Ioannis Psarakis, Lecturer, LL.M (III), PhD Cand.
(republished from www.epixeiro.gr)
Summary: Trademark registration is undoubtedly a smart choice for a business. The trademark powers and is powered by its products and/or services, allowing the creation of a closed loop in which every effort of the business is capitalized (in multiple ways) - this capital ultimately also strengthens its products or services in the competitive struggle. The numbers are the most convincing proof. It is therefore in the interest of the undertaking to seek to protect its trade mark and to defend its uniqueness. The most common threat consists of what in legal science we call the 'risk of confusion'. A good understanding of the concept is useful to every entrepreneur.
Ι. The numbers
According to a survey by the EUIPO (European Union Intellectual Property Office) in cooperation with the EPO (European Patent Office), companies that invest in intellectual property rights (such as trademarks) show a 55% increase in their revenue per employee ratio.
Indeed, the trademark is an important growth tool for a company. At the same time, it is a key asset with great potential. Based on data and scientific studies, it generates profits. The market itself recognises this: according to official figures from the European Union Intellectual Property Office (EUIPO), since 2008 there has been a steady increase in the number of applications for EU trademark registrations. In 2020, 176,992 applications were filed, more than double the 87,498 applications recorded in 2008.
In the light of the above findings, the special treatment reserved by businesses to protect their trademarks from potential infringements is justified.
But what is the reason for infringement of the trade mark which is most frequently found in administrative and judicial practice? It is the 'likelihood of confusion'. Familiarity with this term is useful for every signatory.
II. The basic function of the signal - when it is violated
The following is a decisive help in presenting the issue. They are easy to understand and are "building blocks" for trademark law.
The fundamental function of a trademark consists of what in legal science we call the "function of origin". The trade mark enjoys protection because it has, in essence, the following function: it distinguishes goods from one another on the basis of their origin. This in turn benefits not only consumers (saving them time in finding the goods they want), but also businesses, which see in their trade mark the vehicle in which they can capitalise on a large part of their investments. Any 'good performance' of a particular product is capitalised by 'building' on the brand it carries. From now on, the consumer will be more favourable to the products which the branded company puts on the market. This constitutes a gain, a lead on the market, from day 1.
In other words, and to put it more graphically, the good performance of a particular product 'builds' on two levels: high sales of the product itself and an improvement in the image with which the consumer associates the brand that carries the product in question. It is precisely this second association that will result in a starting point for any subsequent product bearing the same mark. If the next product is now satisfactory, it will again build on two levels and so on. .
Ideally the public has clearly associated the mark with a particular business in their minds: anything that can disturb this clear picture is a problem for the architecture of trademark law and for the evaluations that underpin it. Such a problem arises, for example, where the coexistence of two marks creates a likelihood of confusion in the mind of the relevant public. The 'likelihood of confusion', in other words, could be described as the 'overlap' of one mark with another. Indeed, this is the term used in the new Trademark Law 4679/2020, in alignment with EU provisions (EU Directive 2015/2436 EU and EU Regulation 2017/1001 EU).
III. The risk of confusion
When there is a risk of confusion is a topic that in itself supports the publication of a legal text. The factors taken into account are numerous and the case law is almost inexhaustible.
A brief presentation of the main factors that are considered in practice by the Administration of Trade Marks Board (ACB) and the administrative and civil courts in order to determine whether there is (or is not) a likelihood of confusion between two signs will be attempted below:
First, a comparison between the two indications takes place. This is further based on three axes: i) the visual comparison of the signs (visual comparison - answers the question "what does it look like"?); ii) the aural comparison of the signs (aural comparison - answers the question "what does it sound like when the verbal part of the sign is read"?); and iii) the conceptual comparison of the signs (conceptual comparison - answers the question "where does the verbal or visual part of the sign direct our thinking"?). For each specific type of comparison, more specific rules have been developed through case law and guidelines by the EUIPO.
The comparison of the goods bearing the trade mark is of equal importance. The closer they are to each other, the more likely it is that the Court will reach a finding of likelihood of confusion; it is worth checking this finding for oneself. Indeed, it is more likely that confusion will arise (always meaning: between signs) if the goods covered by the two conflicting signs are identical or even quite similar, than if the goods are only slightly similar. The likelihood of confusing mark A with (even if similar) mark B is less if mark A distinguishes chips and mark B distinguishes milk products than if mark B also distinguishes chips or wafers.
And at this stage, monitoring the case-law is, we would say, the most important tool for safeguarding the interests of the signatory. For whether or not they are similar goods is a judgment which rests on a multitude of other specific sub-criteria. In particular, and specifically in relation to the criterion of the similarity of goods, it has been held that the market to which they are addressed, the type of consumer needs they satisfy and other elements such as the material of which they are made up will be examined. According to the case law of the Court of Justice of the European Union (CJEU), all the elements which may contribute to the comparison of the goods will be taken into account, in particular their nature, the use for which they are intended (intended purpose - e.g. in the case of pharmaceutical products, whether they treat headaches or muscle cramps), the way in which they are used (e.g. (e.g. ointment or pill), whether the goods are in competition with each other (interchangeable products), whether they are complementary to each other, or even whether the differentiated goods are usually supplied by one undertaking (so that there is more likely to be a risk of disturbing the function of provenance in the mind of the public).
However, the public to whom the goods bearing the mark are addressed is also decisive, in the sense that the degree of attention of the public is examined. For exactly the same reason, the goods bearing the compared signs are again decisive, for the following reason: one kind of attention is shown when buying an expensive watch and another when buying a soft drink. Therefore, if we are very careful, a slight differentiation in one sign may be sufficient or, in any event, may play a significant role in the Court's judgment (and thus make it easier for the Court to conclude that there is no likelihood of confusion). Conversely, if the goods are, for example, of everyday consumption, empirical studies have shown that the public will generally not attach much importance to minor distinctions. All of the above are elements which the administrative authority or the Court of Justice takes into account.
A number of other factors are also taken into account, such as de facto situations that cannot be ignored (for example, the 'peaceful' coexistence of the two signs over a number of years will prevent a finding of likelihood of confusion - which is why it is important that the sign is taken into account as soon as the sign is perceived as an infringement).
However, caution is also required in the following: in order to establish the existence of a risk of confusion, there must be at least a minimum degree of similarity between the signs and at least a minimum degree of similarity between the goods. That is to say, if it is found that either the signs or the goods are different, the likelihood of confusion is excluded. This rule is fundamental - an exception is found only in the case of so-called reputation marks (the protection of reputation marks will be the subject of another publication). Thus, if we were to paraphrase the above example of chips and milk products with bicycles on the one hand and headache pills on the other, the likelihood of confusion should be considered to be excluded (with the exception, as written, of the field of 'trade marks with a reputation').
In general, the specific criteria on the basis of which these comparisons are made are detailed and require constant monitoring and development of case law, both domestic and international. Precisely because these are highly subjective assessments, the judgement is made on the basis of principles that are shaped by case law - and the shaping is constantly evolving. For this reason, very often the common sense of similarity (or not) between indications or goods is in danger of being wrong. It is useful to have the assistance of an expert who will apply the specific criteria accepted by case law and come up with a safe advice or even specific guidelines (dos & don'ts) to shape the mark.
IV. In short
It is intelligent to put trademark protection high on a company's list of priorities. A good product or service is powered and fueled by the strength of the brand that accompanies them. It is a mutually beneficial and 'commercially ecological' process: the good product builds the brand, which then gives a 'from day one' boost to any new product; at the same time, if the new product also confirms the reputation of the brand and is good, it will add prestige to the brand which will then support the new products with even more vigour. We can liken this whole mechanism to a closed circuit with zero 'friction', zero losses and maximised benefits. It is therefore good advice indeed to guard it against ventures that might offend and weaken it.
As we have seen, the main cause of signal infringement is the creation of a "likelihood of confusion". Judging what constitutes a risk of confusion is an intellectual process that is highly contingent, multifactorial and often requires a multidisciplinary approach. The minimum requirement is close monitoring of the case law of the national courts and, above all, of the Court of Justice and the General Court of the European Union (CJEU and CJEU). The explanation is simple: the provisions on trade marks derive from EU texts, the interpretation of the content of which is most heavily influenced by the judgments of the EU Courts. Indeed, in the practice of the Administrative Trademark Committee (CTMC) and the Greek Courts, the side whose position will be supported by the case law of the CJEU or the OHIM usually prevails.
It is worth mentioning that, simplistically, it is often (particularly in America) referred to as "grandma's test": if grandma confuses one mark with another, there is likely to be a likelihood of confusion. In reality, however, the whole process is much more complicated. Every situation is different, goods will not always be addressed 'to grandma' and the attention we pay - depending on the goods - differs. All of this is of course taken into account by case law and the Administration when ruling on trade mark cases, and the creation of specific criteria and sub-criteria is also in constant development.
It is important to draw attention to the following: infringement cases are likely to arise even in cases where a non-lawyer does not even consider it likely. It is not uncommon that we are approached by principals who have been served with a notice of default or even a suit or application for a declaration of invalidity of a trade mark, for the use of a particular sign, claiming that there is a "likelihood of confusion" with a third party's trade mark and who (principals) honestly believe that their sign is sufficiently differentiated. It is on the basis of this belief, moreover, that they have built their commercial effort on a particular sign.
As noted, however, the finding of a likelihood of confusion is far from a subjective impression that each of us may, justifiably, have. It is precisely because there must be a minimum degree of certainty and objectivity in the judgments of the competent bodies that the administration and the Courts rely on specific criteria which, quite reasonably, the trader is not in a position to know, let alone apply.
All of the above is reinforced if we take into account that (legally) the 'risk of confusion' also includes the 'risk of association' - an issue that will be analysed in a subsequent article. For the moment, we will content ourselves with the following reference: the risk of association means not only the risk that the public might believe that two indications come from the same undertaking, but even that they come from different undertakings which nevertheless maintain a certain link (e.g. financial, commercial cooperation, etc.).