Judicial Precedent – Cancellation of a Trademark for Similarity with a Previously Registered Mark in an Overlapping Class

Subject of the Case and Grounds
The plaintiff filed a lawsuit before the Commercial Court in Riyadh requesting the cancellation of the trademark (BY THE WAY – BTW BY THE WAY) registered in Class (43) for café and restaurant services under the defendant’s name. The claim was based on Article (22) of the GCC Trademark Law, which stipulates: “Without prejudice to the provisions of Article 7 of this Law, the competent authority and any interested party may resort to the competent court to request the cancellation of a trademark that has been registered unlawfully, and the competent authority shall cancel the registration once a final judgment to that effect is presented.”

The plaintiff’s claims were based on the following grounds:

1. The disputed mark is identical to the plaintiff’s innovative mark (BY THE WAY – BTW BY THE WAY), previously registered in Saudi Arabia.
2. The services covered by the disputed mark in Class (43) are related to the plaintiff’s goods registered in Class (30).
3. The plaintiff’s priority in creating, using, and registering its mark.
4. The plaintiff’s mark enjoys notoriety.
5. Acceptance of the disputed mark would cause confusion and mislead the public by creating an association between the two marks contrary to reality.
6. The plaintiff suffered harm and was deprived of registering its mark in Class (43).

Facts

1. The mark (BY THE WAY – BTW BY THE WAY) was registered unlawfully, as it originally belongs to the plaintiff, who was first to create, use, and register it in Saudi Arabia.
2. The disputed mark is registered for café and restaurant services in Class (43), which are closely connected to coffee and tea products in Class (30) registered under the plaintiff’s mark.
3. Accordingly, the plaintiff filed this lawsuit seeking the cancellation of the disputed mark due to its conflict with the previously registered mark on related products and the similarity between the two marks, which misleads consumers and causes harm to the plaintiff.
4. The defendant argued that the goods and services of the two marks are different and that the plaintiff’s mark was not registered in Class 43.
5. The Commercial Court ruled in favor of canceling the mark, and the judgment was upheld by the Commercial Court of Appeal.

 Reasoning of the Judgment

After reviewing the case documents and the parties’ submissions, the Court of Appeal concluded:

1. The plaintiff based its request for cancellation on the similarity between the disputed mark and its own innovative mark, along with the services connected thereto, despite the plaintiff’s prior registration of its mark in Class (30). The acceptance of the disputed mark creates consumer confusion and mental association between the two marks contrary to reality, given the close interrelation between the classes in question.
2. The Court acknowledged that the plaintiff had priority in registering its mark and accepted the validity of the plaintiff’s arguments as sufficient grounds to grant the request for cancellation.

 Pronouncement of Judgment

The Nineteenth Commercial Circuit of the Commercial Court in Riyadh ruled to cancel the disputed trademark. The judgment was upheld by the Commercial Court of Appeal, adopting the same reasoning.