Similar trademarks and the risk of confusion in the European Union

As is known, European Union trademarks are unitary in nature and have the same effect in the entire Union (article 1 of Regulation (CE) No. 207/2009 of the Board, on 26 February 2009, on EU trademarks).

Consequently, the European Union trademark courts which have the corresponding territorial jurisdiction are competent to rule on European Union trademark violations committed in any Member State (art. 98.1 of the cited Regulation, in relation to art. 97).

Therefore, the European Union trademark courts are competent to prohibit, in the entire territory of the Union, the use of a trademark infringing a registered European Union trademark (art. 102.1 of the Regulation).

That said, what happens if the European Union court in charge of judging a given case comes to the conclusion that the use of the defendant’s trademark can cause a risk of confusion in one part of the European Union, but not in another?

This situation raises the issue resolved by the ruling of the European Union Court of Justice on 22 September 2016 (C-223/15).

The facts were the following: the German company combit Software GmbH is the owner of various German and European Union trademarks that protect the expression combit for computing products and services. For their part, the Israeli company Commit Business Solutions Ltd sells, with the logo Commit, software over the internet in various countries (including, when required, Germany, where the marketing takes places on a German website with delivery in the country where the software is purchased).

The German company sued Commit Business Solutions asking that it be prohibited from marketing software in the entire European Union with the trademark Commit and, in addition, that the prohibition should be extended to Germany exclusively.

The court of first instance (Landgericht Dusseldorf acting in their capacity as a European Union trademark court -), dismissed the main claim, but considered the subsidiary.

Commit Business Solutions appealed to Oberlandesgericht Düsseldorf, which concluded that, while German speaking consumers are subject to a risk of confusion by the use of the Commit trademark, in light of the similarity to combit, English speaking consumers can easily distinguish between the two trademarks, considering above all that any phonetic similarity is counteracted due to the conceptual difference (the English verb to commit versus the reference of com to computer and of bit to binary digit).

In this situation, the German court of appeal referred the following questions to the European Court of Justice:

For the evaluation of risk confusion between a Union word trademark and a designation which presumably violates that trademark, what consequence does the fact that, from the point of view of the average consumer in some member States, the phonetic similarity between the trademark and the designation is neutralized by a conceptual difference, but not from the point of view of the average consumer in other member States have?

a) In order to evaluate the risk of confusion, is the point of view of the average consumers in the first members States decisive, or that of the average consumer in other member States, or the average fictitious consumer of all member states?

b) Does a trademark violation in the entire EU territory have to be assessed when there is only a risk of confusion in one part, or does it have to differentiate between the different member states?

The Court of Justice, in the ruling in question, considered that European Union trademark courts can assess (if they have the corresponding territorial competence according to art. 97 of Regulation (CE) No. 207/2009) the existence of an infraction in any member State of the EU and that, although a risk of confusion that exists in only one part of the European Union should lead the court to declare the existence of a European Union trademark infraction, when the European Union trademark court in question assesses that the risk of confusion will take place in one part of the Union but not in another, it shall exclude from the ruling of a prohibition of use the zones in the European Union where it finds that there will not be a risk of confusion. The Court of Justice is careful to require that the parts of the European Union to which the usage ban has not been extended be meticulously defined in the ruling:

It is also necessary that the European Union trademark court precisely identify the part of the Union in which it finds that there is no damages or risk of confusion for the functions of the trademark, in such a way that it unambiguously deduces from the decision rendered in virtue of article 102 of Regulation n.˚ 207/2009 which part of the Union territory is not affected by the usage ban of the trademark in consideration.

Below we reproduced the final response given by the Court of Justice to the question referred to them by the Oberlandesgericht Düsseldorf:

Article 1, section 2, article 9, section 1, letter b), and article 102, section 1, of Regulation (CE) No. 207/2009 of the Board, on 26 February 2009, on European Union trademarks, must be interpreted as, when a European Union trademark court finds that the use of a trademark creates a risk of confusion with a European Union trademark in one part of the Union, while not creating that risk in another part, the court shall conclude that there is a violation of the exclusive right conferred by that trademark and issue a cessation order of its use in the entire European Union, with exception of the areas in which it has been established that there is no risk of confusion.

The ruling will have important consequences for legal practice relating to European Union trademarks. Firstly, it is foreseeable that lawyers for defendants of European Union trademark infringement will try to argue and prove that at least in certain areas of the European Union there is no infringement due to linguistic or other reasons. There is reason to believe, therefore, that frequently they will pose further requests in response to the claim excluding certain zones of the European Union from the scope of the infringement. For judges, at least when there are corresponding requests from the party, the conclusion that there is risk of confusion on part of the consumers in the Union will be insufficient to issue extensive cessation orders to the entire territory. Judges will have to make a more detailed analysis considering the situation in different territories of the European Union.

For further information on similar trademarks and the risk of confusion,

Please note that this article is not intended to provide legal advice.

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