Trademark rights do not apply to aural equivalent

Israel

In NRG Energy International Ltd v Texaco Inc (Civil Appeal 4410/09, August 31 2010), the Supreme Court has ruled that a mark that might be seen as being aurally equivalent to a registered trademark did not fall within the scope of protection of the registered mark.

NRG Energy International Ltd is an Israeli producer of motor oil additives. In 1982 NRG Energy registered the trademark NRG (and design) in Israel in Class 4 of the Nice Classification. The registration included a disclaimer with respect to the combination of the letters 'NRG'. Texaco Inc is an international energy company that produces, among other things, motor oil. In 2002 it registered the mark HAVOLINE ENERGY (and silver piston design) in Israel in Class 4. The registration included a disclaimer for the word 'energy'.

NRG Energy filed a cancellation action against Texaco's mark with the Israel Trademarks Office. NRG Energy claimed that the registration of the NRG mark prevented the word 'energy' from being used as a trademark with respect to other products in Class 4. Moreover, NRG Energy claimed that the respective marks were confusingly similar in sound, especially since they were sold over the counter. The trademark and patent adjudicator rejected NRG Energy's claims.

On appeal, NRG Energy claimed that Texaco had infringed its exclusive rights in the trademark NRG. This claim was based on two main lines of argument: 

  • The pronunciation of the letters 'NRG' is identical to the pronunciation of the word 'energy' - this is especially relevant with regard to the sale of over-the-counter products.
  • the 'well-known mark' doctrine applies to the NRG mark.

The Supreme Court ruled that, although it might accept the claim that rights in a combination of letters could apply to an aural equivalent, that was not the case here. Even though the pronunciation of the combination of letters 'NRG' was highly similar to the word 'energy', this was insufficient to rule that NRG Energy had exclusive rights that also applied to the word 'energy'.

The court noted that there were no indications in the registration process of the NRG mark that it was meant to cover the word 'energy' as well. The NRG mark does not include the word 'energy' and, moreover, a disclaimer was given for 'NRG'. The court reasoned that the disclaimer applied to words that could be seen as being aurally equivalent to the registered trademark NRG.

Furthermore, the court noted that an aural comparison of the two marks did not support NRG Energy's claim since the comparison must be based on the aural impression of the two marks, each taken as a whole. Here, Texaco's mark consisted of two words, 'Havoline' and 'energy', while the NRG mark included only the combination of letters 'NRG'.

Finally, the court ruled that the word 'energy' was descriptive in connection with motor oil. The court noted that a descriptive term should remain open to the public; this principle also applies to the name of a product in English, since the English language is understood by a significant portion of the population in Israel. Therefore, NRG Energy was not entitled to claim exclusive rights in the word, even on the basis of aural similarity.

The Supreme Court thus rejected the appeal.

Neil Wilkof and Jenia Melkhior, Herzog Fox & Neeman, Tel Aviv

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