Wednesday 27 February 2013

Proprietors of Community trademarks are protected against use of their marks by all third parties, including parties holding a later registration in their own name. Judgment of the Court of Justice of the European Union dated 21 February 2013, Fédération Cynologique Internationale v Federación Canina Internacional de Perros de Pura Raza (C-561/11)

1. Background. The Fédération Cynologique Internationale, proprietors of Community trademark no. 4438751 FCI FEDERACION CYNOLOGIQUE INTERNATIONALES in Classes 35, 41, 42, and 44, lodged a trademark infringement action with Community Trade Mark Court No. 1 in Alicante against Federación Canina Internacional de Perros de Pura Raza, who were themselves the proprietors of various Spanish trademark registrations for FCI (one senior to complainants' Community trademark) as well as a Community trademark registration for FCI (figurative).

With an eye to the facts in this case, the Community Trade Mark Court in Alicante raised the issue of whether the rights conferred by a Community trademark registration entitle the proprietor to prohibit the owner of another registered trademark from using that mark or, by contrast, trademark infringement proceedings are conditional upon first or concomitantly invalidating the defendant's Community trademark.

In the circumstances the Spanish court decided to stay the proceedings and refer the question to the Court of Justice for a preliminary ruling with a view to ascertaining the actual scope of Article 9.1 of the Community Trade Mark Regulation, and in particular whether the words "all third parties" mean that a third party may be prevented from using his own trademark registration before that later trademark registration has been declared invalid.

2.  Findings. In paragraph 33 of the judgment (C-561/11), the Court states explicitly that "… Article 9(1) of the Regulation does not make any distinction on the basis of whether the third party is the proprietor of a Community trade mark or not" and afterwards goes on to add that, as it had already made plain in a Community design matter (judgment of 16 February 2012, Celaya, Case C-488/10), "… that provision grants the proprietor of a Community trade mark an exclusive right to prevent 'any third party', not having its consent, from using, in the course of trade, any signs liable to infringe its mark".

But the Court does not stop there. It also states that "… the proprietor of a Community trade mark is entitled both to apply to OHIM for a declaration of invalidity of the later Community trade mark and to oppose its use through infringement proceedings before a Community trade mark court." The court thus views these two actions as alternatives, as options to which the proprietor of a Community trade mark registration is entitled.

The Court interprets the provisions of the Community Trade Mark Regulation in light of the "priority principle", under which the earlier Community mark takes precedence over a later Community mark.

The court concludes by affirming that "… if the proprietor of an earlier trade mark, in order to prevent the use by a third party of a sign that is liable to affect the functions of its trade mark, were required to await the declaration of invalidity of the later Community mark held by that third party, the protection accorded to it by Article 9(1) of the Regulation would be significantly weakened" (paragraph 51).

3. Remarks. The judgment sets out exactly the same position the Court took in the matter of Community designs (judgment of 16 February 2012, Celaya, Case C-488/10). While this does afford the proprietor of an earlier trade mark registration some certainty, by the same token it is somewhat at odds with the obligation all trademark proprietors are under to use their mark. According to this recent judgment, the proprietor of a later registration will be in a weak and vulnerable position when he first commences using his mark.

However, in its judgment the Court does not enter into any deliberation on the final consideration set forth obiter dictum in paragraph 55 of the Advocate General's opinion, namely, "were the Court to accept the interpretation of the term 'third party' …, that interpretation would have also to include a third party who is the holder of a later registered trade mark in a Member State, regardless of the substance of the relevant national legislation."

In this regard it is important to note that the stance taken by the Supreme Court of Spain is quite different from the position taken by the Court of Justice. The Spanish Supreme Court takes the view that to be able to find that infringement has taken place, and consequently that there is liability for damages, there must also be a previous or concomitant ruling invalidating the later infringing registration (judgment of Chamber I of the Supreme Court on 4 April 2012) (in Spanish).

This difference will definitely have to be taken into account when taking legal action and, above all, when deciding whether to file for a Spanish or a Community trademark. There is also a chance that the Spanish Supreme Court may revise its position based on the judgment issued by the Court of Justice. We will therefore have to be alert to future developments. 

Author: Luis Baz

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