Legal Alerts/26 Nov 2014

Legal Alert – Appropriation of Goodwill – New Trends in Finnish Practice

The Finnish Market Court has traditionally rejected claims based on appropriation of goodwill. However, the Market Court decision MAO 121/12 (Granströms Båtvarv) followed by other Market Court decisions, the latest given on 18 November 2014, show that appropriation of goodwill has gained foothold as an independent ground for action under the Finnish Unfair Business Practices Act (1978/1061). Fairly stringent criteria need, however, to be met in order to succeed.

The Market Court decision MAO 121/12 may be seen as a turning point. Ulf Granströms Båtvarv Oy Ab, Ky Ulf Granströms Båtvarv Kb and the founder Ulf Granström were granted an injunction against the use of “Granströms Båtvarv”, “Granströms Båtvarv Oy” or the registered firm PM Granströns Bårvarv Oy with “PM” presented in a small or unclear form. Ulf Granström’s boatyard had been active in Hanko since the 1960s and the name “Granströms Båtvarv” was a well-known concept on the market. The Market Court considered that the way the former partner marketed his new company established in Tammisaari (a neighbouring town) appropriated the goodwill of the boatyard founded by Ulf Granström. The Market Court referred to established Swedish Market Court practice and noted that appropriation of goodwill is at hand when a trader, for its own advantage, makes use of the value that has been created through efforts by another entrepreneur. A further condition was that the abused subject is to such a degree known that it is associated with the entrepreneur. The Market Court emphasized that appropriation of goodwill does not require a risk of confusion even though this was at hand.

In MAO 84/12/M1 Oy Patrol Ab and Fischer Sports GmbH asked for an injunction against the use by One Way Sport Oy of the black-yellow and black-yellow-white colour combination on skis and ski boots. Fischer had used the colour combination on skies and ski boots for more than 25 years. The Market Court repeated the principles recognized in Granströms Båtvarv but noted that colour combinations were not generally of a distinctive nature. Furthermore, Fisher had not been able to prove that the colour combination would have been so well-known and original that the skies due to said colour combination would have been associated with Fisher or Fisher products.

The Market Court decision MAO 398/14:  Valio had produced, marketed and sold vitamin, protein and calcium enriched milk products since 2010 under the PLUS mark (Valio PLUS). Osuuskunta Satamaito launched Satamaito Rasvaton Plussa Maito for vitamin, calcium and protein enriched products in 2013. Valio claimed an injunction against the use of PLUSSA or PLUSSA milk in connection with special milk products. The Market Court noted that the Valio PLUS milk products were known among the relevant target group. However, according to the Market Court, the word PLUS was descriptive due to its nature and it was not shown that PLUS would on its own have gained a reputation that earned protection against appropriation of goodwill.

In the most recent Market Court case MAO 809/14, Valio claimed among others that Bunge Finland appropriated the goodwill in the VOIMARIINI and OIVARIINI products by marketing a competing butter-vegetable oil spread under the name KEIJURIINI. The Market Court noted that VOIMARIINI and OIVARIINI were well-known trademarks but concluded that in consumers’ minds “RIINI”, which is also used in other competitors’ product names, mainly refers to the nature of the butter-vegetable oil spread. Bunge Finland did  consequently not create an association with the OIVARIINI or VOIMARIINI products. This was further enhanced by the fact that KEIJU is a known mark for Bunge Finland’s products and KEIJURIINI mainly refers to the KEIJU products. See also the corresponding outcome by the Supreme Court in the trademark infringement case KKO 2012:12 (Voimariini, Oivariini/Ingmariini).

Past case law shows that even though appropriation of goodwill is now accepted as an independent ground for action, the threshold is high. The applicant must be able to show that the subject of appropriation (a trademark, trade name, other IPR or concept) is original (or clearly has a secondary meaning), independent and well-known to such a degree that it is associated with the entrepreneur and there is an association with the subject of appropriation (See also Market Court decisions MAO 429/13 Abloy and MAO 269/13 ABB V. El-Parts (number series on lockbody; colouring and shape of toolbox)). If the Finnish Market Court’s Hullut Päivät case MAO 132/04 (Crazy Days – a well-known 20-year-old, two times a year repeated sales concept of the well-known Finnish department store Stockmann) which at that time was dismissed, were to be decided today, the outcome would most likely have been different.

Most of the appropriation of goodwill cases decided by the Finnish Market Court could have been prosecuted as trademark infringement cases as well (as was successfully the Hullut Päivät case). Therefore, it is recommended  in each potential case to carefully assess whether it  should be prosecuted as a trademark (or other IPR) infringement case and/or under the Finnish Unfair Business Practices Act keeping in mind both procedural aspects and aspects relating to the scope of injunction that can be rendered.

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