Audi, Nio trademark dispute in Australia: Scope of protection in automotive industry is relatively narrow

24 January 2025

Audi, German automotive manufacturer of luxury vehicles

Audi’s opposition against Chinese electric vehicle maker Nio’s trademark applications for ES6, ES7 and ES8 in Australia illustrates that in industries where alphanumeric naming conventions are common, such as the automotive industry, the scope of protection afforded is relatively narrow. This is because consumers are more well-adapted to perceive subtle differences between these marks.

Ashley Johnson | Senior associate @ Ashurst, Melbourne

Ashley Johnson, senior associate at Ashurst in Melbourne, gave this statement in reaction to the trademark dispute involving the German luxury car manufacturer and Nio. In November 2024, Australian intellectual property authorities ruled in favour of Nio. They concluded that the marks were significantly different and not substantially similar.

"In an automotive context, this suggests the commonality of features would need to be near-identical for a later mark to be denied protection and highlights the potential challenges that may arise for enforcement purposes," said Johnson.

Nio’s application for the registration of its ES series of marks covers vehicles and the like under Class 12.

According to Audi, the marks are similar to its own trademarks, namely S6, S7 and S8 which also cover vehicles under Class 12. Audi also claimed Nio used the letter E only to refer to electric vehicles (EVs) and that it is commonly used by car manufacturers for their electric vehicle lines.

The company added that E serves a purely descriptive purpose within Nio’s marks. Thus, the main components of Nio’s marks are actually S6, S7 and S8 which may cause confusion among consumers

"Two- or three-letter alphanumeric combinations are capable of registration in Australia provided the characters have no descriptive significance and the combination is relatively unusual, or the goods/services are narrow or specialized in scope," Johnson said.

The ES6, by Chinese automobile manufacturer Nio

Nio argued that the E has also been used for the following purposes: 1) denoting the word “emotion,” 2) denoting sequential vehicle models (such as E-type and C-type), and 3) serving as an acronym for an entire class (such as Executive), among various other uses. In addition, Nio provided details of manufacturers who do not use E to designate electric cars. Through these arguments, Nio tried to prove that the E in the marks aims to register makes them distinct from Audi’s trademarks.

According to Johnson, the Delegate preferred the Shanghai-based EV maker’s evidence that E references “emotionality.” “Even if it was perceived as an abbreviation of ‘electric,’ the Delegate noted that the lack of any apparent meaning for the letter S and sequential numbering 6, 7 and 8, justified their reasoning that all characters in Nio’s marks are equally essential features. Accordingly, based on a side-by-side comparison, the letter E is unlikely to go unnoticed, and therefore, the absence of this letter within Audi’s marks reduced the resemblance between the respective marks,” she said.

In the assessment for deceptive similarity, the letter E was regarded as visually and aurally significant by virtue of its placement at the beginning of Nio's marks. “The delegate acknowledged that letter/number combinations are common to the automotive industry and may only differ by one letter and therefore limits the scope of any monopoly afforded to trade owners of letter/number combinations in this industry. Finally, in finding there is no real or tangible danger of confusion arising between the respective marks, the Delegate noted that the higher price point of automotive goods would likely result in consumers perceiving even subtle differences between the marks,” said Johnson.

Furthermore, Audi showed its continuous use of its trademarks in the sales of its products in Australia for 13 to 26 years. According to Johnson, the delegate considered the low number of actual sales to demonstrate the Audi marks’ limited reputation in Australia. “Even under the lower ‘similar’ threshold, the delegate considered the differences between Audi’s and Nio’s marks to be ‘too notable’ to establish a likelihood of deception or confusion, irrespective of the reputation acquired by Audi in respect of its marks in Australia,” Johnson added.

- Espie Angelica A. de Leon

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