FRANKFURT, March 21 — Volkswagen suffered a legal defeat over its alleged brand infringement case against estranged partner Suzuki, after the General Court of the European Union ruled today in favour of the Japanese carmaker.
The ruling comes at a sensitive time since the two companies are embroiled in a separate arbitration battle over whether Volkswagen may be forced to divest its near-20 per cent stake in Suzuki, bought for €1.7 billion (RM6.8 billion) as part of a broad alliance agreed more than two years ago.
In 2004, Volkswagen contested an application granted by the EU’s Office for Harmonisation in the Internal Market (OHIM) the previous year that allowed Suzuki to use the vehicle nameplate “SWIFT GTi” as a trademark for a derivative of its small car.
The court, the EU’s second highest after the European Court of Justice (ECJ), ruled VW claimed incorrectly the Suzuki version could be confused with its own high-performance Golf GTI, which it had trademarked in Germany and other international markets.
The OHIM was right to conclude any “visual, phonetic or conceptual similarity” was nullified by the Swift model name, according to the court.
“Similarly, OHIM correctly held that the average consumer in Sweden, Benelux, Germany, France, Italy and Austria would not assume that all vehicles, parts and accessories come from the same manufacturer simply on the basis of the combination of the three letters ‘gti’, and accordingly any likelihood of confusion was excluded,” the court said in a statement.
A spokesman for VW said the German carmaker would review the decision and potentially seek an appeal with the ECJ, while Suzuki could not be reached for comment.
The 2009 alliance was originally struck to much fanfare, since it was supposed to help resolve key strategic weaknesses at both companies, such as VW’s lack of small cars competitive in emerging markets such as India and south-east Asia.
The two have since become bitter rivals as the deal unravelled over cultural and business differences.
Suzuki now wants VW to surrender its stake – VW’s only remaining benefit – since this acts as a deterrent to other carmakers looking to link with the Japanese company. — Reuters