Can a trademark be invalidated even if the claim for the lawsuit is withdrawn?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which concerns the issue of to what extent one trademark can be invalidated if the main claim for the lawsuit is withdrawn.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.

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Mandarins, plants varieties and an EU Court decision

The European Court has ruled in case C‑186/18 José Cánovas Pardo SL v Club de Variedades Vegetales Protegidas. This case has the following background:

Following an application lodged by Nadorcott Protection SARL on 22 August 1995 with the Community Plant Variety Office (‘the CPVO’), the CPVO granted it a Community plant variety right in respect of the Nadorcott variety of mandarin tree on 4 October 2004. An appeal with suspensive effect was brought against that decision before the Board of Appeal of the CPVO but was dismissed by a decision of 8 November 2005 published in the Official Gazette of the CPVO on 15 February 2006.

Since 2006, Pardo has cultivated a grove of 4 457 mandarin trees of the Nadorcott variety.

Geslive, on whom the management of the rights over the Nadorcott variety had been conferred, sent Pardo formal notice on 30 October 2007 demanding that, in the absence of the appropriate licence, it cease the cultivation of that plant variety.

On 30 March 2011, CVVP, to whom the management of those rights had been transferred with effect from 13 December 2008, sent Pardo a new letter demanding that, if it were cultivating some 5 000 mandarin trees of the Nadorcott variety, it cease that activity.

Having applied in November 2011 to the Commercial Court, Spain for preliminary measures for a declaration of infringement of the exclusive rights over the Nadorcott variety, CVVP brought two actions against Pardo, one for ‘provisional protection’ in respect of the acts of Pardo prior to the grant of those rights, that is, before 15 February 2006, the other for infringement in respect of acts after that date. In particular, CVVP sought a declaration of infringement of the exclusive rights over the Nadorcott variety from 15 February 2006 until the cessation of cultivation. CVVP also applied for an injunction that Pardo be ordered to bring its unlawful cultivation to an end, to remove and, if necessary, destroy any plant material of that variety in Pardo’s possession, and to pay it compensation in respect of such cultivation.

Having found that a period of time of more than three years had elapsed between the date on which the holder of the rights over the Nadorcott variety had identified Pardo as an unlawful cultivator of that variety, that is, at the latest by 30 October 2007, when Geslive gave formal notice to Pardo, and the date on which CVVP brought its action in November 2011, that court of first instance dismissed the action on the ground that the action for infringement was time barred under Article 96 of Regulation No 2100/94.

Following CVVP’s appeal against that decision, the Provincial Court of Murcia, Spain found that Pardo did not dispute either the cultivation of the trees of the Nadorcott variety or the lack of consent of the holder of the rights in that variety. That court decided that Pardo’s operations resulted in certain acts of infringement which were of an ongoing nature since the trees at issue were continuing to be cultivated. In addition, it held that Article 96 of Regulation No 2100/94 should be interpreted as meaning that the claims relating to those acts of infringement which took place less than three years before CVVP’s action was brought were not time barred but that those relating to acts of infringement which took place more than three years before the claims had been brought were time barred.

Accordingly, Pardo was ordered to pay EUR 31 199 for its acts of infringement and as appropriate compensation for acts performed without the consent of the holder of the Community plant variety right during the period of its provisional protection. In addition, Pardo was ordered to cease all acts of infringement.

Pardo brought an appeal on a point of law before the referring court, the Supreme Court, Spain against that decision of the Provincial Court of Murcia, challenging the latter’s interpretation of Article 96 of Regulation No 2100/94.

The referring court states that, according to the national case-law on matters of intellectual property, occasional acts of infringement must be distinguished from ongoing acts. In the case of the latter, the period of prescription is extended for as long as the act of infringement continues. That court asks whether such case-law can be applied to the rules on prescription set out in Article 96 of Regulation No 2100/94 and, in particular, whether all claims relating to acts of infringement are time barred on the ground that the holder of the Community plant variety right brought his or her action more than three years after becoming aware of those acts of infringement and of the identity of the party liable for them or if only those claims relating to acts of infringement which took place more than three years before the action was brought are time barred.

In those circumstances, the Supreme Court decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1) Is an interpretation according to which, provided that the period of three years has elapsed since the holder, once Community protection of the plant variety right was granted, became aware of the infringing act and the identity of the party liable, the actions provided for under Articles 94 and 95 [Regulation No 2100/94] would be time barred, although the infringing acts were continuing until the time the action was brought, contrary to Article 96 of [that regulation]?

(2)If the first question is answered in the negative, is it to be considered that, in accordance with Article 96 of [the regulation], the limitation period operates only in respect of infringing acts committed outside the three-year period, but not in respect of those taking place within the last three years?

(3) If the answer to the second question is in the affirmative, in such a situation could the action for an injunction and also for damages succeed only in relation to those latter acts taking place within the last three years?’

The Court’s decision:

1. Article 96 of Council Regulation (EC) No 2100/94 of 27 July 1994 on Community plant variety rights must be interpreted as meaning that, irrespective of the ongoing nature of an act of infringement of a protected variety or of the date on which that act ended, the three-year period of prescription set out in that provision in respect of claims pursuant to Articles 94 and 95 of that regulation starts to run from the date on which, first, the Community plant variety right was finally granted and, second, the holder of the right had knowledge of the act and of the identity of the party liable.

2. Article 96 of Regulation No 2100/94 must be interpreted as meaning that claims pursuant to Articles 94 and 95 of that regulation in respect of a set of acts of infringement of a protected variety brought after more than three years have elapsed are time barred only from when, first, the Community plant variety right was finally granted and, second, the right holder had knowledge of each individual act forming part of that set of acts and of the identity of the party liable for them.

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.

Sonos won a lawsuit against Google for key patented technologies

The US audio devices producer Sonos won a patent dispute against Google in the US.

The case concerns an accusation by Sonos that Google has used without authorization patented technologies for W-Lan connectivity and synchronization of audio playback. The concerned patents are:

• 9,195,258 (“System and method for synchronizing operations among a plurality of independently clocked digital data processing devices”)
• 10,209, 953 (“Playback device with synchronisation of a plurality of devices”)
• 9,219,959 (“Multi-channel pairing in a media system”)
• 8,588,949 (“Method and apparatus for adjusting volume levels in a multi-zone system”)
• 10,439,896 (“Connection to a playback device”).

The technologies described in these patents have been used for different Google’s devices such as Pixel smartphones, voice assistant devices etc.

As it is well-known both companies worked together in 2013 when Sonos integrated some of the Google services in its devices. According to the accusation after that, however, Google used some of the information to develop its own products.

Based on this decision the US International Trade Commission can prohibit the import of any goods into the US that violate the Sonos’ patents. This could be a problem for Google because most of its deceives are produced in Asia.

The Court’s decision is not final and can be appealed.

Source: Meyer-Dulheuer MD Legal Patentanwälte PartG mbB

Sony won a trademark dispute against SONICODE in Japan

Sony Corporation hadn’t given up and won a trademark dispute in Japan. The case concerns a trademark SONICODE filed by Field System Inc. for classes 9, 38 and 41.

Against this mark an opposition was filed by Sony based on early registered trademarks SONY for the similar goods and services.

The Japan Patent Office dismissed the opposition finding both marks as dissimilar. Three years later Sony filed a request for invalidation. This is possible according to the law in Japan.

The ground was that because of the serious reputation trademarks SONY have consumers would discover easily the SONI part in the later mark as similar to SONY. What’s more this was particularly possible in the light of the fact that the second part CODE is not so distinctive.

To support their arguments SONY gave an example with voice assistants offered by Google, Apple, Microsoft and Amazon. When someone ask for SONICODE the first information those assistants provide is for SONY.

This time, the Patent Office upheld the Sony’s position and invalidate the SONICODE mark. According to the office, consumers can spot easily the SONI part in the later mark and connect it with the earlier SONY trademarks from visual and phonetic point of view. One of the reason for this, apart from the high reputation that SONY has, is the fact that consumers can perceive the later mark as consisting of two words SONI and CODE.

Source: Masaki MIKAMI (Marks IP Law Firm)

OATLY lost a trademark dispute in the UK

The popular Swedish plant milk manufacturer OATLY lost a trademark dispute in the UK.

The case concerns a trademark application for PUREOATY for oat milk products filed by the family farm Glebe Farm.

Against this mark an opposition was filed by Swinish company based on several earlier marks OATLY for the same goods.

This case stirred up a lot of of negative comments for the company which was accused that of being bigger tries to block a smaller market competitor as the trademark applicant.

The Court dismissed the opposition in its entirety. Although finding some low level of similarity, the Court consider that from phonetic, visual and conceptual point of view both signs were not similar enough in order to create consumer confusion. The element PURE in the later mark was sufficient to overcome any possibility for such thing.

According to the Court, the common part OAT is descriptive for the relevant products and has not power to contribute to the potential similarity.

The claim that the mark tries to take unfair advantages from the established reputation of the earlier marks was dismissed too.

The claim for passing-off didn’t success either. The Court didn’t find any misrepresentation or misleading action by the Glebe Farm when using their PUREOATY mark.

This case is indicative how tricky could be a company to rely entirely or partially on descriptive terms for its trademarks. The Swedish company was successful before the EU Court regarding its slogan “It’s like milk but made for humans”  but in this new case failed. In addition, every attempt for monopolizing descriptive terms can cause negative public reaction that can even threaten the company’s sales. So managing such disputes can be really difficult. That’s why all of this has to be taken into account in the brand building strategy.

Source: Kilburn & Strode LLP – Ruby Vinsome за Lexology.