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Wholesalers Ability to Qualify as Average Consumers Confirmed

In Foundation for the Protection of the Traditional Cheese of Cyprus Named Halloumi v Babel Sajt Kft 2020 EWHC 2858 a UK Judge held that the Hearings Officer was wrong to hold that members of the trade do not qualify as average consumers for the purposes of evaluating the likelihood of confusion.

In 2000 the Foundation obtained an EU registration for HALLOUMI as a collective mark in respect of cheese and has sought to use that registration to prevent cheese producers who are not part of the Foundation from using or registering marks containing HALLOUMI in respect of cheese or cheese products. Use of the collective mark is governed by the Foundation’s regulations, which set out requirements as to composition and that production must take place in Cyprus.

In November 2018 Hungarian based Babel applied to register its Hajdu HALLOUMI device mark in the UK for identical and substantially similar goods and this was opposed by the Foundation. The Hearings Officer rejected the opposition finding that only members of the public and not members of the trade would qualify as average consumers and that such people would only recognise HALLOUMI as referring to a type of cheese. While acknowledging that a registered mark must be assumed to have some distinctiveness, the Hearings Officer found the distinctiveness of the Foundation’s mark to be inherently weak. On the evidence, the distinctiveness of the mark was also found not to have been enhanced through use as articles by the Foundation explaining that the cheese’s production is governed by rules occurred in trade publications rather than in publications aimed at the general public. In making a global assessment the Hearings Officer concluded that Babel’s mark did not create a likelihood of confusion given the finding that average consumers would only recognise HALLOUMI as referring to a type of cheese.

The Judge noted that like standard trade marks collective marks are also assessed for distinctiveness. However, the Judge also found that extra distinctiveness considerations arise for collective marks and that the Hearings Officer had not adequately taken that into account. Whereas a standard trade mark is used to differentiate an undertaking’s products or services from those of others in the same sectors of the market, a collective mark has both a differentiating function (members of the association from others) and can function as a secondary distinctive element within a mark of one of the members of the association. By failing to take account of that latter function the Hearings Officer failed to consider the possibility that the incorporation of the Foundation’s mark within Babel’s mark could deceive members of the public into believing that the mark is used by a member of the association.

The Judge also found error in the Hearings Officer’s finding that the average consumer would only recognise HALLOUMI as referring to a type of cheese. This was inconsistent with the acknowledgement that the mark must be assumed to have some distinctiveness on account of being registered, and effectively raises an absolute ground objection – which the presumption of distinctiveness precludes from opposition proceedings. Instead, the Judge considered that the Hearings Officer should have found that the average consumer would recognise HALLOUMI as referring to a type of cheese and that it is a product produced by a member of the Foundation.

Further, the Judge found error in the Hearing Officer’s finding that members of the trade do not qualify as an average consumer. The Hearings Officer justified the exclusion of members of the trade on the basis that the goods are of a type that would be purchased regularly and without the need for assistance from an intermediary. However, the Judge agreed with the Foundation’s contention that the Hearings Officer failed to give due regard to the voluminous and unchallenged evidence of the Foundation’s marketing and promotion material directed at the UK trade which highlighted that HALLOUMI is registered as an EU collective mark. The Judge found that this material should have led the Hearings Officer to conclude that trade consumers are a significant part of the relevant public and that they could be deceived into thinking that Babel’s mark is used as a member of the association, and so refused registration.

While the Foundation has been successful in this opposition, it is noteworthy that the HALLOUMI registration is currently the subject of a cancellation action by a non-Cypriot third party, presumably on the basis that it lacks distinctiveness or has become generic. In the event that the cancellation action prevails members of the association may instead have to rely upon the Cyprus Ministry of Energy, Commerce and Industry’s attempts to obtain certification trade marks. Notably, they have achieved certification trade mark registrations for HALLOUMI CERTIFICATION MARK in the United Kingdom and for HALLOUMI in the USA and are making a second attempt for HALLOUMI in Australia, but have not made an application in New Zealand. There are currently three registrations in New Zealand that contain the word HALLOUMI, all in the name of one New Zealand based proprietor. Somewhat surprisingly, one of those registrations is for a process chart for making halloumi.

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