Trademark owners can seek compensations even for cancelled marks

judge-1587300_960_720The European Court has ruled in case C‑622/18 AR v Cooper International Spirits LLC, St Dalfour SAS, Établissements Gabriel Boudier SA. The case concerns the following background:

The appellant in the main proceedings markets alcohol and spirits.

On 5 December 2005, he filed an application for registration of the semi-figurative trade mark SAINT GERMAIN with the National Institute of Industrial Property, France.

That mark was registered on 12 May 2006 under No 3 395 502 for goods and services in Classes 30, 32 and 33 corresponding in particular to alcoholic beverages (except beers), ciders, digestives, wines and spirits, as well as alcoholic extracts and essences.

On 8 June 2012, having learnt that Cooper International Spirits was distributing under the name ‘St-Germain’ a liqueur manufactured by St Dalfour and Établissements Gabriel Boudier, the appellant in the main proceedings brought proceedings against those three companies before the Regional Court, Paris, France) for trade mark infringement by reproduction or, in the alternative, by imitation.

In parallel proceedings, by judgment of 28 February 2013, the Regional Court, Nanterre, France revoked the appellant in the main proceedings’ trade mark SAINT GERMAIN with effect from 13 May 2011. That judgment was upheld by judgment of the Court of Appeal, Versailles, France of 11 February 2014, which has become irrevocable.

Before the Regional Court, Paris the appellant in the main proceedings maintained his claims alleging infringement for the period prior to the revocation which was not time-barred, that is to say, from 8 June 2009 to 13 May 2011.

Those claims were dismissed in their entirety by judgment of the Regional Court, Paris of 16 January 2015, on the ground that the trade mark in question had not been used since it had been filed.

That judgment was upheld by judgment of the Court of Appeal, Paris, France) of 13 September 2016.

As grounds for that judgment, the Court of Appeal, Paris found, inter alia, that the evidence relied on by the appellant in the main proceedings was not sufficient to demonstrate that the mark SAINT GERMAIN had actually been used.

The Court of Appeal, Paris concluded that the appellant in the main proceedings could not successfully argue that the trade mark’s function as a guarantee of origin had been adversely affected, or that the monopoly on use conferred by his mark had been adversely affected, or indeed that its investment function had been adversely affected, since the use of a sign identical with the trade mark by a competitor is not such, failing any use of that mark, as to impede its use substantially.

The appellant in the main proceedings brought an appeal in cassation against that judgment, on the ground that the Court of Appeal, Paris had infringed Articles L 713‑3 and L 714‑5 of the Intellectual Property Code.

In support of that appeal, he submits that all his claims alleging infringement were incorrectly dismissed on the ground that he had not demonstrated that the mark SAINT GERMAIN had actually been used, even though neither EU law nor the Intellectual Property Code provides that, during the five-year period following registration of a trade mark, the proprietor of that mark must prove that the mark has been used in order to benefit from trade mark protection. Moreover, as regards infringement, the likelihood of confusion on the part of the public must be assessed in the abstract, in the light of the subject matter of the registration, and not in relation to a specific situation on the market.

Conversely, the respondents in the main proceedings contend that a trade mark performs its essential function only if it is actually used by its proprietor to indicate the commercial origin of the goods or services designated in its registration and that, if the trade mark is not used in accordance with its essential function, the proprietor cannot complain of any adverse effect on that function or a risk of its being adversely affected.

The Court of Cassation, France states, as a preliminary point, that the appeal in cassation before it does not take issue with the fact that the Court of Appeal, Paris examined the infringement not in the light of the reproduction of the mark but of its imitation, which presupposes that there is a likelihood of confusion on the part of the public. It points out that, under national law, the court hearing the case on the merits has sole jurisdiction to assess whether there is such a likelihood of confusion and the Court of Cassation, for its part, has jurisdiction only to assess whether the judgment under appeal correctly applies the law applicable.

It observes that, with regard to infringement by imitation, the Court has held that use of a sign which is identical or similar to the trade mark which gives rise to a likelihood of confusion on the part of the public affects or is liable to affect the essential function of the mark (judgment of 12 June 2008, O2 Holdings and O2 (UK), C‑533/06, EU:C:2008:339, paragraph 59), and that, although a trade mark’s function of indicating origin is not the only function of the mark that is worthy of protection against injury by third parties (judgment of 22 September 2011, Interflora and Interflora British Unit, C‑323/09, EU:C:2011:604, paragraph 39), the protection conferred against infringement by reproduction, in so far as it is absolute and reserved for injury caused not only to the mark’s essential function, but also to other functions, in particular those of communication, investment or advertising, is broader than the protection provided against infringement by imitation, the application of which requires proof of a likelihood of confusion and, accordingly, the possibility that the essential function of the mark may be affected (judgment of 18 June 2009, L’Oréal and Others, C‑487/07, EU:C:2009:378, paragraphs 58 and 59).

The Court of Cassation also stated that the Court has held that a trade mark is always supposed to fulfil its function of indicating origin, whereas it performs its other functions only in so far as its proprietor uses it to that end, in particular for the purposes of advertising or investment (judgment of 22 September 2011, Interflora and Interflora British Unit, C‑323/09, EU:C:2011:604, paragraph 40).

It adds that, in the light of that case-law, it would appear that, since the present case turns on whether or not there is infringement by imitation, all that needs to be examined is the alleged adverse effect on the essential function of the mark, resulting from a likelihood of confusion.

In that regard, it points out that, in the judgment of 21 December 2016, Länsförsäkringar (C‑654/15, EU:C:2016:998), the Court held that Article 15(1) and Article 51(1)(a) of Regulation No 207/2009 confer on the proprietor of the trade mark a grace period within which to begin to make genuine use of his or her mark, during which he or she may rely on the exclusive rights which the mark confers, pursuant to Article 9(1) of the regulation, in respect of all the goods and services, without having to demonstrate such use. That means that, during that period, the extent of the right conferred on the proprietor of the trade mark must be assessed by reference to the goods and services covered by the registration of the mark, not on the basis of the use which the proprietor was able to make of that mark during that period.

The Court of Cassation points out, however, that the case in the main proceedings differs from the case that gave rise to the judgment of 21 December 2016, Länsförsäkringar (C‑654/15, EU:C:2016:998), in that, in the present case, the trade mark proprietor’s rights were revoked as a result of the lack of use of that mark during the five-year period following registration of that mark.

The question then arises as to whether the proprietor of a trade mark who has never used it and whose rights in it have been revoked on expiry of the five-year period laid down in the first subparagraph of Article 10(1) of Directive 2008/95 may claim that the essential function of his or her trade mark has been affected and, consequently, seek compensation for injury as a result of the alleged use by a third party of an identical or similar sign during the five-year period following registration of the mark.

In those circumstances, the Court of Cassation decided to stay proceedings and to refer the following question to the Court:

‘Must Article 5(1)(b) and Articles 10 and 12 of Directive [2008/95] be interpreted as meaning that a proprietor who has never [used his or her] trade mark and whose rights in it were revoked on expiry of the period of five years following publication of its registration can obtain compensation for injury caused by infringement, claiming an adverse effect on the essential function of [his or her] trade mark, caused by use by a third party, before the date on which the revocation took effect, of a sign similar to that trade mark to designate goods or services identical or similar to those for which that trade mark was registered?’

The Court’s decision:

Article 5(1)(b), the first subparagraph of Article 10(1) and the first subparagraph of Article 12(1) of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks, read in conjunction with recital 6 thereof, must be interpreted as leaving Member States the option of allowing the proprietor of a trade mark whose rights in that mark have been revoked on expiry of the five-year period from its registration because he or she failed to make genuine use of the mark in the Member State concerned in connection with the goods or services for which it was registered to retain the right to claim compensation for the injury sustained as a result of the use by a third party, before the date on which the revocation took effect, of a similar sign in connection with identical or similar goods or services that is liable to be confused with his or her trade mark.

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