Omegatiming is only for Omega. But what about megatiming?
Sometimes after receiving a cease-and-desist letter, or during the course of litigation, an infringer will replace its disputed name with a new, modified name. But often such changes are unsatisfactory for the plaintiff and are also challenged. Are the defendant’s prior actions and the designations previously used by the defendant relevant to evaluation of the new, modified designation? How to assess a situation where the defendant modifies its name while attempting to maintain continuity with the one it previously used?
Supreme Court of Poland judgment of 9 May 2019, Case I CSK 263/18
Dispute and circumstances
The case that reached the docket of the Polish courts involved a conflict between the verbal trademark Omega and the term “omegatiming,” used in commerce, and a number of disputed designations used by an alleged infringer. Simplifying the facts, the disputed designations may be divided into two groups: the first containing the term “omegatiming” and the second containing the term “megatiming,” with various graphic elements and extensions typical for internet domain names (such as .eu, .com, .pl).
The defendant did not use names from both groups at the same time. Soon after receiving a demand to cease and desist, the alleged infringer replaced the disputed term “omegatiming” with the term “megatiming.” In court, both sets of designations were challenged.
The plaintiffs in the case are three entities. The first is Omega SA from Switzerland, proprietor of the EU word trademark “Omega.” The others are the Polish distributor of Omega watches and the Polish distributor of Omega timing systems, authorised by the proprietor to use the trademark. The defendant is an entity doing business in Poland involving timing at swimming events. The defendant also operates news sites with results of swimming events, originally using the domain omegatiming.pl and later megatiming.pl.
It was undisputed that the trademark Omega enjoys renown in Poland as a brand of watches and for a timing system used at swimming events, among sports professionals, professional and amateur swimmers, and swimming enthusiasts. It was also undisputed that the designation “omegatiming” may be protected under the Polish Unfair Competition Act and was used with priority in Poland by the plaintiff. Omega SA is an official timer for international sports competitions, and publishes time results at the website omegatiming.com.
Among the relief sought, the plaintiff applied for an injunction prohibiting the defendant from using the EU trademark “Omega,” including as a renowned mark, and from committing acts of unfair competition under Art. 3, 5, 10 and 15 of the Unfair Competition Act through the use of both disputed designations, omegatiming and megatiming.
Is “megatiming” also infringing?
Essentially, the courts hearing the case had no doubt that the use of the disputed designation “omegatiming” infringed the trademark and also violated principles of fair competition.
The court of first instance partially upheld the claim, prohibiting the defendant from using in commerce most of the disputed “omegatiming” word and word/graphic marks (Warsaw Regional Court judgment of 14 March 2014, Case XXII GWzt 26/15). The court stressed the great similarity between these designations and the Omega trademark and the plaintiffs’ designations, as well as the similarity in the compared goods. The court also explained that it was no excuse that the defendant actually used Omega equipment in its operations, as it could provide information about the use of such timing devices in some other manner.
Pursuant to an appeal by the plaintiffs, the court of second instance slightly modified the judgment below, to the plaintiffs’ advantage, by also prohibiting the defendant from using a word/graphic designation that was not covered by the original injunction (Warsaw Court of Appeal judgment of 28 September 2017, Case I ACa 962/16). But so far these were still designations from the disputed group “omegatiming.”
The courts took a totally different view of the disputed designation “megatiming,” denying relief in this respect. The regional court found that it had no similarity to the trademark Omega or the designation omegatiming. It found that the element “timing” served exclusively a descriptive function, and the element “mega” would not be associated with the plaintiff’s mark even though it differed by only one letter. The court of appeal shared this assessment, pointing to differences on the verbal and phonetic level between the designations, heightened by the graphic elements, but placed the greatest weight on the difference in meaning between the designations, finding that the element “mega” generates associations primarily with the dimension of size, and not associations with the plaintiffs.
Thus the aspect of the case that reached the Supreme Court of Poland involved the evaluation of infringement by the disputed designation “megatiming.” The Supreme Court judgment contains several pointers of a universal nature, relevant for assessment of defendants’ actions under the Unfair Competition Act as well as infringements of renowned trademarks.
Change in designations—no coincidence
In their cassation appeal to the Supreme Court, the plaintiffs alleged that in evaluating the disputed “megatiming” designations, the lower courts ignored the defendants’ previous use of the disputed “omegatiming” designations, which were held with legal finality to be similar to the Omega trademark. The modifications made to the designations originally used meant that the defendant had created a group or series of similar designations.
The Supreme Court agreed that the context of the defendant’s actions is relevant for assessment under the Unfair Competition Act. The defendant had indirectly acknowledged the similarity of its modified designation by changing the original name under which it operated its business as well as the names of its internet domains. In seeking a new name, it did not make an entirely coincidental choice, but was guided by the similarity of the “megatiming” designation to the “omegatiming” designation it has used before. It obviously did so to create among audiences an impression of continuity in its business. The fact that the defendant’s modified name was similar to the one it used before, which in turn was similar to the plaintiffs’ names, is not decisive but could be relevant for assessing the similarity between the defendant’s current name and the plaintiffs’ names.
The holding by the Supreme Court may have great practical importance under the Unfair Competition Act and should be greeted with approval. If often happens that defendants slightly modify their designations while continuing to base them on those used before. It would be hard to find that such action is not deliberate. Thus the Supreme Court rightly stated that it is justified to consider the circumstances leading up to such a change. They are relevant first for assessing the similarity between the modified designation and the plaintiff’s designation, and second, for assessing the defendant’s actions in terms of violation of fair practice. It seems that if the defendant, with broad leeway in selecting a new designation, limited only by its imagination, nonetheless chooses a new designation that maintains continuity with the previous one, this only reinforces the soundness of the claims against it connected with use of the modified designation. By maintaining a link with its prior name, already held to be infringing, and thus maintaining a link with the plaintiff’s name, the defendant continues to reap the benefits from the competitive lead previously taken at the cost of the plaintiff, and thus continues, without any effort, to cash in on the advantage already obtained unfairly. It thus appears that such behaviour should be viewed in terms of violation of Art. 3 of the Unfair Competition Act.
How far is “megatiming” from “omegatiming”?
The Supreme Court also pointed to the need to make a proper comparison of the designations under the Unfair Competition Act, thus suggesting that the plaintiffs’ designation “omegatiming” and the disputed “megatiming” designation should be compared in their entirety and across all levels. But the lower courts had focused their analysis on the layer of meaning, ascribing a leading role to this aspect of the names. The Supreme Court agreed that on the level of meaning there is little similarity, but there is great similarity on the phonetic level, as the two names differ by only one letter.
Stronger protection for renowned mark
Renowned trademarks enjoy stronger protection, and in their case the degree of similarity of the disputed mark may be less. This position is well established under both EU law (e.g. C-552/09, Ferrero SpA) and Polish law (prior judgments of the Supreme Court cited from 2009, 2011 and 2017). The position taken by the Supreme Court in this respect is thus nothing new. Nonetheless, its confirmation of the rule in this judgment should be noted with approval. This is a rule that is often lost sight of not only by infringers, but also by courts hearing cases involving renowned trademarks. As the Supreme Court correctly repeated, infringement of a renowned trademark does not require a risk of confusion. With renowned trademarks, it is sufficient if the use of a designation similar to the trademark could reap an undue advantage to the infringer or could weaken the distinguishing power or renown of the infringed mark. As the Supreme Court pointed out, this can occur even when there is a low level of similarity between the designations.
Pursuant to the plaintiff’s cassation appeal, the Supreme Court overturned the existing judgment insofar as it pertained to the “megatiming” designation and remanded the case to the court of appeal for rehearing, recommending that it reconsider the matter under the Unfair Competition Act. It seems that the Supreme Court regarded the similarity between the plaintiffs’ mark and the disputed “megatiming” designation as obvious. But this does not automatically mean that a judgment will ultimately be issued against the defendant on this claim. This will be determined also by other issues which the court must now examine, such as the plaintiffs’ standing under the Unfair Competition Act and the defence alleging that the plaintiffs tolerated the infringement.
Definitely the most interesting aspect of the case is the Supreme Court’s holding of the necessity, when assessing modified designations of the defendant, to consider the circumstances in which the choices were made. As practice shows, such changes may not alter at all how the designations are perceived by the target audiences, and their selection by defendants are rarely coincidental. The courts should take into consideration whether despite the modification, the name still creates an impression of continuity in the defendant’s business, particularly when the previous name has already been held with legal finality to be infringing.
Although it was not the immediate grounds for setting aside the judgment in question, the Supreme Court’s remarks on the specific nature of the protection given to renowned trademarks should also be noted with approval. This is not always understood, and sometimes is incorrectly confused with the protection afforded to “ordinary” trademarks. Thanks to their high recognition and distinct appeal to customers, renowned trademarks carry special value deserving of more extensive protection.
Lena Marcinoska, adwokat, Intellectual Property practice, Wardyński & Partners