'Humorous' mark not protected by freedom of art

The Hamburg Appeal Court has held that use of the mark EIPOTT was in breach of Articles 9(1)(b) and (c) of the Community Trademark Regulation (40/94) (Case 5 W 84/10, August 9 2010).
German household goods manufacturer Koziol sold the plastic egg cup shown below under the name eiPott, meaning 'egg pot' in English and pronounced 'ipod' in German.
Apple Inc is the holder of several Community trademarks for IPOD, registered, among other things, for musical apparatuses, as well as household and kitchen utensils and containers. Apple, considering that Koziol’s use of the EIPOTT mark infringed its trademark rights, filed a request for an interim injunction.
The court proceeded from the assumption that, in order to establish a likelihood of confusion, it is sufficient that the signs in question are similar visually, phonetically or conceptually. At the same time, the court admitted that, in certain circumstances, conceptual differences may counteract the visual and aural similarities between two signs (the so-called 'counteraction theory'). However, for there to be such a 'counteraction', at least one of the signs must have a clear and specific meaning, so that the public is capable of grasping it immediately.
In the present case, the court found that the mark EIPOTT had no clear meaning. Therefore, the counteraction theory was not applicable. Instead, in light of the identity of the goods, and given that Apple’s mark enjoyed at least an average degree of distinctiveness in relation to household goods, the phonetic identity of the marks was sufficient to establish that there was a likelihood of confusion under Article 9(1)(b) of the regulation.
Moreover, the court found that use of the trademark EIPOTT was likely to take unfair advantage of the distinctive character of the earlier IPOD mark, which enjoys a reputation in the European Union in relation to digital music players (Article 9(1)(c)). Referring to the decision of the Federal Supreme Court in Lila-Postkarte (for further details please see "Satirical and artistic uses of a mark are protected"), the court admitted that it should take into account the right to freedom of art, as protected by Article 5(3) of the German Constitution, when deciding whether infringement has occurred. However, it came to the conclusion that the play on words 'eiPott', although a “funny idea”, was not covered by the freedom of art.
The decision is particularly interesting since the court, when assessing the issue of likelihood of confusion, applied the European 'counteraction theory', even though the Federal Patent Court, in Xxero v Zero (Case 24 W (pat) 37/08, April 21 2009), found that the theory does not apply to national trademarks (for further details please see "Concept of 'neutralisation' rejected"). However, the decision is in line with the most recent case law from the Federal Supreme Court, which states that a lack of conceptual similarity between two marks may counteract their phonetic or visual similarity (Case I ZR 102/07, July 29 2009).
The decision is also significant in that it establishes general rules on the issue of whether the user’s right to freedom of art may prevent a finding of trademark infringement. In this respect, the decision shows that use of a trademark in a witty and humorous manner will not imply that there is no trademark infringement if the mark is used for the main purpose of exploiting its distinctiveness.
Anna Sophie Steinmeister, Bardehle Pagenberg, Munich

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