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The battle of two online shops: Verkkokauppa.com v Veneilijanverkkokauppa

The Finnish Supreme Court on 11 March 2016 gave its ruling (KKO:2016:16) in an action between a popular Finnish (online) retail store Verkkokauppa.com Oyj ("Verkkokauppa.com") and Oy Waltic Ab ("Waltic"), a company concerned with retail sale in the boating field. Verkkokauppa.com succeeded in registering Verkkokauppa.com as a Finnish trade mark back in 2004 for goods and services indicated under class headings 9, 35, 38 and 42. Waltic since 2009 used the domain names "veneilijänverkkokauppa.com" and "veneilijanverkkokauppa.com" as well as the mark depicted on the right.

For non-Finnish speakers it is crucial to know that "verkkokauppa" is Finnish for "online store "or "web store". Interestingly, as Verkkokauppa.com's trade mark is for class headings, it also covers retail sales and web sales. The mark "Veneilijän verkkokauppa.com" on the other hand means "Boaters' online store". 

The case began in 2010 when Verkkokauppa.com filed a lawsuit against Waltic in the District Court , seeking cessation of the use of Waltic's marks and payment of the reasonable remuneration of 100,000 Euros for the use of the marks plus Verkkokauppa.com's legal costs. The lawsuit was not favourable to Verkkokauppa.com in the District Court; nor did it go their way in the Court of Appeal -- but finally the Supreme Court took a different stand in the matter.

Once the lower courts had found that there was no likelihood of confusion between the marks due to the descriptive nature of Verkkokauppa.com's mark, Verkkokauppa.com no longer based its claims in the Supreme Court on the likelihood of confusion as described in Article 6, Subsection 1 of the Finnish Trade Marks Act. 

Thus, the nut that the Court had to crack was:

(i) whether Verkkokauppa.com had a reputation as meant by the Article 6, Subsection 2 of the Finnish Trade Marks Act; and 

(ii) should this be the case, if Waltic's marks were similar to the trade mark Verkkokauppa.com; and, finally, 

(iii) if this is the case, if Waltic's use of its marks infringed Verkkokauppa.com's trade mark rights. 

First, regarding reputation, Verkkokauppa.com stated that it was the second largest retail seller of home entertainment electronics in Finland and that its services were mainly targeted at internet users - even though it also had traditional stores. The Supreme Court found that the target group of the Verkkokauppa.com services was consumers living in Finland who used the internet for purchasing goods. 

According to the Supreme Court, the three surveys (showing e.g. that 37 % of the target group interviewed recognized the mark "Verkkokauppa.com" at least by name) submitted in evidence by Verkkokauppa.com strongly supported the fact that the trade mark had a reputation. Also Verkkokauppa.com's reports on the high volume of visitors on their websites and stores plus its high marketing expenses supported the reputation argument. The fact that Verkkokauppa.com had been registered only for six years before filing the lawsuit did not diminish its reputation. The Court considered the mark to have reputation since at least 2009, when Waltic started using its marks. 

Secondly, regarding the similarity of the signs, the court stated that Verkkokauppa.com was included in Waltic's marks as a whole and that the marks were similar both visually and phonetically. Also, the companies offered similar services and even their products are partially similar - save for the fact that Waltic's products were only boat-related. The Court considered that the prefix "Veneilijän" could mislead the public to think that "Veneilijän verkkokauppa.com" was a specific part of Verkkokauppa.com's product offering. Thus the target group of Waltic's services (boaters) was also part of the very wide service scope of Verkkokauppa.com. In addition, Verkkokauppa.com's trade mark was also known to Waltic's customers using online stores. Despite the fact that Verkkokauppa.com's trade mark was not especially inherently distinctive, there was still clearly a link between the trade marks required for the trade mark with a reputation.

Thirdly, the Court considered whether Waltic was free-riding or harming Verkkokauppa's trade mark's distinctiveness and reputation. The Court found that it was clear that Waltic has benefited from Verkkokauppa.com's trade mark as it was entailed in Waltic's marks and it ws already known to the public. As the parties operated in the internet environment, Waltic had likely benefited when consumers made searches based on Verkkokauppa.com's trade mark. 

Waltic started using its trade mark after Verkkokauppa.com's trade mark had gained reputation and significantly chose the .com ending instead of the .fi ending. Additionally there were clear similarities in the way the marks were used (the "Veneilijän" part used clearly separately with verkkokauppa.com in Waltic's mark). The Court concluded that, due to the scope of reputation of the Verkkokauppa.com trade mark, the level of similarity between the trade marks and the quality and similarity of the goods concerned, Waltic was free-riding on the distinctiveness and reputation of Verkkokauppa.com. 

Additionally, the Court considered whether Waltic had any due cause to use the trade mark. Waltic was of the opinion that the word "verkkokauppa", which described the service, should not be exclusive and that there existed a compelling reason to use the trade mark together with the generic domain .com. The Court stated that there was no due cause for Waltec's use and that Waltec could have used the .fi domain ending that it also had.   

Finally, the Court considered that Waltic infringed Verkkokauppa's trade mark rights and ordered the injunction as requested. Verkkokauppa.com presented no evidence of the usual licence or valid reasoning based on which the remuneration could have been calculated. The Court thus ordered a remuneration of 10.000 Euros for the use of Verkkokauppa.com. This was based on Waltec's internet sales during the years 2009-2010. 

The Decision can be found here (in Finnish).

This item has been kindly prepared for Class 46 by Tiina Komppa (Roschier, Finland)

Posted by: Blog Administrator @ 10.13
Tags: Finland, infringement, internet, distinctiveness,
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MARQUES does not guarantee the accuracy of the information in this blog. The views are those of the individual contributors and do not necessarily reflect those of MARQUES. Seek professional advice before action on any information included here.

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