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Owner of MI and MI-8 marks successfully invalidates MI-8MCƂ for Helicopters

Background

Facts

On 7 June 2019 Publichne aktsionerne tovarystvo Motor Sich (‘Motor Sich’) applied for the registration of the figurative international trademark MI-8MCƂ (No 1480434), designating Lithuania, for “aircraft, in particular helicopters; air vehicles” in Class 12 and “maintenance, rebuilding and repair of aircraft, in particular helicopters and their components” in Class 37:

National Helicopter Center Mil & Kamov Joint Stock Company (‘NHC’) was established by Russian Helicopters Holding Company, the only Russian helicopter designer and manufacturer, which produces the famous Mi helicopters. On 19 November 2020 NHC filed a request for invalidity (PNTZ-5) of the international trademark MI-8MCƂ in Lithuania on the ground that the mark had been filed in bad faith (Article 7(3) of the Law on Trademarks of the Republic of Lithuania).

NHC’s arguments

NHC stated that it was the rightful owner of the signs MI and MI-8 for goods and services in Classes 12 and 37, and that it owned earlier rights in these signs. ‘Mi’ corresponds to the first two letters of the name of Mikhail Mil, the famous Russian helicopter designer, scientist and founder of the Mil Moscow Helicopter Plant, while ‘Mi-8’ is a specific helicopter model used in military aviation. The mark MI-8MCƂ is similar to the earlier signs MI and MI-8:

– NHC’s signs are fully incorporated into the contested mark;

– The overlapping parts have the same structure (‘MI’ and ‘MI-8MCƂ’, or ‘MI-8’ and ‘MI-8MCƂ’); and

– These are placed at the beginning of the signs, which is the most noticeable part.

Such coincidence also determined the phonetic similarity. Although the contested mark is written in Cyrillic script, the letters placed at the beginning coincide with Latin letters visually and phonetically. The signs differ in the additional letters ‘MCƂ’, which are at the end of the contested mark, and could refer to a specific variant of the Mi-8 helicopter. The additional letters do not change the pronunciation, visual impression or semantic content, since the contested mark would be perceived as NHC’s sign – either as a Mi (Mikhail Mil) helicopter or as the specific model Mi-8.

NHC asserted that the applicant knew of the prior signs MI and MI-8, since:

– the trademark MI was first used in 1947;

– the first trademark registration was granted in Russia in 1988;

– the mark is registered in many countries;

– the Mi helicopters or models such as the Mi-8 are known worldwide; and

– Motor Sich is active in the aviation market.

NHC submitted evidence proving earlier rights to the signs MI and MI-8, and that it is the only producer of Mi and Mi-8 helicopters in Russia. The parties are helicopters manufacturers and competitors in the same market. There are not many manufacturers in this market, so they monitor and know each other. The fact that Motor Sich registered a mark that is confusing similar to prior signs with a reputation confirmed its intention to create a link between its mark and the prior signs; the characteristics of the goods covered by the earlier signs could be attributed to the goods covered by the contested mark and thus create commercial attractiveness as a result of a possible association with the earlier mark.

Motor Sich’s arguments

Motor Sich stated the earlier signs are short, while the contested mark is long. The first letter ‘M’ of the contested mark symbolises the first letter of the company name Motor Sich, while the letter ‘I’ is a typical Ukrainian letter, characteristically used at the end of marks. As the goods and services at issue are very expensive, the relevant consumers would be professionals with specific knowledge and a high level of attention. In the event that the goods were bought by non-professionals, the latter would request expert advice.

Motor Sich further noted that it uses the contested mark in other countries and intends to use it in Lithuania. In 2011 the State Aviation Administration of Ukraine issued a certificate to Motor Sich confirming the suitability of the Mi-8MSB helicopters for operation. Motor Sich also submitted other evidence of use. Finally, it stated that it had no unfair intentions and followed commercial logic to protect the sign, which it intends to use in Lithuania.

Decision

On 4 August 2021 the Appeals Division satisfied the invalidity request and declared that the mark MI-8MCƂ was invalid in its entirety based on the following arguments:

After analysing the evidence submitted, the Appeals Division agreed that the subjective rights to the signs MI and MI-8, in a broad sense, belonged to NHC, and that NHC was the only producer of Mi-8 helicopters (and other Mi models) in the country of origin.

The Appeals Division noted that both parties are competitors in the same market and, therefore, Motor Sich knew this particular market segment. The aviation sector is very specific; therefore, NHC’s activities could not have been unknown to Motor Sich, especially due to the longstanding use of the signs MI and MI-8. Parties operating in the same sector need to be careful and attentive to what is happening in that sector.

Although the fact that Motor Sich knew or should have known of NHC’s activity did not, in itself, demonstrate unfair intentions, it was significant that the earlier signs MI and MI-8 were fully incorporated into the contested mark, and that the overlapping parts had an identical structure and were placed at the beginning. The Appeals Division concluded that the signs were similar visually and phonetically, and that the contested mark could be associated with NHC.

The contested mark was registered for goods and services in Classes 12 and 37, which are related to NHC’s activity. The Appeals Division indicated that this factor was significant in this case, as the goods and services are specific and target only a very specialized group of consumers.

Given that ‘unfair circumstances’ include the intention to create confusion and attract more consumers, the Appeals Division stated that the registration of a very similar mark for identical and/or similar goods and services enabled the assumption that Motor Sich intended to create a confusing association with NHC and its helicopters – thus giving the impression that Motor Sich’s helicopter was one of the Mi helicopters.

Using the reputation of another trademark is one of the criteria for demonstrating unfair intentions. The Appeals Division concluded that the evidence proved the reputation of the sign MI-8 in the aviation sector, including in the territory of Lithuania. Therefore, Motor Sich’s likely intention was to take advantage of the reputation of the earlier signs and confuse consumers.

Although filing an application does not, by itself, constitute unfair intentions, economic operators must, by acting carefully and diligently, refrain from carrying out any action of an objective nature which may be regarded as not complying with fair trade standards.

It is for the proprietor to provide plausible explanations as to the objectives and commercial logic pursued by the application for registration of the mark. The Appeals Division stated that the evidence submitted by Motor Sich did not justify the filing of the contested mark, since it is very similar to the earlier signs MI and MI-8, which have been used in the market for a long time. To justify the registration of the contested mark, Motor Sich referred to the certificate granted by the State Aviation Administration of Ukraine and other evidence of use. However, the Appeals Division noted that such institution was not competent to resolve IP disputes. Moreover, NHC had submitted evidence confirming the likelihood of confusion among consumers. Therefore, there was no fair participation on the market and the evidence submitted by the applicant did not demonstrate the proper purpose and commercial logic of the trademark application.

The Appeals Division concluded that the applicant had filed the application for registration in bad faith.

Next steps

The term to appeal the decision of the Appeals Division will expire on 4 November 2021. If no appeal is filed, the decision will become final.

 

This article first appeared on WTR Daily, part of World Trademark Review, in August, 2021. For further information, please go to www.worldtrademarkreview.com

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