Court considers distinctiveness of compound noun

In Gagnaeyðing Ltd v Valgeirsson (Case E-254/2013, May 15 2014), the Norðurland eystra District Court has considered whether the use of the name Gagnaeyðing Norðurlands by the defendant infringed the rights of the plaintiff in the trademark and company name GAGNAEYÐING.

In the 1990s the plaintiff established a firm in Reykjavik that provides services in the field of destroying data storage media and other goods in a safe manner. It registered the following word and design trademark (Registration No 902/2007) in 2007:

The registration covers goods and services in Classes 7, 8, 16, 39, 41 and 45 in the Nice Classification, but not Class 40, which includes the services that the plaintiff provides.

The word 'gagnaeyðing' is a compound noun composed of two Icelandic words, 'gagn' and 'eyðing'. The word 'gagn', which is a noun, refers to any kind of data, evidence, document or record, while the word 'eyðing' is a verbal noun derived from the verb 'eyða', which means 'to destroy, erase, spend or delete'.

The defendant established his company on the north coast of Iceland in 2010 under the name Gagnaeyðing Norðurlands. The plaintiff demanded that the defendant cease using the word 'gagnaeyðing', basing its claim on the Trademarks Act, the Act on Supervision of Unfair Commercial Practices and Transparency of the Market and the Company names Act.

The court held that it was apparent from the media that the plaintiff had started his business in 1991, and that it had advertised its services (eg, some publicity was generated when the company celebrated 20 years in business). The court then stated that nothing had been presented to cast doubt on the material submitted by the plaintiff regarding the fact that it had continuously conducted its business since 1991. The court also accepted that the word 'gagnaeyðing' had not been used in the Icelandic language until the plaintiff started to use this word. This was based on documents presented by the plaintiff.

The court then referred to Article 3 of the Trademarks Act, which states that trademarks rights may be established by registration or use, and that a trademark which does not fulfil the requirement of distinctiveness may acquire distinctiveness through use. The court also explicitly stated that Registration No 902/2007 did not include services in Class 40, which covers the treatment of materials and other services that the defendant provides.

In this respect, the court considered the argument of the plaintiff that it had relied on advice from the Patent Office, which had failed to provide correct advice in relation to the appropriate coverage. Consequently, Class 40 was not included in the application. The court, however, stated that the plaintiff was responsible for the wording of the list of services and that its decision should be based on the fact that the registration did not cover the services provided by the defendant.

Regarding the distinctiveness of the word 'gagnaeyðing', the court held that, even though it had been shown that the word had not been used in the Icelandic language prior to the first date of use by the plaintiff, this did not necessarily lead to the conclusion that the word fulfilled the requirements for distinctiveness. The court then reasoned that the word was not to be considered as inherently distinctive in relation to the services provided by the parties. In this respect, the court referred to Flugleiðahótel ehf  H 57 – Flughótel Keflavík ehf v Hótel Keflavík ehf (Case 538/2012, February 28 2013).

The court then considered whether the word 'gagnaeyðing' had acquired distinctiveness through use, and stated that the burden of proof should be placed on the plaintiff. It concluded that the word 'gagnaeyðing' had acquired distinctiveness according to various documents submitted by the plaintiff and that the defendant had not succeeded in reducing the credibility of such evidence.

The court thus decided that the plaintiff had submitted sufficient evidence to show that it had trademark rights in the word 'gagnaeyðing', based on use for a period of 20 years. Due to such use, the word 'gagnaeyðing' had acquired distinctiveness.

Accordingly, the court decided that the defendant should cease using the name Gagnaeyðing Norðurlands for his business. The decision can be appealed to the Supreme Court until August 15.

The court's evaluation of the distinctiveness of the Icelandic word 'gagnaeyðing' is interesting in light of the fact that - although loanwords and icelandicised versions of words from foreign languages exist in the Icelandic language - organisations and individuals in many specialist areas strive to coin new words to meet contemporary needs in order to preserve the language. This makes it easier for new words to fit in with existing Icelandic grammatical rules. Such words are often descriptive within the meaning of the Trademarks Act, since they are formed by joining existing words or parts of words together with the aim of creating a new transparent term.

The word in question, 'gagnaeyðing', is an example of this manner of creating a new term. A search on Google seems to indicate that this word has been incorporated into the Icelandic language.

Valborg Kjartansdóttir, Sigurjónsson & Thor, Reykjavík