Trademark trouble in Norway: the quick compensation guide for trademark infringements

How much compensation can you be awarded for a trademark infringement?

The Norwegian trademark system offers different methods for calculating compensation/damages. The same rules apply to contributory infringement, meaning that distribution channels, stores, or any other party indirectly using the trademark may also incur liability for damages. The trademark owner can usually choose whom to bring legal action against.

The infringed party may choose the most favorable of the following three alternatives for calculation:

• ·Compensation corresponding to a reasonable license fee for the exploitation, plus damages for losses caused by the infringement that would not have occurred under a proper licensing agreement.
  
• ·Damages for the losses caused by the infringement.
  
• ·Remuneration corresponding to the profit gained through the infringement.

As a fourth option, when the infringement is committed intentionally or with gross negligence - as is often the case – you can claim an amount corresponding to twice the reasonable license fee.

It can be difficult to prove economic loss due to the infringement of industrial rights. Due to this fact, double the reasonable license fee is usually the preferred option for the rights holder, despite this frequently also being difficult to ascertain unless the infringed mark is often licensed out in practice.

Engage local counsel

We always advise clients and agents to engage a Norwegian trademark attorney as early as possible in the dispute. Hiring a Norwegian attorney in a trademark dispute is advisable because:

• ·A Norwegian trademark attorney has specialized knowledge of relevant Norwegian legislation and case law and can assess the case to determine how strong it is.
  
• ·A Norwegian trademark attorney can draft cease-and-desist letters and communicate with the opposing party in a legally precise and effective manner in the right tone, without harming the case at a later stage. We sometimes take over disputes where the relationship between the parties has soured because a trademark holder or their agent used a more aggressive tone than is customary in Norway. Involving a local attorney from the beginning can help maintain a more constructive dialogue and reduce unnecessary escalation of the conflict.
  
• ·A Norwegian trademark attorney has experience and knowledge about negotiating favorable out-of-court settlements in Norway.
  
• ·A Norwegian attorney will be able to litigate the matter if a solution is not reached out of court.

Step-by-step guide for claiming compensation for trademark infringements

Step 1: Ascertain whether the use in question constitutes trademark infringement at all

This first step might seem obvious, yet it remains the single most important one. Without a trademark infringement, no compensation.

The exclusive rights conferred on the holder of a trademark, whether registered or use-acquired, include the trademark owner’s right to use the mark (insofar as others’ rights are not an obstacle), and the right to prohibit other businesses from using a mark for commercial activities without consent that:

• Is identical and for identical goods or services

• Or can be confused (directly or indirectly) with the owner’s trademark.

• For well-known marks, an association between the marks can be sufficient to constitute an infringement.

See an unofficial translation of the Norwegian Trademark Act here (external link to patentstyret.no).

A business generally cannot use a competitor’s trademark on similar products or services in advertising, on websites, in Google ads, as a domain name, or in other forms of marketing communication, without first obtaining consent from the trademark owner.

In some instances, the party wishing to use another’s trademark in Norway may invoke certain exceptions under Norwegian trademark law and thus avoid having to obtain the owner’s consent. The following uses of competitors’ trademarks are generally considered acceptable (loyal use):

·Word marks or names may be used in a loyal manner to reference your client’s business to the extent necessary, and so long as the trademark is not highlighted or used in a way that might lead a customer to mistakenly believe there is an economic connection between the competitors. Such trademark use is often relevant in comparative advertising. Comparative advertising is subject to stringent requirements for truthfulness, including objectivity, documentation, and loyalty between competitors.

·If a consumer or business has purchased an item, it may be resold with the brand name and a self-produced image of the item to identify the product, to just the extent that it is strictly necessary to identify the product being resold.

If you discover that someone is using your client’s trademark in their commercial activities in Norway without your client’s consent and in breach of the points above, there may be grounds to act.

Feel free to contact us for an assessment of your case.

Step 2: Start with a Cease-and-Desist letter (C&D letter)

When you feel reasonably certain that your client’s trademark is indeed infringed, it is time to act. The first course of action should always be to attempt to reach an amicable solution. Do this by sending cease-and-desist letter that includes the following:

• ·Identify the specific infringements of your client’s rights and describe them in detail.
  
• ·Demand the immediate cessation of the infringement.
  
• ·Claim any compensation arising from the infringement, or alternatively if this is not established, information from the counterpart that will make you able to calculate reasonable compensation.
  
• ·Specify a deadline by which you expect a response.
  
• ·Be prepared to take legal action if you do not receive a satisfactory reply.

It is important to note that you cannot initiate legal proceedings in Norway without first sending a letter (typically a cease-and-desist letter for trademark matters) expressly stating your claim and its legal basis. This notice must also invite the defendant to respond to the claim and its grounds. Only if this is not satisfactorily done by the deadline you set, can you proceed to initiate legal proceedings.

A Norwegian trademark attorney has the necessary expertise and experience to draft a cease-and-desist letter in accordance with the relevant Norwegian provisions and thus bettering the chances of reaching a favorable outcome for the trademark holder.

Step 3: Negotiations with the counterpart – calculation of damages

During the ensuing negotiations following the C&D letter, in addition to trying to reach an amicable solution, you should attempt to get as much information about the extent of the infringement, in order to be able to accurately calculate the compensation you should demand from the infringer on behalf of your client. Valuable pieces of information in this regard will be infringing units sold, prices per unit, extent of the marketing, et cetera.

Step 4: Filing a writ of summons

If the parties are unable to reach an agreement and settle the matter out of court, the next step will be to file a writ of summons with the Oslo District Court. The Oslo District Court has exclusive jurisdiction over matters concerning cancellation, invalidation, registration and infringement of registered trademarks (in addition to several other areas of IP law). The Oslo District Court is also the compulsory legal venue for appeals of decisions issued by the IP Appeal Board.

Norwegian courts will encourage parties in trademark disputes to consider court mediation. However, the parties are free to reject this option. If you agree to court mediation, a judge will be appointed as mediator. In Oslo District Court, there are judges with specialized knowledge of trademark law. The parties are free to bring their legal representatives. If mediation is unsuccessful, the lawsuit proceeds to trial. The judge who acted as mediator will not adjudicate the case if it proceeds to trial.

Further answers regarding trademark matters in the courts

What are the costs of trademark lawsuits in Norway?

The cost of a trademark lawsuit depends on the complexity of the case. In most first-instance proceedings, each party’s legal costs range between NOK 200,000 and 400,000. The prevailing party is usually awarded its full (reasonable) legal costs, meaning that the prevailing party will typically not incur any expenses other than the time invested in the case, and the losing party will have to pay double of its own legal costs.

How many court days should you expect?

Most trademark disputes are scheduled for one or two days of oral hearings, but cases involving extensive evidence, typically cases regarding use-acquired rights, can take longer. The Norwegian court system is built on the basic principle of orality, and the judge may not base his or her decision on any other evidence than what is documented and reviewed during the oral hearing.

The judgment can usually be expected within four weeks following the oral proceedings. A trademark lawsuit in the Oslo District Court generally takes about 8 to 10 months given the current case backlog. The Court of Appeal is less efficient, and it can take more than a year before an appeal is heard. A final, binding judgment may therefore take around 2 years if you engage in litigation.

Proceedings

Preliminary injunctions are effective tools in trademark infringement cases. Under the Norwegian Trademark Act, the courts can prohibit an infringer from continuing or resuming its infringement. Given the protracted timeframes mentioned above, an injunction can be an important and appropriate measure. Courts can often issue an injunction ruling very quickly - sometimes without hearing the defendant first. The defendant can then request a subsequent oral hearing, which may result in a new decision replacing the initial one.

If a party’s request for an interim injunction is granted in a trademark infringement case, the court will usually set a deadline within which the plaintiff must initiate full proceedings over the alleged infringement.

Criminal sanctions

The Norwegian Trademark Act also provides for criminal sanctions (i.e., fines or imprisonment for up to three years) in cases of aggravated trademark infringement, although such measures are very rarely applied.

What does the appeals process look like?

A decision by the Oslo District Court can be appealed to the Court of Appeal, where the case will, for all practical purposes, follow the same procedural rules as in the first instance but be heard by a panel of three judges. One may appeal further to the Supreme Court, but the Supreme Court only hears cases that have a certain principled significance beyond the specific dispute (on average, only about 15–20% of appealed cases are admitted). However, The Supreme Court has ruled on several trademark matters in the last five to 10 years, including cases concerning infringement, distinctiveness and even the assessment of the similarity of goods and services.

Bryn Aarflot can assist you

Since trademarks often represent substantial value to businesses, we recommend seeking qualified national expertise in conflict resolution. Bryn Aarflot are experts of Norwegian trademark law and procedures. Our attorneys have extensive experience assessing potential and actual trademark infringements and advising on what measures or legal remedies are necessary to resolve the conflict. We assist our clients in everything from administrative procedures and out-of-court dispute resolution to cases before various boards and tribunals, as well as court proceedings.