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Say there is a famous product in the cryptocurrency software industry called "Mixilux".

An ex-employee starts his own business and creates a new product and calls it "Flexilux"

The names are different but the '-xilux' end is the same.

Would there be grounds for a lawsuit in this case?

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Yes

Trademarks that are "deceptively similar" to another trademark are infringing.

In , s10 the the Trade Marks Act 1995 says:

For the purposes of this Act, a trade mark is taken to be deceptively similar to another trade mark if it so nearly resembles that other trade mark that it is likely to deceive or cause confusion.

Other jurisdictions have deceptively similar definitions.

For the example that you give, a prima facie case exists that the second is deceptively similar to the first. Whether a court will find that it is will depend on all the circumstances.

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