Is there bad faith in the case of new registration of former trademarks?

Is it possible for an old former trademark that is not protected anymore to be registered by a new owner and whether this can be a bad faith practice? This is the question to which the General Court of the European Union has answered recently in the case T‑250/21 Ladislav Zdút v EUIPO: The case has the following background:

On 6 May 2013,  Ladislav Zdút filed an application for registration of an EU trademark with EUIPO for the following sign:

The goods for which registration was sought were:

–  Class 18: ‘Leather and imitations of leather, and goods made of these materials and not included in other classes; Animal skins, hides; Trunks and travelling bags; Umbrellas and parasols; Walking sticks’;

–  Class 24: ‘Bed covers; Table covers’;

–  Class 25: ‘Clothing, footwear, headgear’.

The mark was registered on 31 October 2014 under number 11794112.

On 17 June 2019, the interveners, Ms Isabel Nehera, Mr Jean-Henri Nehera and Ms Natacha Sehnal, filed an application for a declaration of invalidity against that mark (‘the contested mark’), in accordance with the provisions of Article 59(1)(b) of Regulation 2017/1001, in respect of all the goods covered by that mark. They claimed that the applicant was acting in bad faith when he filed the application for registration of the contested mark. They stated, inter alia, that in Czechoslovakia in the 1930s, their grandfather, Mr Jan Nehera, had established a business marketing clothing and accessories and had filed and used a national mark identical to the contested mark (‘the former Czechoslovak trademark’).

By decision of 22 April 2020, the Cancellation Division of EUIPO dismissed the application for a declaration of invalidity, on the ground that the applicant’s bad faith when he filed the contested mark had not been established.

On 15 June 2020, the applicants filed a notice of appeal with EUIPO, pursuant to Articles 66 to 71 of Regulation 2017/1001, against the decision of the Cancellation Division.

By the contested decision, the Second Board of Appeal of EUIPO upheld the interveners’ appeal, annulled the decision of the Cancellation Division, and declared the contested mark invalid.

In essence, the Board of Appeal found that the former Czechoslovak trademark was a well-known mark and had been put to genuine use in Czechoslovakia in the 1930s. It held that the applicant was aware of the existence and celebrity both of Mr Jan Nehera and of the former Czechoslovak trademark, which retained a certain surviving reputation. The Board of Appeal also stated that the applicant had attempted to create an association between himself and that former Czechoslovak trademark. In those circumstances, the Board of Appeal considered that the applicant’s intention was to take unfair advantage of the reputation of Mr Jan Nehera and of the former Czechoslovak trademark. It found that the applicant was acting in bad faith when he filed the application for registration of the contested mark.

The decision was appealed.

According to the Court, the fact that one mark was been protected in the past, being reputable amongst consumers, does not mean automatically that every new application for the same mark will be deemed as made in bad faith. It is necessary for the reputation of the old mark still to exist and the bad faith actions to be proved.

According to the Court:

However, it should be borne in mind that, according to the case-law, the existence on the part of the relevant public of a link between a later trademark and a former sign or name cannot be sufficient, on its own, to support a finding that unfair advantage was taken of the reputation of the sign or of the former name.

In addition, it should be noted that the concept of unfair advantage being taken of the reputation of a sign or a name covers a situation in which a third party rides on the coat-tails of a formerly renowned sign or name in order to benefit from its power of attraction, its reputation and its prestige and, without any financial compensation and without having to make any efforts of its own in that regard, to exploit the commercial effort expended by the proprietor or user of that sign or of that name in order to create and maintain the image of that sign or of that name.

However, in the present case, the applicant claims, unchallenged either by EUIPO or by the interveners, that in 2013, the former Czechoslovak trademark and the name of Mr Jan Nehera were completely forgotten by the relevant public, and that he himself devoted considerable effort, time and money to revive the Nehera mark and to make known the history of Mr Jan Nehera and of his business. It follows that, far from merely having exploited in a parasitic way the past reputation of the former Czechoslovak trademark and the name of Mr Jan Nehera, the applicant made his own commercial efforts in order to revive the image of the former Czechoslovak trademark and thus, at his own expense, to restore that reputation. In those circumstances, the mere fact of having referred, for the purposes of promoting the contested mark, to the historic image of Mr Jan Nehera and of the former Czechoslovak trademark does not appear to be contrary to honest practices in industrial or commercial matters.

Secondly, and in any event, the former Czechoslovak trademark and Mr Jan Nehera’s name no longer benefited from any legal protection in favour of a third party at the date on which the application for registration of the contested mark was filed (see paragraphs 42 and 43 above). It follows that Mr Jan Nehera’s descendants and heirs did not hold any right that might be susceptible to fraud or to being usurped by the applicant. Therefore it does not appear that, in applying for registration of the contested mark, the applicant intended to defraud the descendants and heirs of Mr Jan Nehera or to usurp their alleged rights.

In the fifth and last place, EUIPO claims, as the Board of Appeal stated in paragraph 36 of the contested decision, that the concept of bad faith does not necessarily imply any degree of moral turpitude.

In that regard, it is sufficient to note that, according to the case-law cited in paragraph 23 above, the concept of bad faith presupposes the presence of a dishonest state of mind or intention. In the present case, EUIPO and the interveners have not established that the applicant was driven by a dishonest state of mind or intention when he filed the application for registration of the contested mark.

It follows from all of the foregoing that the Board of Appeal erred in finding that the applicant intended to take unfair advantage of the reputation of Mr Jan Nehera and of the former Czechoslovak trademark and in finding that he was acting in bad faith when filing the application for registration of the contested mark.

Denmark lost a dispute regarding Feta cheese produced only for export from the territory of the EU

The European Court has ruled in the case C‑159/20 the European Commission v the Kingdom of Denmark which closed the door to one of the few misunderstandings regarding the scope of geographical indication protection in the EU.

In the case at hand, Greek complained before the Commission that cheese manufacturers from Denmark use the protected geographical indication Feta by labeling their products as ‘Danish Feta’ and ‘Danish Feta cheese’. Denmark refused to prohibit such use on its territory stating that the production was only for export purposes not for sale on the territory of the EU. According to the Kingdom, this type of GI use was not prohibited by the EY Regulations.

The European Commission disagreed and initiated a lawsuit against Denmark. The Advocate General issued its opinion that reasonings are now upheld by the Court.

According to the Court’s decision:

Recital 18 of Regulation No. 11512012 states that the specific objectives of PDO and PGI protection are to ensure fair income for farmers and producers according to the qualities and characteristics of a given product or its production method and to provide clear information about products with specific characteristics related to geographic origin, thereby enabling consumers to make more informed purchasing choices.

In addition, it follows from the Court’s practice that the purpose of the PDO and PGI protection system is mainly to guarantee consumers that agricultural products bearing a registered name have certain specific characteristics due to their origin in a certain geographical area and therefore provide a guarantee of quality due to their geographical origin in order to allow agricultural operators who have made a genuine effort to improve quality to receive higher incomes in return and to prevent third parties from unfairly benefiting from the reputation, related to the quality of those products (judgments of 17 December 2020, Syndicat interprofessional de défense du Fromage Morbier, C‑490/19, EU:C:2020:1043, paragraph 35 and the case-law cited and by the analogy of 9 September 2021, Comité Interprofessionnel du Vin de Champagne, C‑783/19, EU:C:2021:713, paragraph 49).

Since the Kingdom of Denmark points out that it follows from these objectives that Regulation No 1151/2012 is aimed at introducing a system of protection of PDOs and PGIs for products placed on the internal market because the said users are those in the Union, it should be noted that this regulation clearly applies to these users and not to users in third countries. Indeed, that regulation, adopted on the basis of Article 118 TFEU, concerns the functioning of the internal market and, as that Member State points out, is aimed at the integrity of the internal market and consumer information in the Union.

It should also be noted that the objective of informing consumers and the objective of guaranteeing a fair income for producers in accordance with the qualities of their products are interrelated, since informing consumers is aimed in particular, as is clear from the case law, at this to allow agricultural operators who have made real efforts to improve quality to receive higher incomes in return.

However, as follows from recital 18 and from Article 4(a) of Regulation No 1151/2012, the objective of guaranteeing fair income to producers in accordance with the qualities of their products is itself an objective pursued by that regulation. This also applies to the purpose of ensuring the respect of intellectual property rights enshrined in Article 1, letter c) of this Regulation.

It is clear, however, that the use of the PDO ‘Feta’ to designate products produced in the territory of the Union which do not comply with the product specification of that PDO affects the two stated objectives, even if those products are intended for export to third countries.

Finally, as regards compliance with the principle of legal certainty, it should be noted that, undoubtedly, Regulation No. 1151/2012 does not explicitly state that it also applies to products produced in the Union for the purpose of export to third countries. However, in view in particular of the general and unequivocal nature of Articles 13, 36, and 37 of Regulation No 1151/2012, which do not provide for an exception to such products, and the fact that the said objectives are clearly stated in Articles 1 and 4 of that Regulation, Article 13(3) thereof appears clear and unequivocal in so far as it obliges Member States to take appropriate administrative and judicial measures to prevent or suspend the use of a PDO or a PGI to designate products produced on their territory that do not comply of the applicable product specification, including where these products are intended for export to third countries.

Based on the stated considerations, the Court decided:

By failing to prevent or stop the use by Danish milk producers of the Protected Designation of Origin (PDO) ‘Feta’ to designate cheese that does not comply with the product specification of that PDO, the Kingdom of Denmark has failed to fulfill its obligations under Article 13(3) of Regulation (EU) No. 1151/2012 of the European Parliament and of the Council of 21 November 2012 on quality schemes for agricultural products and foodstuffs.

(unofficial translation)

Acquiescence in case of trademark infringements – an EU Court decision

The European Court has ruled in case C‑466/20 HEITEC AG срещу HEITECH Promotion GmbH which concerns the issue of trademark acquiescence in case of a trademark infringement. The dispute has the following background:

The applicant in the main proceedings, Heitec, is the proprietor of the EU word mark HEITEC, applied for on 18 March 1998, with seniority claimed as from 13 July 1991, and registered on 4 July 2005.

It was entered in the commercial register in 1984 under the name Heitec Industrieplanung GmbH. Its name was changed in 1988 to Heitec GmbH. Since the year 2000, it has been operating under the name of Heitec AG.

Heitech, of which RW is the managing director, was entered in the commercial register on 16 April 2003.

Heitech is the proprietor of a German figurative mark containing the word element ‘heitech promotion’, applied for on 17 September 2002 and registered on 4 February 2003, which it has used since 29 September 2004 at the latest, and of an EU figurative mark containing the word element ‘heitech’, applied for on 6 February 2008 and registered on 20 November 2008, which it has used since 6 May 2009 at the latest.

By letter of 29 November 2004, Heitech contacted the representatives of Heitec to ask whether the latter would agree to conclude a coexistence agreement.

On 7 July 2008 Heitec became aware of Heitech’s application for registration of the EU figurative mark containing the word element ‘heitech’.

By letter of 22 April 2009, Heitec sent Heitech a warning letter regarding the latter’s use of its trade name and the EU trade mark containing the word element ‘heitech’. In its reply of 6 May 2009, Heitech again proposed the conclusion of a coexistence agreement.

On 31 December 2012, the Regional Court, Nuremberg-Fürth, Germany received, by fax, the application initiating proceedings, submitted by Heitec against Heitech and RW. That application was dated 15 December 2012. By decision of 4 January 2013, Heitec was asked to pay an advance on the costs of the proceedings.

On 12 March 2013, that court pointed out to Heitec’s representative that that advance payment had not been made and that the originals of the application initiating proceedings had not been lodged.

By letter of 23 September 2013, Heitec informed Heitech that it refused to conclude a coexistence agreement and proposed to conclude a licence agreement while stating that it had initiated legal proceedings.

By letter of 29 December 2013, Heitec informed Heitech that it was relying on its trade name and that it was the proprietor of the EU trademark HEITEC. It stated that the legal proceedings were pending.

On 30 December 2013, the Regional Court, Nuremberg-Fürth received written submissions from Heitec dated 12 December 2013, together with a cheque for court fees and a new application initiating proceedings bearing the date 4 October 2013.

On 14 January 2014, that court drew Heitec’s attention to the fact that it was also necessary to serve the application initiating proceedings of 15 December 2012, and Heitec was therefore asked to lodge the original documents. Those originals were received by the court on 22 February 2014.

On 24 February 2014, that court alerted Heitec to the fact that the heads of claim in the originals of the application initiating proceedings received on 22 February 2014 were not consistent with the heads of claim in the initiating application submitted on 31 December 2012.

On 16 May 2014, the Regional Court, Nuremberg-Fürth opened the preliminary written procedure and ordered that copies, drawn up by that court, of the initiating application of 15 December 2012 be served on the defendants in the main proceedings. Notice was finally served on 23 May 2014.

By that action, Heitec brought claims based, primarily, on the infringement of the rights conferred by its trade name HEITEC and, in the alternative, on the infringement of its EU trade mark HEITEC. It claimed that Heitech should be ordered to refrain from identifying its company by the trade name HEITECH Promotion GmbH, to refrain from affixing the word elements ‘heitech promotion’ and ‘heitech’ on goods and from marketing or advertising goods or services under those signs, to refrain from using or transferring, for commercial purposes, the website heitech-promotion.de and to agree to the removal of its company name from the commercial register. Heitec also brought claims for information, for a finding of an obligation to pay compensation, for the destruction of goods and for the payment of the costs of sending the warning letter.

The Regional Court, Nuremberg-Fürth ordered Heitech to pay Heitec EUR 1 353.80, plus interest, for the costs of sending the warning letter and rejected the other claims brought by Heitec.

Heitec appealed against the decision of the Regional Court, Nuremberg-Fürth before the Higher Regional Court, Nuremberg, Germany.

The Higher Regional Court, Nuremberg held that Heitec’s action was unfounded on the ground that Heitec was time-barred. In that regard, it noted that Heitech had used its later signs for an uninterrupted period of at least five years and that Heitec had acquiesced in such use, since, although it was aware of that use, it had not taken sufficient measures to stop that use.

According to that court, that court action had not interrupted the period of limitation, since it had been served on Heitech and RW only after five years had elapsed since the warning letter which preceded that action.

Heitec brought an appeal before the referring court.

That court notes that the outcome of the appeal depends on whether Heitec is, pursuant to Paragraph 21(1) and (2) of the Law on trademarks and Article 54(1) and (2) and Article 111(2) of Regulation No 207/2009, time-barred from bringing its claim for an injunction and its ancillary claims.

That court notes that the time-barring of Heitec’s claims relating, in essence, to the use by Heitech of the German trademark of which the latter is the proprietor, is governed by Paragraph 21(1) of the Law on trade marks, read in conjunction with Paragraph 125b(3) of that law, in so far as those claims are based on the EU trade mark of which Heitec is the proprietor.

It states that Paragraph 21(1) of the Law on trade marks transposes into German law the limitation provided for in Article 9 of Directive 2008/95, on the right conferred by trade marks (Article 9(1) of Directive 2008/95) and by other signs – including trade names – used in the course of business (Article 9(2) of Directive 2008/95), to oppose the use of a registered trade mark.

In so far as Heitec opposes the use of the trade name Heitech, the limitation is, according to the findings of the referring court, governed by Paragraph 21(2) of the Law on trademarks. In this regard, that court states that, notwithstanding the fact that the scope of that provision goes beyond that of Directive 2008/95 and is not reflected in Article 54 of Regulation No 207/2009, it must be interpreted on the basis of the interpretation of Paragraph 21(1) of the Law on trade marks which is consistent with that directive.

As regards Heitec’s claims concerning the use by Heitech of the EU trademark of which it is the proprietor, the referring court finds that Articles 54 and 110 and Article 111(2) of Regulation No 207/2009 are relevant.

That court notes that the Oberlandesgericht Nürnberg (Higher Regional Court, Nuremberg) did not err in law in finding that there was ‘use’, within the meaning of Paragraph 21(1) and (2) of the Law on trademarks and Articles 54 and 111 of Regulation No 207/2009, in the present case from 6 May 2009 at the latest and that Heitec had become aware of that by the letter of 6 May 2009 which Heitech had sent it. It is, moreover, common ground that Heitech is not accused of having acted in bad faith.

In the light of those circumstances, it is necessary to determine exactly what constitutes ‘acquiescence’ within the meaning of Article 9 of Directive 2008/95 and Articles 54 and 111 of Regulation No 207/2009.

In that regard, first, it is necessary to clarify whether it is possible to exclude acquiescence not only where an appeal is brought before an administrative authority or a court, but also in the event of the sending of a warning letter. Secondly, it is necessary to determine whether, in the event of court action it is necessary to take as a basis, in order to determine whether that action was initiated before the expiry of the period of limitation, the date on which the document instituting the proceedings was lodged or the date on which that document was received by the defendant. It is necessary, in that context, to clarify whether the fact that the service of that document is delayed through the fault of the proprietor of the earlier mark is relevant in that regard.

It is also necessary to determine whether the time limit applies only to an application for an injunction or also to claims that are ancillary or related to such an application, such as claims for damages, the provision of information and the destruction of goods.

In those circumstances, the Bundesgerichtshof (Federal Court of Justice, Germany) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      Can acquiescence within the meaning of Article 9(1) and (2) of [Directive 2008/95] and Article 54(1) and (2) and Article 111(2) of Regulation No 207/2009 be excluded not only by means of an administrative or court action, but also through conduct not involving a court or administrative authority?

(2)  If Question 1 is answered in the affirmative:

does the sending of a warning letter, in which the proprietor of the earlier sign, before initiating legal proceedings, requires the proprietor of the later sign to agree to refrain from using the sign, and to enter into an obligation to pay a contractual penalty in the event of an infringement, constitute conduct precluding acquiescence within the meaning of Article 9(1) and (2) of [Directive 2008/95] and Article 54(1) and (2) and Article 111(2) of [Regulation No 207/2009]?

(3)  When seeking judicial redress, is the bringing of the action before the court or the receipt of the action by the defendant decisive for calculating the five-year acquiescence period for the purposes of Article 9(1) and (2) of [Directive 2008/95] and Article 54(1) and (2) and Article 111(2) of [Regulation No 207/2009]? Is it significant in this regard that receipt of the action by the defendant is delayed beyond the expiry of the five-year period through the fault of the proprietor of the earlier trademark?

(4) Does the limitation of rights in accordance with Article 9(1) and (2) of [Directive 2008/95] and Article 54(1) and (2) and Article 111(2) of [Regulation No 207/2009] encompass consequential claims under trade mark law, for example, claims for compensation, provision of information or destruction, as well as prohibitory injunctions?’

The Court’s decision:

1.  Article 9 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 and Articles 54, 110 and 111 of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark must be interpreted as meaning that an act, such as a warning letter, by which the proprietor of an earlier mark or other earlier right opposes the use of a later mark without taking the necessary steps to obtain a legally binding solution does not stop acquiescence and, consequently, does not interrupt the period of limitation.

2.  Article 9 of Directive 2008/95 and Articles 54, 110 and 111 of Regulation No 207/2009 must be interpreted to mean that the limitation in consequence of acquiescence referred to in those provisions may not be prevented by the bringing of a court action in which the proprietor of an earlier mark or other earlier right sought a declaration of invalidity of a later mark or opposed the use of that mark, where the application initiating proceedings, although filed before the date of expiry of the period of limitation, did not, owing to a lack of diligence on the part of the applicant, satisfy the requirements of the applicable national law for service and was rectified only after that date for reasons attributable to the applicant.

3.  Article 9 of Directive 2008/95 and Articles 54, 110 and 111 of Regulation No 207/2009 must be interpreted as meaning that, where the proprietor of an earlier mark or other earlier right, within the meaning of those provisions, is time-barred from seeking a declaration of invalidity of a later mark and from opposing the use of that mark, that proprietor is also time-barred from bringing ancillary or related claims, such as claims for damages, the provision of information or the destruction of goods.

Impact of earlier rights in case of trademark conflicts – an EU Court decision

The European Court has ruled in case C‑112/21 X BV срещу Classic Coach Company vof which concerns an interpretation of earlier rights under Article 6(2) of Directive 2008/95/EC in cases of trademark conflicts.

Between 1968 and 1977, two brothers were partners of a general partnership, established in Amersfoort (Netherlands), engaged in passenger transport by coach, under the name ‘Reis- en Touringcarbedrijf Amersfoort’s Bloei’. Until 1971, occasional coach transport services were provided by their father, who had been engaged in that activity since 1935.

In 1975, one of those brothers (‘brother 1’) created X, which used, from 1975 or 1978, two trade names, one of which corresponded, in part, to the surname of those brothers.

In 1977, following brother 1’s departure from the company created in 1968, the other brother (‘brother 2’) continued that company’s activity with his wife as a joint partner, in the form of a limited liability company, while retaining the same company name as that of the company established in 1968.

In 1991, for tax reasons, brother 2 also formed, with his wife, a general partnership The two companies belonging to brother 2 and his wife coexisted and both displayed signs on their coaches containing a name corresponding to brother 2’s name.

In 1995, after the death of brother 2, his activity was continued by his two sons, Y and Z, who created, for that purpose, Classic Coach, also established in the Netherlands. For a number of years, the Classic Coach coaches have carried a sign on the back of the coach displaying, inter alia, brother 2’s name, or, more precisely, the initial of his first name followed by his surname.

Furthermore, X is the proprietor of a Benelux word mark, which was registered on 15 January 2008, for, inter alia, services in Class 39, including services provided by a coach company. That mark corresponds to the surname common to brothers 1 and 2.

In those circumstances, X brought an action before the District Court, The Hague, Netherlands, seeking, inter alia, an order that the defendants in the main proceedings definitively cease all infringement of its Benelux word mark and of its trade names.

X based its action on the fact that, by using the sign corresponding to the name of brother 2, the defendants in the main proceedings had infringed its trademark rights, as referred to in Article 2.20(1)(b) and (d) of the Benelux Convention, and its trade name rights, as referred to in Article 5 of the Law on trade names.

The defendants in the main proceedings contested the alleged infringement, relying, in particular, on Article 6(2) of Directive 2008/95. Furthermore, the defendants in the main proceedings objected to the alleged trade name infringement by, inter alia, invoking estoppel.

By judgment of 10 May 2017, the District Court, The Hague upheld X’s action but, by judgment of 12 February 2019, the Court of Appeal, The Hague, Netherlands set aside that judgment and dismissed X’s appeal.

X appealed on a point of law against that judgment to the Supreme Court, Netherlands, which states that it has doubts about the answer to the question of what constitutes an ‘earlier right’ within the meaning of Article 6(2) of Directive 2008/95.

In that regard, according to that court, it is conceivable that the assumption of an earlier right would require that that right be capable, under the applicable national legislation, of prohibiting the trademark holder’s use of the mark. It is apparent from the legislative history of that provision that wording appearing in the initial proposal and extending its scope to earlier rights of local significance which can no longer be relied on against the later registered mark was ultimately not adopted.

Moreover, it is also conceivable that, in order to assume the existence of an earlier right of a third party, it is important whether the trademark holder has an even earlier right, recognised by the legislation of the Member State concerned, with regard to the sign filed as a trade mark and, if so, whether the use of the alleged earlier right of that third party can be prohibited on the basis of that even earlier right.

In the present case, the Court of Appeal, The Hague held that X, the proprietor of the Benelux trademark, had even earlier trade name rights than those of the defendants in the main proceedings in respect of the sign which is registered as a trade mark. However, according to that court, X, as a result of limitation in consequence of acquiescence, lost its right to prohibit, on the basis of those earlier trade name rights, the use by the defendants in the main proceedings of the trade name corresponding to brother 2’s name. Thus, X finds itself in a situation in which it cannot prohibit the use by the defendants in the main proceedings of that trade name on the basis of its even earlier trade name rights.

The assessment of the merits of the appeal on a point of law brought against that assessment of the Court of Appeal, The Hague would depend on the scope of the concept of ‘earlier right’ in Article 6(2) of Directive 2008/95. In that regard, the Supreme Court, Netherlands states that it must be assumed that all the trade names at issue in the main proceedings are rights recognised in the Netherlands for the purpose of that article 6(2).

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

‘(1) For the purposes of determining whether there is an ‘earlier right’ of a third party as referred to in Article 6(2) of [Directive 2008/95],

(a)  is it sufficient that, prior to the filing of the trademark, that third party had made use in the course of trade of a right which is recognised by the laws of the Member State in question; or

(b) is there a requirement that that third party, on the basis of that earlier right, under the applicable national legislation, is entitled to prohibit the use of the trademark by the trademark holder?

(2) In answering Question 1, is it also relevant whether the trademark holder has an even earlier right (recognised by the laws of the Member State in question) in relation to the sign registered as a trademark and, if so, is it relevant whether the trade mark holder may, on the basis of that even earlier recognised right, prohibit the use by the third party of the alleged “earlier right”?’

The Court’s decision:

1. Article 6(2) 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 must be interpreted as meaning that, for the purposes of establishing the existence of an ‘earlier right’ within the meaning of that provision, there is no requirement that the proprietor of that right must be able to prohibit the use of the later mark by the proprietor of that mark.

2. Article 6(2) of Directive 2008/95 must be interpreted as meaning that an ‘earlier right’ within the meaning of that provision may be granted to a third party in a situation in which the proprietor of the later trademark has an even earlier right recognised by the laws of the Member State in question over the sign registered as a trade mark to the extent that, under those laws, the proprietor of the trade mark and of the even earlier right may no longer, on the basis of its even earlier right, prohibit the use by the third party of its more recent right.

Apple lost an EU dispute regarding its THINK DIFFERENT trademarks

The General Court of the European Union has ruled in joined cases T‑26/21 to T‑28/21, Apple Inc. v Swatch AG.

These cases concern registered EU trademarks THINK DIFFERENT owned by Apple against which an application for revocation was filed by the Swiss company SWATCH. The gound for the application was non-use for a period of 5 consecutive years.

Apple submitted evidence for genuine trademark use within the EU but the EUIPO and the Board of Appeal after that dismissed them as insufficient.

The General Court upheld the EUIPO’s position on the case. The reason for this negative result for Apple was hidden in the details of how the marks were used and how this was proved.

From the Court decision:

The applicant complains that the Board of Appeal did not take into account the high level of attention of the relevant public when assessing whether the contested marks had been put to genuine use. In particular, it claims that the Board of Appeal disregarded the case-law according to which consumers pay a high level of attention when purchasing durable and highly technical goods and, at the same time, closely inspect their technical specifications. The Board of Appeal thus concluded, wrongly, that the relevant public would carelessly overlook the top part of the packaging of iMac computers displaying their specifications.

Furthermore, according to the applicant, the Board of Appeal failed to take into account the fact that computers and computer accessories in Class 9 are often sold ‘as seen’ on the shelves of department or specialist stores, where consumers have the opportunity to inspect their packaging visually before purchasing them. It adds that, in those stores, in a typical configuration, those goods are sold on a self-service basis, as the new photographs in the application show, and in that case consumers rely primarily on the original packaging.

It is important to note, however, that, even if the Board of Appeal did not consider the high level of attention of the relevant public for personal computers and computer accessories in Class 9, that cannot have any bearing on the conclusion according to which the contested marks accounted for only a rather insignificant space next to the barcode. In any event, the applicant has not demonstrated that such consideration would have led the Board of Appeal to find that the consumer would examine the packaging in any detail and that he or she would pay particular attention to the contested marks.

As regards the process of purchasing the goods at issue, it should first be noted that, in certain cases, computers and computer accessories in Class 9 may indeed be sold on a self-service basis to consumers, displayed on shelves. Next, in other cases, as the intervener points out, they are stored in a place which is not directly accessible to the public (for example, in their packaging or in a storeroom). Consumers may, however, try out the display models that are presented without their packaging on the table and consult the technical sheets placed next to each product. Last, those goods may also be purchased online, on the basis of information appearing in special catalogues or on the internet.

The applicant complains, in essence, that the Board of Appeal erred in finding that the sales figures for iMac desktop computers provided by the applicant related only to certain Member States of the European Union, namely the United Kingdom, Finland, Denmark and Germany. It claims to have sold more than four million iMac computers under the mark THINK DIFFERENT during the relevant period throughout the European Union, as is allegedly proved by the witness statement of the director of its legal department, dated 23 March 2017.

In the present case, as EUIPO correctly submits, the witness statement was drawn up by the director of the applicant’s legal department and therefore cannot have the same reliability and credibility as a statement from a third party or a person who is independent of the company in question. Accordingly, that statement is insufficient in itself and merely provides an indication which must be confirmed by further probative evidence (see, to that effect, judgment of 21 September 2017, Repsol YPF v EUIPO – Basic (BASIC), T‑609/15, EU:T:2017:640, paragraph 64 and the case-law cited).

In that regard, it should be noted that, according to the witness statement of 23 March 2017, more than four million iMac computers under the mark THINK DIFFERENT were actually sold throughout the European Union during the relevant period. Those sales figures contained in the witness statement are not, however, confirmed by any further probative evidence. Indeed, the annual reports for the years 2009, 2010, 2013 and 2015, attached to the witness statement of 23 March 2017, contain only information on the net worldwide sales of iMac computers. They do not provide any details as to the sales figures of iMac computers in the European Union.

The applicant claims that, contrary to the Board of Appeal’s reasoning, the joint use of multiple trade marks on the packaging of iMac desktop computers cannot, in itself, undermine the function of the contested marks as a means of identifying the goods concerned. In its view, the contested marks were used jointly, but autonomously, with the other marks affixed to the packaging of iMac computers in so far as they were set clearly apart from the other marks on the packaging and at sufficient distance from the nearest mark, namely Macintosh.

The applicant criticises the Board of Appeal for having taken into account, in its assessment of the genuine nature of the use of the contested marks, new criteria, contrary to established case-law. According to the applicant, there is no case-law requiring it to be demonstrated that the contested marks have been affixed to a particular place on the packaging of the product concerned and that they appear in large letters.

It is true, as is apparent from the case-law relied on by the applicant, that there is no precept in the EU trade mark system that obliges its proprietor to prove the use of its earlier mark on its own, independently of any other mark or any other sign.

However, a registered trade mark that is used in conjunction with another mark must continue to be perceived as indicative of the origin of the product at issue for that use to be covered by the term ‘genuine use’ within the meaning of Article 15(1) of Regulation No 207/2009.

In the present case, it should be noted that, contrary to what the applicant claims, the Board of Appeal did not base its conclusions as to the lack of genuine use of the contested marks solely on the finding of the presence of the word mark Macintosh on the packaging of iMac computers next to the contested marks.

On the contrary, the main ground on which the Board of Appeal based its conclusion is that some of the evidence produced by the applicant to that end falls outside the relevant period and that the images produced by the applicant show the contested marks in a single place on the box packaging and that that use alone could not be regarded as genuine in the light of the characteristics of that use, in particular its size and location.

Second, as regards the requirements linked to the positioning and size of the contested marks on the packaging, it is apparent from the case law cited in paragraph 61 above that genuine use of a mark can be found only where that mark is used to guarantee the identity of the origin of the goods or services for which it was registered.

In the present case, as the photographs of the iMac computer packaging in the file illustrate, the word elements ‘think different’ do not appear on the labels affixed to the box packaging in a way which particularly draws the consumer’s attention. On the contrary, those word elements are placed under the technical specifications of the iMac computers, and just above the barcode in a relatively small character size. That expression is, moreover, accompanied by the word ‘macintosh’ of the same size and written in the same font.

It must therefore be concluded that the way in which the contested marks are used on iMac computer packaging does not ground the conclusion that they have been used as trademarks, that is to say, in accordance with their essential function of giving an indication of the commercial origin of the goods concerned.

All of these shows how important trademark placement is. It should be clear and in a way to indicate trade origin. In such cases putting a small R in a circle after the mark could be really helpful because it will show trademark protection.

Interlocutory injunctions and patent protection – an EU Court decision

The European Court has ruled in the case C‑44/21 Phoenix Contact GmbH & Co. KG v HARTING Deutschland GmbH & Co. KG, Harting Electric GmbH & Co. KG, that has the following background:

On 5 March 2013, Phoenix Contact filed a patent application for a plug connector comprising a protective conductor bridge. In the proceedings prior to the grant of that patent, observations on the patentability of the product were submitted by Harting Electric.

On 26 November 2020, the patent applied for was granted to Phoenix Contact, inter alia for Germany.

On 14 December 2020, Phoenix Contact brought an application for interim relief before the referring court, seeking an injunction prohibiting HARTING Deutschland and Harting Electric from infringing the patent at issue.

The mention of the grant of that patent was published in the European Patent Bulletin on 23 December 2020.

On 15 January 2021, Harting Electric filed an opposition to that patent with the European Patent Office (EPO).

The referring court notes that it has reached the preliminary conclusion that the patent at issue is valid and that it is being infringed. It considers that the validity of that patent is not under threat.

However, that court states that it is prevented from ordering an interim measure on account of the binding case-law of the Higher Regional Court, Munich, Germany according to which, in order to issue an interlocutory injunction for patent infringement, it is not sufficient that the patent concerned has been granted by the granting authority, in this case the EPO, after a detailed examination of its patentability and that the question of the validity of that patent has also been reviewed by a court during the examination of the application for interim relief.

Thus, according to that case-law, for interim measures to be ordered, the patent concerned must also be the subject of an EPO decision in opposition or appeal proceedings, or of a decision of the Federal Patent Court, Germany in the context of invalidity proceedings, confirming that the patent concerned confers protection on the product in question.

Taking the view that such case-law is incompatible with EU law, in particular with Article 9(1) of Directive 2004/48, the referring court decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Is it compatible with Article 9(1) of [Directive 2004/48] if German higher regional courts, which have jurisdiction at last instance in proceedings for interim relief, refuse, in principle, to grant interim measures for patent infringement if the validity of the patent in dispute has not been confirmed in opposition or invalidity proceedings at first instance?’

The Court’s decision:

Article 9(1) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights must be interpreted as precluding national case-law under which applications for interim relief for patent infringement must, in principle, be dismissed where the validity of the patent in question has not been confirmed, at the very least, by a decision given at first instance in opposition or invalidity proceedings.

New EU problems for Facebook regarding privacy protection

The European Court has ruled in case C‑319/20 Meta Platforms Ireland Limited, formerly Facebook Ireland Limited, v Bundesverband der Verbraucherzentralen und Verbraucherverbände – Verbraucherzentrale Bundesverband e.V.

The case concerns the issue of whether consumer protection associations bring legal proceedings for breach of privacy even without a particular mandate from consumers. The dispute has the following background:

Meta Platforms Ireland, which manages the provision of services of the online social network Facebook in the European Union, is the controller of the personal data of users of that social network in the European Union. Facebook Germany GmbH, which has its registered office in Germany, promotes the sale of advertising space at the internet address http://www.facebook.de. The Facebook internet platform contains, inter alia, at the internet address http://www.facebook.de, an area called ‘App-Zentrum’ (‘App Center’) on which Meta Platforms Ireland makes available to users free games provided by third parties. When consulting the App Center of some of those games, an indication appears informing the user that the use of the application concerned enables the gaming company to obtain a certain amount of personal data and, by that use, permission is given for it to publish data on behalf of that user, such as his or her score and other information. The consequence of that use is that the user accepts the general terms and conditions of the application and its data protection policy. In addition, in the case of a specific game, it is stated that the application has permission to post the status, photos and other information on behalf of that user.

The Federal Union, a body which has standing under Paragraph 4 of the Law on Injunctions, considers that the information provided by the games concerned in the App Center is unfair, in particular in terms of the failure to comply with the legal requirements which apply to the obtention of valid consent from the user under the provisions governing data protection. Moreover, it considers that the statement that the application has permission to publish certain personal information of the user on his or her behalf constitutes a general condition which unduly disadvantages the user.

In that context, the Federal Union brought an action for an injunction before the Regional Court, Berlin, Germany against Meta Platforms Ireland based on Paragraph 3a of the Law against unfair competition, the first sentence of point 11 of Paragraph 2(2) of the Law on Injunctions and the Civil Code. It brought that action independently of a specific infringement of a data subject’s right to protection of his or her data and without being mandated to do so by such a person.

The Regional Court, Berlin ruled against Meta Platforms Ireland, in accordance with the form of order sought by the Federal Union. The appeal brought by Meta Platforms Ireland before the Higher Regional Court, Berlin, Germany was dismissed. Meta Platforms Ireland then brought an appeal on a point of law (Revision) before the referring court against the dismissal decision adopted by the Higher Regional Court, Berlin.

The referring court considers that the action brought by the Federal Union is well founded, in so far as Meta Platforms Ireland infringed Paragraph 3a of the Law against unfair competition and the first sentence of point 11 of Paragraph 2(2) of the Law on Injunctions, and used an invalid general condition, within the meaning of Paragraph 1 of the Law on Injunctions.

However, that court has doubts as to the admissibility of the action brought by the Federal Union. It takes the view that it cannot be ruled out that the Federal Union, which did indeed have standing to bring proceedings on the date on which it brought the action – on the basis of Paragraph 8(3) of the Law against unfair competition and point 1 of the first sentence of Paragraph 3(1) of the Law on Injunctions – lost that status during the proceedings, following the entry into force of the GDPR and, in particular, Article 80(1) and (2) and Article 84(1) thereof. If that were the case, the referring court would have to uphold the appeal on a point of law brought by Meta Platforms Ireland and dismiss the action of the Federal Union, since, under German procedural law, standing to bring proceedings must endure until the end of the proceedings at last instance.

According to the referring court, the answer in that regard is not clear from the assessment of the wording, scheme and objectives of the provisions of the GDPR.

As regards the wording of the provisions of the GDPR, the referring court notes that the existence of standing to bring proceedings of not-for-profit bodies, organisations or associations which have been properly constituted in accordance with the law of a Member State, pursuant to Article 80(1) of the GDPR, presupposes that the data subject has mandated a body, organisation or association for it to exercise on his or her behalf the rights referred to in Articles 77 to 79 of the GDPR and the right to compensation referred to in Article 82 of the GDPR where the law of a Member State so provides.

The referring court states that standing to bring proceedings under Paragraph 8(3)(3) of the Law against unfair competition does not cover such an action brought on the basis of a mandate and on behalf of a data subject in order to assert his or her personal rights. On the contrary, it confers on an association, by virtue of a right peculiar to it and stemming from Paragraph 3(1) and Paragraph 3a of the Law against unfair competition, standing to bring proceedings on an objective basis against infringements of the provisions of the GDPR, independently of the infringement of specific rights of data subjects and of a mandate conferred by them.

In addition, the referring court observes that Article 80(2) of the GDPR does not provide for an association’s standing to bring proceedings in order to secure the application, objectively, of the law on the protection of personal data since that provision presupposes that the rights of a data subject laid down in the GDPR have actually been infringed as a result of the processing of specific data.

Furthermore, an association’s standing to bring proceedings, such as that provided for in Paragraph 8(3) of the Law against unfair competition, cannot result from Article 84(1) of the GDPR, under which the Member States are to lay down the rules on other penalties applicable to infringements of that regulation and are to take all measures necessary to ensure that they are implemented. The standing of an association, such as that referred to in Paragraph 8(3) of the Law against unfair competition, cannot be regarded as constituting a ‘penalty’ within the meaning of that provision of the GDPR.

As regards the scheme of the provisions of the GDPR, the referring court considers that it may be inferred from the fact that it harmonised, inter alia, the powers of the supervisory authorities that it is principally for those authorities to verify the application of the provisions of that regulation. However, the expression ‘without prejudice to any other … remedy’, which appears in Article 77(1), Article 78(1) and (2) and Article 79(1) of the GDPR, may undermine the argument that oversight of the application of the law is exhaustively governed by that regulation.

As regards the objective of the provisions of the GDPR, the referring court notes that the effectiveness of that regulation may support an argument in favour of associations having standing to bring proceedings on the basis of competition law, in accordance with Paragraph 8(3)(3) of the Law against unfair competition, independently of the infringement of specific rights of data subjects, since that would allow an additional opportunity to supervise the application of the law to remain, in order to ensure as high a level as possible of protection of personal data, in accordance with recital 10 of the GDPR. Nonetheless, accepting that associations have standing to bring proceedings under competition law may be considered to run counter to the objective of harmonisation pursued by the GDPR.

In the light of those considerations, the Federal Court of Justice decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:

‘Do the rules in Chapter VIII, in particular in Article 80(1) and (2) and Article 84(1), of [the GDPR] preclude national rules which – alongside the powers of intervention of the supervisory authorities responsible for monitoring and enforcing the Regulation and the options for legal redress for data subjects – empower, on the one hand, competitors and, on the other, associations, entities and chambers entitled under national law, to bring proceedings for breaches of [the GDPR], independently of the infringement of specific rights of individual data subjects and without being mandated to do so by a data subject, against [the person responsible for that infringement] before the civil courts on the basis of the prohibition of unfair commercial practices or breach of a consumer protection law or the prohibition of the use of invalid general terms and conditions?’

The Court’s decision:

Article 80(2) of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive 95/46/EC (General Data Protection Regulation) must be interpreted as not precluding national legislation which allows a consumer protection association to bring legal proceedings, in the absence of a mandate conferred on it for that purpose and independently of the infringement of specific rights of the data subjects, against the person allegedly responsible for an infringement of the laws protecting personal data, on the basis of the infringement of the prohibition of unfair commercial practices, a breach of a consumer protection law or the prohibition of the use of invalid general terms and conditions, where the data processing concerned is liable to affect the rights that identified or identifiable natural persons derive from that regulation.