The plaintiff is the owner of two international marks extended to Hungary (Figures 1 and 2).
Figure 1: IR No. R426,376, design in class 25 for sport shoes
Figure 2: IR No. 589,156, design in class 3 for cosmetics
The defendant filed a request for permission to export sports shoes to Serbia. The competent Customs Office ordered a seizure of 8,565 pairs of sport shoes under different signs, including GREWAL, EC-ART, LUCK and WANLI.
The plaintiff claimed that:
- the sports shoes with the signs EC-ART, LUCK and WANLI bore confusingly similar stripes to those of its protected marks; and
- the GREWAL sport shoes bore a confusingly similar sign to its mark IR No. 589,156 (ie, four parallel stripes running on both sides of the shoes).
The Metropolitan Tribunal ordered, via an interim injunction, the seizure of the whole shipment. The plaintiff filed a trademark infringement claim before the Metropolitan Tribunal.
The claim was partially successful.
The defendant was condemned for trademark infringement and prohibited from continuing the infringing activity. Moreover, the Tribunal ordered:
- the destruction of the goods seized;
- the publication of the judgment in two leading newspapers at the defendant's own costs; and
- the defendant's payment of the storage cost of the seized shoes to the Customs Office, which had been ordered by the Customs Office.
The Tribunal held that the owner of the mark had exclusive right to use the marks. Moreover, the Tribunal pointed out that the use of marks that hold a significant reputation is forbidden under section 12(2) of the Trademark Act. Importing or exporting such goods is also prohibited.
Likelihood of confusion
The defendant contested that there was a likelihood of confusion between the marks on its goods and those of the plaintiff. The Tribunal examined the four infringing shoes separately.
The GREWAL shoes featured:
- four parallel stripes on the shoes; and
- the word "Grewal" printed on the tongue.
The GREWAL shoes did not feature the well-known word "Adidas". The Tribunal found that there was insufficient evidence to establish infringement relating to confusing similarity. As a result, the Tribunal rejected this part of the claim.
In respect of the EC-ART shoes, which were decorated by a ribbon that featured three stripes, the Court found no danger of confusion and also rejected this part of the claim.
In contrast, the Tribunal found that there did exist a confusing similarity with respect to the LUCK and WANLI shoes. The Tribunal ordered the seizure of these two kinds of shoes.
Both the defendant and the plaintiff filed an appeal with the Supreme Court.(1)
The Supreme Court found the defendant's appeal partially founded, but the plaintiff's appeal unfounded. The Court annulled the provision obliging the defendant to pay the storage costs and approved the other provisions of the Tribunal's judgment.
Likelihood of confusion
The Court agreed with the Tribunal that the characteristic stripes used on the goods branded LUCK and WANLI were confusingly similar to the plaintiff's mark.
The Court found that the GREWAL shoes showed only a little similarity with the plaintiff's mark. Consequently, the overall impression of the sign GREWAL did not seem to be confusingly similar to the claimant's mark.
The Court found that the EC-ART shoes were not confusingly similar to the claimant's mark.
In respect of the storage costs, the defendant's appeal was accepted. Such a penalty cannot be enforced under section 27(2) of the Trademark Act. The claim was premature; it could be enforced only after the Customs Office had definitively determined the storage costs.
The claimant introduced its three-stripe logo in 1952, after the Olympic games took place in Helsinki. The three stripes are highly reputed at least in Europe,(2) and are protected by the international trademarks R426,376 and 589,156.
The seizure procedure was started by the Customs Office, and the infringement procedure was initiated by the owner of the reputed marks as a trademark infringement action.
The Tribunal and the Supreme Court rendered their decisions in respect of trademark law and did not condemn the use of the reputed three-stripe logo. They had not been used on both sides of the sports shoes, but as a quasi-decorative element.
The result would perhaps have been different if the claimant had also sued for unfair reputation – in particular, for the unfair exploitation of the three-stripe logo on the sports shoes.
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(1) This case was judged in conformity with the Trademark Act that was effective at the time (1997). As the system of the jurisdiction was reformed in 2003, an appeal in similar cases would now be judged by the Metropolitan Court of Appeal and not by the Supreme Court.