This recent decision of Canada’s Trade-marks’ Opposition Board shows a classic confusion battle.  The applicant, Loris Technologies, applied to register the mark FILENEXUS, in association with software for certain document management and work flow distribution.

Loris’ application was opposed by IBM, who owned the trademark FILENET, which was used with somewhat similar services.

The Board noted the usual tests for confusion under Section 6 of the Trade-marks Act, including the factors:

  • Inherent and/or acquired distinctiveness;
  • Length of time in use;
  • Nature of the wares, services or business;
  • Nature/channels of the trade;
  • Degree of resemblance between the marks in appearance, sound or idea suggested by them.

The Board noted that neither of the marks possessed a high degree of distinctiveness, and found that “NEXUS” suggests a link between computer files, and the word “NET” in FILENET mark refers to a network of computers and telecommunications equipment, and is therefore also suggestive of computer products.

Both marks had a similar period of use in Canada since the late 1990′s.

The Board then examined the nature of the services and nature of the trade.  IBM used FILENET to sell products to organizations of different sizes, which could be purchased through IBM directly or through 3rd parties authorized by IBM. In contrast, Loris’ FILENEXUS mark was aimed at sophisticated corporate officers responsible for their company’s computer systems and business management, and therefore Loris claimed their products and services were likely only sold to professional customers, reducing the likelihood of confusion.

The Board found that confusion may be reduced where consumers are in the market for expensive or important wares or services, but held that even careful research in the high end market did not eliminate the risk of confusion, especially if the consumers made their initial decision to investigate a product in a state of confusion over the source.  Therefore, the Board chose to continue to apply the test of first impression, where we consider a consumer who has an imperfect recollection of one mark and then sees the other.  Due to the overlap in the businesses carried out by the parties, the Board found that this factor supported IBM’s confusion argument.

The Board then looked at the resemblance of the marks and found that while they resemble each other to some extent, the use of the suffix “NEXUS” is different from “NET” visually and in sound, and is sufficient to lessen the effect of the common and suggestive word “FILE” as the first component of the marks.

The Board also considered that there were 23 registrations or pending applications for trade-marks containing the word “FILE” in association with computer software or computer services.  This enabled the Board to infer that consumers are accustomed to seeing the term “FILE” as part of trade-marks in association with computer software services, so that consumers can distinguish between them.

Finally, the Board noted that there were no instances of actual confusion, which of itself is not definitive, but may be a relevant factor.

The Board concluded that FILENET was a weak mark not entitled to a broad scope of protection, the differences in the marks were sufficient, and when combined with the state of the register evidence and the absence of actual confusion, the opposition by IBM was rejected.

The message:  Small differences may be enough to avoid confusion between trade-marks with low distinctiveness.