Judgement of Warsaw Court of Appeals of 9th October 2019 (case no. VII AGa 1570/18)

 Intellectual property disputes are usually complex and evoke much emotion. A boundary  between an infringement and its absence is often difficult to clearly and unequivocally determine. In the present case, it might have seemed that the judgement in favor of the defendant was certain because of  dissimilarity of the compared trademarks. Nevertheless, the dispute was able to warm up both parties and the speedway club sponsored by them.

The plaintiff Cinkciarz.pl operating in the Internet currency exchange industry was a sponsor of one of the leading Polish speedway clubs Falubaz Zielona Góra. The club placed the sponsor’s designation, which is a registered EU trademark, on clothing of crew. Below, there is the plaintiff’s device trademark:

Cinkciarz.pl wanted to continue cooperation with the club while maintaining industry exclusivity and to become the titular sponsor of the club, but no agreement was reached between the sponsor and the club. The club began its new cooperation with the defendant Ekantor.pl which just as the previous sponsor is an entrepreneur operating in Internet currency exchange sector. Ekantor.pl became the titular sponsor of the club. The defendant is using in their economic activity a logo, which is, however, not registered as a trademark (EUIPO refused registration of the trademark EUTM 013805239 because of its descriptive character and lack of distinctiveness). Below there is the mark used by the defendant:

The defendant along with the club created a modified logo, which is a combination of the abovementioned mark and the logo used by the club. However, no attempt was made to register the resulting sign as a trademark.

The above sign has not been directly used by the defendant to designate the currency exchange services it offers. The logo was created solely for sponsorship purposes and was used by the club to promote Ekantor.pl, as it was established in the sponsorship agreement.

According to the plaintiff, the combined mark was similar to the trademark registered by Cinkciarz pl. However, the court established that there was no such similarity, pointing to the fact that in the defendant’s sign a different font and color were used, and that the similarity in terms of the arrangement of the overlapping circles did not pose a risk of confusion by the recipient. The court also emphasized that the presence of Mickey Mouse in the new sign (which is not present in the claimant’s trademark) was clearly distinctive. On the other hand, placement of currency symbols in marks used by both entrepreneurs had, according to the Court, little distinctive character in case of the business of foreign currency exchange .

Despite the above classification, the Court of Appeal found, unlike the Court of the first instance, that the mark in question was used in the function of a trademark, which in this case was an advertising function. Sponsorship is an indirect form of advertising of the sponsor’s services. This type of advertising involves use of a distinctive sign such as the surname, entreprenur’s name or trademark to indicate the sponsored entity, such as a sports team or music band, and not directly the services of the sponsor. However, the sponsor’s goal is to achieve advertising effect in relation to their goods or services.

Another noteworthy issue is the use of a mark that is a combination of two other independent marks. In the opinion of the Court, if the sponsor’s mark which is an element of the combined mark, is retained in the new mark, then the sponsor’s mark is also being used on the market. In the present case, it was with the consent of the defendant, which allowed the club to modify its trademark and use it.

What significance does this judgement have? The entrepreneurs conducting sponsorship activities should bear in mind that it is also a form of advertising, which results with specific legal consequences. In particular, if a trademark is used by a sponsored team, such action may be assumed to be a trademark use by the sponsor.