WIPO Lex

This is an informal case summary prepared for the purposes of facilitating exchange during the 2023 WIPO IP Judges Forum.

Session 1: Emerging Issues in Trademarks

District Court, Tirana, Albania [2018]: Besniku v M & Sillosi, Elledii and the General Directorate of Industrial Property, Decision No. 5839

Date of judgment: June 13, 2018
Issuing authority: Tirana District Court
Level of the issuing authority: First Instance
Type of procedure: Judicial (Civin( �br> Subject matter: Trademarks
Plaintiff / Counter Defendant: Besniku Company Ltd
Defendants: M & Sillosi Company Ltd. (also counter-plaintiff); Elledii Company Ltd; General Directorate of Industrial Property
Keywords: Trademark infringement, Bad faith, Unfair competition, Trademark cancellation

Basic facts: Plaintiff, the company Besniku Ltd., is a commercial entity registered under Albanian legislation. The object of its activity is the “trading of raw materials, materials and various industrial goods and for the construction industry wholesale and retail, their import and export...”.

Defendant, the company M & Sillosi Ltd., is subject to Kosovar commercial law and has acquired legal personality with its registration before the Business Registration Agency in Kosovo. The object of its activity is, inter alia, the “import and export, wholesale and retail trading of flour, wheat and other food products, etc.”

Since 1999, Besniku has maintained a contractual relationship with the defendant and, without interruption, has regularly imported from M & Sillosi the products wheat flour (type 500 and type 850), wheat germ, commercial corn and wheat, under the FINNESA name. The parties renewed their contractual relationship annually until the filing of the lawsuit. Payments were made by bank transfers from Besniku to M & Sillosi. The packaging for the Besniku FINNESA brand flour was produced by M & Sillosi. This packaging always contained the note, “Importer for Albania, Besniku Ltd.”

In 2012, M & Sillosi registered the trademark “FINNESA” with the Industrial Property Agency of Kosovo. During this period, M & Sillosi continued its commercial cooperation with Besniku.

On December 17, 2013, Besniku applied for and registered in the General Directorate of Industrial Property of Albania (GDIP) the protection of the trademark BESNIKU FINNESA.

M & Sillosi made numerous applications to register the trademark “FINNESA” in Albania, but these were all rejected by the GDIP. Thus, in 2017, having been unsuccessful in registering the FINNESA mark, M & Sillosi applied for the registration of the trademark “FINESA” (with one “N”) in Albania.

At the end of 2017, M & Sillosi supplied the goods in packaging with the “M & Sillosi FINESA” logo, together with the note, “Importer for Albania, Besniku Ltd.”. The plaintiff, Besniku, refused to take delivery of the goods and this event led to the breakdown of the commercial relationship between the parties. Besniku discovered that M & Sillosi had registered the brand “M & Sillosi FINESA” with the GDIP in Albania.

In its suit, Besniku sought:

1. Prohibition of the import of the wheat flour product “M & Sillosi FINESA”, originating from Kosovo;

2. The confiscation and removal from circulation of the “M & Sillosi FINESA" wheat flour goods located in the warehouses of the importer company, Elledii Ltd;

3. Revocation of the trademark “M & Sillosi FINESA” (words and figures) for violating the industrial property rights of the earlier mark, “Besniku FINNESA” (words and figures), which is well known in the Albanian market;

4. An order that M & Sillosi cease use of the “M & Sillosi FINESA” mark for all food products included in class 30 of the Nice Classification, a ban on import into the Albanian territory, and the non-repetition of these actions in the future.

In its countersuit, M & Sillosi sought:

1. Revocation of Besniku’s “FINNESA” trademarks (words and figures), alleging that the application for the registration of the trademarks was made in bad faith by Besniku;

2. Cessation of the infringement of its industrial property rights by Besniku, with Besniku ceasing its use of the trademark FINNESA and any similar sign in its commercial activity without the authorization of M & Sillosi;

3. Prohibition of Besniku using and placing the FINESA trademark on its goods or packaging;

4. Prohibition of Besniku producing, exporting, importing, distributing, marketing, offering for sale, storing, advertising and/or packaging its products with the FINESA brand label or any similar sign;

5. Blocking and destruction, at the expense of Besniku, of all FINNESA flour products produced and distributed in the Albanian market by Besniku, as well as all other products that can be found at any commercial entity, warehouse or any other place in Albania; and

6. Prohibition of acts constituting unfair competition by Besniku and the non-repetition of such actions in the future.

Held: The Tirana District Court dismissed Besniku’s claim and accepted M & Sillosi’s counterclaim, finding that Besniku violated the rights of M & Sillosi in the FINESA trademark. It ordered the revocation of Besniku’s FINNESA marks, finding that the applications for registration were made in bad faith by Besniku. It granted the orders requested by M & Sillosi.

In reaching its decision, the Court found that the FINESA and FINNESA designs have no difference for the consumer. The designs feature a longitudinal extension with a table in the middle and the name FINESSA / FINESA placed on the middle table, which makes it impossible for the consumer to identify the difference between them.

Regarding the phonetic aspect of the brand, the main and obvious identifying part of the brand is the word FINESA, which in the Albanian language does not differ in pronunciation with either one "N" or two "NN".

Furthermore, both companies use the marks to sell the same wheat flour product. The Court found it impossible for an ordinary consumer to differentiate between FINESA wheat flour and FINNESA wheat flour in the marketplace, making consumer confusion inevitable.

Relevant holdings in relation to emerging issues in trademarks: In addition to questions involving unfair competition, the Tirana District Court considered whether Besniku’s application for registration of the FINNESA mark was made in bad faith, and what evidence could be taken into account.

Bad faith can be described as behavior that deviates from known and accepted principles of ethical behavior or honest business and trade practices. The trademark registered in bad faith must be identical or very similar to the mark referred to by the person requesting cancellation of the trademark.

For an application to be considered to have been made in bad faith, the applicant must be aware of the previous use of an identical or very similar mark by another person for identical or similar products/goods or services. When the parties are involved in a relationship or business agreement, the knowledge of the owner of the registered trademark in bad faith is presumed. The Court noted that this position was supported by the jurisprudence of the Court of Justice of the European Union, which establishes that the existence of a direct or indirect relationship between parties before the filing date of an application for trademark registration can serve as a clear indication of the bad faith of the applicant for registration of the later mark.

The Court noted that the relevant evidence for its determination was the facts, actions or non- actions of the parties, and the documentary evidence administered during the investigation: such as the contracts signed by parties, receipts for bank transfer, and the certificates or trademark registration.

In the present case, the Court determined from the evidence presented that the FINNESA brand was the earlier mark registered by M & Sillosi in 2012 with the Industrial Property Agency of Kosovo. The Court further found that the commercial cooperation contracts concluded between Besniku and M & Sillosi, such as the supply and purchase contracts from 2009 onwards, lead to the conclusion that Besniku had full knowledge that M & Sillosi was the owner of the mark. For example, Besniku had, with free and full consent, signed contracts for the sale and purchase of flour and wheat goods, which expressly provided that: “The seller is the owner of the products and brands ‘Finnesa’ and ‘Dellino’…While the Buyer is a regular customer of the seller and who distributes the seller's products for the market of the Republic of Albania.” Thus, Besniku was fully aware of the rights of M & Sillosi over the trademark FINNESA at the time of filing the application for registration.

Further, the Court found that the FINNESA trademarks registered by Besniku were completely identical to the trademarks previously registered in Kosovo by M & Sillosi company. The Court further found evidence for bad faith in the fact that the marks sought to be registered by Besniku differed only in that the name of the manufacturer was replaced with its own name. In the conditions of such flagrant bad faith, Besniku has applied for the registration of the FINNESA trademark for the goods of class 30 of the Nice Classification, goods that completely coincide with the type and nature of the products produced by M & Sillosi.

Here, Besniku had knowledge of the previous use of an identical or very similar mark by M & Sillosi for identical or similar products/goods or services.

Relevant legislation:
Articles 142, 143, 156, 173, 184, 184/a, and 184/c of Law No. 9947/2008 on Industrial Property
Articles 32, 103, 106, 154, 202, and 348 of the Code of Civil Procedure
Articles 103, 105, 106, 608, 617, 625, 638, 639, and 644 of theCivil Code of the Republic of Albania