 Asolo filed an application for registration of a European Union trade mark for the word sign ‘FLÜGEL’ [translates to 'wing' in English] in class 32 (Beers; mineral and aerated waters and other non-alcoholic drinks; fruit drinks and fruit juices; syrups and other preparations for the preparation of drinks) and class 33 (Alcoholic drinks except beers). 

On 5 December 2011, Red Bull filed an application for a declaration of invalidity based on two earlier marks: 'VERLEIHT FLÜGEL' [gives wings], and 'RED BULL VERLEIHT FLÜÜÜGEL' registered for ‘energy drinks’ in class 32, in Austria.

Red Bull successfully contested the mark- the Cancellation Division found that in light of the repute of their earlier mark, a link could be made in the mind of the public between the two marks, which could take unfair advantage of the earlier mark.

Asolo filed an appeal against the Cancellation Division decision in January 2015, which was dismissed by the Fifth Board of Appeal of EUIPO on 17 November 2016. This is the contested decision in the present case.

Asolo's Appeal

Asolo appealed on two grounds; that the Board of Appeal had incorrectly determined certain evidence inadmissible in relation to acquiescence and had wrongly determined that the signs could be similar in relation to their goods, as a result of the similarity between alcoholic drinks and energy drinks. In relation to inadmissible evidence the Court stated that the Board of Appeal rightly upheld the Cancellation Division’s decision on whether the applicant had adduced evidence of Red Bull’s actual knowledge of the use of the contested mark in Austria. and rejected the Asolo’s argument.

Similarity between alcoholic drinks and energy drinks

The second plea, related to likelihood of confusion, which requires similarity between both the marks at issue and the class of goods or services to which the mark is registered.

Asolo argued that there was no likelihood of confusion between the signs because the goods are not similar; specifically that energy drinks are not similar to alcoholic drinks. As such, the Board of Appeal had wrongly considered a connection between the goods, on the basis that they might be mixed. Asolo brought the argument home by pointing out that Red Bull packaged their product with a warning: ‘do not mix with alcohol’ and marketed it as a drink that gives energy and alertness - the opposite effect of consuming alcoholic drinks. For example, they argued, a consumer wishing to remain alert, such as a driver, would not consider substituting an alcoholic drink for a non-alcoholic energy drink.

Victory Sip to Asolo
Image: Christine Majul

Red Bull, however, argued that the products were similar since both could be described as ‘party drinks’, and are consumed by the same consumers, at the same locations, are interchangeable and in competition with each other, can be mixed, have a very similar stimulating and energising nature, and can be made by the same undertakings. The only thing that differentiates them is the presence of alcohol.

The Court noted that a large number of alcoholic and non-alcoholic drinks are mixed, consumed, or marketed together, but that such products are not similar purely on that basis. So, an alcoholic drink and an energy drink are not similar merely because they can be mixed, consumed or marketed together, given that the nature, intended purpose, and use of those goods differ, based on the presence - or absence - of alcohol in their composition.

The Court recognised that the German, and thereby the Austrian, public is used to and aware of the distinction between alcoholic and non-alcoholic drinks and would make that distinction when comparing the Red Bull and Asolo marks.

Despite the fact that previous case law acknowledged a low degree of similarity between alcoholic drinks and non-alcoholic drinks, the Court held that was not enough to challenge the points made by Asolo. Thus, the second plea was upheld and the contested decision annulled (where the Board of Appeal had found that there was a likelihood of confusion between the signs at issue as regards the goods in Class 33 covered by the contested mark and the ‘energy drinks’ in Class 32 covered by the earlier mark.) EUIPO and Red Bull to bear, in addition to their own costs, those incurred by Asolo.

Three Appeals Cheers to that, Prost!