Distinguishing marks under the marketing control act – Loen Skylift vs. Voss Gondol and Resort
In case TBERG-2019-145093, Bergen District Court determined whether Voss Gondol AS and Voss Resort AS ("Voss Gondol and Resort") had violated the prohibition against copying of distinguishing marks and acted in conflict with good business practices, cf. the Marketing Control Act sections 30 and 25. Loen Skylift AS' ("Loen Skylift") claimed that Voss Gondol and Resort had used logos too similar to logos used by Loen Skylift, for similar skylift attractions.
By Jenny Nondal & Thomas Hagen
Loen Skylift's two distinguishing marks (the "Loen Skylift Logos"):
Voss Gondol and Resort's four distinguishing marks (the "Voss Gondol and Resort Logos"):
On 18 November 2020, Bergen District Court decided in favor of Loen Skylift, and Voss Gondol and Resort were prohibited from producing, marketing and selling products or services with the Voss Gondol and Resort Logos. The District Court found that Voss Gondol and Resort had violated both the Marketing Control Act sections 30 and 25.
There are three key takeaways from the District Court's considerations:
- The relation between the prerequisites for applying either the Marketing Control Act section 30 or the Trademarks Act section 4.
- The assessment of likelihood of confusion.
- The measurement of remuneration.
The Marketing Control Act vs. the Trademarks Act
Distinguishing marks are protected against infringement under both the Marketing Control Act and the Trademarks Act. The Trademarks Act only applies to a) registered trademarks, and b) trademarks established by use.
With respect to a), Loen Skylift's registered trademarks for the relevant services did not have priority over Voss Gondol and Resort's registered trademarks. Thus, Loen Skylift could not claim infringement of its registered trademarks. With respect to b), to claim infringement of trademarks established by use, Loen Skylift would have had to prove that its logos were well known as distinguishing marks for its skylift services. Under the Marketing Control Act, there is no such explicit requirement for protection against infringement.
However, the District Court stated that, as under the Trademarks Act, a logo must be distinctive for the protection of the Marketing Control Act section 30 to apply. Under the assessment of the distinctiveness, the District Court made reference to the degree of recognition that the Loen Skylift Logos have achieved for its services. Consequently, whether the Loen Skylift Logos were well known as Loen Skylift's distinguishing marks for its services, was of relevance under the Marketing Control Act as well. Thus, the District Court applied similar prerequisites for protection under the Marketing Control Act section 30 and the Trademarks Act section 4.
Likelihood of confusion
Pursuant to the Marketing Control Act section 30, the District Court concluded that the Voss Gondol and Resort Logos were copies of the Loen Skylift Logos, and that there was a likelihood of confusion between these logos. The District Court found that the dominating elements of the logos, the lines and squares illustrating a skylift/cable car, had similar shapes and proportions, which gave visual and conceptual similarities. The District Court emphasized that while the shapes were simple and consisted of generic elements referring to the services in question, Voss Gondol and Resort had not utilized the possibilities to distinguish its logos from the distinctive Loen Skylift Logos.
However, the District Court did not take into account that while Loen Skylift and Voss Gondol and Resort are in the same county, it is more than 250 kilometers between the two attractions. The average potential customers for skylift/cable car services were considered to be tourists from outside the county that book the services online. Thus, the average customer might be particularly attentive towards the location of the service as it would have to travel to the skylift/cable car. Furthermore, as tourists from outside the county might be interested in booking several attractions as in the same geographical area location, and thus particularly attentive towards the location. Consequently, one could argue that the geographical distance between the attractions would prevent the average customer from confusing the two service providers. The District Court did not comment on this.
Additionally, it is worth noting that the District Court did not seem to take into account that the Norwegian Industrial Property Office ("NIPO") had registered the Loen Skylift Logos as trademarks for the relevant services, even though the Voss Gondol and Resort Logos had already been registered for the same services. On that basis, one might argue that NIPO did not find the Loen Skylift Logos likely to be confused with the Voss Gondol and Resort Logos. Instead of discussing this point, the District Court made reference to its obligation to conduct an individual assessment of the Marketing Control Act section 30. However, one could argue that this obligation did not prevent the District Court from discussing the fact that the NIPO had registered both the Loen Skylift Logos and the Coss Gondol and Resort Logos. In addition, it can be argued that such an approach can lead to different thresholds for likelihood of confusion under the Marketing Control Act and the Trademarks Act in the future.
The measurement of the remuneration
The District Court ordered Voss Gondol and Resort to pay remuneration for gains obtained as a result of the violations, cf. the Marketing Control Act section 48b, litra c (not litra a, cf. misprint in judgment). The gain was considered to be the total difference between Loen Skylift's costs and Voss Gondol and Resort's costs related to branding. The calculation included Loen Skylift's costs of consultants engaged for branding strategy, and not only costs related to the design of the logos. The District Court did not consider whether this difference constituted the actual gains that Voss Gondol and Resort obtained. The District Court's method of measuring the gains appears overly simple in favour of Loen Skylift, as Voss Gondol and Resort was considered to have gained all the benefits of Loen Skylift.
Additionally, under this method of measuring the gains, an infringer will benefit from high costs related to designing infringing logos, as the costs will reduce the difference considered to be the infringer's gains. This might lead to results that do not reasonably reflect the actual gains obtained by the infringement.
Thus, in light of the above, District Court's evaluation of the damages to be awarded under the Marketing Control section 48b, litra c seems to be incorrect.