Risk of confusion between the marks "ISP" and "IPS"?

Can a risk of confusion exist between two signs with identical letters if these are presented in a different order? The Federal Court of Justice (BGH) had to decide this in a case involving a risk of confusion between the marks "ISP" and "IPS".

The proprietor of the 2008 registered German word mark "IPS", which is registered in particular in classes 37 and 42 for
the services of maintenance and repair of data processing equipment and computers as well as development and maintenance of computer hardware and software, sought to prevent the use of the sign "ISP" by a Polish software provider. The company operating under the name ISP Polska sp. z o.o. provides IT solutions for industrial automation and develops corresponding software products.
Both the Regional Court (LG) Bochum and the competent higher regional court (OLG) Hamm found no infringement of trademark rights due to the absence of a risk of confusion between the marks "ISP" and "IPS". The courts argued that the phonetic difference resulting from the transposition of the consonants carried particular weight because of the brevity of the opposing signs "IPS" and "ISP".

Court's decision

By judgment of 05.03.2015 – Az. I ZR 161/13 – the Federal Court of Justice (BGH) rejected the reasoning of the lower courts for denying a risk of confusion and remitted the action to the court of appeal due to otherwise missing findings regarding the risk of confusion.

The question of a risk of confusion between opposing marks is to be assessed according to the similarity of the signs in sound, in appearance and in meaning. According to established case law, similarity in one of these perception areas is in principle sufficient for a finding of sign similarity.

Here, however, it cannot be assumed that the phonetic differences resulting from the transposition of the consonants carry particular weight because of the brevity of the opposing signs "IPS" and "ISP". The fact that when pronouncing the individual letters of the signs as "i-pe-es" and "i-es-pe" the sequence of vowels "i-e-e" is identical means that, despite the transposition of the consonants following the initial vowel "I", the signs produce a phonetically similar overall impression.

Conclusion

Between two marks with identical letters, a risk of confusion can exist even if these are presented in a different order. In particular, an identical sequence of vowels can establish a phonetic risk of confusion.