Licensing and trademark infringement – an European court decision

juropean-justiceThe European court ruled in Case C‑163/15, Youssef Hassan v Breiding Vertriebsgesellschaft mbH. The case concerns the following:

Since 2 January 2011 Breiding has been the holder of a licence, which is not registered in the Register of Community trade marks (‘the Register’), relating to the Community word mark ARKTIS, which was applied for on 15 August 2002 and registered on 11 February 2004 under the number CTM 002818680 by KBT & Co. Ernst Kruchen agenzia commerciale sociétà and which covers, inter alia, bedding and blankets. The licence agreement stipulates that Breiding is to assert, in its own name, rights arising from infringement of the trade mark.

Mr Hassan is the managing director of OVL Onlinevertrieb & -logistik GmbH & Co. KG, which took over, on 1 May 2010, his one-man undertaking. On 27 October 2009 and 30 October 2012 respectively, those undertakings offered for sale several down duvets ‘Arktis 90’, ‘Arktis 90 HS’, and ‘innoBETT selection Arktis’ on the website ‘schoene-traeume.de’.

Following the first offers and a letter of formal notice sent by the company that at that time was the holder of a licence for the ARKTIS mark, Mr Hassan, on 3 February 2010, submitted a so-called ‘cease-and-desist declaration’, by which he undertook to refrain from using the sign ‘Arktis’ for bedding, failing which he would be subject to a penalty for non-compliance to be determined at the discretion of the licensee.

In proceedings brought by Breiding, the court hearing the case at first instance declared the cease-and-desist agreement to be valid, ordered Mr Hassan to provide information and to remove the infringing products for the purpose of having them destroyed, and ordered him to pay damages.

The referring court, before which Mr Hassan has brought an appeal against that decision, takes the view that the success of that appeal depends on whether Breiding, which, according to the licence agreement, has the consent of the trade mark proprietor, as required by Article 22(3) of the Regulation, may bring proceedings for infringement of that trade mark even though the licence has not been entered in the Register.

That court states that, in a previous decision, it ruled that the first sentence of Article 23(1) of the Regulation governs only the possibility of a ‘good faith’ acquisition. It observes that, admittedly, on a purely literal reading of that provision, which provides, in general terms, that acts concerning the Community trade mark referred to in Articles 17, 19 and 22 of the Regulation are to have effects vis-à-vis third parties in all the Member States only after entry in the Register, the bringing of infringement actions by the licensee might be included among those acts. However, in its view, as the second sentence of paragraph 1 and the following paragraph concern only ‘good faith’ acquisitions, a schematic reading calls for the same conclusion in respect of the first sentence also.

The referring court states that a Spanish court has, however, taken the view that the licensee can invoke rights vis-à-vis third parties only after the licence has been entered in the Register.

Moreover, the referring court states that, should it be held that the assertion of the licensee’s rights is subject to entry of the licence in the Register, the question then arises as to whether the licensee, who is not entered in the Register, can assert, in its own name, the trade mark proprietor’s rights by virtue of the power conferred on it for that purpose, which German law permits under certain conditions which are satisfied in the present case.

In those circumstances, the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

1. Does the first sentence of Article 23(1) of [the Regulation] preclude a licensee who is not entered in the Register … from bringing proceedings alleging infringement of a Community trade mark?

2. In the event that the first question is answered in the affirmative: Does the first sentence of Article 23(1) of [the Regulation] preclude a national legal practice whereby the licensee can enforce the trade mark proprietor’s rights against the infringer by virtue of the power conferred on it for that purpose (“Prozessstandschaft”)?’

The Court’s decision:

The first sentence of Article 23(1) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark must be interpreted as meaning that the licensee may bring proceedings alleging infringement of a Community trade mark which is the subject of the licence, although that licence has not been entered in the Register of Community trade marks.

 

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