Court considers likelihood of confusion between word marks using same letters in different order

The German Federal Court of Justice has ruled (I ZR 161/13, March 5 2015) that two word marks consisting of the same three letters, albeit in a different order (here, IPS and ISP), might lead to confusion as to the origin of the goods and services sold under these marks. In particular, the court noted that the pronunciation of the individual letters in their given order had the same sequence of vowel sounds (here: ‘i-e-e’, German pronunciation). Thus, the court found that there was a likelihood of confusion between the two word marks, which were both used for IT services.

Pursuant to Section 14, Paragraph 2, No 2 of the German Trademarks Act (MarkenG):

“A third party shall be prohibited, without the consent of the proprietor of the trademark, from using a sign in the course of trade if a likelihood of confusion exists for the public because of the identity or similarity of the sign to the trademark and the identity or similarity of the goods or services covered by the trademark and the sign, including the likelihood of association with the trademark.”

The question of whether a likelihood of confusion exists between two marks must be assessed globally, taking into account all factors relevant to the circumstances of the case. According to the Federal Court of Justice, the Hamm Court of Appeal had been right, therefore, to consider that:

• the two marks shared a first identical vowel, ‘I’;

• both are formed according to the pattern ‘vowel-consonant-consonant’;

• they have the same number of syllables; and

• they have a similar sequence of vowel sounds in German (‘i-e-e’).

The relevant factors to be considered in the assessment of similarity between two marks are phonetic similarity, graphic similarity and similarity in meaning. Under established case law, it is, in principle, sufficient to show similarity between two marks in one of these areas. Thus, in the present case, the fact that the sequence of vowels is identical led the court to conclude that the (German) pronunciation of the two marks may lead the public to believe that the IT services at issue derive, at the very least, from economically linked undertakings. In the court’s opinion, a likelihood of confusion in the perception of the targeted public could therefore not be ruled out, despite differences in the consonant pattern.

Benjamin Beck and Konstantin von Werder, Mayer Brown, Frankfurt