U.S. Krispy Kreme Doughnuts Win 4-0 Over Spanish Donuts

by Foley Hoag LLP - Trademark, Copyright & Unfair Competition
Contact

A decision rendered by the European Court of Justice (ECJ) on March 2, 2017, affirming a General Court ruling and potentially ending a nearly twenty-year legal battle, is a reminder to trademark owners that what is generic in one territory can be distinctive in another.

Doughnuts are well-known in the U.S. but, until recently, they were far less known in Europe. In 1962, a Spanish company called Donut Corporation Española (which later became Panrico SA, now a subsidiary of the Mexican Bimbo group) filed to register the DONUT trademark in Spain and developed a whole family range of pastries, which became quite popular. In 1988, they also filed to register in Spain the mark DOGHNUTS (not the correct English spelling; in the U.S., the pastry is of course referred to as a “donut” or “doughnut”).

The Krispy Kreme Application and Opposition

On September 6, 1999, HDN Development Corp., parent company of the U.S. Krispy Kreme Doughnuts chain, filed a European Community trademark application for the word and design mark: KRISPY KREME DOUGHNUTS, which is a well-known mark in the U.S.

Krispy Kreme declared that it was not seeking to acquire any rights in the word “doughnuts” alone. Nevertheless, Panrico filed an opposition based on its prior Spanish DONUT and DOGHNUTS trademarks. Panrico’s opposition was rejected on January 27, 2005, on the ground that there was no risk of confusion. That decision was confirmed by the First Board of Appeal. Panrico filed and later withdrew a further appeal, and the KRISPY KREME DOUGHNUTS mark was registered.

The Cancellation Action

Panrico then tried a different strategy, and filed a request to cancel the now-registered KRISPY KREME DOUGHNUTS mark. Panrico’s cancellation request was based on the same two trademarks it had relied upon in the opposition, as well as a few additional trademarks, including an international DONUT word mark registered on April 30, 1969, and covering a number of European countries, including Portugal. Panrico argued that there was a risk of confusion between the trademarks, and that the KRISPY KREME DOUGHNUTS trademark would unduly benefit from the distinctive character and reputation of the DONUT and DOGHNUTS trademarks.

Krispy Kreme raised a res judicata defense and argued that, since the earlier opposition proceeding resulted in a ruling that there was no risk of confusion between the trademarks, Panrico could not raise that same argument again in the cancellation proceedings. This argument was rejected on the grounds that proceedings before the European Trademark Office are administrative in nature, not judicial, and that the res judicata rule applies only when one party has obtained a final court decision.

Krispy Kreme also failed to make the case that the “DONUT” and “DOGHNUTS” trademarks lacked distinctiveness, because the General Court had already held in an earlier case, Bimbo v. OHIM, that these trademarks were not devoid of distinctiveness.

Nevertheless, Krispy Kreme prevailed on the merits and Panrico’s request for cancellation was rejected. The decision was confirmed by the Fourth Board of Appeal on July 25, 2013, and by the General Court on October 7, 2015.

Was there a risk of confusion?

The General Court compared the trademarks in question from three perspectives: visual, conceptual and phonetic. From a visual perspective, the Court noted that the marks had different appearances because the words “KRISPY KREME” appeared first and in bigger letters, and were thus more prominent than “DOUGHNUTS,” the only word similar to Panrico’s marks.

As to the conceptual perspective, since the words “doughnuts”, “donut” and “donuts” do not belong to the common Spanish vocabulary, the Court held that Spaniards would not associate them with a particular concept, and it was therefore not possible to compare the trademarks from a conceptual point of view.

Finally, the Court considered phonetics. The Court found that it was not possible to determine with certainty how the word “doughnuts” is pronounced by the relevant public because the combination of letters “gh” is unknown in Spanish and “ou” is uncommon. As a consequence, it is not possible to predict with certainty how Spanish consumers will pronounce “doughnuts” but at least a portion will pronounce it differently from “donuts”.

The General Court also found that, at least in certain respects, the goods were not similar. Panrico’s trademarks covered various pastry products in class 30, whereas Krispy Kreme’s trademark also covered “restaurant services specialized in doughnuts, tarts, cakes, brioches, bagels” in class 42. Panrico argued that these class 42 services were similar to its products, but the General Court disagreed. Panrico also argued that, pursuant to article 8 paragraph 5 of the 40/94 Regulation, trademarks that have developed a certain reputation should be given broader protection to cover non identical products and/or services. However, the Court found this regulation inapplicable because of the lack of similarity between the marks.

The General Court concluded that, taking into account all relevant factors, there was no risk of confusion, and the KRISPY KREME DOUGHNUTS mark was valid.

The ECJ Appeal

Panrico pursued a further appeal to the ECJ, but this appeal was rejected by the ECJ on March 2, 2017. The ECJ decision is a useful illustration of that Court’s role. The ECJ does not review findings of fact unless a gross error is alleged, which was not the case here. As a consequence, the findings of the lower court as to the similarity between the trademarks, as well as findings regarding the nature of the products and services, could not be challenged.

The ECJ decides only whether the General Court has correctly applied the law and, in this case, the ECJ found no fault in the General Court’s application. Panrico argued that the General Court failed to take into account the reputation of its trademarks and the fact that some of the products and services covered by Krispy Kreme’s trademark belonged to the very same class (class 30) as those covered by Panrico’s trademarks. However, the ECJ found that the General Court had, in fact, taken these factors into account.

This is the end of a long battle: Krispy Kreme has a strong and valuable trademark in the U.S., but it took them eight years to obtain the registration of a European Union Trademark, and then another ten years to obtain a final decision confirming its validity. But it was certainly worth it: after all, they did not end up with “donuts”!

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Foley Hoag LLP - Trademark, Copyright & Unfair Competition | Attorney Advertising

Written by:

Foley Hoag LLP - Trademark, Copyright & Unfair Competition
Contact
more
less

Foley Hoag LLP - Trademark, Copyright & Unfair Competition on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!