Husqvarna prevailed over Lidl after a European Court decision

The European Court has ruled in case C-607/19 Husqvarna AB срещу Lidl Digital International GmbH & Co. KG. The case has the following background:

Husqvarna manufactures appliances and tools for gardening and landscaping. It is the proprietor of a three-dimensional EU mark, registered on 26 January 2000 under number 456244 for the goods ‘sprinklers for irrigation’.

From July 2014 until January 2015, Lidl offered for sale a spiral hose set consisting of a spiral hose, a sprinkler nozzle and a coupling sleeve.

Taking the view that the product marketed by Lidl constituted an infringement of its trade mark, Husqvarna brought an action for infringement against Lidl before the Regional Court, Düsseldorf, Germany, for the purposes of, inter alia, bringing the infringement to an end and obtaining damages.

Lidl, by way of counterclaim, requested the revocation of Husqvarna’s rights in the mark at issue in the main proceedings, alleging non-use of that mark.

The Regional Court, Düsseldorf upheld Husqvarna’s claims referred to in paragraph 20 of the present judgment and dismissed Lidl’s counterclaim.

Lidl brought an appeal against the judgment of that court before the Higher Regional Court, Düsseldorf, Germany, which, following the last hearing held before it on 24 October 2017, set aside that judgment and declared that Husqvarna’s rights in the mark at issue in the main proceedings were revoked as from 31 May 2017.

In that respect, the Higher Regional Court, Düsseldorf considered that the relevant date, for the purposes of calculating the continuous period of non-use, was not the date on which Lidl had filed its counterclaim, namely in September 2015, but that of the last hearing before that court, which had taken place on 24 October 2017. That court found that the goods protected by the mark at issue in the main proceedings had no longer been marketed as from May 2012 and therefore concluded that, at the date on which the counterclaim for revocation had been filed, the continuous period of five years referred to in Article 51(1)(a) of Regulation No 207/2009 had not yet expired, whereas that period had expired as at the date of the last hearing.

Husqvarna brought an appeal on a point of law (Revision) before the referring court, the Federal Court of Justice, Germany.

That court takes the view that the outcome of the dispute before it depends, first, on the question whether the determination of the relevant date for the purposes of calculating the five-year period referred to in Article 51(1)(a) of Regulation No 207/2009 and Article 58(1)(a) of Regulation 2017/1001 is governed by those regulations and, second, should that be the case, on how that date is to be determined.

According to that court, neither Article 51(1)(a) of Regulation No 207/2009 nor Article 58(1)(a) of Regulation 2017/1001 indicates the relevant date for the purposes of calculating the five-year period of non-use referred to in those provisions, where the request for the revocation of rights in the EU mark concerned is made by way of counterclaim.

In that regard, the Bundesgerichtshof (Federal Court of Justice) is of the view that that question is a procedural matter and that, in the absence of any clarification in Regulation No 207/2009 and Regulation 2017/1001, it falls within the scope of national law. That court states that that assessment follows from a combined reading of Article 14(3) and Article 101(3) of Regulation No 207/2009 and of Article 17(3) and Article 129(3) of Regulation 2017/1001, as is apparent from the judgment of 22 June 2016, Nikolajeva (C‑280/15, EU:C:2016:467, paragraph 28).

The referring court notes that, according to German civil procedure law, the court must base its decision on all arguments and facts relied on before the date on which the last hearing ends. Where an objection relating to revocation is raised in the course of legal proceedings by way of counterclaim, German trade mark law provides, in the first sentence of Paragraph 25(2) of the MarkenG, that the five-year period within which use must be demonstrated is to be calculated with regard to the date on which the action is brought. However, where the period of non-use comes to an end only after the action has been brought, the relevant date, pursuant to the second sentence of Paragraph 25(2) of the MarkenG, is the date on which the hearing ends. Furthermore, the second sentence of Paragraph 55(3) of the MarkenG provides that, in respect of an application for declaration of invalidity of a trade mark on the ground of the existence of an earlier mark, the proprietor of that earlier mark must, where the defendant has raised an objection, prove that it has been used during the last five years prior to the end of the hearing.

If the answer should be that both Regulation No 207/2009 and Regulation 2017/1001 determine the date with regard to which it must be ascertained whether the five-year period has come to an end, the referring court takes the view that the relevant date should be that of the last hearing before the court hearing the appeal on the merits.

In that regard, the referring court states that that solution is confirmed by recital 24 of Regulation 2017/1001, according to which there is no justification for protecting EU trade marks unless they are actually used. That court adds that taking the date of the last hearing as the relevant date for the purposes of calculating the five-year period of non-use of the EU mark meets the requirement of procedural economy, in that, should that period expire in the course of the proceedings, the party making the counterclaim would not be required to file a new application or counterclaim.

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

‘(1) In the case of a counterclaim for the revocation of rights in an EU trade mark which was filed prior to the expiry of the five-year period of non-use, is the determination of the date which is relevant for the purposes of calculating the period of non-use in the context of Article 51(1)(a) of Regulation No 207/2009 and Article 58(1)(a) of Regulation 2017/1001 governed by those regulations?

(2) If Question 1 is to be answered in the affirmative: In the case of a counterclaim for the revocation of rights in an EU trade mark which was filed prior to the expiry of the five-year period of non-use referred to in Article 51(1)(a) of Regulation No 207/2009 and Article 58(1)(a) of Regulation 2017/1001, must that period be calculated by taking into account the date on which the counterclaim was filed or the date of the last hearing in the appeal on the merits?’

The Court’s decision:

Article 51(1)(a) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the [European Union] trade mark must be interpreted as meaning that, in the case of a counterclaim for the revocation of rights in an EU mark, the relevant date for the purposes of determining whether the continuous five-year period referred to in that provision has ended is the date on which that counterclaim was filed.

New Balance won a $2.8 million lawsuit in China

The US sportswear company New Balance has won an important lawsuit in China related to its trademark.

The case at hand concerns the Chinese company New Barlun that uses the letter N on shoes. This letter is a New Balance well-know trademark all over the world. However, New Barlun succeeded to registered the sign first in China.

The US company initiated a lawsuit seeking invalidation of the mark based on a bad faith registration that took advantages of the New Balance’s trademark global reputation.

The court concurred with the US company finding bad faith approached by New Barlun, which was proven by the fact that the Chinese company failed to cease infringement despite the court issuing an interim injunction order.

The Court ordered $2.83 million in damages to New Balance for the trademark infringement. This is one of the biggest sum awarded by a Chinese court in case of trademark infringement in the field of sportswear.

Another indicative moment regarding this dispute is that trademark registration doesn’t mean a save harbor for the relevant applicant if the mark is registered in bad faith especially in light of worldwide well-known brands.

Source: WIPR.

A fight for Call of Duty: Modern Warfare’s “Mara” character

The photographer and writer Clayton Haugen has initiated a copyright lawsuit against the video maker Activision Blizzard.

The case and hand concerns the video game Call of Duty: Modern Warfare. According to Clayton Haugen one of the characters part of the game “Mara” is copied from a character called Cade Janus created by him.

In 2017, Haugen hired a model and took photos for the action character Cade Janus. Later on, Activisation hired the same model for a photo session for the game using similar makeup, style and clothes.

According to the photographer in that way the company copied his own character. Evidence for this was the fact that both the model and the makeup professional were required to sign non-disclosure agreements, which he believes was an attempt the video maker to conceal the copyright infringement, that is to say the they use elements and inspiration from the Cade Janus.

Clayton Haugen registered his photographs that cover his character in the US Copyright Office.

The dispute arise some interesting questions. For example, is using similar makeup, style and clothes can constitute copyright infringement of photographers that are taken by different photographers. In addition, to what extent there is a copyright infringement over the character itself.

Source: WIPR.

Bentley Motors lost a lawsuit regarding a clothes dispute

Bentley Motors lost a lawsuit regarding the option to use its Bentley trademarks on clothes.

The case concerns a dispute with almost 20 years of history, where another British company Bentley Clothing has tried to stop this use.

Bentley Clothing is a company that has been selling clothes with the Bentley since 1962, and is the owner of several Bentley for class 25.

On the other side, Bentley Motors in an attempt to expand its merchandising line started to offer beanie hats and scarfs with its brand.

According to the company, by doing that Bentley Motors infringes on the company’s trademark rights.

The English High Court upheld this accusation stating that both marks are very similar due to the leading word element Bentley.

This means that Bentley Motors will have either to stop using the mark for clothes or eventually to sign an agreement with Bentley Clothing.

Source: WIPR.

Patents, pharmaceutical products and compensations

The European Court has issued a decision in case C‑688/17 Bayer Pharma AG v Richter Gedeon Vegyészeti Gyár Nyrt., which concerns the following:

On 8 August 2000, Bayer filed an application for a patent relating to a pharmaceutical product containing a contraceptive ingredient at the Szellemi Tulajdon Nemzeti Hivatala (National Intellectual Property Office, Hungary; ‘the Office’). The Office published that application on 28 October 2002.

Richter, in November 2009 and August 2010, and Exeltis, in October 2010, began marketing contraceptive pharmaceutical products in Hungary (‘the products at issue’).

On 4 October 2010, the Office granted Bayer a patent.

On 8 November 2010, Richter filed an application with the Office for a declaration of non-infringement seeking to establish that the products in question did not infringe Bayer’s patent.

On 9 November 2010, Bayer applied to the referring court, the Fővárosi Törvényszék (Budapest High Court, Hungary) for provisional measures to prohibit Richter and Exeltis from placing on the market the products at issue. Those applications were rejected on the ground that the plausibility of the infringement had not been demonstrated.

On 8 December 2010, Richter and Exeltis submitted an application for a declaration of invalidity of Bayer’s patent to the Office.

On 25 May 2011, Bayer submitted further applications for provisional measures before the referring court, which, by enforceable orders of 11 July 2011, entering into force on 8 August 2011, prohibited Richter and Exeltis from putting the products in question on the market, and also requiring them to provide guarantees.

On 11 August 2011 Bayer initiated infringement proceedings against Richter and Exeltis before the referring court. Those proceedings were suspended until a final decision is issued in the proceedings for the declaration of the invalidity of Bayer’s patent.

Having heard appeals by Richter and Exeltis against the orders of 11 July 2011, the Fővárosi Ítélőtábla (Budapest Regional Court of Appeal, Hungary), on 29 September and 4 October 2011 respectively, set aside those orders on the grounds of procedural defects and referred the case back to the referring court.

By orders of 23 January 2012 and 30 January 2012, the referring court refused Bayer’s applications for provisional measures. Whilst it took into account that Richter and Exeltis had entered the market in infringement of the patent, the referring court held that, having regard, in particular, to the advanced stage of the proceedings for a declaration of invalidity of Bayer’s patent and for revocation of an equivalent European patent, the adoption of such measures could not be deemed to be proportionate. By decision of 3 May 2012, the Fővárosi Ítélőtábla (Budapest Regional Court of Appeal) upheld those two orders.

By decision of 14 June 2012, the Office granted in part the application for a declaration of invalidity in respect of Bayer’s patent submitted by Richter and Exeltis. Following a further application by Richter and Exeltis, the Office withdrew its decision of 14 June 2012 and, by decision of 13 September 2012, declared that patent invalid in its entirety.

By order of 9 September 2014, the referring court set aside the Office’s decision of 13 September 2012. It also varied the Office’s decision of 14 June 2012 and declared Bayer’s patent invalid in its entirety.

By order of 20 September 2016, the Fővárosi Ítélőtábla (Budapest Regional Court of Appeal) upheld that order.

On 3 March 2017, the referring court terminated the infringement proceedings between Bayer and Exeltis following Bayer’s withdrawal from those proceedings.

By decision of 30 June 2017, the referring court definitively dismissed the claim for infringement brought by Bayer against Richter on the grounds of Bayer’s patent having been definitively declared invalid.

Richter, by a counterclaim brought on 22 February 2012, and Exeltis, by a counterclaim lodged on 6 July 2017, requested that Bayer be ordered to provide compensation for the losses they claim to have suffered as a result of the provisional measures referred to in paragraph 21 of the present judgment.

Before the referring court, Bayer submitted that those claims should be rejected, arguing that Richter and Exeltis themselves caused the losses they claim to have suffered by having intentionally and unlawfully placed the products in question on the market. In accordance with Article 340(1) of the Civil Code, there is therefore no justification for their claim for compensation for these losses.

In that context, the referring court considers, in essence, that, in the absence of any provision in Hungarian law specifically governing the situations referred to in Article 9(7) of Directive 2004/48, the general rules of the Civil Code relating to liability and compensation must be interpreted in the light of that provision. However, the referring court first raises questions regarding the scope of the rule contained in Article 9(7) of that directive and asks, in particular, whether that provision merely guarantees the defendant a right to compensation or whether it also defines the content of that right. Secondly, the referring court asks whether Article 9(7) of that directive precludes the national court, applying a provision of the civil law of a Member State, from examining the defendant’s role in the losses occurring.

In those circumstances, the Fővárosi Törvényszék (Budapest High Court, Hungary) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘1.  Should the expression ‘provide … appropriate compensation’ referred to in Article 9(7) of Directive [2004/48/EC], be interpreted to mean that Member States must establish the substantive rules of law on the liability of parties and the amount and method of compensation, by virtue of which the courts of the Member States can order applicants to compensate defendants for losses caused by measures which the court subsequently revoked or which subsequently lapsed due to an act or omission by the applicant, or in cases in which the court has subsequently found that there was no infringement or threat of infringement of an intellectual property right?

2. If the answer to the first question referred for a preliminary ruling is in the affirmative, does Article 9(7) of [Directive 2004/48/EC] preclude opposition to the legislation of a Member State by virtue of which the rules to be applied to the compensation referred to in that provision of the Directive are the general rules of that Member State on civil liability and compensation according to which the court cannot oblige the applicant to provide compensation for losses caused by a provisional measure which was subsequently held to be unfounded due to the invalidity of the patent, and which were incurred as a result of the defendant’s failure to act as would generally be expected in the circumstances in question, or losses for which the defendant is responsible for that same reason, provided that, when requesting the provisional measure, the applicant acted as would generally be expected in those circumstances?’

The Court’s decision:

Article 9(7) of Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual property rights, in particular, the concept of ‘appropriate compensation’ referred to in that provision, must be interpreted as not precluding national legislation which provides that a party shall not be compensated for losses which he has suffered due to his not having acted as may generally be expected in order to avoid or mitigate his loss and which, in circumstances such as those in the main proceedings, results in the court not making an order for provisional measures against the applicant obliging him to provide compensation for losses caused by those measures even though the patent on the basis of which those had been requested and granted has subsequently been found to be invalid, to the extent that that legislation permits the court to take due account of all the objective circumstances of the case, including the conduct of the parties, in order, inter alia, to determine that the applicant has not abused those measures.

Where a trademark lawsuit has to be initiated in case of online sales in the EU?

The European Court has ruled in case C‑172/18 AMS Netve Ltd, Barnett Waddingham Trustees, Mark Crabtree v Heritage Audio SL, Pedro Rodríguez Arribas. This case concerns the territory where a trademark lawsuit has to be initiated in case of online sales. In details:

AMS Neve is a company established in the United Kingdom which manufactures and sells audio equipment. BW Trustees, also established in the United Kingdom, is the trustee of the AMS Neve executive pension scheme. Mr Crabtree is a director of AMS Neve.

Heritage Audio is a company established in Spain which sells and supplies audio equipment. Mr Rodríguez Arribas, who is domiciled in Spain, is the sole director of Heritage Audio.

On 15 October 2015 AMS Neve, BW Trustees and Mr Crabtree brought an action against Heritage Audio and Mr Rodríguez Arribas before the Intellectual Property and Enterprise Court (United Kingdom) claiming infringement of an EU trade mark of which BW Trustees and Mr Crabtree are the proprietors and for the use of which AMS Neve is exclusively licensed.

Their action concerns, in addition, the alleged infringement of two marks registered in the United Kingdom of which BW Trustees and Mr Crabtree are also the proprietors.

The EU trade mark relied on consists of the figure 1073 and was registered for goods within Class 9 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended. The description of the goods covered is in part as follows: ‘sound studio recording, mixing and processing equipment’.

The defendants in the main proceedings are alleged to have offered for sale to consumers in the United Kingdom imitations of goods of AMS Neve bearing a sign that is identical or similar to that EU trade mark and to the national trade marks or referring to that sign, and to have advertised those products.

The applicants in the main proceedings have submitted documents in support of their action, including the contents of the Heritage Audio website and the latter’s Facebook and Twitter accounts, an invoice issued by Heritage Audio to an individual residing in the United Kingdom and correspondence between Heritage Audio and a person established in the United Kingdom concerning possible deliveries of audio equipment.

The applicants in the main proceedings have in particular submitted screenshots from that website on which they claim appeared offers to sell audio equipment bearing a sign identical or similar to that EU trade mark. They have stressed that the offers for sale are worded in English and that a section headed ‘where to buy’ lists distributors established in various countries, including the United Kingdom. Further, they claim that it is apparent from the general sale conditions that Heritage Audio accepts orders from any EU Member State.

The defendants in the main proceedings pleaded that the court before which the action was brought had no jurisdiction.

While the defendants do not deny that Heritage Audio products might have been purchased, in the United Kingdom, through other companies, they assert that they have not, themselves, either advertised in the United Kingdom or made any sales in that Member State. They further assert that they have never appointed a distributor for the United Kingdom. Last, they contend that the content displayed on the Heritage Audio website and on the platforms to which the applicants in the main proceedings refer was, by the time of the period covered by the infringement action, obsolete and ought not therefore to be taken into account.

By judgment of 18 October 2016, the Intellectual Property and Enterprise Court held that it had no jurisdiction to hear the infringement action in so far as that action is based on the EU trade mark at issue.

That court states that the applicants in the main proceedings submitted evidence capable of proving that the Heritage Audio website was directed to, inter alia, the United Kingdom. That court considers, further, that the facts of the dispute before it enable it to find that Mr Rodríguez Arribas is jointly liable for the acts of Heritage Audio and that the courts of the United Kingdom have jurisdiction to hear the case in so far as that dispute concerns the protection of national intellectual property rights.

The Intellectual Property and Enterprise Court considers, on the other hand, that that dispute, in so far as it concerns infringement of the EU trade mark, is subject, in accordance with Article 97(1) of Regulation No 207/2009, to the jurisdiction of the courts of the Member State in whose territory the defendant is domiciled, in this case the Kingdom of Spain. The Intellectual Property and Enterprise Court adds that the jurisdiction of the Spanish courts also stems from Article 97(5) of that regulation, under which infringement actions may also be brought before the courts of the Member State in whose territory the act of infringement has been committed.

As regards the latter provision, the Intellectual Property and Enterprise Court considers that the court which has territorial jurisdiction to hear an action brought by the proprietor of a mark against a third party that has used signs identical or similar to that mark in advertising and offers for sale on a website or on social media platforms is the court with jurisdiction over the place where the third party decided to place that advertising or to offer for sale products on that site or on those platforms and took steps to give effect to that decision.

The applicants in the main proceedings brought an appeal against that judgment before the Court of Appeal (England & Wales) (Civil Division).

The referring court considers that the court of first instance, while referring in its judgment to certain judgments of the Court, such as those of 19 April 2012, Wintersteiger (C‑523/10, EU:C:2012:220), and of 5 June 2014, Coty Germany (C‑360/12, EU:C:2014:1318), misinterpreted those judgments and the case-law of the Court in general.

The referring court is of the opinion that such an interpretation would lead, in essence, to a finding that ‘the Member State in which the act of infringement has been committed’, within the meaning of Article 97(5) of Regulation No 207/2009, is the Member State in which the defendant set up its website and its social media accounts. According to the referring court, it follows, however, from the wording, purpose and context of that provision that the territory of the Member State subject to that provision is that in which the consumers or traders to whom the advertising and offers for sale are directed are resident.

The referring court adds that the Bundesgerichtshof (Federal Court of Justice, Germany), in its ‘Parfummarken’ judgment of 9 November 2017 (I ZR 164/16), held that the interpretation of the wording ‘law of the country in which the act of infringement was committed’, in Article 8(2) of Regulation (EC) No 864/2007 of the European Parliament and of the Council of 11 July 2007 on the law applicable to non-contractual obligations (Rome II) (OJ 2007 L 199, p. 40), adopted in the judgment of 27 September 2017, Nintendo (C‑24/16 and C‑25/16, EU:C:2017:724), can be transposed to Article 97(5) of Regulation No 207/2009. However, the referring court has some doubts with regard to that finding of the Bundesgerichtshof.

In those circumstances, the Court of Appeal (England & Wales) (Civil Division) decided to stay proceedings and to refer to the Court the following question for a preliminary ruling, adding in its decision that that question concerns the interpretation of Article 97(5) of Regulation No 207/2009:

‘In circumstances where an undertaking is established and domiciled in Member State A and has taken steps in that territory to advertise and offer for sale goods under a sign identical to an EU trade mark on a website targeted at traders and consumers in Member State B:

(i)  does an EU trade mark court in Member State B have jurisdiction to hear a claim for infringement of the EU trade mark in respect of the advertisement and offer for sale of the goods in that territory?

(ii)  if not, which other criteria are to be taken into account by that EU trade mark court in determining whether it has jurisdiction to hear that claim?

(iii)  in so far as the answer to (ii) requires that EU trade mark court to identify whether the undertaking has taken active steps in Member State B, which criteria are to be taken into account in determining whether the undertaking has taken such active steps?’

The Court’s decision:

Article 97(5) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the [European Union] trade mark must be interpreted as meaning that the proprietor of a European Union trade mark who considers that his rights have been infringed by the use without his consent, by a third party, of a sign identical to that mark in advertising and offers for sale displayed electronically in relation to products that are identical or similar to the goods for which that mark is registered, may bring an infringement action against that third party before a European Union trade mark court of the Member State within which the consumers or traders to whom that advertising and those offers for sale are directed are located, notwithstanding that that third party took decisions and steps in another Member State to bring about that electronic display.

Bacardi won a case in Turkey for a trademark that has been never used there

Mutlu Köse published an interesting article for Marques Class 46 which discusses the court practice in Turkey regarding cases of non-use of trademarks.

The dispute at hand concerns a lawsuit initiated by Bacardi against a local beverage producer for a trademark infringement of BREEZER mark owned by the company.

The Turkey company uses similar sign FREEZER and look-alike packaging.

As a response, KIRBIYIK FREEZER started revocation proceeding against Bacardi’s BREEZER mark for lack of genuine use in the country for a period of 5 years as it is stipulated by the law.

Bacardi had never used its trademark but the reason for this was the fact that the Turkish regulations do not allow the sale of cocktail beverages containing distilled alcohols.

According to the Court, however, this represented a valid reason for non-use of the registered mark (the onliest option for overcoming such revocation apart from actual use) and dismissed the Turkish company request. At the same time, the court accepted the claims for trademark infringement and unfair competition against KIRBIYIK FREEZER.