Final ruling in the "Stortorvets Gjæstegiveri" case

On 14 December 2021, the Norwegian Supreme Court delivered its unanimous judgment in the case between the appellant, Olav Thon ("Thon"), and the defendants, Erik Jacobsen and Madriku AS (jointly referred to as "Madriku"). Thon is the operator of a restaurant called "Stortorvet Gjæstegiveri" in Oslo, which was established in the 19th century. Thon had applied for trademark registration for the following logo ("Thon's logo"):

Madriku opened a resaturant in Hamar in 2015 under the trade name "Stortorvet Gjestestegiveri". Madriku used the following logo for the restaurant ("Madriku's logo")

The question in the case was whether Madriku's use of the trade name "Stortorvets Gjestegiveri" and Madriku's logo infringed Thon's rights in connection with their trademark and/or constituted a breach of the Norwegian Marketing Control Act sections 30 and 25.

A national trademark registration gives the trademark holder an exclusive right to use its trademark for the goods and services for which it is registered within Norway. According to section 5 of the Norwegian Trademarks Act, the trademark right does not include parts of a trademark that cannot be separately registered. Consequently, the main question was whether the name "Stortorvets Gjæstegiveri" was sufficiently distinctive and not descriptive, in order to be registered as a trademark.

The Norwegian Supreme Court concluded that Thon's trade name was descriptive and not sufficiently distinctive. The words "Stortorvets Gjestegiværi" means a serving place located at Stortorvet, which is a generic name for a large square in several Norwegian cities. Although the word "gjestegiveri" is old-fashioned, it is still used, and there are approximately 60 hospitality establishments in Norway which use the name. The Supreme Court stated that the fact that there are more modern or commonly used words describing the service is not relevant in the assessment of the descriptive character of the trademark.

A descriptive text can be registered if a change or addition to the descriptive text distracts the relevant public's attention from the word meaning. The Supreme Court assessed whether the typeface and the arc shape of the text in Thon's logo constituted a perceptible difference enabling it to be viewed as not being descriptive. The Supreme Court stated that the old-fashioned font was neither original nor striking, and the words could easily be read. Although the logo gave nostalgic associations, it did not take away from the descriptive nature of the trademark.

Lastly, the Supreme Court acknowledged that the logo had been used exclusively for a long time, and therefore it had been incorporated as a trademark. However, as Thon had not actively marketed the restaurant outside of the Oslo region, the incorporation did not extend to Hamar. Consequently, the incorporation of the trademark did not prevent the use of a similar or identical trademark outside the Oslo region.

The Norwegian Supreme Court assessed whether Madriku's use of the name and logo constituted a breach of sections 25 and 30 of the Norwegian Marketing Control Act. As a general rule, the Norwegian Marketing Control Act can supplement the Norwegian Trademarks Act if there are elements to the case which will not be covered by the Norwegian Trademarks Act. Although a third party's use of a trademark is not an infringement of a trademark right, it can constitute unlawful exploitation of the other party's efforts and results.

The Supreme Court concluded that Madriku's use of the name and logo did not constitute a breach of sections 25 and 30 of the Norwegian Marketing Control Act. Although the visual designs of the trademarks were similar, the Norwegian Supreme Court did not find it necessary to assess whether this constituted an imitation. Madriku's and Thon's restaurants were placed in different cities, and consequently, they did not have the same customers. Furthermore, the geographical placement of Madriku's restaurant and its year of establishment was highlighted in Madriku's logo. As a result, the Supreme Court could not see that Madriku's logo indicated any relation to Thon's restaurant in Oslo, and the restaurant customers' confusion of the two restaurants when booking online seemed to be a symptom of the descriptive nature of the trademarks. The Norwegian Supreme Court noted that descriptive trademarks, as a general rule, should be free to use for everyone. In addition, the Supreme Court pointed to the fact that there was no evidence showcasing that the reason for Madriku's choice of name and Madriku's logo was to take advantage of a free ride on Thon's logo and trade name. The fact that Thon's trade name did not have any particular goodwill in the Hamar area underlined this.

The Supreme Court ruling in the "Stortorvets Gjæstegiveri" case can serve as an example of the importance of choosing a distinctive trademark that is not descriptive of the services or goods for which it is meant to be used. A strong trademark that is inherently distinctive will enable the trademark holder to prevent others more easily from using the same or a similar trademark without permission. On the other hand, the weaker a trademark is, the more difficult and costly it will be to defend it legally. Consequently, using more resources to create a strong, distinctive trademark at the outset might pay off in the end.