Can a trademark be invalidated even if the claim for the lawsuit is withdrawn? – an EU Court decision

The European Court has ruled in an important case C‑256/21 KP v TV, Gemeinde Bodman-Ludwigshafen, which concerns the issue of to what extent one trademark can be invalidated if the main claim for the lawsuit is withdrawn. The dispute has the following background:

KP is the proprietor of the EU word mark Apfelzügle (‘the contested mark’), registered on 19 October 2017 for services in Classes 35, 41, and 43. It is common ground that the term ‘Apfelzügle’ denotes a vehicle designed for the harvesting of apples, consisting of several trailers pulled by a tractor.

On 26 September 2018, TV, which operates a fruit farm, and the Municipality of Bodman-Ludwigshafen published promotional information on an activity involving the harvesting and tasting of apples as part of a ride on the Apfelzügle.

KP brought an action for infringement of the contested mark before the Regional Court, Munich, Germany, seeking an order prohibiting TV and the Municipality of Bodman-Ludwigshafen from using the term ‘Apfelzügle’ for the services covered by that mark. Before that court, TV and the Municipality of Bodman-Ludwigshafen filed counterclaims for a declaration of invalidity of the contested mark, pursuant to Article 59(1)(a) of Regulation 2017/1001, read in conjunction with Article 7(1)(b), (c) and (d) thereof.

At the hearing before the Regional Court, Munich, KP withdrew his action for infringement.

TV and the Municipality of Bodman-Ludwigshafen having pursued their counterclaims in spite of that withdrawal, the Landgericht München (Regional Court, Munich), by a judgment of 10 March 2020, held that those claims were admissible, declared the contested mark invalid in respect of the services in Class 41 and rejected the claims in question as to the remainder.

The Municipality of Bodman-Ludwigshafen appealed against that judgment before the Higher Regional Court, Munich, Germany – the referring court – seeking a declaration of invalidity of the contested mark also as regards the services in Classes 35 and 43.

In its decision, the referring court states that it must first assess the admissibility of the counterclaims brought by the defendants in the light of the withdrawal by KP, noting that it is not bound on that point by the decision of the court of first instance.

In that regard, relying on the spirit and purpose of the counterclaim provided for by Regulation 2017/1001, the referring court expresses doubts as to whether an EU trademark court may rule on such a counterclaim if there has been a withdrawal of the action for infringement in response to which the counterclaim was brought.

Specifically, the referring court notes that the registration of an EU trademark is an act of a body of the European Union and that national courts do not have jurisdiction to annul such acts, save in the case of an exception expressly provided for, such as that of the filing of a counterclaim, which is, moreover, confirmed in Article 128(7) of Regulation 2017/1001. In the view of the referring court, EUIPO has ‘jurisdiction in principle’ in the matter, which is conferred on it ‘as a matter of priority’. That follows, inter alia, from Article 63(1) of Regulation 2017/1001.

The referring court observes that, according to the predominant view in German legal literature, a case such as the present one comes not within the scope of Regulation 2017/1001 but rather, pursuant to Article 129(3) of that regulation, within the scope of the rules governing German civil procedure and, specifically, of Paragraph 261(3)(2) of the ZPO, according to which the jurisdiction of the EU trade mark court established as a result of the filing of a counterclaim is independent of the outcome of the action for infringement and cannot therefore cease to exist in the event that that action is withdrawn.

However, in the view of the referring court, the need to give the defendant an opportunity to defend himself or herself no longer exists where, as a result of a withdrawal, there is no longer any need for the EU trademark court to rule on the action for infringement. That interpretation is, moreover, supported by the judgment of 19 October 2017, Raimund (C‑425/16, EU:C:2017:776). Thus, national procedural law should apply only for as long as an action provided for under EU law is pending. Furthermore, such an interpretation would not place an undue and disproportionate burden on the counterclaimant, since he or she will still be able to bring proceedings before EUIPO under Article 63 of Regulation 2017/1001.

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

‘Must Article 124(d) and Article 128 of Regulation 2017/1001 be interpreted as meaning that the EU trademark court has jurisdiction to rule on the invalidity of an EU trademark asserted by a counterclaim within the meaning of Article 128 of Regulation 2017/1001 even after the action for infringement based on that EU trade mark for the purposes of Article 124(a) [of that regulation] has been validly withdrawn?’

The Court’s decision:

Article 124(a) and (d) and Article 128 of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trademark,

must be interpreted as meaning that an EU trademark court hearing an action for infringement based on an EU trade mark the validity of which is challenged by means of a counterclaim for a declaration of invalidity still has jurisdiction to rule on the validity of that mark, in spite of the withdrawal of the main action.

Volkswagen successfully defended its classic Van trademark in the EU

Protection of three-dimensional trademarks can be a real challenge both in the process of their registration with the Patent Offices and in case of enforcement.

One indicative case about this is the following EU trademark application filed by Pinball Factory GmbH for classes 11, 12(including camping vehicles), 20, 21 и 39:

Against this application, an opposition was filed by the German car manufacturer Volkswagen based on the following earlier three-dimensional trademark in classes 12, 20, 21 и 39:

Initially, the EUIPO dismissed the opposition finding both signs dissimilar. According to the Office, the images in the earlier mark represent “true-to-life depiction of a camper van, or bus” because of this they have a low distinctive character.

The mark applied for shares a similar image of a van but because of its low distinctiveness, it is not decisive for the assessment of similarity. On the other hand, the word part CULTCAMPER plays a differentiating role between both marks.

In the appeal, however, the Board of Appeal overturned this decision. The Board stated that the earlier mark has to be taken as a whole, not as individual perspectives only. The fact that the mark represents a depiction of a van is not sufficient to conclude that the marks’ distinctiveness was low.

On the contrary, the Board considered the earlier mark as distinctive enough because it departs from the norms and customs of the sector concerned.

In the case at hand, “the front of the van is characterised by a divided windshield and the curved V-shape on the bonnet with the circular headlights on each side“.

The same elements were shared by the mark applied for although stylized. The word part CULTCAMPER cannot be so differentiating because it can be interpreted as a laudatory word combination – CULT and CAMPER, that is to say, “camper van which is greatly admired or regarded as fashionable“.

Taking into account all of this the Boarded concluded that there was a likelihood of confusion and that the later mark can be associated with the earlier sign by consumers.

Source: Vlotina Liakatou – Baker McKenzie for Lexology.

Which are the most innovative economies in 2021?

WIPO published its annual Global Innovation Index for 2021 where the level of innovations of most than 130 countries is evaluated.

This year the most innovative nation is Switzerland followed by Sweden, the US, the UK and South Korea.

Top three of the most innovative countries by region is as follow:

Bulgaria, as an EU Member State, is at 35th position in this index, but more interestingly is the fact that the country is second in the list, after China, from the group of countries with an upper middle-income level that have performance above expectations.

The Global Innovation Index is very indicative how well developed and competitive the relevant countries are. It is no surprising that the most developed countries are at the top of the list.

The good news for Bulgaria is that the country is in the first group of countries with positive perspective for future development in the innovation area.

One of the reason for this is that the software industry in Bulgaria has been growing year after year with an impressive pace (the growth for 2020 is about 20% compared with 2019 despite the pandemic). The other reason is that more and more foreign companies open R&D departments.

An additional progress in the Index, however, will require better connection between the business, scientific organizations and universities as well as better access to startup financing.

Brief IP news

1. Who’s IP is it? The AI Inventor or the AI’s Inventor? For more information here.     
2. Building High-Quality Patent Portfolios in the United States and Europe: Part III – Examiner Interviews. For more information here.  
3. High-growth technology business forum – Licensing, 30 September 2021. For more information here.

Source: Intellectual Property Center at the UNWE. More information can be found here.

One crucial thing before filing a trademark in order not to waste your money and time

When you have your own business sooner or later you will start thinking about your branding and how to protect it from unfair use by competitors.

All of this is normal because when one business takes off, gaining some traction and achieving some success, other market participants will try to take advantage of its reputation and recognizability amongst the consumers. 

From that perspective, every business owner should be prepared with a proper trademark protection strategy.

Building a good brand name is not an easy task. From one side, such a name should follow so many marketing requirements, from the other the name should be unique, that is to say, it must not be registered as a trademark by someone else.

This, in particular, is essential. If your brand is already registered with the Patent Office of the country where you are operating as a business, this means that you can become a trademark infringer even without suspecting this.

It can be a trap because in such cases a lawsuit can be really expensive and in the end, you probably will need to change your beloved brand.

What is the solution in such situations? Well, it is a simple one, just check the official trademark database of your state Patent Office. This will show you whether there are earlier marks or not.

What do you need to know when you conduct such searches?

In brief, the things that can be bear in mind are:

1. Every trademark is valid only for the goods and services for which it is registered. This means that when you compare two marks they have to share common G&S. If this is the case it could create a problem. All goods and services are grouped in classes called Nice Classes. You can classify your G&S using this free tool TMCLASS.
2. Trademark protection scope covers not only other identical signs but similar too. For example, a trademark INEX for bicycles can stop a later mark INIX for bicycles.
3. Assessment of identical marks is relatively easy. Both marks should be absolutely identical in every aspect. They have to be for identical G&S too.
4. Assessment of similar marks, however, could be tricky. This requires in-depth legal knowledge and understanding of the case law in the relevant country.

It is advisable, such searches to be done through the brand-building process because this will allow you to make modifications to the brand before launching and filing a trademark application. It can save you a lot of money and time. 

In case you want to learn how to do trademark searches in the US, Canada, the UK, Ireland, Australia, and New Zealand you can check this Udemy Complete course on trademark search.

HYDRO and HYLO are similar enough according to the General Court of the EU

The General Court of the European Union has ruled in case  T‑817/19, Olimp Laboratories sp. z o.o v EUIPO.

This case concerns an attempt by Olimp Laboratories to register the following European trademark in class 05 – Pharmaceutical preparations, Pharmaceutical preparations for the treatment of eye diseases and conditions; Medical preparations; Eye drops, Preparations for ocular lubrication, Medicated eye-washes, Eye lotions for medical use; Topical anti-infective substances for the treatment of infections of the eye; Cachets for pharmaceutical purposes, Capsules for medicines, Lozenges for pharmaceutical purposes, Lozenges for pharmaceutical purposes; Medicines for human purposes, Tonics [medicines], Medicines for medical purposes, Adjuvants for medical purposes, Medicaments in liquid form; Ointments for pharmaceutical purposes, Eye ointment for medical use; Eye pads for medical use, Eye compresses; analgesic and anti-inflammatory preparations; Medicinal herbs.

Against this application an opposition was filed by OmniVision GmbH  based on an earlier European trademark for HYLO-VISION in class 05 – Dietary supplements and dietetic preparations; Medical and veterinary preparations and articles.

Both the EUIPO Opposition division and the Board of Appeal upheld the opposition finding the signs similar enough.

The decision was appealed. Olimp Laboratories argued that the earlier mark is devoid of distinctive character. The element VISION is used by many producers of such products. On the other hand HYLO refers to sodium hyaluronate.

The General Court disagreed and dismissed the appeal.

The Court found the goods as identical. In terms of the signs, the Court considered that the stylistic elements of the mark applied for are purely decorative. The figurative element of an eye and the word HYDRO have low distinctive character. In addition, VISION is descriptive for the goods at hand.

The Court found the claim for relation between HYLO and sodium hyaluronate as not proved and insufficient.

When it comes to the comparison between the marks, the Court considered them visually and phonetically similar. Conceptual similarity was found only in regard to the VISION element but not for the signs as a whole.

The difference between the mark in the letters L and DR was not enough to overcome the similarity.

The EUIPO decision was upheld

Pirelli won a tyre dispute in the EU

The European Court has ruled recently on joined cases C‑818/18 P и C‑6/19 P The Yokohama Rubber Co. Ltd v Pirelli Tyre SpA.

The dispute at hand concerns the following figurative European trademark registered by Pirelli in 2001 for class 12 – tyres, solid, semi-pneumatic and pneumatic tyres, rims and covers for vehicle wheels of all kinds, vehicle wheels of all kinds, inner tubes, wheel rims, parts, accessories and spare parts for vehicle wheels of all kinds“:

On 27 September 2012, Yokohama filed before EUIPO an application for a declaration of invalidity of the mark at issue for the goods ‘Tyres, solid, semi-pneumatic and pneumatic tyres for vehicle wheels of all kinds’, based on Article 52(1)(a) of Regulation No 40/94, read in conjunction with Article 7(1)(b) or Article 7(1)(e)(ii) of that regulation.

By decision of 28 August 2014, the Cancellation Division of EUIPO declared the mark at issue invalid for those goods, as well as for ‘rims and covers for vehicle wheels of all kinds’, on the ground that the mark at issue consisted exclusively of the shape of the goods concerned necessary to obtain a technical result within the meaning of Article 7(1)(e)(ii) of Regulation No 40/94.

Pirelli filed a notice of appeal against that decision with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009.

The Fifth Board of Appeal of EUIPO upheld the appeal in part, annulling the decision of the Cancellation Division in so far as it had declared the mark at issue invalid for ‘rims and covers for vehicle wheels of all kinds’. It dismissed the appeal as to the remainder, thus confirming the invalidity of the mark at issue in respect of ‘Tyres, solid, semi-pneumatic and pneumatic tyres for vehicle wheels of all kinds’.

The decision was appealed before the General Court of the EU.

The Court overturned it concluding that the sign at hand does not perform any technical functions. The reason for this is that the mark represents only a single groove of a tyre tread and just alone it cannot has technical function. In order such a function to be achieved other elements from the tyre are necessary. What’s more the groove represents one very small part of the entire tyre.

The European Court upheld this position. Nevertheless the Court highlighted that the scope of protection of the above mark is quite limited. Other manufacturers can use similar grooves if they are part of tyres with different overall shapes.