International In-house Counsel Journal Vol. 6, No. 23, Spring 2013, 1

Battle for a Reputed Brand, Legitimate Competition or Free-Riding?

TERESA LAIMIO Senior Legal Counsel, Valio Ltd,

Abstract This article is a case study of a long-running trademark dispute between the two leading dairy companies in Finland, focusing on the protection of a trademark with a reputation. Initially, Valio Oy (Valio) alleged that Arla Ingman Oy Ab (Arla Ingman) had committed trademark infringement of Valio’s well-known trademarks VOIMARIINI®, OIVARIINI® and MARIINI® through Arla Ingman’s use of the trademark INGMARIINI for identical spreadable fat products. In addition to the proceeding in the district court, Valio opposed Arla Ingman’s trademark application INGMARIINI in the Finnish National Board of Patents and Registration. Both of these proceedings led, through appeal, to final rulings by the Finnish Supreme Court (KKO 2010:12) and the Supreme Administrative Court (KHO 421/2/09). The Supreme Court held that Valio’s trademarks VOIMARIINI® and OIVARIINI® are trademarks with a reputation in Finland. However, INGMARIINI was not deemed to be confusingly similar to Valio’s trademarks and the use of INGMARIINI was not regarded to take unfair advantage of Valio’s reputed trademarks. A year later, the Supreme Administrative Court took the opposite view and held that even though the trademarks were not confusingly similar as such, INGMARIINI did benefit from the reputation of the earlier VOIMARIINI® trademark, with the result that the INGMARIINI trademark did not fulfil the registration requirements of the Finnish Trademark Act. The effects of the different rulings of the two high courts are evident as INGMARIINI is not allowed to be registered as a trademark and yet Valio may not prevent Arla Ingman from using the INGMARIINI name to distinguish its products. The rulings did not only spark off debate among Finnish academics and trademark lawyers but also justified the need for a special IP court that is planned to be established in Finland in the near future.

Keywords trademark with a reputation, the Supreme Court, the Supreme Administrative Court, unfair advantage of a trademark, likelihood of confusion, similarity

International In-house Counsel Journal ISSN 1754-0607 print/ISSN 1754-0607 online 2 Teresa Laimio

1 Background The Finnish food industry has rarely seen any major litigation between competitors that is followed continuously in the media and in professional circles from one year to the next. In 2005 an exceptional dispute, unprecedented in the practice of Finnish trademark law, arose between two Finnish dairy products companies. The Finnish dairy products company Ingman Foods Oy Ab, which later became part of the international Arla group (Arla Ingman), brought a blended spreadable fat called INGMARIINI onto the market and applied for registration of the trademark. Valio Oy (Valio), which had up until then enjoyed a strong and even unique position in the market for spreadable fats, felt that the competitor’s brand came too close to its well known VOIMARIINI® trademark, which had been a watchword for similar blended spreads and had been in continuous use since 1980. When the negotiations with Arla Ingman failed to result in the company discontinuing the use of the INGMARIINI brand, a resolution to the dispute had to be sought in court. One of the motives for bringing the action was a change in the EU legislation on foodstuffs, bringing consequences to which Valio had to adapt. The VOIMARIINI® product had been the only spreadable fat blend consisting of butter and rapeseed oil on the Finnish market, and its name had made a strong impression on the consumers’ mind. At the time the INGMARIINI product was launched, the conditions were ripe for Arla Ingman, as in the same year Valio had had to relinquish the VOIMARIINI® name and create a new brand in its place. In 1997, the EU Commission drafted a regulation on the protection of designations used in marketing and milk products and the regulation known as the ‘spreadable fats regulation’, according to which the word ‘butter’ may not be used in the denominations of products where the milk fat portion has been replaced by other than milk-derived ingredients.1 When the transition period expired at the end of 2004, VOIMARIINI® became OIVARIINI®, and thanks to large-scale marketing activities it soon acquired widespread recognition and a good reputation. To prevent the use and registration of the INGMARIINI brand by Arla Ingman in competing products, Valio had to proceed along two official paths. The authority responsible for the registration of trademarks in Finland is the National Board of Patents and Registration of Finland (NBPR), which examines whether a trademark meets the conditions for registration under the Finnish Trademarks Act. The Board is not, however, competent to take a stand on whether Arla Ingman has committed a trademark infringement. Trademark infringement actions based on the likelihood of trademarks being confused are resolved in civil proceedings in a general court of law, and they have been handled centrally by the District Court. 2. Hearing of the case in a civil procedure: no infringement of trademark law Two legal issues arose in the infringement suit brought by Valio in the Helsinki District Court. According to Valio, Arla Ingman’s INGMARIINI brand could be confused with Valio’s registered trademarks VOIMARIINI®, OIVARIINI® and MARIINI® under the Trademarks Act, section 6, subsection 1 2 and the European Union’s Directive on trademarks, Article 5, paragraph 13 (the Directive). Secondly, the use of the INGMARIINI mark in the case of spreadable fats was also held to constitute unfair exploitation or action detrimental to the reputation and distinctive character of Valio’s widely known VOIMARIINI® and OIVARIINI® trademarks under the Trademarks Act, section 6.2 and the Directive, Article 5(2).

1 Commission regulations 1898/87, 2991/94, 577/97 and 1278/97 2 Trademarks Act 10.1.1964/7 3 DIRECTIVE 2008/95/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 22 October 2008 to approximate the laws of the Member States relating to trade marks

Trademark Disputes 3

In the case of the first legal issue referred to above, in appraising the likelihood of confusion under the Trademarks Act, section 6.1 and the Directive, Article 5(1), the District Court and later also the Court of Appeal considered that INGMARIINI was not liable to be confused with Valio’s trademarks. According to the District Court VOIMARIINI®, OIVARIINI® and MARIINI® are descriptive trademarks, and thus do not have a strong distinctive function as names for spreadable fats. The initial part ‘VOI’ (=butter) refers to the nature of the content and the initial ‘VOIMA’ (=strength) and ‘OIVA’ (=very good) to a quality of the product. The endings ‘MARIINI®’ or ‘RIINI’ referred, according to the District Court, to margarine. Additionally, the word ‘MARIINI®’ can mean blue or refer to the sea. In the District Court’s view, the similarity of the trade names was attributable to the mainly descriptive endings or words ‘-RIINI’ or ‘-MARIINI®’, and for this reason the degree of similarity could not be considered very great. As Valio and Arla Ingman are leading, well known dairy product companies in Finland, the District Court considered that would serve to reduce the likelihood that the relevant public would be misled about the origin of the product, especially as the dominant part of the INGMARIINI brand refers clearly to the company’s name. In assessing the protection of a trademark with a reputation, the District Court and later also the Court of Appeal and the Supreme Court were all of the opinion that Valio’s trademarks VOIMARIINI® and OIVARIINI® are trademarks with a reputation and that the trademarks VOIMARIINI®, OIVARIINI®, MARIINI® and INGMARIINI all refer to identical products, that is spreadable fats. According to the Directive, Article 5(2), ‘Any Member State may also provide that the proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade any sign which is identical with, or similar to, the trade mark in relation to goods or services which are not similar to those for which the trademark is registered, where the latter has a reputation in the Member State and where use of that sign without due cause takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.’ In Finland, the provision of the Directive has been enacted by section 6.2 of the Trademarks Act and it is to be applied in accordance with the Directive and according to the judicial practice of the European Union Court of Justice. In the Davidoff case, the EU Court of Justice considered that Article 5(2) of the Directive is also to be applied in situations where trademarks are used for the same or similar goods or services 4. It also follows from EU legal praxis that ‘the protection of widely known trademarks conferred by Article 5(2) of the Directive is not conditional on a finding of a degree of similarity between the mark with a reputation and the sign such that there exists a likelihood of confusion between them on the part of the relevant section of the public. It is sufficient for the degree of similarity between the mark with a reputation and the sign to have the effect that the relevant section of the public establishes a link between the sign and the mark.’ Furthermore, ‘it is sufficient for the national court to find a likelihood of association on the basis of a visual, aural or conceptual similarity between the mark with a reputation and the sign.’5 According to EU legal praxis, the above-mentioned type of link between trademarks that does not necessarily lead to confusion must be appreciated globally, taking into account all factors relevant to the circumstances of the case. In assessing the existence of such a link between an earlier trademark with a reputation and a later one, reference is made to

4 C-292/00 Davidoff & Cie v. Gofkid Ltd, paragraph 25 5 C-408/01 Adidas-Salomon and Adidas Benelux v. Fitnessworld Trading Ltd, paragraphs 27-31

4 Teresa Laimio

‘the perception of the relevant public, which consists of average consumers of the goods or services for which that mark is registered, who are reasonably well informed and reasonably observant and circumspect.’6 The marks INGMARIINI and VOIMARIINI® have in common an identical ending - MARIINI®, and the marks INGMARIINI and OIVARIINI® have in common the ending -RIINI. The District Court and the Court of Appeal were of the opinion that because of the identical ending, INGMARIINI must be considered similar to the trademarks VOIMARIINI® and OIVARIINI® to such a degree that the relevant public would associate the marks with each other. Arla Ingman was, however, considered to have due cause for using the mark, as INGMARIINI includes an abbreviation of the company name (INGMA-), and the mark is in line with the company’s earlier trademark registrations for INGMANDAM and INGMANTAL. According to the District Court and the Court of Appeal, Arla Ingman’s use of the marks did not constitute unfair exploitation of the distinctive character and reputation of the VOIMARIINI® and OIVARIINI® trademarks, nor was it considered to be detrimental to the distinctive character of the marks. The Supreme Court heard Valio’s complaint, but decided in favour of the defendant in both legal issues.7 In the question of the likelihood of confusion of the marks, it upheld the Court of Appeal’s decision that there is no likelihood of the marks being confused on the basis of the Trademarks Act, section 6.1 and the Directive, Article 5(1). As regards the protection of a trademark with a reputation, the Supreme Court decided on a different interpretation to that of the lower courts on the degree of similarity between the marks. Assessing the written form of the marks, the Supreme Court found that the impression of similarity between the marks VOIMARIINI®, OIVARIINI® and INGMARIINI arises mainly from the common ending of the words, i.e. –RIINI or –ARIINI. As regards the VOIMARIINI® and INGMARIINI marks, the impression of similarity can also arise on the basis of the common ending –MARIINI®. The Supreme Court did not consider the degree of similarity based on the endings, which are partly different in their written form, to be in principle very great. Like the courts of lower instance it considered that to the average consumer the part of the name common to the marks used in connection with spreadable fats primarily brings to mind a margarine and thus describes the type of product. The Supreme Court’s interpretation also took into consideration the differences between the first parts of the names and the fact that average Finnish consumers know Valio and Arla Ingman to be important, but separate, manufacturers of dairy products and various spreads in Finland. On the basis of these arguments, the marks were also judged to be so different overall that consumers could not be considered likely to make a sufficiently strong connection between them. 3. Supreme Administrative Court: INGMARIINI does not meet the conditions for registration Valio’s poor luck continued in the administrative procedure, when its claim against the trademark application for INGMARIINI was turned down by the National Board of Patents and Registration. This was followed by a negative decision on Valio’s appeal to the NBPR’s Board of Appeal.8 Contrary to the Supreme Court’s interpretation, the Supreme Administrative Court saw a link between the marks VOIMARIINI® and INGMARIINI that is considered sufficient for applying the Trademarks Act, section 6.2 and the Directive, Article 5(2) according to

6 C-252/07 Intel Corporation Inc. v CPM United Kingdom Ltd, paragraphs 60 and 63 7 Supreme Court 2010:12 8 1.12.2008 no 2006/T/031

Trademark Disputes 5 current legal praxis.9 The Court referred to the preliminary ruling handed down by the EU Court of Justice in June 2009 in the case of L’Oreal, where the issue was the unfair exploitation of the distinctive character and reputation of a widely known trademark.10 According to the practice adopted in the above-mentioned preliminary ruling and earlier rulings on Adidas Salomon and Intel, stronger protection of a trademark with a reputation is not conditional on there being a risk of confusion between the trademark in question and marks used by a third party. ‘It is sufficient for the degree of similarity between the mark with a reputation and the sign to have the effect that the relevant section of the public establishes a link between the sign and the mark.’11 According to the Supreme Administrative Court, the relevant section of the public connected the two marks despite the fact that the products designated by the trademarks were understood to originate from different manufacturers. As a result of this conclusion, it was necessary for the Court to assess whether the criteria of the Directive, Article 5(2) and of the Trademarks Act, section 6.2 for the protection of a trademark with a reputation have been met. If even one of these criteria is met, there are sufficient grounds for applying the provision:  detriment to the distinctive characteristic of the trademark, i.e. the trademark’s effect may be diluted or blurred  detriment to the repute of the trademark  exploitation of the trademark’s distinctive character or repute without due cause, i.e. parasitism, free-riding In the L’Oréal case, the EU Court of Justice took a stand on the interpretation of the criteria that deviated from the previous legal praxis. The dilution or blurring of a trademark occurs ‘when that mark’s ability to identify the goods or services for which it is registered is weakened, since use of an identical or similar sign by a third party leads to dispersion of the identity. That is particularly the case when the mark, which at one time aroused immediate association with the goods or services for which it is registered, is no longer capable of doing so’. ‘As regards detriment to the repute of the mark, also referred to as “tarnishment” or “degradation”, such detriment is caused when the goods or services for which the identical or similar sign is used by the third party may be perceived by the public in such a way that the trade mark’s power of attraction is reduced. The likelihood of such detriment may arise in particular from the fact that the goods or services offered by the third party possess a characteristic or a quality which is liable to have a negative impact on the image of the mark.’ As regards the concept of ‘taking unfair advantage of the distinctive character or the repute of the trade mark’, also referred to as “parasitism” or “free-riding”, that concept relates not to the detriment caused to the mark but to the advantage taken by the third party as a result of the use of the identical or similar sign. In that regard, here a third party attempts, through the use of a sign similar to a mark with a reputation, to ride on the coat- tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of its own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark, the advantage resulting from such use must be considered to be an advantage that has been

9 Supreme Administrative Court decision 8.7.2011, file copy 1996, diary number 421/09 10 C-487/07 L’Oréal SA, Lancôme parfums et beauté & Cie SNC and Laboratorie Garnier & Cie v Bellure NV, Malaika Investments Ltd ‘Honey pot cosmetic & Perfumery Sales’ and Starion International Ltd 11 C 487/07 L’Oréal, paragraph 36

6 Teresa Laimio unfairly taken of the distinctive character or the repute of that mark. Contrary to the earlier interpretation of the EU Court of Justice in the earlier Intel case12, it cannot be a requirement for proving exploitation that there is a likelihood of confusion or evidence of the detriment caused to the distinctive character or repute of the trademark.13. The Supreme Administrative Court appealed in its decisions to the grounds used in the L’Oréal case and found it evident that the wide repute of the VOIMARIINI® trademark is to the advantage of Arla Ingman and that using a similar mark constitutes an effort to benefit from its attraction, reputation and prestige. Despite the fact that the INGMARIINI mark refers to the company’s name and forms a uniform series together with the INGMANDAM and INGMANTAL marks, the Supreme Administrative Court nevertheless was of the opinion that these references do not constitute sufficient cause for free-riding on the strength of the VOIMARIINI® trademark. In its ruling, the Supreme Administrative Court also gave weight to the suffix of the widely known VOIMARIINI® trademark, –MARIINI®, which it considers to have a strong distinctive character. On the above grounds, the INGMARIINI mark was not held to meet the conditions for registration under the Trademarks Act, section 6.2, when the said point of law is applied in accordance with the provisions of the Directive on trade marks and the legal praxis based on these. There was thus an obstacle to registration of the INGMARIINI mark as referred to in the Trademarks Act, section 21.1, on the basis of which the Supreme Administrative Court decreed that the registration be revoked. 4. Likelihood of confusion of marks It is worth noting that no court of law considered it likely that the INGMARIINI mark would be confused with the trademarks VOIMARIINI®, OIVARIINI® and MARIINI® according to the Trademarks Act, section 6.1. The District Court considered Valio’s trademarks to be descriptive and thus to have only a weak distinctive character for blended fats. This view can be questioned, especially as regards the MARIINI® trademark, as it is an invented expression that can in no way be said to describe the type or qualities of the spreadable fat. According to a consumer survey conducted by Valio, more than half of the consumers did not know what the word MARIINI® means, and in practice no one associated it with a spreadable fat. The word MARIINI® has become effectively established and known to the public as part of the VOIMARIINI® trademark. The fact that Arla Ingman wants to use the trademark MARIINI® registered to a competitor in such a way as to create the impression in the consumer’s mind that the products are of a similar kind, cannot be said to weaken Valio’s trademark or make it merely descriptive. According to the Directive, Article 6(1 b), a suggestive or more distinctive trademark, or part thereof, registered to another may not be used to refer to or describe the characteristics of a product. Arla Ingman’s view expressed in court that competitors should for the public good be allowed to use the -RIINI and -MARIINI® endings to describe their own products, cannot be considered to be based on the Trademarks Act in the respect that the aim is to take advantage of a trademark registered to another. In assessing the likelihood of confusion of the marks, there can also be disagreement on the first part of the mark referring to Arla Ingman’s company name INGMA-. In the judgment of the EU Court of Justice on the Thomson Life case it was specifically found that the use of a commercial name with a reputation does not in itself remove the likelihood of confusion between brands. According to the ruling made in the case, no one

12 C-252/07 Intel, paragraph 77 13 C-487/07 L’Oréal, paragraph 43

Trademark Disputes 7 can take an earlier trademark, perhaps less widely known, and place before it a widely known commercial name, claiming that the composite mark belongs to the competitor who has entered the market later. As stated in the reply of the Court, ‘The finding that there is a likelihood of confusion should not be subject to the condition that the overall impression produced by the composite sign be dominated by the part of it which is represented by the earlier mark.’14 Despite the above, The Supreme Court did not find grounds for refusing the right to use the INGMARIINI mark, even though the competitor used the trademark MARIINI® in its entirety as part of its composite mark to describe its own identical product. The Supreme Administrative Court also interpreted the likelihood of confusion of the marks in a somewhat special way. First of all, the Court did not consider the word MARIINI® to be generic or descriptive, but in the context concerned it was held to be a distinctive element of a trademark. Considering the wide repute of the VOIMARIINI® trademark, the Court nevertheless considered it probable that the consumers’ mental associations are not based on the word MARIINI®, meaningless in itself in connection with the goods in question, but on its use in connection with the Valio trademark. The INGMARIINI product was seen as Arla Ingman’s product comparable to VOIMARIINI® or MARIINI® and the consumers would not be misled to assume that the INGMARIINI and VOIMARIINI® products originate from the same manufacturer or from companies with a shared benefit. Appealing to these arguments, the Supreme Administrative Court considered that the marks are not likely to be confused. Valio’s attorney in the case, Dr Jukka Palm, LLD, has criticised the interpretation, stating: ‘Based on these arguments one would expect this to result in a textbook case of likelihood of confusion, particularly a likelihood of association, since this type of direct link between the trademarks clearly would imply some form of license or other agreement between the companies (i.e. a business connection).’15 5. Protection of a trademark with a reputation 5.1 The Intel test case In the Intel case, the EU Court of Justice examined the question of what the relevant criteria are for the purposes of establishing whether there is a link, ‘within the meaning of the judgment in Adidas Salomon and Adidas Benelux =‘a link’), between the earlier mark with a reputation and the later mark, by virtue of which the relevant public would form a mental association between the marks, even though there is no likelihood of confusion.’ The existence of a link must be assessed globally, taking into account all factors relevant to the circumstances of the case. These include:  the degree of similarity between the conflicting marks;  the nature of the goods or services for which the conflicting marks were registered, including the degree of closeness or dissimilarity between those goods or services, and the relevant section of the public;  the strength of the earlier trademark’s reputation  the degree of the earlier mark’s distinctive character, whether inherent or acquired through use;  the existence of the likelihood of confusion on the part of the public.16

14 C-120/04 Thomson Life, paragraphs 32-33 15 Palm Jukka: Battle for a reputed brand – top courts clash in curious case of rebranding. Brands in the Boardroom 2012 16 C-252/07 Intel, paragraphs 40-42

8 Teresa Laimio

The Supreme Court’s view that there is no such link between the INGMARIINI, VOIMARIINI®, OIVARIINI® and MARIINI® marks has been criticised by trademark lawyers and academics. Arla Ingman has admitted that there is similarity between the marks. It was also indisputable that the products are identical. The earlier VOIMARIINI® was very widely known and had been in use continuously for decades. It was the first and for a long time the only blended fat spread made from butter and vegetable fat on the market, and had thus achieved the standing of a unique product. The Supreme Court, however, ignored these factors and based their view that there is no link on the grounds that consumers understand that the products originate from competing manufacturers. The judgment of the EU Court of Justice in the L’Oréal case was handed down in June 2009, around the same time as the Supreme Court was preparing its decision on the dispute between Valio and Arla Ingman. Valio appealed to the above precedent, which had been widely publicised, but surprisingly the Supreme Court completely ignored the appeal and did not take a stand on the relevant issue of exploitation of the distinctiveness and repute of a trademark with a reputation. 5.2 Exploitation of a trademark’s distinctive character and reputation The national court of justice that requested a preliminary ruling in the L’Oréal case had found that the trademark concerned in the infringement case had not been used in such a way that it caused confusion or otherwise jeopardised the essential function of the trademark as an indication of origin of goods or services. A trademark does, however, have other functions, such as guaranteeing the quality of goods or services, and functions relating to communication, investments or advertising. Against this background, the Court of Justice of the European Union confirms specifically that an infringement may nevertheless exist, if by using the mark in question, even one of the other functions of the registered trademark is or may be jeopardised. From the perspective of the proprietor of a trademark with a reputation, the trend in judicial practice that takes account of economic realities and the competitive circumstances of businesses is a welcome one. Competing companies may well benefit by placing themselves and their product brands close to those of the market leader. As stated by Dr Max Oker-Blom, DSc (Econ), Licentiate in Law, in his article assessing the decisions of the Supreme Court and the Supreme Administrative Court ‘Vapaamatkustajana tunnetun merkin siivellä’ (Free-rider on the coat-tails of a known trademark), a company can in this way achieve an advantage, if a mental association is aroused in consumers between competing products and their trademarks. In a situation of price competition, this advantage can also offer the possibility of cost savings, for example in terms of investments in product development and marketing.17 The conflicting decisions of the courts of higher instance have also been appraised by Dr Virpi Tiili, LLD.18 She refers to the Supreme Administrative Court’s decision according to which, considering the link between goods and the trademark, the mental association created by the -MARIINI® suffix is based on the wide recognition of the VOIMARIINI® trademark. It is evident in Dr Tiili’s view that this is to the advantage of Arla Ingman. In using a similar mark, the aim is to benefit from the attraction, reputation and prestige of the VOIMARIINI® trademark. In addition, the Supreme Administrative Court considered that there was no due cause for free-riding on the strength of the VOIMARIINI® trademark based on the fact that the INGMARIINI mark refers to the

17 Max Oker-Blom: Vapaamatkustajana tunnetun merkin siivellä. Voimariini-Oivariini-Ingmariini ja taloudelliset realiteetit. IPRInfo 3/2010 18 Virpi Tiili: VOIMARIINI/OIVARIINI JA INGMARIINI, rasvasota. IPRInfo 1/2012

Trademark Disputes 9 company’s commercial name. Dr Tiili referred to Dr Max Oker-Blom’s above-mentioned article as follows: ‘It was easy to free-ride in the wake of the earlier VOIMARIINI® trademark. The positive mental associations aroused by this trademark, its attraction and reputation could be exploited in marketing the INGMARIINI spreadable fat. Why else would they have used the -mariini, -ariini or -riini endings. They could just as well have thought of something else, such as spread.’

6. Impacts of the contradictory rulings of the higher courts 6.1 Unclear legal position of disputed trademarks After the ruling of the Supreme Court in 2010, Arla Ingman was allowed to use the INGMARIINI mark freely to identify its products. In the following year, after the Supreme Administrative Court had given its own ruling on case, the disputing parties were placed in a confusing position when the registration of the INGMARIINI trademark was revoked. The mark could thus be used, but on the other hand it could not be registered as a trademark. As stated above, both courts resolved the case applying the Trademarks Act, section 6.2 and the Directive, Article 5(2), but arrived at different conclusions. Arla Ingman lodged a complaint and an application for annulment of the decision with the Supreme Administrative Court, where the question was raised as to whether the positive influence due to the force of res judicata of the previous Supreme Court decision constituted a procedural obstacle to the hearing of the case in the Supreme Administrative Court. The positive influence of the force of res judicata refers to the extent to which the judgment applies in another case that does not directly concern the ruling given, but in which the earlier judgment should be taken into account as a precedential question. The Supreme Administrative Court rejected the complaint and application for annulment, stating that the case under consideration concerns the conditions for registration, while the Supreme Court had resolved a dispute concerning demands in the nature of claims under civil law based on infringement of a trademark. The cases resolved by the Supreme Administrative Court and the Supreme Court and the legal consequences relating to them differed as to their content and nature. In addition, taking into account that the rules concerning the investigation of a case and other court procedure in the Supreme Administrative Court differ from those followed in the Supreme Court, the decision of the Supreme Court cannot be considered to have prevented or limited the Supreme Administrative Court in assessing the question relating to its own powers as to the conditions for registering the INGMARIINI trademark. The conflicting rulings of the higher courts are one example in favour of the argument that legal proceedings concerning immaterial rights should be handled by a special court established specifically for such cases. In 2009, the Finnish Government made a decision in principle on a strategy for immaterial rights. According to the strategy, the hearing of disputes concerning immaterial rights should be dealt with exclusively by the Market Court. In future, the registration of rights will remain with the National Board of Patents and Registration of Finland, but the hearing of appeals will be transferred from the NBPR’s Board of Appeals to the Market Court, as well as the handling of immaterial rights disputes. The Finnish business community has for years advocated the setting up of an IPR Court. It has been held that by concentrating expertise, the quality of the decisions made will be improved and there will be less need for the parties involved to appeal against decisions. The overall costs incurred could also be reduced.

10 Teresa Laimio

6.2 The battle is not over yet At the time of writing this article, the trademark dispute between Valio and Arla Ingman has still not been resolved. Arla Ingman has started proceedings for annulment with respect to the Finnish trademark registration VOIMARIINI® on the grounds that the trademark has not been used since its name was changed to OIVARIINI®. If Valio were to lose its exclusive right to the VOIMARIINI® trademark due to its not being in use, the National Board of Patents and Registration could reconsider the conditions for registering the INGMARIINI brand. It is indicative of the reputation and prestige of the OIVARIINI® brand, which is the market leader, that a new product called KEIJURIINI has been launched onto the spreadable fats market in spring 2012. Keiju is a well known margarine brand in Finland owned by Bunge Finland Oy, and by adding the ending –RIINI as a catchword to the name it has been able to communicate effectively to consumers what kind of product KEIJURIINI is. In advertising the product it is even expressly stated that ‘Keiju spreads well, now also a “riini”’. The -RIINI ending is thus becoming a generic term for blended spreads containing butter and rapeseed oil – products that it is considered especially desirable to keep distinct from margarine. It is a fact that the products of a market leader are copied everywhere. One may ask to what extent the market leader should tolerate replication by competitors. The tolerance threshold may be overstepped at different levels, depending on whether the issue is assessed from the point of view of trademark law or business. No one could have imagined in 1980 that a blended spread made from butter and rapeseed oil would be such a popular product that the last part of its name -MARIINI® or -RIINI would become a generic designation for the product. It is easy to say with hindsight that suffixes of this kind cannot be monopolised by one company. Could Valio have done something differently to avoid the threatened dilution of its trademarks? Or would it be more constructive to admit that it is a great privilege to own such a prestigious brand that it will soon generate a word with its own meaning in the dictionary? *** Teresa Laimio is a Senior Legal Counsel of Valio Ltd and has worked in-house for more than 10 years with a particular focus on IP matters. She has a broad experince in international patent and trademark licensing, technology transfer, complicated IP disputes and legal advice related to brand strategy, brand advertising and sponsorship. Prior to joining Valio Ltd at 2002 she worked in-house at IT and insurance sector. Teresa is a postgraduate student in IP and commercial law at the University of Helsinki, Finland.

Valio Ltd is the biggest milk processor in Finland by net turnover at 1.9 billion euros. Valio is the market leader in all key dairy product groups in Finland and a world class pioneer as the developer of functional foods. Valio is the leading brand in Finland and strongly positioned in neighbouring countries , and the Baltic States with subsidiaries in the USA and , too. Valio has 15 production plants in Finland, two in , and a Customer Service Center including production facilities in Moscow. Valio also commands global sales in food ingredients. International operations including licensing encompass 65 countries accounting for one third of turnover.