HKScan Finland Oy (HKScan) is a Finnish food manufacturer. The company specializes in meat foods and products. HKScan has many trademarks and a European Union trademark (EUTM) 005379061, registered in 2007, is one of them. The mark is registered in classes 5, 29, 30, 31, 32, 35 and 39.
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| EUTM no. 005379061. |
Verdener Keks- und Waffelfabrik Hans Freitag GmbH & Co. KG (Hans Freitag) is a German company specialized in bakery products. The company has a EUTM 011473031, registered in 2013 and in classes 29 and 30.
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| EUTM no. 011473031. |
In 2015, HKScan launched trade mark infringement proceedings against Hans Freitag in the Market Court.
HKScan requested that the court:
1. confirms that the EUTM 005379061 has a reputation in Finland since 2010 or not later than 2013 and primarily for groceries and secondarily for meat products.
2. (i) primarily, confirms that Hans Freitag is guilty of trademark infringement and prohibits the company from using its trademark in Finland for groceries. The court should impose a conditional fine of 200 000 euros to reinforce the order; and
(ii) secondarily, confirms that Hans Freitag is guilty of unfair business practice and prohibits the company from taking advantage of the goodwill of the HKScan's mark and from causing detriment to the mark. The court should impose a conditional fine of 200 000 euros to reinforce the order.
3. orders Hans Freitag to pay reasonable compensation to HKScan, in total 77 250 euros.
4. orders Hans Freitag to pay damages to HKScan, in total 100 000 euros.
5. orders Hans Freitag to pay HKScan's legal fees, in total 98 643,03 euros plus legal interest.
The Market Court issued its decision 355/16 on 15 June 2016.
In its decision, the court assesses first whether the HKScan's seal trademark has a reputation in Finland. Then it assesses whether the Hans Freitag's trademark use is infringing. If the court does not find any infringement, it still has to assess whether Hans Freitag is guilty of unfair business practice according to the Unfair Business Practices Act (1061/1978).
Does HKScan's seal trademark have a reputation in Finland?
The court stated that the concept of a trademark with a reputation is based on European Union legislation and on the rulings of the Court of Justice (CJ). The court referred to a CJ decision C-375/97 General Motors (paras 26 and 27) where CJ ruled that:
"The degree of knowledge required must be considered to be reached when the earlier mark is known by a significant part of the public concerned by the products or services covered by that trade mark. In examining whether this condition is fulfilled, the national court must take into consideration all the relevant facts of the case, in particular the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the size of the investment made by the undertaking in promoting it."
HKScan provided evidence that it had used the HK seal trademark since 2007. The company also provided evidence that it had used somewhat similar round trademarks since 1960's. Those marks also had the letter combination HK. The court stated that the current seal trademark does not benefit directly from the duration and extent of use of the earlier marks, but the letter combination HK has been in use since 1960's and that can have some effect when one assesses the reputation of the current HK seal mark.
According to the court, HKScan has put significant financial efforts (millions of euros per year) in order to market its products, mainly meat products. The HK seal trademark has been very visible in that intensive marketing and the marketing has covered the whole Finland.
HKScan also provided a market survey. According to the market survey, 94,8 percent of the respondents connected the HK seal trademark with HKScan from a list that had 14 different manufacturers. Therefore, the prompted (or aided) awareness was very high. The court acknowledged this survey but also stated that the survey question itself aided the respondents to choose HKScan from the list, because the company name and the trademark both have the letter combination HK in them. The court also paid attention to the fact that the market survey had been done in March 2014. The court found this problematic because, according to HKScan, the HK seal trademark has had a reputation in Finland since 2010 or not later than 2013. The court continued by stating that the significance of the survey can not be very high when one assesses the reputation of the mark in 2010 because the mark has been in use for a relatively short period of time. Therefore, the market survey has much more significance in providing that there has been a reputation in 2013.
The court concluded that the HK seal trademark has had a reputation in Finland since 2013, despite the fact that the market survey had some debilitating factors. The court specified that the reputation of the mark is only regarding meat products, not in general.
Is there an infringement?
HKScan argued that Hans Freitag has infringed its exclusive rights provided in Article 9(1)(c) of the Community trademark Regulation No 207/2009:
1. A Community trade mark shall confer on the proprietor exclusive rights therein. The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:
(c) any sign which is identical with, or similar to, the Community trade mark in relation to goods or services which are not similar to those for which the Community trade mark is registered, where the latter has a reputation in the Community and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the Community trade mark.
The court started its analysis by referring to the case-law of CJ. CJ has ruled, in essence, that it is sufficient for the degree of similarity between the mark with a reputation and the other sign to have the effect that the relevant section of the public establishes a link between the sign and the mark. No likelihood of confusion is required between them on the part of the relevant section of the public (see C-408/01 Adidas Benelux, para 31).
The existence of the link mentioned above must be assessed globally, taking into account all factors relevant to the circumstances of the case. According to C-252/07 Intel (para 42), those factors include:
- The degree of similarity between the conflicting marks, in particular visual, aural or conceptual similarity (see C-408/01 Adidas Benelux, para 28).
- the nature of the goods or services for which the conflicting marks were registered, including the degree of closeness or dissimilarity between those goods or services, and the relevant section of the public;
- the strength of the earlier mark's reputation;
- the degree of the earlier mark's distinctive character, whether inherent or acquired through use;
- the existence of the likelihood of confusion on the part of the public.
So the court had to assess first whether there is a similarity link between the HK seal trademark and the hf trademark. If such link exists, the court has to then asses whether the use of the hf trademark without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the HK seal trademark (see C-487/07 L'Oréal, paras 37-38).
The conflicting marks both have seal elements and a letter combination in the middle. Thus, the visual similarity is somewhat high on the part of the relevant section of the public, even though there are some differences, such as the vertical ribbon element in the hf trademark, the text elements circling the logo and the circle and wing element in the HK seal trademark above the letter combination HK. However, this visual similarity, according to the court, is primarily caused by the shapes and colors that are typically used in different seals or quality stamps regarding different groceries.
After this, the court assessed the aural similarity. The HK seal trademark has a letter combination 'HK', which is pronounced as 'hookoo' among the relevant Finnish public. On the other hand, the hf trademark has several text elements for the public to pronounce and only the letter combination 'hf' is similar to the 'HK'. Therefore, there is a minimal degree of aural similarity.
The court was not so impressed with the conceptual similarity either. The court stated that the letter combinations 'HK' and 'hf' do not have any meanings as such, even though part of the relevant public understands that the letter combination 'HK' stands for 'Helsingin kauppiaat' ('Helsinki Merchants'). Furthermore, the public understands that the text element 'HANS FREITAG' refers to a person and the meaning of the German text element 'Keks- und Waffelbäckerei' can be also understood because of the knowledge of Swedish language among the relevant Finnish public.
Since the seal shapes and colors are fairly typical in trademarks representing grocery products, the court considered that the text elements 'HK', 'hf' and 'HANS FREITAG' are the dominant components of the conflicting marks. There is a minimal degree of similarity in this regard.
The court then compared the goods and stated that the bakery products are not, per se, similar to meat products, but they are both groceries and have in general the same distribution channel, the same relevant public and the same purpose of use. Therefore, the goods are fairly identical.
Even though the HK seal trademark has a reputation in Finland and it is distinctive, the court concluded, based on the analysis above, that the relevant section of the public does not establish a link between the conflicting marks. Therefore, there were no need to assess the remaining requirements (detriment to the distinctive character of the mark, detriment to the repute of that mark and unfair advantage taken of the distinctive character or the repute of that mark).
Unfair business practice (reputation parasitism)?
HKScan argued that Hans Freitag has, by using the hf trademark, created an association between the mark and the HK seal trademark and therefore has taken undue advantage of the goodwill of the HK seal trademark. HKScan referred to section 1 paragraph 1 of the Unfair Business Practices Act. According to that rule, good business practice may not be violated nor may practices that are otherwise unfair to other entrepreneurs be used in business.
It has been ruled in the Finnish case-law that the section 1 paragraph 1 of the Unfair Business Practices Act prohibits anyone from taking undue advantage of another's goodwill (in trademarks, products, business concepts etc). This is also known as 'reputation parasitism' ('maineen norkkiminen' in Finnish).
Also according to Article 15 of the ICC Code on Advertising Practice, marketing communications should not in any way take undue advantage of another firm's, individual's or institution's goodwill in its name, brands or other intellectual property, or take advantage of the goodwill earned by other marketing campaigns without prior consent.
The court stated that there are two requirements for reputation parasitism. Firstly, the alleged victim mark of the reputation parasitism has to be well-known in the market and have a reputation. Secondly, there has to be an association between the conflicting marks and the one who has created the association is aiming to exploit the goodwill of the other mark. The court added that the reputation parasitism does not require, per se, that the conduct misleads the average consumer about the commercial origin of the product.
The court found earlier that the HK seal trademark has a reputation in Finland since 2013. Therefore it has, according to the court, the goodwill that the assessment of the reputation parasitism requires.
HKScan argued that Hans Freitag has, by using the hf trademark, created an association between the mark and the HK seal trademark and therefore has taken undue advantage of the goodwill of the HK seal trademark. HKScan referred to section 1 paragraph 1 of the Unfair Business Practices Act. According to that rule, good business practice may not be violated nor may practices that are otherwise unfair to other entrepreneurs be used in business.
It has been ruled in the Finnish case-law that the section 1 paragraph 1 of the Unfair Business Practices Act prohibits anyone from taking undue advantage of another's goodwill (in trademarks, products, business concepts etc). This is also known as 'reputation parasitism' ('maineen norkkiminen' in Finnish).
Also according to Article 15 of the ICC Code on Advertising Practice, marketing communications should not in any way take undue advantage of another firm's, individual's or institution's goodwill in its name, brands or other intellectual property, or take advantage of the goodwill earned by other marketing campaigns without prior consent.
The court stated that there are two requirements for reputation parasitism. Firstly, the alleged victim mark of the reputation parasitism has to be well-known in the market and have a reputation. Secondly, there has to be an association between the conflicting marks and the one who has created the association is aiming to exploit the goodwill of the other mark. The court added that the reputation parasitism does not require, per se, that the conduct misleads the average consumer about the commercial origin of the product.
The court found earlier that the HK seal trademark has a reputation in Finland since 2013. Therefore it has, according to the court, the goodwill that the assessment of the reputation parasitism requires.
Now the court had to assess whether Hans Freitag has, while using the hf trademark, created an association between the hf trademark and the HK seal trademark among the reasonably well-informed and reasonably observant and circumspect average consumers.
The court referred to its analysis above regarding the absence of the similarity link between the conflicting marks and ruled that an average consumer would not associate the hf trademark with the HK seal trademark. Interestingly enough, HKScan had provided evidence that it has sometimes used the HK seal trademark with a blue ribbon element, but the court did not change its stance. Therefore, Hans Freitag has not taken undue advantage of the goodwill of the HK seal trademark.
The action was dismissed.
The court referred to its analysis above regarding the absence of the similarity link between the conflicting marks and ruled that an average consumer would not associate the hf trademark with the HK seal trademark. Interestingly enough, HKScan had provided evidence that it has sometimes used the HK seal trademark with a blue ribbon element, but the court did not change its stance. Therefore, Hans Freitag has not taken undue advantage of the goodwill of the HK seal trademark.
The action was dismissed.
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