New decision in the Loen Skylift v. Voss Gondol and resort case
The long-awaited appeal in the Loen Skylift v. Voss Gondol and Resort case was pronounced on 23 September 2021 by Gulating Court of Appeal. In contrast to judgment from Bergen District Court, the Court of Appeal decided in favor of Voss Gondol and Resort. The long-awaited appeal in the Loen Skylift v. Voss Gondol and Resort case was pronounced on 23 September 2021 by Gulating Court of Appeal.
By Anna Eide and Thomas Hagen
A short introduction to the case
The Loen Skylift v. Voss Gondol and Resort case relates to whether Voss Gondol AS and Voss Resort AS ("Voss Gondol and Resort") use of its logos breaches the Marketing Control Act section 30 and 25, and if Voss Gondol and Resort consequently were liable to pay compensation or remuneration to Loen Skylift. Voss Gondol and Resort used the disputed logos in connection with its cableway attraction. On the other hand, Loen Skylift AS ("Loen Skylift") used similar logos for its ropeway attraction. Accordingly, Loen Skylift claimed that the use of the Voss Gondol and Resort Logos constituted a breach of the Marketing Control Act.
Loen Skylift's two distinguishing marks (the "Loen Skylift Logos"):
Voss Gondol and Resort's four distinguishing marks (the "Voss Gondol and Resort Logos"):
The District Court found that Voss Gondol and Resort violated the Marketing Control Act section 30 and 25, and that Voss Gondol and Resort had to pay remuneration to Loen Skylift. In contrast, the Court of Appeal found that Voss Gondol and Resort's use of the logos did not violate the Marketing Control Act section 30 and 25. In the following, we will review the Court of Appeal's reasoning for this judgment.
The significance of the trademark registration
The key question in the case was whether Voss Gondol and Resort's use of the Voss Gondol and Resort Logos violated the Marketing Control Act section 30 and 25. However, before the Court of Appeal assessed the overall question regarding the Marketing Control Act, they clarified the significance of the parties' trademark registration for their logos.
Both Loen Skylift and Voss Gondol and Resort had registered their respective logos as trademarks. Although Loen Skylift had registered their logos first, they had not objected to the Norwegian Industrial Property Office ("NIPO") registration of the Voss Gondol and Resort Logos. The Court of Appeal stated that the court should exercise caution when re-examining the NIPO's decisions. The NIPO is an expert body with special expertise in cases concerning intellectual property rights. In this case, the NIPO had decided to register the Voss Gondol and Resort Logos for the same services as the Loen Skylift Logos. As part of the NIPO's preliminary inspections, they assessed if the registration the Voss Gondol and Resort Logos would constitute a violation of third-party's right cf. the Trademarks Act sections 14 and 16. In addition, the Court of Appeal highlighted that Loen Skylift had not raised a lawsuit claiming that the trademark registration was invalid or should have been refused. Therefore, the Court of Appeal based their assessment of whether the Voss Gondol and Resort Logos constituted a breach of the Marketing Act section 30 and 25 on the fact that both parties had valid trademark registrations.
The District Court, on the other hand, took a different approach in this regard by subjecting Marketing Control Act section 30 to an individual assessment and referring to the NIPO decision as non-decisive factor. Accordingly, the Court of Appeal took a different stand on the significance of a the NIPO decision than the District Court. As we pointed to when the District Court ruling was published, the approach of taking an individual assessment of the Marketing Control Act section 30 can create different thresholds for the likelihood of confusion under the Marketing Control Act and the Trademarks Act. Such incoherency can undermine the right given by trademark registration.
However, although the court should look to the decisions made by the NIPO, they are not bound to the decisions made by the NIPO. The Supreme Court of Norway has, in several cases, highlighted the fact that the NIPO's decisions are administrative decisions that the courts can fully challenge. Furthermore, unlike patents, trademark cases typically do not rely on information requiring the special and technical expertise and broad experience that the NIPO holds. Thus, there is no reason for the courts to exercise caution when re-examining cases concerning trademarks. Therefore, the Court of Appeal should have highlighted its competence in this department and clarified that the NIPO decision was upheld for the reason that the Court of Appeal found the decision correct, not that it should exercise caution when re-examining decisions from the NIPO.
The marketing control act section 30
According to the Marketing Control Act section 30, the use of copies of distinguishing marks, products, etc., presenting a risk of confusion is prohibited in the course of trade if used in a manner or circumstance that must be considered unfair exploitation of the efforts or results of another person. Since the Loen Skylift Logos were registered as trademarks, the use of the Marketing Control Act presupposes that trademark registration did not offer enough legal protection.
The District Court and the Court of Appeal came to different conclusions considering different factors in the legal assessment of whether Voss Gondol and Resort were in breach of the Marketing Control Act section 30. According to the District Court, the dominating elements of the logos were the lines and squares, which illustrated the attraction. These elements and proportions gave the logos visual and conceptual similarities. Although Loen Skylift's logos were simplistic and generic, the District Court found that Voss Gondol and Resort had not utilized the possibilities to distinguish its logos from the distinctive Loen Skylift Logos.
In contrast, to the District Court, the Court of Appeal considered the geographic difference and distance between Loen and Voss. The parties are located over 250 km away from each other, and the attractions are only available at the respective geographic place. Consequently, the Court of Appeal found that the logos could not constitute a direct risk of confusion as for sale on-site and on the parties' websites. As for third-party sales, the locations' names were almost always used with the logos, and the parties used different descriptions for the attractions (Gondol and Skylift). Further, the Court of Appeal did not find the use of unprotected slogans as constituting a risk of creating the illusion of a joint commercial origin. Thus, the Court of Appeal concluded that the use of the logos were not likely to cause a direct risk for confusion.
Furthermore, the Court of Appeal did not find an indirect risk of confusion between the logos. In this regard, the Court of Appeal pointed to the different history, nature, and traditions of Voss and Loen. In addition to the different associations attached to the locations, the Court of Appeal found that the disconnected square in the logo was not prominent in the marketing. Thus, the Court of Appeal found that there was no indirect risk of confusion between the logos.
In our view, the legal assessment conducted by the Court of Appeal complies with the applicable law and case law on this matter.
The measurement of the remuneration
Since the Court of Appeal gave a judgment in favor of Voss Gondol and Resort, the question regarding compensation was not assessed in the judgment. However, as the District Court's measurement of remuneration gave rise to criticism, we will briefly go into the measurement of remuneration.
In its judgment, the District Court found that Voss Gondol and Resort had to pay remuneration for the gains obtained because of the violations cf. the Marketing Control Act section 48b, litra c. According to the Marketing Control Act section 48b, in the event of willful or negligent infringement of the Marketing Control Act sections 30, the infringing party shall pay the injured party the most favorable for the infringed party of either;
- Remuneration equivalent to a reasonable license fee for use, as well as compensation for damages resulting from the infringement that would not have occurred in the event of licensing
- Compensation for damages resulting from the infringement, or
- Remuneration corresponding to the gain obtained as a result of the infringement.
Thus, the fact that remuneration can be sought if the provisions in the Marketing Control Act are violated is not controversial. However, the method by which the District Court measured the remunerations are controversial. The District Court found that the total difference between the parties' branding costs amounted to Voss Gondol and Resort's gain. This included expenses that did not only relate to the design of the logos. Furthermore, the District Court did not assess if the difference constituted the actual gains obtained by Voss Gondol and Resort. Therefore, under the applied method, an infringer will benefit from a high designing cost. In our view, such remuneration should be measured based upon the profit and savings that the infringing party gained by the infringement, which does not include payment for the strategic work by consultants not relating to the design of the logos. In view of the District Court's assessment and measurement of the remuneration, it would have been interesting if the Court of Appeal had re-examined the question of remuneration. However, we trust that also this part of the judgment will be disregarded in the future.