Buggy car mark held to be confusingly similar to famous LAMBORGHINI mark

The IP High Court has reversed a trial decision in which the Patent Office had declined to invalidate the registration for the trademark LAMBORMINI for "automobiles and parts and accessories thereof" in Class 12 and "retailing and providing services to customers as wholesalers for automobiles and parts and accessories thereof" in Class 35 of the Nice Classification.

The High Court determined that the mark LAMBORMINI, registered by KK Liberty Walk, was similar to the famous mark LAMBORGHINI, which is owned by Automobili Lamborghini SpA for "automobiles and parts and accessories thereof" in Class 12. The court invalidated the registered trademark LAMBORMINI under Articles 4(1) (10), (15) and (19) of the Trademark Law (127/1959, as amended).

Several articles of the law restrict the registration of trademarks in certain circumstances - for example:

• Article 4(1)(7) provides that registration cannot be obtained "in the case of trademarks liable to contravene public order or morality".
• Article 4(1)(10) provides that registration cannot be obtained:

"in the case of trademarks which are well known among consumers as indicating the goods or services as being connected with another person's business, and trademarks similar thereto, and which are used in respect of such goods or services or similar goods or services."

• Article 4(1)(15) of the law provides that registration cannot be obtained:

"in the case of trademarks which are liable to cause confusion with goods or services connected with another person's business (other than the trademarks mentioned in Items (10) to (14))."

• Article 4(1)(19) of the law provides that registration cannot be obtained:

"in the case of trademarks which are well known among consumers in Japan or abroad as indicating the goods or services as being connected with another person's business, and trademarks identical with or similar thereto, and which are used by the applicant with an unfair intention (intention to gain an unfair profit, intention to cause damage to such other person and other unfair intentions...) (other than the trademarks mentioned in each of the preceding Items) in respect of such goods or services."

• Article 46(1) of the law provides that:

"where a trademark registration falls under any of the following items, a trial for invalidation of trademark registration may be demanded for the invalidation of the trademark registration. In such a case, if two or more designated goods or designated services are covered by the trademark registration, a trial may be demanded with respect to each of such designated goods or designated services: (1) where the registration has been effected contrary to Articles 3, 4 (1)… of the law."

Lamborghini owns the trademark registration for the mark shown below (Registration No 1507740, registered on March 31 1982) for "automobiles and parts and accessories thereof and others" in Class 12.

KK Liberty Walk filed a trademark application for the mark shown below for "automobiles and parts and accessories thereof" in Class 12 and "retailing and providing service to customers as wholesalers for automobiles and parts and accessories thereof" in Class 35 on March 30 2009. The application matured to registration on August 14 2009 (under Registration No 5256629).

On October 28 2010 Lamborghini sought the invalidation of the subject trademark under Articles 4(1)(7), (10), (15) and (19) of the law.

On August 24 2011 the Patent Office refused to invalidate the trademark. Its reasoning as to Article 4(1)(7) was as follows:

• The assertion by Lamborghini should be understood by virtue of the facts with respect to Articles 4(1)(15) or 4(1)(19) of the law and was considered irrelevant under Article 4(1)(7).
• Generally speaking, neither the lettering nor the image of the subject trademark was structured in a violent, indecent or discriminatory manner; in a way such as to give displeasure to others; or in a way that was contrary to public interest or the moral norms of society if used on the designated goods or services; nor did they constitute a trademark prohibited from use by other laws or a trademark insulting a specific nation or nationals or generally in contravention of international morals.
• Therefore, it was considered that the subject trademark did not fall under Article 4(1)(7) of the law.

The reasoning as to Article 4(1)(19) was as follows:

• Analysing the similarity between the subject trademark and the cited trademark, the former produced only the sound 'Lambormini' and did not carry any specific meaning.
• However, the cited trademark produces the sound 'Lamborghini' and calls to mind the name of the Lamborghini supercar which is manufactured and sold by Lamborghini.
• From an analysis of the above structure, the trademarks were deemed to be clearly dissimilar in respect of appearance.
• From a comparison of the above sounds, the trademarks were deemed dissimilar in respect of sound.
• As the subject trademark had no specific meaning as a whole, the trademarks were not comparable in respect of meaning.
• In view of the above, the trademarks were deemed not confusingly similar in respect of appearance, sound and meaning.
• As the trademarks were considered dissimilar, even if the subject trademark were used on the buggy cars manufactured and sold by the applicant, such acts could not be construed as having an unfair intention under Article 4(1)(19) of the law.
• Therefore, the court ruled that the subject trademark did not fall under Article 4(1)(19) of the law.

The reasoning as to Articles 4(1)(10) and 4(1)(15) was as follows:

• Although the cited trademark is well known among consumers in Japan as indicating automobile goods (ie, supercars) manufactured and sold by Lamborghini since before the date on which the application for the trademark in question was filed, there was little likelihood of consumers mistakenly believing Liberty Walk to have a corporate or business link to Lamborghini, which is famous as an Italian corporation that manufactures and sells supercars, if the size of Liberty Walk's business, the nature of the products involved (ie, the manufacture and sale of parody goods) and other factors were taken into account.
• Therefore, the subject trademark could not be considered to cause confusion as to the source of origin of the goods or services, as if the goods or services of the subject trademark were those of the goods or services of Lamborghini or of a related party, even if the subject trademark were used on the designated goods or services.
• Thus, the subject trademark did not fall under either Article 4(1)(10) or 4(1)(15) of the law.

The registration of the subject trademark did not violate the provisions of Articles 4(1)(7), 4(1)(10), 4(1)(15) or 4(1)(19) of the law and thus could not be invalidated.

Lamborghini appealed to the IP High Court. The court reversed the Patent Office trial decision on May 31 2012.

The court opined that the Patent Office had erred in concluding that the subject trademark did not fall under Articles 4(1)(10), (15) or (19) of the law. On the basis of Lamborghini's evidence and assertions, it found as follows:

• Lamborghini is an automobile company, established in Italy in 1962 and famous worldwide as a producer and seller of high-quality sports cars. Lamborghini's products were first imported into Japan around 1968; the Countach model subsequently became popular as a supercar in the 1970s.
• The cited trademark – part of Lamborghini's company name – became well known among car dealers and car enthusiasts in Japan as indicating the supercar sold by Lamborghini.
• Lamborghini owns various trademarks in Japan - and in more than 100 other countries and regions - covering the cited trademark and other LAMBORGHINI combination marks for automobiles and other goods.
• The defendant promotes and sells a custom buggy (ie, a mini-car) that imitates Lamborghini's product by bearing the trademark LAMBORMINI.
• The defendant also promotes this product on its website and in YouTube videos.
• The cited trademark contains the word 'Lamborghini' and is pronounced 'Lamborghini' – a well-known name among car dealers and car enthusiasts in Japan indicating Lamborghini's supercar.
• No special meaning is derived from the word 'Lamborghini' in the Roman alphabet among ordinary Japanese people.
• The subject trademark consists of the word 'Lambormini' and an image depicting an animal's tail.
• The text component of the subject trademark makes a stronger impression on viewers than the image component, as the wording is bigger than the image.
• The sound 'Lambormini' is produced from the subject trademark. No special meaning is produced from the whole of the subject trademark.

Examining the similarity of the marks, the court found that, as the lettering component presented a stronger impression to viewers within the subject trademark, when comparing the wording and the cited trademark, it was evident that nine of the 10 letters of the subject trademark are common to the cited trademark, and the sounds 'mi' (in the subject trademark) and 'ghi' (in the cited trademark) are similar, with a common vowel sound. Thus, the subject trademark was considered to be similar to the cited trademark in respect of sound.

Although there is a slight difference according to whether the image is added, the trademarks were considered similar as a whole in respect of appearance.

In view of the above similarities - and also in view of the circumstances concerning the use of the trademarks - it was considered that the subject trademark was similar to the cited trademark.

With regard to the applicability of Article 4(1)(10), the court held that LAMBORGHINI is well known among car dealers and car enthusiasts in Japan as indicating the supercars manufactured and sold by Lamborghini since before the date on which the application for the subject trademark was filed. Therefore, it was recognised that LAMBORGHINI is well known among consumers as indicating the goods of a party other than the LAMBORMINI applicant.

The subject trademark was considered similar to the trademark which is well known among customers as indicating the goods manufactured and sold by another party and to be used in respect of automobile goods. Therefore, the subject trademark fell under Article 4(1)(10) of the law.

With regard to the applicability of Article 4(1)(15), the court noted that:

• Lamborghini has been manufacturing and selling supercars using the trademark LAMBORGHINI since before the date on which the application for the subject trademark was filed;
• the subject trademark is similar to the cited trademark;
• the designated goods of the subject trademark include the same automobile goods covered by the cited trademark; and
• the defendant has been manufacturing and selling a custom buggy which imitates the automobile manufactured and sold by Lamborghini by using the trademark LAMBORMINI.

On this basis, the subject trademark was considered liable to cause confusion with goods handled by another party. Therefore, even if the subject trademark did not fall under Article 4(1)(10) of the law, it was deemed to fall under Article 4(1)(15).

The court then turned to the applicability of Article 4(1)(19). Although the defendant was aware that Lamborghini was a world-famous automobile manufacturer and that the cited trademark was well known among consumers, it had still filed an application to register the subject trademark for automobiles, and was manufacturing and selling a custom buggy that imitated Lamborghini's products, using the trademark LAMBORMINI.

In view of this, the subject trademark was considered to have been used by the defendant in bad faith (eg, with the intention of gaining unfair profit or causing damage to another party). Therefore, even if the subject trademark did not fall under Article 4(1)(10) or 4(1)(15) of the law, it fell under Article 4(1)(19).

The court established that the Patent Office had erred in concluding that the subject trademark did not fall under Articles 4(1)(10), 4(1)(15) or 4(1)(19). Lamborghini's claim was well grounded and it was unnecessary to consider the remaining arguments. Therefore, Lamborghini's claim was admitted.

The difference between the court's conclusion and the trial decision of the Patent Office appears to be based on the difference in ruling on the basic similarity between the trademarks. The court found that the trial decision had been too rigid in comparing both trademarks only in appearance, sound and meaning; instead, it was more flexible in dealing with the similarity of the marks and the applicability of various items included in Article 4(1) of the law.

It is now expected that the Patent Office will be more flexible in its analysis, and more prepared to block applicants which appear intent on free-riding or unfairly exploiting famous foreign brands.

Eiichi Fukushima, Nishimura & Asahi, Tokyo