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By | OUT-LAW.COM 29th November 2007 09:55

Gateway Inc fails to block rival's Gateway brand

Door closed on 'gateway' challenge

Gateway Inc cannot stop Fujitsu-Siemens' registration of the words ACTIVY Media Gateway, the European Court of First Instance ruled yesterday. The tech companies' marks will not confuse consumers, the court ruled.

Computer maker Gateway Inc owns numerous trademarks incorporating the word "Gateway" and objected to its rival's application for a pan-European trademark registration in 2002. The companies' respective marks are intended to be exclusive in the IT market.

Fujitsu Siemens sells an "ACTIVY media centre" and "ACTIVY media player"; it does not presently use the ACTIVY Media Gateway brand, though. Gateway Inc is the world's third-largest PC company and attaches its Gateway brand to a wide range of computers and gadgets.

In 2004, the Office of Harmonisation for the Internal Market (OHIM), Europe's trademark registry, said there was no likelihood of confusion between the marks. That was upheld on appeal the following year. Gateway Inc then took its opposition to the Court of First Instance.

Gateway made various arguments in trying to suppress the rival mark, including that both marks were "phonetically and conceptually" similar. It is not the word "ACTIVY" that catches the consumer's attention, it argued.

Many non-English speakers in Europe would perceive that as a misspelling of "activity" and "therefore would not confer such distinctiveness on it in comparison with the other elements of the mark, namely 'media' and 'gateway'. These consumers would nonetheless recognise the Gateway mark because of its reputation", it said.

OHIM, not Fujitsu Siemens, defended the case in the Court of First Instance.

The court said that confusion was unlikely, noting that "the European consumer of [information technology goods and services] is more familiar with the use of English words than the average consumer".

From a visual point of view, "gateway" is not an element which stands out in the trademark applied for, the court ruled. "By contrast, the element 'activy', by virtue of its position at the beginning of the trademark applied for and by its reproduction in capital letters, clearly stands out," it wrote. "Therefore, it constitutes the distinctive and dominant element in the trade mark applied for from a visual point of view."

It concluded that there was no visual similarity between the marks. There was no phonetic similarity either, it said. Even if some consumers read the word as a misspelling, that only serves "to reinforce the fanciful character of the word 'activy'", it wrote.

The court said the word "gateway"2 evokes the concept of a gateway, a term commonly used in the computing sector, deeming it "highly descriptive" of the goods and services covered by the mark.

The court dismissed the action and ordered Gateway to pay the costs of OHIM.

Lindsey Wrenn, head of trademarks at Pinsent Masons, the law firm behind OUT-LAW.COM, said the case highlights the value of a distinctive trademark. "A well-known brand can still be difficult to protect," she said. "Gateway's biggest rivals – Hewlett-Packard and Dell – have brands that are much, much easier to protect."

Wrenn said the ruling is unsurprising and does not weaken trademark protection. "In most situations you can still stop someone using your registered trademark as a component of a new trademark," she said.

Wrenn points to a 2005 ruling from the European Court of Justice (ECJ) in a dispute between rival tech firms Medion and Thomson. Germany's Medion owned the word mark "Life" for electronic entertainment goods and Thomson wanted to register the mark "Thomson Life" in the same sector. Medion won the case – but Wrenn distinguishes that ruling from Gateway's circumstances.

"The registered mark Life was ruled to be 'of normal distinctiveness' for the goods in question," said Wrenn. "That was an important factor. Had it been a more descriptive mark, such as Gateway, the decision may well have gone the other way."

Wrenn said the Gateway mark has "low descriptiveness" because it alludes to the products, albeit still eligible for registration.

"The addition of a company name or another mark to a registered trade mark of average distinctiveness will not avoid the composite mark being deemed confusingly similar to the registered mark," she said. "But as Gateway has discovered, that situation can change where the registered mark has low distinctiveness."

"When your brand is a generic or descriptive word, protection is always an uphill struggle. When you're choosing a brand, you should always go for something distinctive."

See: The judgment

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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