British American Tobacco Italia (“BATI”), owner of the historical cigarette brand “MS”, has sued Manifatture Sigaro Toscano (“Manifatture”) to obtain a ruling establishing that the “MST” word and device trademark -- originally registered for tobacco, cigars and cigarettes, and items for smokers in class 34 -- is null. Manifatture then limited the trademark registration by eliminating “cigarettes”, but only after the legal dispute had already begun.  

In its claims, BATI argued that due to the high degree of resemblance between the two signs and the identity of the goods for which they were registered, it was highly likely that consumers would be confused, or (in the best case scenario) associate the two trademarks with one another. Nevertheless, BATI highlighted the fact that because the MS trademark is well-known in Italy, Manifatture’s use of a trademark that is extremely similar to MS allows it to take undue advantage of the reputation of plaintiff’s trademark while, at the same time, prejudicing the reputation and distinctiveness of the same.

Manifatture replied to these allegations by denying that there is any risk of confusion between the trademarks because both have a low degree of distinctive character due to the fact that they are acronyms and/or short word trademarks composed of few letters. Further, there are many differences between the two signs and the goods for which they are registered -- one referring to cigarettes and the other to cigars. Manifatture, moreover, asked for a declaration of partial forfeiture for lack of use of the MS trademarks because they were never used with reference to cigars.

On October 30, 2012, the Judge granted the request for a declaration of nullity of the MST trademark and rejected the defendant’s request for partial forfeiture for lack of use.

Before comparing the trademarks, the Judge analyzed the reputation of the MS trademark, affirming that such sign has maintained a certain fame throughout the years, especially in reference to the two letters “MS”. In fact, although various graphic elements have been modified over time (using different kinds of elements which were still significantly distinctive), the combination “MS” has consistently been present in many different graphic renditions and has acquired, over time and through constant use, unquestionable fame.

The Judge then proceeded to compare the trademarks and applied the guidelines as set forth by prominent case-law on the matter. Despite the differences between the graphic elements, the most relevant aspect of the comparison was the identity of the element with the highest level of distinctiveness in the trademarks: the combination “MS”, which is present in both signs. In this comparison the aspect which presented the strongest level of similarity was the phonetic resemblance. In addition, the jurisprudence provides that even a low level of similarity between signs may be compensated by a higher similarity between goods. Here, the Judge determined there was indeed a high risk of confusion between the trademarks because of the partial identity between the registered goods (cigars) or, if the comparison is made with regards to cigars and cigarettes, because of the significant similarity between these products.

The Judge provided a noteworthy clarification with regards to risk of association: likelihood of confusion should not be excluded even when prominent importance is given to the diversity between the signs. Recalling and referring to the historical origins of Manifatture, which was created from a department of BATI, the Judge opined that the peculiar relationship between the parties made the risk of association between the trademarks even more plausible due to the possibility that the consumer could believe there is still a connection between the two companies. 

Regarding the counterclaim for partial forfeiture of the MS trademark for lack of use, the Judge established that such counterclaim is not viable when referring to similar goods (cigars) because “the potential extension of a trademark indicates the limit of its exclusivity and the limit of the forfeiture for lack of its use”. Hence, the Judge accepted the plaintiff’s argument concerning forfeiture for lack of use, recognizing a connection between the scope of protection of the trademark (which is extended to similar goods, and, in this case, cigars) and the burden to use the trademarks.