By judgment dated 3 December, 2018, Section 8 of the Alicante Court of Appeal, acting as the EU Trademark Court, has declared that a product marketed by the companies Productos Ibicencos, S.L. and Aromáticas de Ibiza, S.L. under the sign "IBIZA BEACH", consisting of liquor bottles whose appearance was highly similar to the "MALIBÚ" bottle infringes theTHE ABSOLUT COMPANY, AB's (hereinafter, TAC) three-dimensional and graphic trademarks on the shape of its well-known "MALIBÚ" liquor bottle.

The background of the case was the following:

On 24 November 2017, TAC and PERNOD RICARD ESPAÑA, S.A. filed a lawsuit against the companies Productos Ibicencos, S.L. and Aromáticas de Ibiza, S.L. before the EU Trademark Courts for infringement of two three-dimensional EU Trademarks and a Spanish graphic trademark, which protect the shape and appearance of the well-known liquor bottle "MALIBÚ" (both the naked/unlabelled bottle and the labelled bottle) and, additionally, for unfair competition, for marketing a liquor in a bottle with a white body and a black stopper very similar to the "MALIBÚ" bottle, even though it was referred to as "IBIZA BEACH".

The defendants denied the infringement and, among other issues, alleged a lack of use of the TAC Trademarks.

EU Trademark Court No. 2 did not evaluate the trademark action because it upheld the defendants' non-use exception. However, the Court upheld the subsidiary action for unfair competition on the grounds that the defendants' product "IBIZA BEACH" induced confusion in the consumers and took unfair advantage of the reputation of the plaintiffs' "MALIBÚ" product.

Although this judgment was favourable, TAC filed an appeal before the EU Trademark Court of Appeal insisting that the main trademark infringement action be upheld. The appeal was upheld in its entirety by the Court of Appeal, which stated the following:

-Rejection of the non-use exception of the TAC Trademarks raised by the defendants on the grounds that the Court of first instance made mistakes in the assessment of the evidence on use of the trademarks which was sufficiently proved by TAC's submission of numerous sales invoices of the "MALIBÚ" bottle in different EU States. Furthermore, on application of the ECJ case-law, the Court found that the trademarks on the "MALIBÚ" bottle without a label were being used, even when the product was marketed with a label.

-TAC trademarks are declared clearly distinctive. In this respect the Court of Appeal takes into account a survey submitted by the plaintiffs which shows that 79.1% of the respondents, and 86.3% of those under the age of 30, associate the TAC Trademarks on the naked (unlabelled) "MALIBÚ" bottle with the product "MALIBÚ".

-The well-known character of the TAC Trademarks is considered proven. Apart from the conclusions of the survey provided by the plaintiffs, the Court of Appeal takes into account, among other means of evidence, the high sales figures, the investment in advertising, a decision of the SPTO recognising the "well-known" status of the EU Trademark consisting of the "MALIBÚ" bottle (with label) and the certification of the Association for the Defence of the Trademark.

In light of these premises, the Court of Appeal fully upholds the infringement action because of:

(i) The likelihood of confusion (Articles 9.1.b) EUTMR and 34.1.b) Spanish Trademarks Act) between the TAC trademarks and the defendant's "IBIZA BEACH" product, in view of the high similarity between the latter and the signs protected by the trademarks, and the identical appearance of the goods. It should be noted that, for the Court of Appeal, the different word elements ("IBIZA BEACH"/"MALIBÚ") are not enough to avoid that risk.

(ii) The unfair advantage of the TAC Trademarks (Articles 9.1.c) EUTMR and 34.2.c) Spanish Trademarks Act), since the closeness sought by the defendants in marketing their liquor bottles with an appearance very similar to the well-known TAC Trademarks is parasitic, as in doing so the defendants sought to take advantage of their reputation.

The Court of Appeal also upheld the action for damages brought by TAC. The amount of compensation will be determined in the enforcement proceedings.

This judgment has not been appealed by the defendant and has therefore become final.

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