In June 2017, the Finnish Supreme Court handed down its judgment in Case KKO:2017:42 in which the court considered the distinctiveness of a three-dimensional trade mark and the likelihood of confusion between the shapes of competing goods. The defendant, Hardware Group Oy, had released its EDGE keys [illustrated below, right] on to the market which bore resemblance with Abloy’s EXEC keys [illustrated, right] after Abloy's design and patent protection had expired. Abloy claimed that Hardware's keys infringed its three-dimensional trade mark [illustrated below, left] in that (i) the defendant's key heads were causing a likelihood of confusion among the public with its trade mark, and (ii) the defendant's use of Abloy's trade mark, which has a reputation in Finland, would take unfair advantage of the distinctive character or the repute of Abloy’s mark, or be detrimental to the distinctive character or the repute of that mark.

Prior to the case at hand, the Court of Justice of the European Union (CJEU) considered trade mark protection for the shape of goods in several cases. The CJEU has, inter alia, held that all factors must be taken into account when the likelihood of confusion is assessed and that, the more distinctive the earlier mark, the greater will be the likelihood of confusion (see e.g. CJEU ruling of 22 June 1999, Lloyd Schuhfabrik Meyer, C-342/97, paras 18 and 20). The CJEU also stated that average consumers are not prone to make assumptions about the origin of goods based on the shape of their packaging and it could therefore prove more difficult to establish distinctive character in the case of a three-dimensional trade mark than in the case of a word or figurative mark (see e.g. CJEU ruling of 12 February 2004, Henkel, C-218/01, para. 52). Further, the CJEU held that a distinctive character can be established even for three-dimensional trade marks with only functional essential characteristics if the shape of the goods at issue incorporates a major non-functional element, such as a decorative or imaginative element which plays an important role in the shape (see e.g. CJEU ruling of 14 September 2010, Lego Juris A/S, C-48/09 P, para. 52).

In the case at hand, the Supreme Court held that the products of Abloy and Hardware fell into the same product category and had a rather similar general look which caused a greater likelihood of confusion among the public. However, the Court added that the quality, purpose of use and the manufacturing processes do provide certain requirements for the appearance of the key heads and that the key heads protected by Abloy's trade mark were not materially different from key heads commonly used in the relevant market. Accordingly, key heads with round corners, holes drilled for attachment and which consists of black plastic are common on the market.

Pic 1: Abloy Oy's EXEC key  Pic 2: Abloy Oy's TM   Pic 3: Hardware Group Oy's EDGE key

The Supreme Court held that the shape of Abloy's key head was considered mainly functional rather than decorative or imaginary. Thus the scope of protection of Abloy's three-dimensional trade mark was considered narrow. According to that Court, the most distinctive part of the key head protected by Abloy's trade mark was the diagonally placed mounting hole. As part of its overall assessment, the Supreme Court stated that the oval mounting hole was bigger and placed horizontally in Hardware Group's key head and that the key head also contained the defendant's mark "EDGE". These differences were sufficient for the Supreme Court to maintain the Market Court's earlier ruling that there was no likelihood of confusion between Hardware Group’s products and Abloy's trade mark.

In relation to the reputation of Abloy's trade mark in Finland, the Market Court had held that this mark did not have reputation within the meaning of Section 6 (2) of the Trade Marks Act. Due to the restrictions in the granted leave to appeal, the Supreme Court did not reassess this issue. However, the Supreme Court stated that the reputation and distinctiveness of the trade mark also have relevance when considering the likelihood of confusion, even if the trade mark would not in casu be considered to fulfill the criteria set out in Section 6 (2) of the Trade Marks Act.

The Supreme Court based its consideration on the following criteria established by the CJEU in its earlier practice (see e.g. CJEU ruling of 18 June 2002, Philips, C 299/99, para. 60): (i) the market share, (ii) the time and intensity during which the trade mark in question has been in use, and (iii) how extensively the target audience recognizes the commercial origin of the trade mark. In the case at hand, the Supreme Court considered it evident that Abloy had a strong position in the Finnish market and that Abloy, as well as its competitors, had been using the triangular shaped key heads for a long time. Abloy had also conducted a survey according to which 75% of the consumers subject to the survey had considered Abloy as the commercial origin of both the Abloy's EXEC key and the Hardware Group's EDGE key. However, the Supreme Court held that Abloy’s consumer surveys had not sufficiently established that Abloy's three-dimensional trade mark would, as such, have been the reason for the confusion of the commercial origin by the survey participants.

The Supreme Court also emphasized that the expiration of Abloy's patent protection was rather extensively informed in media and sophisticated consumers should be aware of the fact that similar key heads are available from different manufacturers. Therefore, the Supreme Court dismissed Abloy's appeal.

In the judgment, the Supreme Court gave three-dimensional trade marks a quite narrow scope of protection. It is therefore possible that even small differences can be sufficient to avoid infringement.

This post has been kindly prepared for publication on Class 46 by Anne Kyyrö and Vilhelm Schröder of Roschier, Finland.