As the new year has been off to a good start, it is time to look back at some of the most interesting IPR disputes resolved in Finland last year. This news update will focus on three major trademark cases and one company name case decided by Finnish courts in 2022.
The Market Court has issued a decision concerning the protection of a well-known trademark in the context of conceptual similarity
On 17 February 2022, the Market Court annulled Lidl Stiftung & Co. KG’s (“Lidl”) trademark TUKKIJÄTKÄ (No 266777) in the decision MaO:H37/2022 based on the application of Valio Oy (“Valio”) as proprietor of the KOSKENLASKIJA trademarks. Valio is a leading Finnish producer of dairy products and its well-known trademark KOSKENLASKIJA is used for a processed cheese product. The word koskenlaskija means “rafter”. Lidl had likewise registered the trademark TUKKIJÄTKÄ for a processed cheese product, and the word tukkijätkä in turn means “lumberjack”. The dispute in the Market Court concerned the invalidation of the registration of the trademark TUKKIJÄTKÄ on the basis of Valio’s earlier well-known KOSKENLASKIJA registrations, the similarity between those trademarks in terms of their semantic content and their design, and the characteristics of the goods.
Lidl argued that the KOSKENLASKIJA trademarks are not well-known and that even if the trademarks or some of them were to be considered as well-known trademarks, the protection of well-known trademarks could not be applied in this case, because the trademarks in question were both visually and phonetically different. According to Lidl, there is also no connection between the meanings of the marks, since the words “tukkijätkä” and “koskenlaskija” are not synonymous and do not refer to the same concept and, therefore, consumers do not perceive them as similar. Lidl thus argued that the mere fact that the semantic content of the trademarks was related to the same theme was not a sufficient basis for the trademarks to be perceived as similar by the general public. As opposed to Lidl’s argumentation, the Market Court concluded that despite the phonetic and visual differences between the marks, they were similar in meaning, they concerned the same type of goods and the Koskenlaskija cheese has a strong distinctiveness and reputation. Thus, the conceptual similarity was considered sufficient to create an association between the two trademarks.
As regards the question whether the registration of TUKKIJÄTKÄ was unfounded and whether the use constituted an unfair advantage, the Market Court found that Lidl had not justified its choice of trademark in such a way as to show that it had sought to create a distinctive mark for its goods. It was not clear why Lidl had chosen as the name of its processed cheese a word which referred to the name used by Valio for its processed cheese and which, moreover, corresponded in appearance to the image depicted in the Koskenlaskija figurative marks. The Market Court also emphasized that neither the word “tukkijätkä” in Lidl’s trademark nor the word “koskenlaskija” in Valio’s trademarks, nor the images on the packaging, have any connection with cheese products.
The Market Court also held that Lidl had imitated the packaging of Valio’s Koskenlaskija processed cheese on the packaging of its Tukkijätkä product. In addition, Lidl used the advertising slogan “Tukkijätkä-sulatejuustossa on luonnetta kuin kuohuvassa koskessa” (in English “The Tukkijätkä cheese has the character of white-water rapids”), which, according to the Market Court, also referred to Valio’s product. This further reinforced the Market Court’s assessment that Lidl’s purpose in using the TUKKIJÄTKÄ trademark on its cheese was for consumers to associate it with Valio’s Koskenlaskija cheese, and that Lidl thereby intended to take advantage of the reputation of Valio’s well-known trademarks. On the above basis, the Market Court referred the case back to the Finnish Patent and Registration Office (the “Patent Office”) for annulment. Lidl applied for a right to appeal the decision to the Supreme Administrative Court, but the application was rejected.
The Supreme Administrative Court has issued a ruling on acquired distinctiveness of a trademark and its effect on the registration of a modernised version of the same
In April 2022, the Supreme Administrative Court issued a ruling on the acquired distinctiveness through use in its decision KHO:2022:44. Kiilto Family Oy (“Kiilto”) had applied for registration of the figurative mark KiiLTO PRO, which was a modernised version that differed to some extent from the company’s earlier KIILTO figurative mark. Both figurative marks were dominated by the word “kiilto” (shine in English), and the blue color schemes of the marks were also similar. The mark was mainly used for certain adhesives, industrial detergents and chemicals.
The Patent Office had rejected Kiilto’s application for registration of the KiiLTO PRO figurative mark, partly on the grounds that the mark was not distinctive for goods in Classes 1 and 2 and partly since it had not been shown that the mark had acquired distinctiveness through use. The matter was then referred to the Market Court, which in its judgment MaO:573/20 held that the KiiLTO PRO figurative mark cannot be considered a mere modernised version of the earlier Kiilto figurative mark and consequently that Kiilto’s evidence concerning the earlier KIILTO figurative mark’s distinctiveness acquired through use cannot be taken into account when assessing whether the current KiiLTO PRO figurative mark has acquired distinctiveness through use.
The Supreme Administrative Court found no reason to assess the case differently to the extent that the Market Court had held that the KiiLTO PRO figurative mark was per se devoid of distinctive character in relation to goods in classes 1 and 2. The Supreme Administrative Court, however, considered that since the dominant part of both figurative marks is the word “kiilto” and the color schemes of the marks are similar, the evidence concerning the prior KIILTO mark’s acquired distinctiveness through use can also be taken into account in the assessment. Merely adding the word “pro” to the new KiiLTO PRO figurative mark to describe the nature, character and purpose of use of the goods does not change the overall impression of the mark in such a way that it can no longer be associated with the earlier KIILTO figurative mark of the same commercial origin. The court further noted that statements of reputation have been provided by the relevant industry and by prominent organisations representing consumers and traders and these statements can be considered impartial and reliable and thus constitute strong evidence of long-standing use and reputation of the mark. Moreover, KIILTO’s share of total sales of certain adhesives and of domestic sales of industrial detergents and chemicals in the relevant years has been significant, which was relevant in determining the question of the distinctive character of the mark through use.
Based on the above, the Supreme Administrative Court held that although the market survey submitted by Kiilto cannot be considered sufficient in itself to prove the recognition and extensive use of the KiiLTO PRO figurative mark for each of the goods in classes 1 and 2, these goods are clearly linked to each other in such a manner that a diligent target audience could, on the basis of the extensive and long-standing use of the applicant’s KIILTO sign, link the KiiLTO PRO figurative mark to the same commercial origin. The Supreme Administrative Court considered that the evidence submitted by Kiilto, taken as a whole, shows that the KiiLTO PRO figurative mark had acquired distinctiveness through use before the date of the application for registration also for the goods in question in classes 1 and 2.
The Court of Justice of the European Union has issued a preliminary ruling on trademark exhaustion and legitimate interests in connection with the marketing of refilled bottles in a case pending in the Finnish Supreme Court
In the case Soda-Club (CO2) SA and SodaStream International B.V. (“SodaStream”) versus MySoda Oy (“MySoda”), SodaStream claimed that MySoda infringed Soda-Club SA’s trademarks by unauthorised use of the trademarks in the marketing and sale of carbon dioxide bottles in Finland manufactured by SodaStream and bearing SodaStream’s trademarks. SodaStream’s labels had been removed from such bottles and replaced by new labels by MySoda. SodaStream also asked the Market Court to prohibit MySoda from continuing or resuming the infringing actions under a penalty payment of EUR 100 000 and demanded compensation for the unlawful use of the trademarks and damages for the harm caused by the infringement. MySoda contested SodaStream’s claims and invoked the principle of trademark exhaustion.
Facts of the case: SodaStream sells carbonated soda machines and refillable carbonated soda bottles under the trademarks SODASTREAM and SODA-CLUB. All carbonated soda machines require a refillable carbonated soda bottle, and the bottles are compatible with all SodaStream carbonated soda machines. Consumers can return used bottles to retailers, such as large supermarkets, and have them refilled. Retailers deliver empty bottles, regardless of the labels or branding on the bottles, for refilling to SodaStream, MySoda, AGA or any other equivalent company, depending on which of these refill companies the retailer works with. Upon refilling, the bottle is inspected and cleaned and, if necessary, a new label is affixed, indicating the gas filled and who acted as filler.
MySoda has been distributing carbonated bottles since 2016. Some of the carbon dioxide bottles had originally been issued by SodaStream and then returned to MySoda for refilling. At the time of refilling, MySoda had removed the SodaStream label from the bottles and replaced it with its own, whereas the SodaStream brand marked on the bottle remained visible. After refilling, MySoda had sold and marketed the bottles with two different types of labels, pink and white. The pink labels were dominated by the MySoda logo. The white labels, on the other hand, were dominated by the word ‘carbon dioxide’ in five different languages. The white label also stated that the bottle was filled by MySoda and that neither MySoda nor its MySoda brand had any connection with the original supplier of the bottle or with the brands marked on the bottle.
There are legitimate reasons for a trademark proprietor to oppose further commercialisation of the goods, particularly where the condition of the goods changes or deteriorates after they have been placed on the market. There must also be no misunderstanding regarding a financial link between the retailer of the refilled products and the trademark proprietor. The question was whether SodaStream had legitimate reasons to oppose the new label.
The Market Court (MaO:388/19) found that the marking on the white label did not give a false impression of a link between the two companies, but that there was a legitimate reason to prohibit the use of the trademark on the pink label, since the SodaStream trademarks on the bottles were marked in relatively small font while the MySoda trademark was printed in large letters on said label, and since there was no indication on the label that MySoda had no connection with SodaStream. The Market Court based its ruling on EU case law, according to which there is a legitimate interest to oppose the use for example when goods bearing a trademark are altered or deteriorate. There is also a legitimate interest where a third party using the same trademark seriously damages the reputation of the trademark or where the third party’s behavior gives a false impression that it belongs to the distributor’s distribution network or that there is a special relationship between the two.
Following the Market Court’s ruling, the case was brought before the Supreme Court, which in March 2021 referred the case to the Court of Justice of the European Union (“ECJ”) for a preliminary ruling, asking essentially whether the nature of the case involves repackaging in accordance with the case law of the ECJ and whether the re-labelling as such jeopardises the rights of the trademark proprietor or whether the decisive fact is that the target public is deemed to understand that the label refers only to the origin of the carbon dioxide despite the trademark proprietor having determined its own label for the bottle.
In October 27, 2022, the ECJ issued its preliminary ruling on the matter and stated that EU trademark law must be interpreted as meaning that the proprietor of a trademark who has marketed goods in a Member State bearing that trademark and which are intended to be reused and refilled a large number of times is not entitled, on the basis of those provisions, to oppose the continued marketing of those goods in that Member State, by a retailer who has refilled the goods and replaced the label bearing the original trade mark with another label, while leaving the original trade mark visible on the goods. A condition for the foregoing is that that new labelling does not give consumers the false impression that there is an economic link between the retailer and the trademark proprietor. In determining whether there is such a likelihood of confusion, an overall assessment must be made in the light of the information contained on the product and its new labelling as well as in the light of the distribution methods commonly used in the sector concerned and the consumers’ awareness of those methods.
In the light of the ECJ ruling, there is no reason to believe that the Supreme Court will significantly change the ruling of the Market Court. The preliminary ruling is important because the case concerns a trademark infringement which requires an interpretation of the EU Trademark Regulations and the Trademark Directives on the principle of exhaustion of trademark rights. There are no detailed rules in EU legislation and there has so far been limited court praxis on the conditions under which the trademark proprietor has a legitimate interest in opposing subsequent marketing of refilled goods placed on the market, and thus the ruling plays an important role.
The Supreme Court has given a precedent on the use of an auxiliary company name
In June 2022, the Supreme Court issued a precedent (KKO:2022:41) concerning the use of an auxiliary company name. X-WK Logistics Oy Ab (“X-WK Logistics”) had requested that the registration of Blue Water Shipping Oy’s (“Blue Water Shipping”) auxiliary company name WIKESTRÖM & KROGIUS is cancelled as X-WK Logistics considered that the name had not been used by Blue Water Shipping during the last five years in the manner referred to in Section 19 (2) of the Company Names Act. According to Section 19 (2) of the act, a court may on application cancel the registration of a company name (including an auxiliary company name) if the company name has not been in use for the last five years and the proprietor does not show good cause for the non-use. The auxiliary company name Wikeström & Krogius was transferred to Blue Water Shipping in 2013 following the purchase of the business of Oy Wikeström & Krogius Ab and it had been registered for the provision of transport, forwarding and logistics services.
X-WK Logistics argued that Blue Water Shipping had systematically stopped using the auxiliary company name after the acquisition of the business, as the auxiliary company name had not been used to identify the business activities carried out by Blue Water Shipping, but only in an overlapping field of activity and together with the names of the parent company. The Market Court noted that the auxiliary company name had been used during 2015-2017 in emails in the form “Wikeström & Krogius part of Blue Water Shipping”, referring mainly to the Danish parent company in the signature part (see picture below) of the employees transferred in connection with the transfer. The court also noted that the auxiliary company name had been used only on the leased trailers which had been transferred in connection with the transaction (but not on new ones), and on the website only in connection with the operations in two of the three locations covered by the transaction, whereas the group as a whole had operations in more than 60 countries.
The Market Court concluded that Blue Water Shipping had failed to prove that the auxiliary company name had been in use during the relevant five-year period in the manner required by the Company Names Act, and consequently cancelled the registration. The Supreme Court granted Blue Water Shipping leave to appeal.
In its reasoning, the Supreme Court noted that according to the preparatory works to the Company Names Act, an auxiliary company name may be used, for example, in advertising and other marketing as an independent designation without indicating its connection with the company itself. Furthermore, the use of the auxiliary company name presupposes that the name has appeared, for example, in the company’s advertisements, business documents or in other similar contexts. The Supreme Court noted that the use of the auxiliary company name had rapidly declined after the transaction in 2013 and that the name was no longer in use after 2017, but took a more pragmatic view, emphasising that the same principles for assessment can be applied in this case as when assessing whether a trademark has been in use. The main question is whether the use be considered to have taken place to create or maintain a market for relevant products or services and not merely to maintain protection. The Supreme Court held that the auxiliary company name Blue Water Shipping had been in use as required by the Company Names Act during the relevant five-year period although not to a large extent, but nevertheless to an extent that could be considered normal practice in the industry and in connection with a business transaction. The Market Court’s ruling was therefore set aside, and the action brought by X-WK Logistics was dismissed.