On 5 March 2015, the German Federal Court of Justice (I ZR 161/13) issued a ruling that two wordmarks that consist of the same three letters, albeit in a different order (here: IPS and ISP), might lead to confusion as to the origin of goods and services sold under these marks. In particular, the Court noted that the pronunciation of the individual letters in their given order had the same sequence of vowels (here: i-e-e, German pronunciation). Thus, the Court found there to be a likelihood of confusion between the two wordmarks that were both used for IT services.

Pursuant to section 14 para. 2 No. 2 of the German Trademarks Act (MarkenG), “a third party shall be prohibited, without the consent of the proprietor of the trademark in the course of trade, from using a sign if the likelihood of confusion exists for the public because of the identity or similarity of the sign to the trademark and the identity or similarity of the goods or services covered by the trademark and the sign, including the likelihood of association with the trademark”. The question whether a likelihood of confusion exists between two marks must be assessed globally, taking into account all factors relevant to the circumstances of the case. According to the German Federal Court of Justice, the Hamm Court of Appeal was right, therefore, to consider that the two marks share a first identical vowel, “i”, that both are formed according to the pattern “vowel-consonant-consonant”, that they have the same number of syllables and have a similar sequence of vowel sounds in German (“i-e-e”).

The relevant factors to be considered in the assessment of similarity between two marks are phonetic similarity, graphic similarity and similarity in meaning. Under established case law, it is, in principle, sufficient to show similarity between two marks in one of these areas. Thus, in the present case, the fact that the sequence of vowels is identical led the Court to conclude that the (German) pronunciation of the two marks may lead the public to believe that the IT services at issue derive, at the very least, from economically linked undertakings. In the Court’s opinion, a likelihood of confusion in the perception of the targeted public could therefore not be ruled out, despite differences in the consonant pattern.