Trademark held to be detrimental to reputation of PepsiCo’s marks

Estonia
The Estonian Board of Appeal has upheld an opposition against the registration of the trademark PEIPSI KOLA on the grounds that it would take unfair advantage of, and be detrimental to, the reputation of the earlier PEPSI COLA marks (Decision 1025, November 23 2010).
 
OÜ Business Grain filed an application for the registration of the trademark PEIPSI KOLA in Classes 5 (“pharmaceutical and hygienic products; medical confectionery”) and 30 (“pastries and confectionery products, especially candies”) of the Nice Classification. PepsiCo Inc, the owner of the earlier trademarks PEPSI and PEPSI COLA, registered in Class 32 for beverages, filed an opposition, arguing that PEIPSI KOLA would take unfair advantage of, and be detrimental to, its trademarks.
 
The applicant’s main argument was that the conceptual difference between the marks would rule out any likelihood of confusion among the public. ‘Peipsi’ is the Estonian name for Lake Peipus (located on the border between Estonia and Russia), which is the fifth largest lake in Europe, as well as the largest trans-boundary lake in Europe. The word ‘kola’ means ‘trash’, ‘useless thing’. The applicant thus claimed that the Estonian consumers would perceive PEIPSI KOLA as meaning ‘Lake Peipus trash’, and would not confuse it with PEPSI COLA.
 
The Board of Appeal found that the trademarks in question were highly similar visually and phonetically. The board further held that the applicant had chosen a combination of words that did not have a specific meaning, but was highly similar to PepsiCo’s well-known marks from a visual and phonetic point of view. The board held that, by doing so, the applicant had sought to attract the attention of consumers. However, even if consumers perceived the meaning of the words making up the applicant’s mark, they might still make an association with the well-known PEPSI COLA marks, even though the products covered by the marks fell within different classes.
 
The Board of Appeals concluded that, if the applicant had chosen the word combination PEIPSI KOLA, which is similar to the well-known trademarks of PepsiCo, to designate its products, it should be responsible for the fact that such a trademark would undoubtedly remind consumers of PepsiCo’s well-known marks. Moreover, the association between the marks was in no way beneficial to the reputation of PepsiCo’s trademarks. The board pointed out that the applicant could have chosen the name of other lakes in Estonia, such as Võrtsu, Rõuge or Viitna Kola. The board was thus of the opinion that the choice of the trademark PEIPSI KOLA was not accidental.
 
The applicant also claimed that PepsiCo had failed to demonstrate that there was a risk that use of the mark PEIPSI KOLA would take unfair advantage of, or be detrimental to, the reputation and distinctive character of its earlier marks. The board found that newspaper articles referred to by PepsiCo’s representative (“Peipsi Kola proves the difference”, Äripäev, October 30 2006; “PepsiCo tries to prevent introduction of Peipsi Kola on the market”, Tarbija24, October 30 2006) qualified as unwelcome publicity for the PEPSI COLA marks, and thus caused detriment to their reputation.
 
In the light of the foregoing, the board upheld PepsiCo’s opposition.
 
Mikas Miniotas, AAA Legal Services, Tallinn

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