Court: ‘Aljansas Aibė’ may not use a photograph of the Marijampolė factory on its sugar packaging

The “Aljansas Aibė” alliance, which brings together retail companies, may not use photographs of the Marijampolė factory, operated by Lietuvos cukraus fabrikas, on its sugar packaging and must compensate the company for losses amounting to 25,400 euros, the court has ruled. 

On 23 October, the Vilnius Regional Court partially upheld the claim brought by Lietuvos cukraus fabrikas – it prohibited “Aljansas Aibė” from using the photographs on sugar packaging, and in the event of non-compliance with the ruling – to impose a fine of 300 euros for each day. Furthermore, “Aljansas Aibė” must withdraw from circulation all packaging featuring a photograph of the Marijampolė factory.

“The defendant (‘Aljansas Aibė’ – BNS) engaged in acts of unfair competition (...) by using photographs of the Marijampolė sugar factory, which is operated by the Lithuanian Sugar Factory”, the court announced.

According to the court, by misleading consumers into believing that the sugar was produced in Marijampolė, “Aljansas Aibė” sought to harm its competitor and capitalise on its reputation.

The Lithuanian Sugar Factory told the court that in July last year it had noticed that “Aljansas Aibė” sugar products were labelled with a trademark that misled consumers, and that the Marijampolė factory’s reputation and brand recognition were being exploited unfairly.

According to the company, it began receiving complaints from regular customers – beekeepers – about the quality of the sugar, and it then became clear that they had purchased the sugar from “Aibė” shops. According to the Lithuanian Sugar Factory, the customers were convinced that they were buying the company’s products.

At the time, “Aljansas Aibė” explained to the court that, as the owner of the “Marijampolės cukrus” trademark, it had decided to incorporate a historical photograph showing the factory building onto its sugar packaging.

“It is not prohibited to use photographs depicting historic buildings solely on the packaging of goods that are exclusively related to the buildings or locations visible in the photograph” – “Aljansas Aibė” explained to the court.

Having compared the sugar packaging of both companies, the court found that they were visually different, but acknowledged that the Lithuanian sugar factory uses a non-specific illustration which could simply be attributed to an industrial facility, whilst “Aljansas Aibė” – a historical photograph of the Marijampolė sugar factory.

“Although the defendant (‘Aljansas Aibė’ – BNS) claims that the caption ‘Marijampolė Sugar Factory 1938’ is used to identify the building visible in the photograph and that this does not mean consumers will automatically understand that the product’s place of origin is the aforementioned factory, such an interpretation is not logical“, the court stated.

The dispute over the “Marijampolė Sugar” trade mark has been referred to the Patent Office

Lithuanian Sugar Factory acquired the complex in Marijampolė in May 2021 from the bankrupt company “Lietuvos cukrus“, including the rights to the trademark „Marijampolės cukrus“ registered in the latter’s name. Its registration was valid until January 2023, and the trademark now belongs to “Aljansas Aibė”, which uses it to label sugar sold in “Aibė” shops.&

According to the Lithuanian Sugar Factory, “Aljansas Aibė” acted dishonestly by taking advantage of “Lietuvos cukrus”’s difficult financial situation at the time and, in 2020, was the first to submit an application and register the ‘Marijampolės cukrus’ trademark, even though no sugar is produced in Marijampolė.

Lietuvos cukraus fabrikas asked the court to order “Aljansas Aibė” not to use this trade mark on its packaging; however, the court ruled that the question of its validity must be decided by the Patent Office, to which applications for the revocation of the trade mark registration have been submitted.

“As the defendant’s trade mark is currently registered, no decision has been made regarding the validity of the registration or possible misuse; the court has no grounds to consider a matter which falls within the jurisdiction of (...) the Appeals Division of the State Patent Office“ – the court’s ruling states.

The Marijampolė sugar factory has been in operation since 1931 and is the oldest such factory in Lithuania; its complex of buildings is listed in the Register of Cultural Heritage.

The ruling of the Vilnius Regional Court may still be appealed to the Court of Appeal of Lithuania.