The First Hall of the Civil Court, presided over by Judge Joseph R. Micallef, in the case ‘Eden Leisure Group Ltd (C-4529) v Sign-It Ltd (C32228) et’, held that the applicant company failed to sufficiently prove that the respondents breached competition rules under article 32 of the Commercial Code and concluded that the use of ‘Arena’ and ‘Arena One’ in the respondent’s company name did not create confusion with the applicant company’s use of the name Eden Arena.

In 2001, Eden Leisure Group Ltd (hereinafter referred to as Eden), opened an ice rink under the name Eden Ice Arena – subsequently renamed Eden Arena and transformed into a multi-purpose hall for a wide variety of commercial activities including parties and concerts.

In early 2006, Sign-It Ltd (hereinafter Sign-It) began works with the aim of setting up a structure for the purpose of holding activities of a commercial nature, which structure was to be named Arena One – The Malta Convention Centre, in short Arena One.

In February 2006 , Eden sent a judicial letter to Sign it Ltd requesting it to refrain from making use of the words ‘Arena’ and ‘Arena One’ or any other name which included the word ‘arena’, claiming that the Eden Arena was known to the general public as the ‘Arena’, and the use of the said names was creating confusion and violated article 32 of the Commercial Code (chapter 13 of the Laws of Malta).

Article 32 of the Commercial Code states that “traders shall not make use of any name, mark or distinctive device capable of creating confusion with any other name, mark or distinctive device lawfully used by others, even though such other name, mark or distinctive device be not registered in terms of the Trademarks Act, nor may they make use of any firm name or fictitious name capable of misleading others as to the real importance of the firm.”

After Sign-It Ltd refused to refrain from using the name Arena One, Eden filed legal proceedings against it on the basis of article 32 of the Commercial Code, requesting the court to order Sign-It Ltd to refrain from making use of the name Arena One or Arena One –The Malta Convention Centre or any derivation thereof with the use of the word ‘arena’ and also requested the court to award it damages for the said use.

Following the commencement of legal proceedings, Eden registered the name Eden Arena as a trademark with effect from February 15, 2006.

In reply, Sign-It contested the legal action arguing that the word ‘arena’ is a generic common word. Sign-It explained that they were using the name Arena One – The Malta Convention Centre because the company enjoyed exclusive representation in Malta of the English company Arena Structures Ltd which in turn formed part of the Arena Group.

The court said that in the present case, for the action of the applicant company to succeed, it must be proven that the main ideas of the two names resemble each other and that this resemblance is such as to create confusion in the mind of the ordinary consumer

Sign-It also produced a quantitative research survey report to prove that, in actual fact, the applicant company was known as Eden rather than Arena and, consequently, the use of the word ‘arena’ could in no manner be found to be in breach of article 32 of the Commercial Code.

The court held in favour of Sign-It, finding that Eden had failed to sufficiently prove that Sign-It had breached competition rules contemplated under article 32 of the Commercial Code and concluded that the use of the words Arena and Arena One in Sign-it’s company name did not create confusion with Eden’s use of the name Eden Arena.

The court explained that the aim of article 32 is to prohibit traders from creating confusion between products of the same nature to the extent that it would preclude the ordinary consumer from distinguishing between one product and another.

In determining whether the use was in breach of article 32, it is irrelevant whether the trader acted in good faith or with fraudulent intent; intention is only relevant when calculating the damages to be paid pursuant to article 37 of the Commercial Code.

The court pointed out the importance of distinguishing the said action, aimed at regulating competition between traders, from the action contemplated in the Trademarks Act (chapter 416 of the Laws of Malta) relating to the protection of a registered trademark.

An action in relation to unfair competition on the basis of the use of a name, mark or distinctive device could be successful independently of the registration of the said name, mark or distinctive device, because the property right of a trademark exists independently of registration and, consequently, the registration of the name ‘Eden Arena’ did not have the effect of creating a property right, but only the effect of declaring and rendering public the said right against third parties.

Noting that the legislator does not indicate what type of ‘use’ can create confusion with another name, mark or distinctive device, the court proceeded to give a number of non-exhaustive guiding principles when determining what would amount to so-called “deceptive resemblance”.

The court said that there was no need for the two names, marks or distinctive devices to be entirely identical; it was enough for there to be the possibility of the creation of confusion in the consumer’s mind.

In addition, citing Kerley on Trade Marks and Trade Names (2001), when determining whether names, marks or distinctive devices resemble each other, one must look at the aspect of the mark that is most likely to be memorable – the so-called “the idea of the mark”(W.R. Cornish – Intellectual Property: Patents Copyright Trademarks and Allied Rights).

Quoting Lord Herschell (cited in a ruling by Judge Harding on June 7, 1950, in the case ‘Vassallo v Caruana et’), the court further explained that while “a critical comparison of the two marks might disclose numerous points of difference, the idea which would remain with any person seeing them apart at different times might be the same”.

The court said that in the present case, for the action of the applicant company to succeed, it must be proven that the main ideas of the two names resemble each other and that this resemblance is such as to create confusion in the mind of the ordinary consumer.

The deceptive resemblance must be such that, in the ordinary course of things, a person with reasonable apprehension and with proper eyesight would be deceived.

Moreover, the deceptive resemblance must mislead the ordinary consumer in relation to the nature of the products. This means that the two names need not be entirely identical as long as the general idea of the name would confuse the “ordinary man and woman who would take ordinary care in purchasing what goods they require, and if desiring a particular brand, would take ordinary precautions to see that they get it” (‘Thorne & Co. Ltd v Sandaw’, 1912).

In determining whether there is unfair competition as contemplated under article 32 of the Commercial Code, “the resemblance between the two marks must be considered with reference to the ear as well as to the eye”; therefore, one must consider the resemblance both phonetically and graphically.

According to the court, the name, mark or device must be distinctive or at least must have acquired a secondary meaning and in reality this was the only requirement expressly required by article 32 of the Commercial Code. This means that not any name, mark or device used is protected by article 32; the use of geographical or generic words is not protected unless such words acquire a ‘secondary meaning’ in the minds of the public.

Quoting L.J. Herschell (Camel Hair Betting Case cited in Kerly on Trade Marks, sixth edition), the court explained that “the name of a person or words forming part of the common stock of language, may become so far associated with the goods of a particular maker that it is capable of proof that the use of them by themselves without explanation or qualification by another manufacturer would deceive a purchaser into the belief that he was getting the goods of ‘A’ when he was really getting the goods of ‘B’.”

The fame of a registered trademark plays an important and dominant role when analysing whether a mark enjoys legal protection under article 32.

The court emphasised that the onus of proving that a name, mark or device is distinctive, famous and has acquired a secondary meaning lies on the person alleging unfair competition. Therefore, Eden – being the party claiming that its mark is famous – has the burden of proving it.

Applying the above guiding principles, the court stated that Eden uses the name Eden Arena while Sign-It uses the name Arena One – The Malta Convention Centre and/or Arena One.

From the evidence presented, the court concluded that the name Eden Arena is a distinctive name, however, emphasis is placed on ‘Eden’ rather than ‘Arena’ and further concluded that the word ‘arena’ is a generic word not capable of causing confusion between the name used by Eden and that used by Sign-It.

The court argued that Eden was bound to prove that the use of the word ‘arena’ assumed a secondary meaning in the Maltese market, that is, that the public’s perception was such as to consider the use of the word ‘arena’ immediately connected with Eden Arena and, in the court’s opinion, Eden failed to provide such proof.

Rachel Genovese is a trainee advocate at Ganado Advocates.