This article is written by Shlok Bansal, pursuing a Diploma in Intellectual Property, Media, and Entertainment Laws from LawSikho. The article has been edited by Aatima Bhatia (Associate, LawSikho) and Ruchika Mohapatra (Associate, LawSikho).
What comes to your mind when you see the trademark “Zoom”? I believe, post-COVID-19 pandemic, we have all been so occupied with the app that we cannot associate “Zoom” with anything other than Zoom video communication company that has gained worldwide fame for its easy-to-use video-conferencing application. But what if I were to tell you that there exist more than 500 marks at EUIPO that incorporate the trademark Zoom. Shocked? Well, why don’t you try doing a search using the EUIPO search tool?
If you are wondering what’s the whole point of registering a trademark and spending extra bucks when trademark registration doesn’t ensure that other companies will not have a similar trademark? Let me give you the answer. Trademark law has a policy of not allowing registration of identical marks for similar goods and services and as a result, it gives one an option to register an identical mark at a registry which has “no likelihood of confusion.”
In this article, we will aim to understand what registry means by “no likelihood of confusion” through a well-celebrated case of Zoom KK v FaceTec Inc. We will also try to understand the importance of trademark registration by using another example.
Zoom KK v. FaceTec, Inc.
Facts of the case
The dispute was between Zoom KK from Japan and FaceTec, Inc. from Nevada, USA, both of which own the trademark “Zoom”. The dispute dates back to 2016 when FaceTec applied for its ‘Zoom’ trademark with EUIPO in October 2016 under Class 9, covering “security software that allows users to secure and access their mobile device through multi-dimensional facial recognition identification”.
To this application, Zoom KK filed a notice of opposition on the basis that the FaceTec application infringes on its already registered trademark ‘Zoom’, which Zoom kk got registered in 1999 under classes 9 and 15. To Zoom kk’s utter shock, the EUIPO opposition division and later the Board of Appeals dismissed its opposition confirming the absence of likelihood of confusion hence that led Zoom KK to appeal at CJEU.
Proceedings at Court of Justice of the European Union (CJEU)
The prominent set of rules this dispute revolved around was Article 8(1)(b) of Regulation No. 2017/1001 wordings which state that on receiving opposition through the proprietor of an earlier trademark, the disputed/contested mark may not be registered, because of its identity with, or similarity to, the earlier trademark and the identity or similarity of the goods or services covered by the two marks, there exists a likelihood of confusion on the part of the public in the territory in which the earlier mark is protected. The likelihood of confusion includes the likelihood of association with the earlier trademark.
To prove that, Zoom KK contested that both marks are related to “downloadable computer programs” in Class 9 having a high probability of similarity and further argued on the similarity of trade channels targeting similar customers.
Considering the arguments, CJEU affirmed that the Board of Appeal acted wisely in concluding that it was of vital importance to compare the functions of software and programs and that each of the descriptions of the goods refers to a specific and distinct intended purpose. The goods covered by the FaceTec mark are aimed particularly to secure access to mobile devices through multi-dimensional facial recognition identification, whereas the goods covered by the Zoom KK mark are devices for recording, transmitting, or playing music and videos. It became evident at the first instant that goods provided under both marks did not aim at the same consumers nor were complimentary within the meaning of case law.
The CJEU and the Board of Appeal also made a global assessment of the likelihood of confusion, which, according to case law (judgment of 12 June 2007, OHIM v Shaker, C-334/05 P), concerns visual, phonetic, or conceptual similarity of the signs at issue, that is based on the overall impression given by those signs, bearing in mind, in particular, their distinctive and dominant elements. Therefore, the perception of the mark by the average consumer of the goods or services plays a crucial role in this assessment. The Board of Appeal firstly, as also CJEU in the present case, found that both marks in question were practically identical, as they are composed of the single word “Zoom”, whereas the earlier figurative mark Zoom consists in a stylized form, so they, therefore, display a high degree of similarity.
Decision of CJEU
Anyhow, the CJEU after detailed scrutiny upheld the decision of the Board of Appeal and ruled that there is no likelihood of confusion between the two marks. The court stressed the fact that there lies dissimilarity of goods between the contested marks as one pertains to software and other deals with computer programs. The court was of the view that since relevant consumers for such goods are attentive public with a high level of attention, they will not make the connection between both the marks and hence won’t be confused. This was all the more so because “Zoom” actually has a common meaning in English for sound-related goods, and therefore as rightly pointed out by the Board of Appeals there lies a below-average distinctive power for sound related to goods.
Admittedly, the CJEU also acknowledged the argument that the distribution of the goods in question is being made available through the same distribution channels and was a factor that requires attention. To this, CJEU concluded later that if- as in the present case- a variety of software or programs with completely different functions can be found in the same shops, this does not lead to a likelihood of confusion for consumers, hence the argument was abandoned.
The court, therefore, dismissed the action in its entirety and upheld the decision of the Board of Appeal, which had also found no likelihood of confusion between the two Zoom marks. Hence, the case law makes it clear what registry means by “no likelihood of confusion” and displays the points that one should be keeping in mind while registering a trademark or filing a trademark infringement case.
Importance of trademark registration
That brings us to our next question as to why exactly is trademark registration important? To answer this let me brush up on your memory and bring forward a widely covered case from early 2020 that includes your favorite video conferencing platform Zoom.
Zoom Video Communications, the company behind Zoom video conferencing services, which we have all been using for work meetings, exercise classes, meeting with friends, and classes, skyrocketed since the start of the covid-19 pandemic in its value. Due to its mass usage, Zoom Video Communication has received unprecedented interest amongst the investment fraternity and as a result, has witnessed a huge inflow of investments flowing in its pocket. However, the Security Exchange Commission realized that highly enthusiastic investors were also mistakenly buying up stock in Zoom Technologies having a confusingly similar trademark to that of Zoom Video Conferencing.
Zoom Technologies a company that researches, develops, and sells electronic communication products for mobile phones having a “ticker symbol ZOOM”, came into the limelight on March 25, 2020, when the Security Exchange Commission suspended its trading in securities because of concerns relating to adequacy and accuracy of publicly available information concerning it. There were issues of financial irregularities involved with Zoom Technologies and concerns of Zoom Technologies trademark “ZOOM” capitalizing on the mark of Zoom Video Communication in the stock market.
Considering the popularity of Zoom Video Communications since the start of the Covid-19 pandemic and concerns about the adequacy and accuracy of publicly available information concerning Zoom Technologies, Inc. (“ZOOM”), including its financial condition and its operations, if any, in light of the absence of any public disclosure by the company since 2015; Security Exchange Commission announced the temporary suspension, pursuant to Section 12(K) of the Security Exchange Act of 1934 (the “Exchange Act”), of trading in securities of Zoom Technologies, Inc. (“ZOOM”).
Noting the above case, it becomes crystal clear that registering a trademark is extremely important not only to prevent intellectual property rights but also to save oneself from embroiled legal disputes as it’s common to find similar trademarks coexist in the marketplace.
The trademark registry allows registration of similar trademarks based on various factors and trademark owners should keep in mind that their registration in a particular mark will not give them sole right over all the classes except in very specific cases; like the mark being well known.
The trademark registry also aims for promotion and expansion of trade and it doesn’t stop one from registering his trademark just because there lies another identical mark registered with the registry, but provided they are dealing in non-similar goods. Unless the mark has the likelihood of confusion, there can be an identical trademark registered simultaneously with the registry.
Does that mean one should not spend on trademark registration since it provides limited protection? The answer to that is crystal clear from the Zoom Video Communication highlighting the importance of trademark registration.
Intellectual property law has established mechanisms to protect the rights of both trademark owners and the bonafide users of the mark. These mechanisms also help the users to identify the source of goods/services in which they are interested.
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