Facts
Decision


On 1 September 2022, Alicante EU Trademark Court No. 1 held that the trademark LOLEA, which belongs to Colmado Casa Lola SL (the plaintiff), was not well known. Moreover, it held that the Barcelona Brands SL's (the defendant's) use and registration of its own trademark, LOLA MOLA, was compatible with the plaintiff's trademark, LOLEA, and its trade name, Colmado Casa Lola.

Facts

In July 2020, the plaintiff filed a lawsuit against the defendant, claiming:

  • that the defendant had infringed the plaintiff's allegedly well-known LOLEA trademark and its brand name, Colmado Casa Lola;
  • that the defendant's LOLA MOLA trademark ought to be nullified;
  • that the defendant had committed unfair competition; and
  • compensation for damages.

Decision

The Court acquitted the defendant of all motions filed against it. The legal bases of the judgment are set out below.

Well-known character of LOLEA trademark
The Court pointed out that the plaintiff had failed to provide sufficient evidence to prove the well-known character of its trademark in relation to the products for which it is registered in class 33 – specifically, for sangria, a typical Spanish drink. Therefore, it concluded that the trademark was not well known.

Infringement of LOLEA trademark
In its examination of the conflicting signs, the Court took into account that:

  • the denomination "lolea" (which it understood could be translated as "to do the lola") evoked the word "lola", which strongly evoked Spanish culture and its folklore;
  • the term "lola" was habitually used in products in class 33; and
  • as a consequence, the confronted marks presented a low degree of distinctiveness in relation to the products of this class, which meant that small variations between the confronted signs were sufficient to avoid a risk of confusion.

The Court thus concluded that the LOLEA trademark had not been infringed.

Infringement of Colmado Casa Lola trade name
The Court considered that the terms "colmado" and "casa" did not have a descriptive or generic nature in relation to the products or services that were the subject of the trade name. Further, beyond the coincidence present in the term "lola", which had little distinctiveness, there was no phonetic or graphic similarity between the sign LOLA MOLA, used by the defendant, and the plaintiff's trade name, Colmado Casa Lola, because the variations between them were sufficient to avoid the risk of confusion or association. The Court thus concluded that the Colmado Casa Lola trade name had not been infringed.

Nullity of LOLA MOLA trademark
The plaintiff based its nullity action on:

  • the defendant's bad faith, given that the defendant was the exclusive distributor of LOLEA sangria in the Belgian market; and
  • the incompatibility of the LOLA MOLA trademark with the plaintiff's LOLEA trademark and its trade name, Colmado Casa Lola.

The Court held that the pre-existence of the distribution contract between the parties did not lead to the conclusion that the registration of the LOLA MOLA trademark had been carried out in bad faith – particularly considering the characteristics of the sign registered by the defendant.

In relation to the alleged incompatibility of the LOLA MOLA trademark with the plaintiff's trademark and corporate name, the Court held that a comparative analysis had already been carried out between the signs during the examination of the infringement actions. As a consequence, it dismissed both the main action and the subsidiary action for annulment of the LOLA MOLA trademark.

Unfair competition
The plaintiff claimed that the defendant's use of the sign LOLA MOLA and the advertising that it carried out for its sangria under this trademark breached the Unfair Competition Law (UCL).

In this regard, the Court held that – in line with existing case law on the relative complementarity of the UCL and the Trademark Law (TL) – that issues can only be examined under the UCL if they have not already been resolved under the TL. Therefore, the Court limited its analysis to the question of both parties' advertising strategies with respect to articles 6, 12 and 4.1 of the UCL in particular.

Acts of confusion (article 6 of UCL)
The Court pointed out that the facts which would result in any possible confusion were the same as those that had already been examined under the TL. Therefore, to the extent that the action brought had been dismissed under the TL, the Court also dismissed any possible infringement under article 6 of the UCL.

The Court also added that what was truly distinctive about the LOLEA sangria was the bottle and its polka dot design, as well as its stopper system. The presentation of the LOLA MOLA sangria was substantially different. Therefore, there was no risk of confusion based on the appearance of both products either.

Exploitation of others' reputation (article 12 of UCL)
The Court indicated that this article is relevant only where trademark legislation cannot be applied due to a non-distinctive use of protected signs (eg, cases of descriptive or ornamental use) outside the scope of the exclusive right, as occurs in cases of cybersquatting of domain names on the Internet.

The Court also pointed out that, under article 12 of the UCL, cases of taking advantage of the efforts of others, as well as those of damage to the reputation of others, are excluded, as they are not specifically typified in it. Such arguments must be analysed under the general disloyalty clause contained in article 4 of the UCL.

The Court concluded that the behaviours referred to by the plaintiff (ie, the defendant's imitation of the plaintiff's distinctive signs, company name and communication elements) referred to an assumption of taking advantage of another's effort, for which they must be prosecuted in light of the general clause of article 4 of the UCL.

General disloyalty (article 4.1 of UCL)
The Court pointed out that the competitive position reached by the defendant derived from its own efforts and that the existence of a previous distribution contract between the parties does not automatically qualify as unfair the situation where a distributor notices a business opportunity and decides to enter the market with its own product, since this is the very nature of competition.

The Court also pointed out that the defendant had not used:

  • the plaintiff's clients, only its own clients; or
  • the advertising investment made by the plaintiff. The channels used by the defendant to promote its trademark were those that were normally used by any competitor. As for the advertising elements used by the defendant, they were not exclusive to the plaintiff, but rather those commonly used by many sangria trademarks.

For further information on this topic please contact Antonia Torrente at Grau & Angulo by telephone (+34 93 202 34 56) or email ([email protected]). The Grau & Angulo website can be accessed at www.ga-ip.com.