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The case of Zara: Do trademark laws bend under brand reputation?

After more than a decade of legal actions Zara's ambitions to expand into food and restaurant services remain but a dream that is unlikely to become reality any time soon.

By

Igor Demcak

Timeline of the Dispute

Back in 2010, Inditex, the parent company of the brand we now recognize as Zara, filed an application to trademark the word Zara in classes 29, 30, 31, 32, 35 and 42 – covering a range of food products, as well as restaurants and retail/wholesale outlets. This application was then challenged by an Italian company Ffauf Italia, as it opposed previous trademarks they have registered that included the word Zara in them. Subsequently, Inditex requested Pfauf Italia to prove the genuine use of their trademarks. The Italian company delivered on this request and was successful in proving the use of their trademarks including the word Zara in commerce.

Between 2010 and 2020, the case kept going back and forth to the Board of Appeal, as both parties kept disputing over the proof of genuine use and the likelihood of confusion. 

In 2021, the case was moved to the General Court, which ruled that the EUIPO should revoke its decision and issue a new one, on the basis that it was not sufficiently motivated according to EU law. The revised decision of the General Court partially upheld the appeal of the Italian company and confirmed the likelihood of confusion between all goods that Inditex was seeking to trademark and already existing trademarks of Pfauf Italia, except for classes 31 and 32, covering fresh vegetables and fruit juices.

In its final decision in January 2022, the General Court rejected the claim of Inditex against Ffauf Italia and confirmed that the goods and services in the application of Inditex were identical or similar to the earlier registered trademarks of Ffauf. As of 2022, Inditex has now applied to the Court of Justice to review the case, which means that this dispute will likely receive continuation.

Likelihood of Confusion and Brand Reputation

Oppositions to trademark applications vary from case to case but by far the most common ground relates to the likelihood of confusion. The real issue is whether the consumer at the point of purchase is confused into believing that the goods they are buying belong to the other trademark owner. In order to determine if there is a significant risk of confusion between two trademarks when a trademark application receives opposition, the IPO proceeds with a careful assessment of the degree of similarity between the signs registered and the goods and services to which they relate to. 

Inditex argued that Zara has a prominent reputation on the market, which allows the relevant public to automatically associate the word with the fashion brand and not the Italian pasta producers. The claim then is that the high reputation of Zara as a clothing brand neutralizes any visual or phonetic similarity with already existing trademarks despite the similarity of products and services. However, the General Court rejected this claim, stating that in the EU trademark law the reputation of the later registered trademark is irrelevant when assessing the likelihood of confusion. 

Although the reputation of the brand does play a significant role in some trademark opposition disputes, it is not always applicable as a reason to disregard trademark similarity. Brands that rely on reputation have to file relevant evidence of their reputation in relation to each of the goods for which it is claimed, rather than rely on the general reputation or reputation for a particular product or service to sustain a claim across a range of goods and services. Zara case once again highlights the importance of registering a trademark as soon as possible, while also extending it to all relevant classes of goods and services a company is currently offering, or planning to start doing so in the future.

Igor Demcak
Igor Demcak
Trademark Attorney

Founder & CEO of Trama

7 year experience in IP protection

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