Federal Supreme Court: likelihood of confusion analysis should be the same for trade names and trademarks

The Federal Supreme Court has upheld a decision of the Commercial Court of the Canton of Aargau in which the latter had held that there was likelihood of confusion between the trade names MIPA Baumatec AG and Mipa Lacke + Farben AG (Supreme Court, 4A_123/2015, August 25 2015).

The plaintiff, a company registered under the name Mipa Lacke + Farben AG and the licensee of the Swiss part of the international trademark MIPA in connection with “paints, varnishes, dyestuffs, wood preservatives and rust-removing preparations”, sued the defendant over its use of the name MIPA Baumatec AG.

The court considered that the notion of 'likelihood of confusion' should be given the same interpretation with regard to the comparison of both trademarks and trade names. In both contexts, the assessment of the likelihood of confusion is based on the spectrum of distinctiveness. The most unusual, fanciful company and brand names are considered to be the most memorable, leading to a broader scope of protection. Trademarks or business names that describe some aspects of the goods or services or allow conclusions to be drawn in this respect are considered to be weakly distinctive.

The court noted that the common term 'Mipa' was distinctive, since the term does not have any particular meaning. Thus, 'Mipa' was considered to be the dominant component, as it “stood out” in the overall impression of the trade names at issue. The distinctive element 'Mipa' was wholly included in the defendant’s trade name, contributing to a conclusion of similarity. The elements 'Lacke + Farben' and 'Baumatec', on the other hand, were descriptive with regard to the goods and services at issue, or at least allowed conclusions to be drawn in this respect. Therefore, they were not distinctive.

The court further found that the overlap of the parties’ trade channels and the parties' closely related purposes weighed particularly heavily in the plaintiff’s favour. Therefore, despite the geographical distance, the court determined that there was an increased likelihood of confusion between the trade names at issue.

With regard to trademark infringement, the court concluded that the plaintiff and the defendant deal in competing goods, as the defendant promotes various kinds of paint under the logo MIPA Baumatec AG on its website, while the trademark licence held by the plaintiff covers, among other things, paint.

In summary, the court confirmed the likelihood of confusion - by comparing the trade names, as well as the trademark at issue - based on the correlation of the degree of similarity between the goods involved and of the degree of similarity of the signs.

Benno Fischer and Sahar Milani, Walder Wyss Ltd, Zurich