BMW lost a brand dispute in a Russian court to Gazprom Neft

October 25 of 2013. Pravo.RU

Gazprom Neft registered on its own behalf the four G-Drive trademarks (458431, 458432, 457919, 458433) in spring of 2012, for the goods of classes 1, 4, 12, 16, 20, and services of classes 35, 37 of the ICGS – brake and transmission fluid, chemicals for elimination of snuff from motors and for economical use of fuel, oil, means of transportation, paper, advertising, equipment maintenance and installment, motor repairs, technical maintenance of means of transportation etc. The signs are a phrase G-Drive, under which, except for one sign (№ 458432), a straight line ending in a stylized star on the right-hand side is. The Gazprom subsidiary sells the G-Drive fuel under this brand at its filling stations.

However, the BMW concern, which uses xDrive and iDrive steering systems in its cars, did not like this. Later that year, in September, the counsel of the German automobile manufacturer sent their objections demanding that registration of brands for all goods of the 12^th class indicated in the certificate, in particular – means of transportation, be revoked. The car industry also opposed the expansion of the G-Drive brand to certain goods of the 16^th class (brochures and booklets) and services of classes 35 and 37 (advertising, repairs, reconstruction of motors, means of transportation). BMW objected by saying that it, being a “company famous worldwide”, produces automobiles that “are marked, everywhere in the world, with a series of trademarks using the word Drive as a component”.

BMW insisted that the contested G-Drive marks are similar to a point of confusion with BMW brands IDrive (750332), xDrive (795021), MyDrive (819403), MDrive (846134), SDrive (936458), HDrive (940979), eDrive (940980). Legal protection for those brands in Russia was established earlier than for the G-Drive brand. The lawyers of BMW tried to persuade the officials that all those marks were “phonetically similar, because all of them contained the Drive element”. And the car manufacturer is convinced that the images in the G-Drive trademarks are of no significance for the evaluation of the similarity.

Gazprom Neft had a different view regarding the domination of elements in the disputed brands. The oilmen explained that the word Drive has little distinguishing power, because that English word “is widely known in the automobile sphere” – in particular, the test drive service is suggested before the purchase of any car. Besides, the statement of defense stipulated that the word Drive was widely used by many car makers “making part of a number of trademarks owned by other entities”.

The counsel of Gazprom Neft also denied the similarity between the opposable brands – one cannot be confused for the other since “the compared marks make different impressions due to the style element G present in the contested trade mark”. The company argued: “[It is that element that] bears the main function. The G-Drive denomination was created [as a derivative] from the mother brand Gazprom [G in the form of a lighter – ed.], the main shareholder of Gazprom Neft OJSC. Also, the oil company pointed out that the contested trademark was a combined one, since the letter G was “highlighted by a designing move”, both components of the word element contained impact sounds and were separated by a dash, which allegedly ensured the perception of the trademark as consisting of two separate parts.

Gazprom Neft also alleged the results of a survey done by the All-Russian Center of Public Opinion Studies. According to that survey, “most of the respondents do not associate the iDrive and xDrive marks with any certain goods or manufacturer”. The Center reported that only a few of the respondents are familiar with the marks MyDrive, Mdrive, SDrive, hDrive, eDrive; their numbers are below the statistically significant levels and do not enable speaking of any repute. Gazprom Neft, at the same time, informed that it was developing “an entire family of sub-brands codenamed G-Family: G-Drive, G-Energy, G-Wave, G-Motion, G-Special”.

The Chamber on patent disputes agreed with Gazprom Neft on the matter of the dominating element. The ruling says: “Drive in English means “to drive a car” (inter alia), and has little distinguishing capability in regard to the goods related to transportation. It is not the prevailing element of the compared trademarks”. Besides, the Chamber stated that the element Drive cannot be a base of the series of trademarks mentioned by BMW. The point is that the word is frequently seen in the brands of other manufacturers (e.drive (300784), S.drive (299251), A.drive (340072), Natural Drive (280317). Besides, the BMW brands are done in a standard font and in black and white, while the contested marks of Gazprom Neft are combined (three of them have image elements, and the letter G is depicted in an original font). This increases the recognizability of the contested trademark, according to the Chamber’s opinion.

The Chamber on patent disputes resumes: “G-Drive is not similar to any of the opposed signs due to their difference in the initial (the strongest) parts of the marks”. As a result, the Chamber kept the four contested marks for Gazprom Neft on February 28 of 2013.

In spring of 2013, BMW appealed against the dismissals of the Chamber on patent disputes to the Court of Arbitration of Moscow. The requests were joined in the single proceedings, and Judge Yulia Matiushenkova (case А40-62615/13) was charged with them. The German car maker’s claim was dismissed on October 11 (the declaration of the ruling was published this week). In the ruling, the judge actually gives excerpts from the opinions by the Chamber on patent disputes on the impossibility to classify the existing BMW brands with the Drive element as a series of trademarks. Also, Judge Matiushenkova points out the weak distinguishing power of the Drive element in the opposing brands – the sign is systematically repeated in the trademarks owned [by BMW and Gazprom Neft] as well as registered for other persons”. The ruling states: “The distinction [of the brands] is due to strong elements, which include the initial letters of the signs”. Therefore, the trademarks cannot be ruled similar to the point of confusion.

Judging by the experts’ opinions, BMW had slim chances of victory. Pavel Sadovsky, head of intellectual property practice of the advocates’ bureau “Egorov, Puginsky, Afanasiev and Partners” told Pravo.Ru: “Even though the “series” of the claimant’s trademarks contains the word Drive, it is difficult, in my opinion, to conclude that there is similarity to the point of confusion. Besides, one may hardly speak of the high distinguishing capability of the word Drive contained in the claimant’s trademarks”. Tatiana Kormilitsyna, Deputy Director of “Yakovlev and Parners” law group, agrees. According to her, there are hardly any motives to revoke the ruling as the Drive sign if quite widely used, in particular – in the trademarks of third parties. She said: “Rospatent, and later – the court, were correct in their indication that the strong element of the trademark by definition cannot be widespread, and the Drive element should be classified as the weak element”.

Alexander Dondokov, associate with the “Line of Law” advocates’ bureau, reasons: “The position of the court generally complies with the methodical recommendations of Rospatent, which were also followed by the competent authority, when it dismissed the BMW objections. One may agree with the court ruling on the merits”. Advocate Denis Shumskiy of the Law Firm "YUST" also approves of the court ruling. He said: “There is a similarity between the disputed trademarks, but like similarity to the point of confusion is out of the question”.

However, there are ways to continue the dispute. P.Sadovsky of EPAP pointed out that the practice of the Chamber on patent disputes and the judicial practice are not uniform in such cases. D.Shumsky added: “It should be noted that the evaluation of similarity of certain trademarks is often quite subjective, since the point is how the average consumer perceives the compared signs. Thus, BMW has chances of contesting the ruling. It would be interesting to study the position that the Court on intellectual rights will adopt on this case”.