Landmark decision on refusal practice issued

The Athens Administrative Court of Appeals has issued a landmark decision which alters prior ex officio refusal practice (Decision 2476/2006, November 15 2006). Under the previous system, the Greek Trademark Committee would refuse an application where the mark was confusingly similar to an earlier registration, even if the earlier trademark was owned by a company within the same group of companies as the applicant. The court stated that applications should be allowed in such circumstances.

The decision stemmed from an application by Soremartec SA, a Belgian company which belongs to the Ferrero Group, to register the trademark KINDER MERENDERO, covering goods in Class 30 of the Nice Classification.

Both the Trademark Committee and the Athens Administrative Court of First Instance refused the application on the grounds that its dominant element was the word KINDER which directly conflicted with the prior registered mark KINDER, in the name of Ferrero SpA, covering identical goods in Class 30, despite the latter company's letter of consent and evidence produced regarding the fact that Soremartec SA and Ferrero SpA belong to the same group of companies.

Soremartec lodged an appeal and the Athens Administrative Court of Appeals in a very significant ruling reversed the two previous decisions and decided in favour of Soremartec.

The rationale of the appellate court was quite concise, as it also took into account several well-known decisions of the European Court of Justice such as Canon on the issue of likelihood of confusion and the interpretation of the First Trademark Directive and the IHT Case on the issue of freedom of movement of goods in conjunction with trademark protection.

It determined that the previous interpretation of Article 4(1) (regarding the bar to registration of similar trademarks covering identical goods) of the Greek Trademark Law 2239/1994 was erroneous when it comes to companies belonging to the same group and when explicit consent by the prior trademark's owner was given, and that the waiver of the bar to registration called for by Article 4(4) of the same law (which provides for a potential waiver of the bar in the event a letter of consent is furnished, unless there are public interest and risk of confusion considerations) had been similarly misconstrued.

According to the appellate court, the spirit of the Greek Trademark Law purely aims to deter the registration of trademark applications that are likely to cause confusion to the public. Such a provisional risk cannot encompass situations where the two conflicting marks are owned by companies which belong to the same group. In principle, there can be no risk of confusion in such cases as there is a financial nexus between the respective companies, which per se guarantees the ability to apply a uniform quality control of the products bearing the similar marks. In effect, in such cases there can be no direct or indirect risk of confusion to consumers, given the court's global assessment of the status of two companies belonging to the same group as being integral parts of a single undertaking with the same objectives and the same modus operandi.

The court further noted that the decision as to which company within a group of companies is responsible for registering a certain mark on behalf of the group remains within the absolute discretion of the group, as it falls within the group's freedom to operate. Any decision to the contrary would in effect impose undue restrictions on this corporate liberty.

It is expected that the above decision will serve as very useful precedent for similar matters.

Eleni Lappa, Dr Helen G Papaconstantinou John V Filias & Associates, Athens