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Background
8 August 2023

VW’s GTX challenge backfires

The Perils of Enforcing a Short Trade Mark

VW has failed in opposing registration of XTG in the EU based on GTX.

Background

A Polish entity, XTG S.A, applied to register the trade mark XTG in the EU in Class 35 for retail of a wide variety of goods, including vehicles, batteries and accumulators. Volkswagen AG opposed the application based on its earlier EU registration for GTX which covers, among others, retail of motor vehicles and motor vehicle parts. VW lost before the Opposition Division, the Board of Appeal and most recently the General Court of the European Court of Justice (“GC”).

VW’s Arguments

The GC case centred round whether there was a likelihood of confusion between the two marks in commerce and a number of factors which might influence this.

It was common ground that the respective services of both parties were identical. VW tried various lines of argument to persuade the GC that the earlier decisions contained errors, most notably:

  • The purchasing public will only pay an average (rather than a high) degree of attention when buying batteries, accumulators and second hand cars because the price of these items can be quite modest.

The GC disagreed because a second hand car is not a regular purchase but involves some financial investment as well as considerations of reliability and safety. This suggests a high degree of attention. Likewise, vehicle batteries and accumulators, whilst not of the same financial value as the vehicle itself, are still irregular purchases and there are technical considerations of compatibility with the relevant vehicle. Batteries for hybrid and electric vehicles are not interchangeable with those for diesel or petrol vehicles.

  • There is an average (rather than a low) degree of visual and phonetic similarity between XTG and GTX because they consist of the same three letters in reverse. Additionally, some EU consumers might believe XTG is a foreign language version of GTX in the same way that OTAN is a foreign language version of the English acronym NATO.

This failed for a number of reasons. The alphabet consists of a finite number of letters and it is inevitable that some short three letter marks will contain overlapping or even identical letters. That of itself does not create either visual or phonetic similarity. Both marks are short ones which means that any differences are more likely to be noticed by the public. Further, it is an accepted principle that the beginning of a mark is the part which is noticed first and generally carries more weight. The respective first letters G and X are very different on all levels. On the OTAN/NATO claim, although this point might apply to the names of some international organisations, there is nothing to suggest it does in the automobile sector.

  • A conceptual comparison between GTX and XTG is not possible because neither has a meaning.

The GC disagreed because a significant part of the relevant purchasing public will associate the letters “GT” with grand touring vehicles so, for that part of the public, there is a concept attached to GTX which is absent from XTG.

  • GTX benefits from a higher than average degree of distinctiveness because of its association with the sign GTI which was found by an Italian court to be “super famous”.

This was given short shrift because of a lack of evidence to indicate that GTX would benefit from the same finding as GTI.

  • GTX is part of a family of marks which, taken together, have a high level of distinctiveness

This was inadmissible because it was a new plea made at the GC appeal not previously raised either directly or indirectly.

Comment

Three letter marks are very common, particularly in some technical fields or more generally as accessible acronyms for longer company names. The register is crowded. Whilst each case is decided on its own merits, this decision illustrates that short marks have a limited ambit of protection as against other short marks even where the respective goods or services are identical. It is often a good idea to back up registration of a short word mark with a second registration for the mark accompanied by a logo or in a coloured stylised script. That adds another layer of protection and means that if a competitor’s application gets rather close to the look and feel of your business, you have an additional argument to put forward beyond one based purely on letters.