Closing the retail gap

19th Oct 2020

Trade mark law may be catching up with the digital era, suggests Anousha Vasantha. C-763/18 P, Wallapop SL v EUIPO & Unipreus SL, CJEU (AG), 25th June 2020

In this decision, the Advocate General (AG) agreed with the General Court (GC) that “retail services” and “online trading services” are similar, albeit to a low degree. If the CJEU follows the AG’s opinion, it will likely be a positive outcome for retailers – which have already borne a heavy negative impact from the digital movement and expansion of e-commerce over the years. Is this a sign of trade mark law catching up with the digital era?

Case history

The Appellant in this case, Wallapop SL (Wallapop), is a Spanish online marketplace provider through which users can buy and sell items online and through a mobile app. Wallapop filed an EU trade mark on 18th September 2014 (application No. 013268941) and protection was sought for, inter alia, “online trading services” in class 35.

Unipreus SL (Unipreus), a Spanish footwear retailer that operates both online and in physical stores, brought opposition proceedings against Wallapop’s application. Unipreus’ opposition was based on Article 8(1)(b) EUTMR, alleging likelihood of confusion with its earlier figurative Spanish trade mark (shown opposite) which includes the word element “Wala^w” (registration No. 28741010). Unipreus’ earlier registration covers “retailing of sporting articles” in class 35.

At first instance, Wallapop’s opposition was rejected by the EUIPO Opposition Division (OD) on the basis that there is no likelihood of confusion because the services are dissimilar. The Fifth Board of Appeal (BoA) agreed with the OD’s decision that the services are dissimilar, dismissing Unipreus’ appeal to annul the OD’s decision.

Unipreus appealed to the General Court (GC). In 2018, the GC overturned the BoA’s and the OD’s decisions and instead held that the services are, at the very least, similar to a low degree. The GC noted that the notion of retail includes both sales in physical premises and online and that, contrary to the BoA’s conclusion, “retailing of sporting articles” encompasses online sales as well.

Registration no. 28741010 — Registration NO. 28741010

In its grounds of appeal, Wallapop claimed that the GC erred in law by concluding that the services covered by Wallapop’s mark are similar to a low degree to the services covered by Unipreus’s earlier registration. Wallapop claimed first that the GC misconstrued the concept of “online marketplace”, referring to Article 4(1)(f) of Regulation 524/2013, and secondly that the GC misconstrued the relevant factors that should be taken into account in the assessment of the similarity of services.

Key question

The key question that arose from the judgment under appeal was: are online trading services relating to the operation of an online marketplace different or similar to retailing services? In considering this, the AG considered whether: (1) the distribution channels of the marks in question are similar; (2) the services to which Wallapop’s application refers are in fact “retail services”; (3) the intended purposes and public perception of the services in question are similar; and (4) the services in question are in competition.

The AG referred to the reasoning of the Court in Praktiker (C-418/02), where the Court concluded that offering a variety of services aimed at inducing the consumer to conclude a transaction is encompassed within “retail services”. The AG also followed Tulliallan Burlington (C-155/18 P to C-158/18 P), in which the CJEU confirmed that the operator of a luxury shopping arcade falls within the notion of “retail”. Here the CJEU noted that retail services are the services separate from the act of sale, bringing together a variety of goods and services which seek to ensure that the consumer purchases those goods sold in the store.

By analogy with the CJEU’s rationale in Tulliallan Burlington, it was the AG’s opinion that Wallapop’s retail online platform is, in effect, “a form of ‘virtual’ shopping arcade which can be accessed via the internet”. Essentially, the AG’s reasoning was that although Wallapop claimed it is not engaged in “retailing” as such, the intermediation services that Wallapop provides are sufficient to fall within the class 35 definition of “retail services”. The AG agreed with the GC that all the services Wallapop provides, including providing business information that is useful for sales, fall under the definition of retail services since, ultimately, these services have the objective of inducing the sale of products to consumers.

The AG also noted that the traditional distinction between shops selling to consumers in bricks-and-mortar premises and those entities engaging in direct online sales has been undermined by technological developments and changing patterns of consumer behaviour.

He pointed out that consumers who are searching for particular sports footwear could find the same products on both websites, even though the sellers on Wallapop’s site are third-party sellers. The AG stated that consumers can compare the offer for the same product on Unipreus’ site and on Wallapop’s site. On this basis, the AG concluded that there is a risk of confusion as they share similar channels of distribution and are indeed in competition with each other.

Ultimately, in the AG’s opinion, the GC’s reasoning was sound and there was no error in law. The AG disagreed with Wallapop’s submission that the online nature of its intermediation services takes it outside the scope of retail services.

Wallapop’s trade mark application contained, inter alia, “providing evaluative feedback and ratings of sellers’ goods and services and providing of business information” and in the AG’s opinion, these terms are offerings separate from the act of sale that are principally similar to the offerings that a traditional shopping arcade owner would provide.

Therefore, Wallapop’s online trading services are similar in nature to “retail services” for the purposes of class 35. The AG proposes that the CJEU dismisses Wallapop’s appeal and upholds the decision of the GC.

The AG in this matter raises interesting points regarding the distinctions between intermediate online services, online trading and retail trading in physical stores. It remains to be seen whether the CJEU will adopt the AG’s opinion. However, following Praktiker and Tulliallan Burlington, it is likely that the CJEU will follow precedent in encompassing the facilitators of sales within the definition of retail sales.

Key points

The services provided by the operators or facilitators of online marketplaces might fall under “retail services” in class 35 even if the operators are not selling goods directly to consumers
The provision of certain informational services might be viewed as part of a retail service if they aim to facilitate the sale and ensure the consumer purchases those goods