Successful branding of an online business – the Finnish way

30 May 2016

Ella Mikkola, Maija Puustinen

One of the pioneers in online retail has registered "verkkokauppa.com", i.e. "onlineshop.com", as its trade mark in Finland. Now the Finnish Supreme Court has confirmed that the brand, with its 86% brand recognition, deserves special protection.

In March 2016, the Finnish Supreme Court ruled that online retailer "Verkkokauppa.com" (meaning "onlineshop.com") is a well-known trade mark in Finland and deserves special protection. Verkkokauppa.com had shown with market surveys that 86% of relevant internet users recognised the sign Verkkokauppa.com.

The stock-market listed "verkkokauppa.com" is a Finland-based online retailer with a turnover of €344 million in 2015. Its business is growing rapidly, with revenue  having grown by 25% in 2015 alone.

Verkkokauppa.com was originally well-known for selling home electronics and IT products. However the company has expanded its product range significantly and  now offers a wide variety of products including toys and family products.

The defendant and alleged infringer was a company selling boat accessories online. The defendant started using the domain and sign "veneilijanverkkokauppa.com" ("boater's onlineshop.com"). The Supreme Court concluded that the use of "veneilijanverkkokauppa.com" infringed the well-known trade mark "Verkkokauppa.com". It was relevant that the defendant's sign had visual similarities, including the use of similar colours, to the Verkkokauppa.com sign. The Court found this implied that the defendant had tried to exploit the reputation and distinctiveness of the well-known trade mark Verkkokauppa.com.

The Court also gave weight to the significance of online business in the commercial world today. The Court stated that although the trade mark Verkkokauppa.com had been registered relatively recently, in 2004 (six years before the trade mark infringement was commenced), the trade mark could be regarded as a well-known trade mark, especially taking into account the significant increase in the use of internet and online sales over recent years.

The infringer has now changed its brand and domain to avoid infringement, although it continues to sell boat accessories under the Finnish domain ".fi" using the sign "veneilijanverkkokauppa.fi". However, it appears to be a quite widely accepted understanding at least in the Finnish media that the change is enough in this particular case to avoid any further infringement suits – whether that is in fact the case remains to be seen.

Online shopping continues to boom

 According to the European Commission, 65% of internet users in the EU use the internet for online shopping. At the same time there is still potential for future  growth given that just 37% of retailers in the EU sell online to consumers in their own country, and only 12% of retailers sell online to consumers in other EU countries.

This article is part of our BrandWrites May 2016 edition.

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