A Trademark Master Class

In May 2022, the final resolution of a trademark conflict that had started 12 years earlier between Ferrum S.A. de Cerámica y Metalurgia (Ferrum) and Facebook Inc. (Facebook) was made available. The conflict involved trademark oppositions and a cease of use request, brought under the previous trademark law, so the issue was settled in court, both in the first instance and in the appeal instance.

Notwithstanding the different specific issues that were submitted to the courts for decision by each of the parties, as we will describe in the following paragraphs, the main issue in this case was to determine whether the trademarks and were sufficiently similar so as to order the cease of use of the trademark , and to prevent the coexistence of the trademarks in the registry. And we say “in the registry” because, in the market, the trademarks coexisted between -at least- 2004, when Facebook made its worldwide launch, and 2022, when the decision of the Federal Civil and Commercial Court was issued.

The details of the case are as follows: a legal dispute between Ferrum and Facebook, that involved five cumulative processes between the same parties.

The first claim, which happens to be the cumulative case, was brought to the courts by Ferrum against Facebook, in relation to seven (7) trademark applications for , which Facebook filed in 2010 to identify goods in class 9, and services in classes 35, 36, 38, 41, 42 and 45. In this process, which began in August 2011, Ferrum argued that these trademarks were confusingly similar to its institutional logo , and requested: i) that the cease of use of the trademark applied for by Facebook be ordered; ii) that its oppositions be declared founded; iii) that the defendant be ordered to take the necessary steps and measures so that third parties do not use the challenged sign; and iv) that the publication of the ruling in mass media be ordered at the expense of Facebook.

At the time of answering the complaint, Facebook preliminarily claimed that the action sought by Ferrum should be barred due to the statute of limitation set forth by the Trademark Law, considering that since 2007 and until 2010, which is the date of filing of the oppositions, Facebook had used its logo in a peaceful, uninterrupted and ostensible manner, and had allowed third parties to use the sign by means of license.

The remaining cases, joined to the main proceedings, were brought by Facebook against Ferrum in February, May and August 2012, and sought to have the oppositions filed by Ferrum against the following Facebook trademark applications declared undue:

“F8” (wordmark), in classes 38 and 41;
, in classes 9, 35, 36, 38, 41, 42 and 45;
, in classes 35, 36, 38 and 41; and
, in classes 9, 16, 35 and 36.

The bottom line

Let us begin the story by identifying the parties, as they themselves were presented in the dispute. On the one hand, Ferrum is a national company, leader in the ceramic sanitary ware market, with an important presence in the market of wood fiber boards, acrylic bathtubs and hydromassage, among others. It is a company that has been in business since 1897, which claims to be positively known by the consumer public, who also knows its outstanding history in the national industry.

On the other hand, Facebook is a company that started offering its social networking services globally since 2004, with over one billion users on a worldwide basis, and even millions of users in Argentina (at least at the time this legal action was brought), which uses its trademark frequently in advertising, as a way to promote the relationship between the company and its customers, acting Facebook as an intermediary. Facebook argues that its trademark is a well-known trademark.

The arguments supporting Ferrum’s position and substantiating its claim can be summarized as follows:

That the trademark constitutes the sign that Ferrum chose as its institutional logo in the mid 70’s, whose trademark registration it applied for in 1973, and that such sign is also a commercial designation under the terms of the Trademark Law;

That Facebook’s trademark is confusingly similar to its institutional logo, and features a typography identical to its own, in addition to the same color tone, which generates a risk of trademark dilution greater than usual, and that the damage to the trademark occurs regardless of the class, so that the principle of specialty is not applicable;

That its mark is a well-known mark, and that Facebook appeared at a considerably later time;

That the trademark is only known in the field of information technology;

That, although the services provided by both companies are in principle unrelated, confusion is nevertheless generated in the consumer public; and that its activity is not limited to the mere manufacture of furniture, as it also offers community services that are identified with its trademark ; and

That, although Facebook’s trademark is well-known, such characteristic does not validate the infringement of registered trademarks owned by third parties, which are precedent in time.

Facebook’s arguments in defense of its trademark applications are the following:

That Ferrum already consented to other trademark registrations that Facebook obtained in Argentina, and that its logo has already been registered in multiple jurisdictions around the world;
That the trademark is a well-known trademark, through which services are offered in more than 70 languages and to over one billion users around the world;

That there can be neither confusion nor dilution based on a trademark designation, since this only protects the activity carried out by its owner, and not other activities or different branches, and that the companies do not operate in the same market, which rules out the claim on undue use of the fame and prestige of another’s trademark;

That the registration of a trademark consisting of a single letter (in this case, the letter “F”) must be considered as a weak sign, so that it cannot be intended to monopolize the letter, nor the colors when specific colors have been claimed;

That the strictness of the comparison between the marks should be softened, since Ferrum used defense trademarks to oppose these applications, on account that it does not use its trademarks in classes 38, 41 and 42;

That the confronted trademarks already coexist peacefully in the market, and that it is impossible to comply with a court order to cease use, due to the impact that the sign has already caused in the consumer public, which is verifiable from the large clientele already generated by Facebook, and which must be safeguarded;

That the estoppel doctrine is applicable, given that i) Ferrum also applied for the registration of its trademark in the United States of America, and to that end declared that its trademark was not confusingly similar to any existing trademark in such country; and that ii) Ferrum was well aware of the existence of the trademark , since it has a page for its business on Facebook, opened on September 21, 2008.

The court decision

In March 2021, the first instance ruling resolved the matter in favor of Facebook: it upheld the defense based on the statute of limitations, rejected Ferrum’s claim and admitted Facebook’s claims.

To do so, the first instance judge initially referred to the Facebook’s defense based on the statute of limitations, in accordance with the provisions of article 29 of the Trademark Law: “Any person with a legitimate interest may oppose against the use of a designation. The relevant proceedings shall be limited to one year from the time when the third party began using the designation publicly and openly or from the time when the plaintiff became aware of such use”. On this issue, the judge hearing on the case pointed out that Facebook started the public and open use of its trademark in February 2004, and that in February 2008 the Spanish website was created. Moreover, according to the evidence in the case, it was proved that Ferrum created a Facebook account on September 21, 2008, date on which it undoubtedly became aware of the existence of the social network. Thus, and taking into account that Ferrum’s initial claim was brought to court on August 5, 2011, the one-year term provided for in our legal system had already elapsed.

Consequently, the defense based on the statute of limitations raised by Facebook was upheld, and the petition to cease the use of the trademark was rejected, which rendered irrelevant the treatment of Ferrum’s claims that Facebook should take the necessary measures to prevent third parties from using the challenged sign, and the publication of the ruling in the mass media.

Then, the ruling referred to the “well-known” character of Facebook’s trademark, and decided that it should be considered as a differentiating factor and not as an element to approximate the marks, since it is precisely the well-known character of the mark what is decisive to consider that the confronted signs are not confusingly similar. He also pointed out that, although the trademark is highly recognized in the sanitary ware field, it is not a well-known trademark, and that this circumstance makes the principle of specialty applicable: the right of ownership of a trademark extends to the universe included in the class where it was applied for, or to the set of goods and services falling in the class to which the applicant voluntarily restricted the request for registration. On this basis, the ruling determined that classes 16 and 38 were out of the scope of the comparison.

With respect to the possible similarity between the signs, the judge ruled that, since both trademarks consist of the letter “F”, which happens to be of common use, their owners must know that their trademarks will have to coexist with those previously registered, and also with those to be applied for in the future. Moreover, the decision ruled that no one can ignore that, among trademarks featuring these characteristics, there will always exist resemblance derived from the co-participated particles, which are ineligible for trademark privilege.

The highly renowned nature of the trademark is associated with the scope of the activities its owner is engaged in, and this circumstance protects the mark from dilution: the consumer public (in the field of sanitary and furniture products) cannot be induced to purchase sanitary products in confusion with a social network. This is because the dilution does not lie in purchasing one product for another, but in the consumer being able to believe that both different products have a common origin, or an identical quality control.

Finally, and on the account that the letter “F” should be regarded as a weak sign when assessing confusing similarity as described above, the first instance judge referred to the remaining trademarks applied for by Facebook and challenged by Ferrum, and concluded that: i) the sign “F8” did not only have the character of a word mark, in comparison with Ferrum’s design mark, but also had the addition of the number “8”, which provided the mark with sufficient distinctive capacity to repel any possibility of similarity; that; ii) there were sufficient graphic differences between the marks and , and that iii) in none of the cases there was confusion from the phonetic point of view -since the comparison was between figurative signs-, and that there was no confusion from the ideological point of view either, because in all cases the trademarks consisted of fanciful signs.

Ferrum appealed the first instance judgment on October 26, 2021, which merited Facebook’s reply on November 11, 2021. Regarding the defense based on the statute of limitations as raised by Facebook, and admitted in the first instance, Ferrum argued that the 3-year term provided in article 36 of the Trademark Law was applicable, and not the 1-year term applicable to designations.

In support of its position, Ferrum argued that the action was not time-barred because the undue use attributed to Facebook was continuous. Moreover, Ferrum insisted on the well-known character of its trademark , registered in all classes, and hence it argued that the principle of specialty should not be applicable. Finally, it pointed out that the trademark was present in the mass media and was used by individuals and companies of any sector for advertising purposes, so that, although the commercial activities carried out by the parties were different, the error of the consumer public about the products offered was still feasible.

In the appeal instance, the Chamber decision issued in May 2022 confirmed the first instance judgment, and stated that the statute of limitations was not for the designation (according to article 29 of the Trademark Law) but for the trademark, according to article 36 of such law, which establishes that: “The right to bring any civil claim shall expire three (3) years after the infringement was committed, or one (1) year counted from the day in which the owner of the trademark became aware of the action giving raise to the claim”. However, the appellate court pointed out that the rational interpretation of the law does not admit the general imprescriptibility proposed by Ferrum, since this would contradict the civil principle that postulates that all actions are subject to statute of limitations, especially when the extinctive term is expressly provided for in the law. He also added that Ferrum did not exercise the civil action derived from the commission of a trademark crime, but the one concerning the alleged confusing similarity of a registration already obtained, without any opposition on its part.

Finally, it concluded that the continuity in time of the undue use of a trademark similar to another did not determine the inapplicability of the statute of limitations for a civil action, and specified that Ferrum had not indicated the moment from which Facebook started to use its trademark. Indeed, the court mentioned that the only date stated by Ferrum in this regard was January 18, 2010 (date on which Facebook applied for the registration of the trademark ), clarifying that Facebook was using the sign in question by itself or through third parties, without further details. After assessing this issue, the court understood that, prior to the filing date of these trademark applications by Facebook, there were only two dates: the registration of Facebook’s (word and figurative) trademarks on March 17, 2009, and the opening of the page that Ferrum has on Facebook, on September 21, 2008. Both dates are directly related to the use of the trademark by Facebook, a fact that could not have been unknown to Ferrum. Thus, even if the most convenient starting point for Ferrum was considered (January 18, 2010), the annual statute of limitations had expired at the time of filing the lawsuit, in August 2011.20

With respect to the conflicts between the trademarks “F8” (word) and , and between the signs and , the court of appeal confirmed the lower court’s decision that postulated that there is no likelihood of confusion between the signs.

Finally, regarding the conflict between the marks and , the court also referred specifically to the services of classes 35, 36, 38, 41 and 42, which Ferrum mentioned were of its interest for the mark , although they were not central for its business. On this issue, the Chamber mentioned that, notwithstanding the claims raised by Ferrum, there was no evidence in the case proving the existence of the mentioned use and that, taking into account that none of those tasks constituted its main business activity (that is, the development, production and commercialization of sanitary products for the bathroom, kitchen and laundry), the registrations that Ferrum owns in classes 35, 36, 38, 41 and 42 should be considered “defense trademarks”. This circumstance softened the strictness of comparison between the signs, especially in light of the history of each company, the products and services they offer, the manner in which their trademarks are used, and the degree of knowledge that the public has of each one of them.

In addition to the differences between the different activities each company is engaged in, which are projected in clearly different markets and geographical areas (sanitary ware for Ferrum, within Argentina, and social network services for Facebook, on a worldwide level), the reality of the facts shows that Facebook consumers use the trademark to inform the account they have in that social network, while Ferrum uses the mark in its business documentation, in the packaging of its products and in graphic advertising.

The Court reaffirmed that Facebook is a well-known trademark worldwide, while Ferrum is not, notwithstanding the prestige it has gained in the sanitary ware sector. In this sense, the Court pointed out that the use of the trademark abroad had a legal impact in this case, while the prestige of the trademark is inseparably linked to the local level. In short, and taking into account that no concrete evidence on the likelihood of confusion had been submitted in the case, the Court interpreted that there was no real likelihood of confusion because it was not possible for the consumer public, which is generally normal, lucid and moderately distrustful, to incur in confusion believing that refers to the sanitary ware company Ferrum.

Conclusions

This decision by the Federal Civil and Commercial Court, which confirms the first instance judgment, is in our opinion a master practical class on a large number of theoretical legal concepts of daily application in conflicts of trademark nature, such as: the three perspectives of comparison (graphic, phonetic and ideological); the difference between well-known and renowned trademarks; the weakness of trademark registrations consisting of a single letter -and the impossibility of monopolization-; coexistence in the market; defense trademarks; the principle of specialty; trademark dilution; and the factors that condition or soften the strictness of trademark comparison, including as “bonus tracks” also the (in)applicability of the statute of limitations for a civil action; the estoppel doctrine; and the importance of how the presence in markets and geographical areas impacts on trademarks, as objective circumstances in the case.

But the most relevant aspect of the matter is that the decision adopted turns out to be clear, sound and logical, in line with the perception that one could have when intuitively comparing the signs, even without the detail of the arguments posed by each party in the case. This circumstance only seems feasible when the trademarks are renowned or well-known (as in this case) and the average consumer has sufficient specific information on the areas in which each of the parties carries out its activities.

Although this controversy took 12 years to be resolved, we understand that justice has been done, through the application of theoretical concepts adjusted to the reality of the facts.

For further information please contact: pgalvan@ojambf.com

A Trademark Master Class