Candy co-operation turns into candy competition
Kraft Foods Sverige IP AB recently won over Mars Inc. and their Swedish subsidiary Mars Sverige AB in a trademark matter before Svea Court of Appeal in Stockholm.
Mars started using the trademark “m&m’s” in 1941. Shortly after that Mars entered into a co-operation with Marabou/Freia A/S (later acquired by Kraft). This co-operation resulted in the development of a product, peanut covered in milk chocolate and sugar coated, that Marabou (Kraft) started selling in Sweden under the trademark “m” in 1957.
The co-operation concerned exchange of information and know-how and was formalized in a written agreement between the parties in 1989. In this agreement Mars undertook not to sell “m&m’s” in Sweden, Norway or Finland and Kraft undertook not to sell their “m”-product on markets outside of those countries.
However, Mars started selling the product “m&m’s” on the Swedish market in 2009.
Kraft presently holds two registrations for the trademark “m” (device) in Sweden dating back to 2005 and 2009. In addition, they claim a right to the trademark acquired through user on the Swedish market, dating back to at least 1996. In a previous court matter between the parties, this reputation was found to be a prior right to a now cancelled Swedish trademark registration for “m&m’s”.
The present decision, however, concerns a request from Kraft to prohibit the use of “m&m’s” in Sweden. The Court of Appeal found that Kraft held an unregistered right to the trademark “m” in 2009, before Mars started using “m&m’s” in Sweden. Market surveys showed brand recognition of around 80% and the annual sales were around 200 tons.
The court held that Mars had provided evidence to the fact that “m&m’s” was considered a well known trademark on the Swedish market in 2014 and that the Swedish consumers could correctly identify the commercial source of origin. 88% could identify Mars as origin for “m&m’s” whereas only 31% could identify “m” to Kraft, Marabou or candy. However, the court was not convinced that this was the case in 2009, the relevant point of time, since sufficient evidence was not shown to this effect.
The decision of the court results in a prohibition for Mars to use the trademarks “m” or “m&m’s” in Sweden for candy in penalty for a fine of SEK 2.000.000. In addition, Mars should compensate Kraft for their court costs.
Kristina Fredlund, European Trademark Attorney