Zara TM Ruling Shows Prefiling Clearance Is Always Advisable

This article was originally published on Law360: https://www.law360.com/articles/1522712

When it comes to trade mark law, it is commonplace for clothing brands to be at the center of enforcement actions.

In this case, Zara, a global clothing powerhouse, sought to prevent an independent brand from registering its own trade mark, arguing at the recent Trade Mark Tribunal hearing that there was a “high degree of visual and oral similarities” between the two brands.

However, Zara lost its battle to force Amber Kotrri, founder and owner of House of Zana, to change her branding, with the tribunal judge, Matthew Williams, finding the link “too insubstantial.”

Background

Kotrri is an independent kimono maker who since 2019 trades as “House of Zana,” presented in stylized handwriting-based script, and this stylization is echoed in her concept store signage, website and promotional materials.

Looking to safeguard the continued use of this indicia on a more formal footing rather than being wholly reliant on any accrued unregistered trade mark rights, and the tort of passing off, she sought to register this trade mark in class 25 for clothing in December 2020.

This trade mark application was examined and, as it met the registrability criteria, it was accepted and published for opposition purposes in February 2021 with an initial two-month opposition window for interested third parties.

An opposition followed based on Sections 5(2)(b) and 5(3) of the Trade Marks Act 1994. This took more than a year until it recently reached a decision in Kotrri’s favor.

Zara v. House of Zana

Kotrri’s application was opposed by Industria de Diseño Textil SA, the Spanish owners of the Zara fashion brand, which has held class 25 “Zara” trade mark registrations in the U.K. since 1993.

Zara’s claim under Section 5(2)(b) was that the contested application should be refused on the basis that the goods are identical to those under the opponent’s earlier trade marks.

It claimed that both parties’ marks are highly similar, visually, aurally and conceptually, such that there is a likelihood that the average consumer will be confused as to the origin of the goods, this being all the more likely as the opponent’s earlier mark “Zara” enjoys an extensive reputation in the U.K. and EU and possesses an enhanced level of distinctive character.

The claim under Section 5(3) was that the contested application should be refused as:

• Its Zara mark enjoys an extensive reputation in relation both to clothing and other goods;
• The relevant consumer on encountering the contested mark will bring to mind the Zara mark, such that use of the contested mark would give rise to the following types of injury, namely it would:
  • Take unfair advantage by free-riding on the coattails of the reputation of the Zara mark;
  • Cause detriment to the reputation of the Zara mark if the goods under the contested mark were of inferior quality; and
  • Cause detriment to the distinctive character of the Zara mark because it will dilute the distinctiveness of the reputed trade mark Zara.

These are genuine grounds for opposition based on earlier rights in a similar mark, the premise being that the respective marks are so similar that confusion would result to the detriment of the earlier rights holder.

While that might hold true for a comparison between Zana and Zara as the difference in the respective third letters might be overlooked, the same cannot be said when the comparison is being made with House of Zana and Zara, as consumers are well versed in recognizing offerings held by different entities.

It is wrong to dissect the trade mark artificially as the comparison to be made is between the respective marks as a whole, taking into account the distinctive components of the marks.

The selection of Section 5(3) seeks to mitigate the differences in the respective mark, but it is the proviso around the likelihood of confusion and or association that determines success when Section 5(2)(b) is cited. It is not enough for a similarity to exist between the respective brands, nor is occasional confusion by a small minority sufficient to find a likelihood of confusion.

Zana is an Albanian mythological figure of pre-Roman Paleo-Balkan origin, usually associated with mountains, vegetation and sometimes destiny. The selection of Zana was directed more toward a fanciful reference to nymphs or fairies than a play on Zara.

In addition, whereas the fashion brand had argued that there was a “high degree of visual, aural and conceptual similarities” between the respective brands, the tribunal ruled that any “mental link” made by consumers between House of Zana and Zara would be “too insubstantial and fleeting” to result in an exploitation of Zara’s reputation.

The opposition was unsuccessful and, subject to any appeal to this decision, the trade mark application may proceed to registration.

Conclusion

The outcome of this opposition was not surprising. Had Kotrri’s trade mark been “Zana,” a word mark, rather than a stylized “House of Zana” figurative mark, then it is possible that the decision would have gone the other way, as in that scenario the respective marks would have been too close to each other, a likelihood of confusion could have been argued successfully, ditto, that there may have been a riding on the coattails aspect not easily disproved in relation to the selection of the later trade mark.

It is unfortunate that the parties were unable to reach an amicable resolution prior to the commencement of the opposition proceedings. This case underlines the importance of prefiling clearance investigations to ensure a party is clear to both use and register a prospective trade mark.

Such knowledge aims to streamline the registration process and avoid any opposition being encountered. Should this happen, such a possibility will already have been discussed, and a strategy will be in place to cover the reason an opposition would not be warranted. Negotiations would commence to achieve this outcome.

Any legal action, opposition or otherwise, is usually commercially driven and lawyers are well versed in negotiating away from the threat of an opposition, defending rights when oppositions are encountered or making the initial contact when an opposition against a third party is a consideration.

While there may be a David and Goliath perception arising from this case, trade mark protection is available to all irrespective of size, and there are very good reasons for traders to gain such protection.

Equally, if confronted with a much larger entity, one should not be deterred from defending one’s rights due to perception that the other side has deeper pockets.

As shown here, where trade marks are distinguishable, the correct decision will be reached.