Online use of competitor's name is infringing, says Supreme Court

In UAB Balionu salis v UAB Vilbalas (Case 3k-3-408, September 28 2004), the Lithuanian Supreme Court has ruled that the defendant's use of the title 'Country of Balloons' and the slogan 'Welcome to the country of balloons' on its website infringed the plaintiff's rights in its company name - Balionu salis meaning 'country of balloons'.

The Supreme Court ruling reversed the decision of the Appeal Court of Lithuania, which held that there was no infringement. The Appeal Court found that Vilbalas's use (i) was descriptive of a business related to balloons, and (ii) did not mislead consumers.

In contrast, the Supreme Court based its decision on the following arguments:

• Company names are protected under the Paris Convention for the Protection of Industrial Property regardless of whether they are registered as company names or even trademarks. Article 2(42) of the Lithuanian Civil Code also provides that a company name cannot be used without permission from the holder of the name.
  
  
• Even though the words making up the company name Balionu salis are descriptive, their combination is figurative: it is original, easy to remember and there is no real 'country of balloons'.
  
  
• Use of a company name does not have to be in another company name or a trademark to be unlawful. Unauthorized use in a slogan or title may also be infringing.
  
  
• Balionu salis and Vilbalas are competitors in the balloons business. Therefore, use of the phrase 'Balionu salis' as a title or slogan may cause confusion between the two companies, their products or business under Article 10bis of the Paris Convention and Article 16 of the Lithuanian Law on Competition.
  
  
• The name was used for commercial purposes, which is one of the criteria identified by the Joint Recommendation Concerning Provisions on the Protection of Marks and other Industrial Property Rights in Signs on the Internet, adopted by the Assembly of the Paris Union for the Protection of Industrial Property and the General Assembly of the World Intellectual Property Organization in 2001 to assess whether use of a company name is lawful.
  
  
• Vilbalas had acted in bad faith as it had at first agreed to Balionu salis's requests to cease use of the company name on its website, but later refused to comply.

Accordingly, the Supreme Court ordered Vilbalas to cease any use of Balionu salis's name on its website.

It should be noted that the court decision to prohibit Vilbalas from using Balionu salis's company name only applies to the words 'balionu' and 'salis' together - they can be used separately.

Giedre Domkute-Lukauskiene, AAA Legal Services, Vilnius