SAGA Case highlights importance of trademark use

In the dispute between Saga Oil ASA and StatoilHydro over the use of the name Saga, the Court of Appeal has ruled in favour of Saga Oil (March 25 2008).
Norsk Hydro ASA (now part of StatoilHydro) bought the company Saga Petroleum in 1999. Saga Oil was established in 2005 to focus on the oil and gas industry in Russia.
Norsk Hydro holds four registrations for the trademark SAGA for goods in Classes 1 and 4 of the Nice Classification. Saga Petroleum began using the SAGA marks in 1972.
In 2006 Saga Oil filed a cancellation action against Norsk Hydro seeking to have the SAGA marks removed from the trademark register on grounds of non-use under Section 25(a) of the Norwegian Trademark Act. Norsk Hydro claimed that it had established sufficient use, as its subsidiary companies (Saga Petroleum Transport and Trading AS, Saga Petroleum Holding AS, Saga Petroleum Danmark AS and Saga Petroleum Mabruk AS) all engaged in commercial business activities.
The Court of Appeal disagreed, holding that the name Saga had not been used in a trademark sense – that is, it was not perceived by consumers as indicating the origin of the goods or services in question. The court also found that the names of the subsidiaries were used exclusively in connection with international business operations, and not within the Norwegian territory. The fact that the companies are registered in Norway, shareNorsk Hydro’s principal business address and are administered by Norsk Hydro was deemed to be irrelevant.  
As a subsidiary claim, Norsk Hydro alleged that there were reasonable grounds for non-use due to the merger of Norsk Hydro and Saga Petroleum. However, the court dismissed this claim.
Norsk Hydro also alleged that the SAGA marks were protected due to prolonged use and that Section 25(a) did not apply in this case. The court agreed that even if a mark had not been used for a period of five years, it could still enjoy a certain degree of protection due to prolonged use. However, the court emphasized that such protection did not prevent a mark from being removed from the register, as this would contravene the objectives of the use requirement.
Therefore, the court ordered that the four SAGA marks be removed from the register. The decision has not been appealed and is thus legally binding.
The decision shows that it is essential that registered trademarks are actually being used. Otherwise, the marks may be the subject of a cancellation action, even if the trademark owner demonstrates that it has a real commercial interest in the mark. Moreover, the decision highlights the fact that the requirement of use is absolute and does not allow derogations on the basis of reasonableness.
Felix Reimers, Advokatfirmaet Grette DA, Oslo

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