Detailed analysis of the Orlando vs Orlanda case

If the trademark is registered in bad faith, the mark may be cancelled by others on the basis of prior use irrespective of the years of registration.

In this case, the plaintiff filed cancellation action before the Commercial Court in Riyadh, the facts of the case are as follows:

• Pacific Choice was the rightful owner of the mark (ORLANDO CALIFORNIA GRAPE LEAVES) since 1976. Since then, the defendant was selling Orlando branded products in Saudi Arabia.
• In 2013, the mark (ORLANDO CALIFORNIA GRAPE LEAVES) was assigned to Yergat Packing, the plaintiff’s parent company, while the business relationship with the defendant continued.
• Yergat Packing, established a new company called Orlando Grape Leaves LLC “the plaintiff” and assigned the mark (ORLANDO CALIFORNIA GRAPE LEAVES), with all its rights, to the plaintiff, while the business relationship between the plaintiff and the defendant continued.
• In the meantime, the defendant registered the mark “Orlanda,” subject matter of cancellation, which is similar to the plaintiff’s trademark “Orlando.”
• The plaintiff filed an application to register their Orlando brand with the Saudi Authority for Intellectual Property, however, the plaintiff’s application was rejected due to similarity with Orlanda, owned by the defendant.
• Accordingly, the plaintiff filed a cancellation action before the Riyadh Commercial Court against the Orlanda based on its prior use of the trademark in KSA pursuant to Article 7 of the GCC Trademark Law and the bad faith of the defendant. The plaintiff alleged that the defendant did not respect the long-term commercial relationship and that the registration of the mark by the defendant amounts to breach of fiduciary duty towards the plaintiff.  
• In response to the cancellation claim, the defendant argued that it had been selling Orlanda branded products since 1976, and that its trademark Orlanda had been registered in the KSA since 2001, where the plaintiff’s company did not come into existence. The defendant also argued that the Orlanda trademark is dissimilar to the plaintiff’s Orlando brand.

Ruling

The court decided that the registration of Orlanda is not as per law. In the reasoning, the court mentioned the continuous use of the mark by the defendant for more than twenty years does not establish a legal right to imitate a third-party trademark.

Comment

Resignation of the mark establishes prima facie evidence that the registrant is the owner of the mark. Such ownership may be contested by third parties on the ground of prior use in KSA within five years of the date of registration pursuant to Article 7 of the GCC Trademark Law. Nevertheless, the mark may be disputed by third parties irrespective of the years of registration in the event to bad faith registration. In the Orlando case, the registration of Orlanda last for 20 years, however, the court ordered cancellation of the mark.