OGH: Trademark Law Can Take Precedence over Naming Law

Dec 2, 2022 Benn-Ibler Rechtsanwälte 02.12.2022

The Austrian Supreme Court (Oberster Gerichtshof, OGH) has ruled that the use of components of a registered trade mark is unfair if the parties to the dispute use the same surname and sell the same products.

The managing director of the plaintiff private limited company (GmbH) and the sole shareholder of the defendant GmbH are brothers. The plaintiff is the owner of the word mark SZIGETI (registered in 2006) and he sells sparkling wines. The defendant has been the owner of a figurative mark containing words, NORBERT SZIGETI, since 2020. Sparkling wine products are sold under this trade mark.

The lower courts prohibited the defendant from using the figurative mark containing word elements in business relating to the selling of sparkling and semi-sparkling wine.

The Supreme Court confirmed this view.

Pursuant to Section 10 (1) of the Austrian Trademark Protection Act (Markenschutzgesetz, hereafter MaSchG), a trademark owner has the right to prohibit others from using signs identical or similar to this trademark for identical or similar goods and services if the targeted public in all likelihood will confuse them. Section 10 (3) MaSchG provides as an exception that a third party may not be prohibited from using its own name, provided this is in accordance with honest practices in trade and commerce.

It was undisputed that the goods of the two parties (sparkling wine) are largely identical. Different label designs also do not eliminate the likelihood of confusion because the word element is the most recognisable element.

With regard to the exception under Section 10 (3) of the MaSchG, the Supreme Court ruled that if a label design similar to a well-known trade mark is used by another manufacturer, it is reasonable to assume ulterior motives, in particular, exploitation of the original company's good reputation. Therefore the court ruled that the company owner with the younger priority must take all reasonable steps to eliminate the likelihood of possible confusion between the two companies. Complete adoption of the plaintiff's word mark as a dominant element of the product name is unfair because the trademark is being used to attract the attention of the average supermarket customers. Also, the younger trade mark had distanced itself from its original company name and had become more similar to that of the plaintiff.

OGH 4 Ob 131/22a (18 October 2022)