Court of Appeal recognises well-known status of SHERATON device marks

In a recent decision (decision of the 11th Chamber of the Court of Appeal dated March 9 2015, merit number 2014/18262 and decision number 2015/3101), the Court of Appeal has upheld an appeal against a decision of the Court of First Instance (decision of the Ankara Second Civil Court of Intellectual and Industrial Property Rights dated September 17 2014, merit number 2014/102 and decision number 2014/251) in which the latter had declared that the trademark application for SOYIÇ HOTEL (and device) (depicted below on the left) was not confusingly similar to the plaintiff's SHERATON device marks (depicted below on the right).

In a recent decision (decision of the 11th Chamber of the Court of Appeal dated March 9 2015, merit number 2014/18262 and decision number 2015/3101), the Court of Appeal has upheld an appeal against a decision of the Court of First Instance (decision of the Ankara Second Civil Court of Intellectual and Industrial Property Rights dated September 17 2014, merit number 2014/102 and decision number 2014/251) in which the latter had declared that the trademark application for SOYIÇ HOTEL (and device) (depicted below on the left) was not confusingly similar to the plaintiff's SHERATON device marks (depicted below on the right).

The Court of Appeal held that the SHERATON device marks are well known in the relevant sector; it was not possible for consumers to recognise that the trademarks belonged to two different entities, and consumers could believe that the SOYIÇ HOTEL mark belonged to the plaintiff. The court further held that the defendant was attempting to benefit unfairly from the plaintiff’s trademarks.

Upon rejection by the Turkish Patent Institute (TPI) of the appeal filed against the trademark application for SOYIÇ HOTEL and device, a cancellation action was filed against the TPI’s decision (decision of the Re-Examination and Evaluation Board dated January 21 2014, No 2014-M-253) based on confusingly similarity and on the well-known status of the cited trademarks.

The Court of First Instance dismissed the action, stating that the trademark applied for includes the expression 'Soyiç Hotel', three stars and the letters 'S' and 'H', as well as semi-circles; therefore, there were key differences with regard to the overall impression of the trademark applied for and the cited trademarks, so the trademarks were not confusingly similar. Furthermore, the court followed a curious definition of 'well-known status', stating that the plaintiff’s trademarks were so well-known in the hotel sector that they could not be confused with other small-scale hotels.

There is no strict definition of 'well-known status' and it varies from one jurisdiction to the other. Although it is commonly accepted that wider protection will be conferred to well-known trademarks, the court adopted an unexpected approach and stated that, since the Sheraton hotels are reputed, they will not be confused with other small-scale hotels that use similar trademarks.

In contrast, the Court of Appeal held that wider protection must be conferred to well-known trademarks, thereby adopting a more familiar approach. With its decision of March 9 2015, the Court of Appeal also accepted that the SHERATON and device marks are well known in the relevant sector. However, contrary to the decision of the Court of First Instance, the Court of Appeal concluded that there was a possibility that the trademark SOYIÇ HOTEL and device could derive an unfair benefit from the plaintiff's trademark, or be detrimental to the reputation or distinctive character of that trademark. The Court of Appeal concluded that the trademark applied for could be perceived as belonging to a series of trademarks and as designating low-cost hotels.

Arguably, the decision of the Court of Appeal is more pertinent as the future use of the mark SOYIÇ HOTEL and device cannot be predicted - the applicant could use the trademark without the 'three stars' device and the expression 'Soyiç Hotel'. In this case, the well-known device element of the plaintiff’s trademark and the letters 'SH', which are the initials letters of 'Sheraton Hotels', could be used on their own, damaging the reputation and the distinctive character of the plaintiff’s well-known trademarks. Therefore, the decision reveals the importance of not only acknowledging the well-known status of trademarks, but also conferring wider protection on such marks.

Güldeniz Doğan Alkan and Kübra Kaplan, Gün + Partners, Istanbul