Infringement of EU trademarks and counterclaims – a decision by the European court

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The European Court has ruled in case C‑425/16 Hansruedi Raimund v Michaela Aigner. The case concerns the following:

Mr Raimund is the proprietor of EU word mark Baucherlwärmer under which he has, since approximately the year 2000, marketed a herbal base to be added to alcohol. Ms Aigner too sells a herbal mixture for adding to high-proof alcohol, which she also calls Baucherlwärmer.

Mr Raimund brought an action for infringement of the EU trade mark of which he is proprietor before the Handelsgericht Wien (Commercial Court, Vienna, Austria), so that Ms Aigner would be prohibited from using the sign ‘Baucherlwärmer’ for goods and services in the classes covered by that mark. Ms Aigner, who is the defendant in the main proceedings and claimed, in particular, that Mr Raimund had obtained that mark improperly and in bad faith, brought a counterclaim for a declaration of invalidity of that mark before the same court.

The Handelsgericht Wien (Commercial Court, Vienna) decided to stay the proceedings in respect of that counterclaim until a final ruling on the action for infringement, which is the subject matter of the main proceedings. The order staying the counterclaim was set aside, however, and the counterclaim therefore remains pending at first instance. The action for infringement was dismissed by the Handelsgericht Wien (Commercial Court, Vienna) on the ground that Mr Raimund had filed the EU trade mark application in bad faith.

The Oberlandesgericht Wien (Higher Regional Court, Vienna, Austria) having upheld the first-instance judgment on appeal, Mr Raimund lodged an appeal on a point of law with the Oberster Gerichtshof (Supreme Court, Austria).

The referring court considers that the applicant in the main proceedings did indeed obtain the EU trade mark at issue in the main proceedings in bad faith and that the trade mark should therefore be declared invalid, in accordance with Article 52(1)(b) of Regulation No 207/2009. However, it is uncertain, and the question was raised by Mr Raimund in his appeal, as to whether the two lower courts were entitled to rule on the question of bad faith in the infringement proceedings, when there was no final decision on the counterclaim for a declaration of invalidity of the mark.

In view of the fact that the defendant in the main proceedings is relying on an absolute ground for invalidity within the meaning of Article 52(1)(b) of Regulation No 207/2009, which, as Article 99(1) of that regulation provides, may be properly invoked in an action for infringement only if the defendant brings a counterclaim based on such a ground, the Oberster Gerichtshof (Supreme Court) asks whether it is sufficient that a counterclaim has been brought, alleging that trade mark rights have been obtained in bad faith, in order for the court to be able to dismiss an action for infringement before that counterclaim has been determined (first option); or whether the action for infringement may be dismissed on that ground only if the trade mark concerned is, at the very least simultaneously, declared invalid on the basis of the counterclaim (second option); or indeed whether a claim, in the context of the infringement action, that trade mark rights have been obtained in bad faith can succeed only if the trade mark has first been definitively declared invalid on the basis of the counterclaim (third option).

The referring court states that, in the present case, the success or failure of the action for infringement depends solely on the plea of invalidity. It proposes that the Court of Justice apply the second option, in so far as it follows from Article 99(1) of Regulation No 207/2009 that an action for infringement may be dismissed on account of the existence of a ground for invalidity only if, at least simultaneously, the counterclaim brought on the same ground is upheld. It considers that the mere bringing of such a counterclaim should not be sufficient but that, on the other hand, it should not be necessary to wait for the decision on the counterclaim to become final. It states that the question whether there is any obligation to wait for the decision on the counterclaim to be made final, the possible joinder of infringement proceedings and a counterclaim, and the structure of the appeal proceedings should be determined solely under national procedural law.

The referring court also states that the option which it recommends the Court of Justice apply ensures that the plea of invalidity or relating to revocation inter partes, put forward in the context of infringement proceedings, can succeed only if the trade mark is declared invalid or revoked for the same reason in the context of the counterclaim, with effect erga omnes. In particular, the applicant in the main proceedings in the action for infringement would, if unsuccessful at first instance, have to challenge both the decision on the infringement action and the decision on the counterclaim in order to succeed on appeal. Were he to appeal only the decision on the infringement action, his appeal would be destined to fail because the decision on the counterclaim, which is res judicata, would a priori preclude the infringement action being successful.

However, the Oberster Gerichtshof (Supreme Court) acknowledges that the literal meaning or the purpose of Article 99 of Regulation No 207/2009 might also be interpreted otherwise than as it suggests.

n those circumstances, the Oberster Gerichtshof (Supreme Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘1. May an action for infringement of an EU trade mark (Article 96(a) of Regulation No 207/2009) be dismissed on the ground of an objection that the trade mark application was filed in bad faith (Article 52(1)(b) of Regulation No 207/2009) if, despite the defendant having brought a well-founded counterclaim for a declaration of invalidity of the EU trade mark (Article 99(1) of Regulation No 207/2009), the court has not yet ruled on that counterclaim?

2. If the answer is in the negative: may the court dismiss an action for infringement on the ground of an objection that the trade mark application was filed in bad faith, if the court at least simultaneously upholds the counterclaim for a declaration of invalidity, or must the court delay the decision on the action for infringement in any event until the decision on the counterclaim is res judicata?’

The Court decision:

1. Article 99(1) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark must be interpreted as meaning that an action for infringement brought before an EU trade mark court in accordance with Article 96(a) of that regulation may not be dismissed on the basis of an absolute ground for invalidity, such as that provided for in Article 52(1)(b) of that regulation, without that court having upheld the counterclaim for a declaration of invalidity brought by the defendant in that infringement action, pursuant to Article 100(1) of the regulation, and based on the same ground for invalidity.

2. The provisions of Regulation No 207/2009 must be interpreted as not precluding an EU trade mark court from being able to dismiss an action for infringement within the meaning of Article 96(a) of that regulation on the basis of an absolute ground for invalidity, such as that provided for in Article 52(1)(b) of that regulation, even though the decision on the counterclaim for a declaration of invalidity, brought pursuant to Article 100(1) of the regulation, and based on the same ground for invalidity, has not become final.

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