Summary: The Market Court prohibited a distributor from using marks confusingly similar to registered trademarks of former principle based on unfair business practices act.
Facts
The defendant had acted as a distributor for the plaintiff's kitchens for over ten years using a mark "Keittiömaailma" (which roughly translates to "Kitchen World"). While acting as a distributor the defendant had registered a domain name "keittiomaailma.com" in May 2000. Since its registration the defendant has used the domain in distributing and selling the plaintiff's products.
The plaintiff used the mark "Keittiömaailma" to sell its kitchen through the defendant and other distribution channels. The plaintiff started protecting its rights in the mark "Keittiömaailma" in 2002 and since then has registered a trademark "Keittiömaailma" and several auxiliary business names containing the work "Keittiömaailma". The plaintiff also registered in its name the domain name "keittiomaailma.fi".
The defendant terminated the distributorship in February 2011 and continued using its domain "kettiomaailma.com" to sell products competing with the products the defendant had sold and distributed for the plaintiff. Among other things the defendant directed enquiries to the "keittiomaailma.com" to the website of a competing provider of kitchens.
Findings at the Market Court
The plaintiff filed for an injunction at the Market Court to stop the defendant from using the mark "Keittiömaailma" after the distributorship had terminated. The claim for injunction was based on the argument that the use of the mark in the .fi domain name and otherwise in relation to defendant's business constituted unfair business practice because its aim was to unjustly exploit the goodwill associated with the plaintiff's marks and it caused confusion between the products of the plaintiff and its competitors.
The Market Court concluded that the continued use of the "keittiomaailma.com" domain name as www- and e-mail addresses had created the impression that the defendant continues to be associated with the plaintiff and the other distributors selling plaintiff's products. The Market Court concluded that in doing so the defendant's aim was to unjustly take advantage of the goodwill associated with plaintiff's products and marks. Consequently, the defendant's actions were construed to constitute an unfair business practice.
The decision of the Market Court further concludes that the way the defendant used the domain name "keittiomaailma.com" to direct traffic to other web-sites selling kitchen provided by other vendors was prone to cause confusion as to the origin of the products. The use of marks in a way that resulted in a likelihood of confusion also amounted to an unfair business practice.
Further the Market Court concluded that as the parties were engaged in the same area of business the use of the marks associated with the plaintiff by the defendant affected competition in the market. Consequently, the Market Court confirmed that the continued use of marks containing the word "Keittiömaailma" or the domain name "keittiomaailma.com" constituted unfair business practices and granted the injunction.
Implications for the producers and distributors
The case and Market Courts decision highlight the need for both the distributor and manufacturer to agree on the ownership and use of marks associated with the distributorship at the beginning or during their relationship. The manufacturers cannot necessarily rely on the fact that the Market Court decided the matter described above in favor of the manufacturer. The conclusions of the Market Court seem to be strongly based on the facts of the case and do not necessarily provide guidance on situations with different set of facts. Through addressing the question in their agreement or other documentation the parties can allocate costs, risks and rewards in a predictable way and avoid the uncertainties of the post-termination effects of a distribution agreement.
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