SHOPIFY v SHOPPI: What are the risks of a weak trade mark?
Updated: Nov 24
The EU General Court has upheld a finding of no likelihood of confusion between an EU trade mark for Shoppi (figurative, pictured) and the earlier EU word mark SHOPIFY, registered for identical/similar goods and services.
The case (Case T-222/21, Shopify Inc.) raises some interesting issues, including regarding the impact of Brexit and the distinctiveness of the earlier mark.
The dispute started when Shopify filed an invalidity action, which was successful. But the EUIPO Board of Appeal reversed the decision of the Cancellation Division, and held that the application for a declaration of invalidity should be dismissed.
The Court agreed. First, it found that the level of the attention of the relevant public was higher than average and that the marks were visually similar to a low degree, phonetically similar to an average degree and conceptually similar to a low degree.
Distinctiveness of SHOPIFY
Shopify challenged the Board’s finding that its mark had a low degree of inherent distinctiveness and that it lacked enhanced distinctiveness acquired through use.
In its decision, the Board had found that the inherent distinctiveness of SHOPIFY was “slightly higher than minimum level” for the non-English-speaking public and low for the English-speaking public.
The Court agreed that “shop” and “ify” are common in English and that their combination would be understood by English speakers as meaning “to make something become a shop”.
It also rejected the argument that the combination of the two elements is “fanciful” for the non-English-speaking public, saying contrary decisions concerning the marks Hydrovision and CREATHERM “concern marks, admittedly composed of a descriptive term and a non-descriptive term, but in which the non-descriptive term was longer or occupied a more important position in the mark in question, in such a way as to create a fanciful combination and confer on that mark an average degree of distinctiveness”.
Regarding enhanced distinctiveness acquired through use, Shopify sought to rely on evidence from the UK as the EUTM application in question was filed on 8 May 2017, when the UK was still a member of the EU. But the Court said that “for the evidence of enhanced distinctiveness of the earlier mark acquired through use in the United Kingdom to be relevant for the application for a declaration of invalidity of the contested mark, that use must still be capable of being relied on at the date on which EUIPO rules on the application for a declaration of invalidity”.
This date was 18 February 2021, after the end of the Brexit transition period, which meant that evidence of use of SHOPIFY in the UK was rightly disregarded.
The evidence of acquired distinctiveness submitted from other countries did not include “surveys, opinion polls or statements from chambers of commerce or other professional associations”. And the evidence that was submitted (such as newspaper articles) was not sufficient to demonstrate enhanced distinctiveness, said the Court.
As the Court noted, “although, in accordance with the case-law of the Court of Justice, the more distinctive the earlier mark, the greater will be the likelihood of confusion, the opposite is also true”.
In this case, the SHOPIFY mark was found to have weak distinctive character.
Marketers like to use such terms as brands because they chime with consumers, are memorable and snappy, and work well online. However, the downside is that they are much harder to enforce in trade mark disputes – as Shopify has discovered in this case.