Mercantile courts make a move

The Official State Gazette for the penultimate day of the year came out with a surprise in the form of the publication of a decision whereby the National Judicial Council has designated specialized courts to hear IP related lawsuits in the following autonomous communities:

  

Community	Designated courts
Catalonia	Barcelona Mercantile Courts Nos. 1, 4 and 5: patents and industrial designs Barcelona Mercantile Courts Nos. 2, 6, 8 and 9: trademarks
Madrid	Madrid Mercantile Courts Nos. 7, 8, 9 and 10
Valencia	Valencia Mercantile Court No. 2: patents Valencia Mercantile Courts Nos. 1 and 3: trademarks and industrial designs

The decision has been prompted by the risk (relative though it may be), perceived upon the promulgation of the new Law 24/2015 on Patents, that lawsuits in the IP field could migrate to Barcelona. It will take effect from April 2017, which is when that new law comes into force.

It remains to be seen whether, since the geographical scope of the specialization remains limited, legal actions are going to be concentrated in    Madrid, Barcelona and Valencia (together with Alicante) to the exclusion of other autonomous communities. However, that is another story. For the moment, the decision of the National Judicial Council may be received with relief and applause.

Author: Antonio Castán

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The graphic representation of the Rubik’s Cube will no longer be a trademark in the European Union

All of us will be familiar with the famous puzzle invented in 1974 by Erno Rubik. The cube has a core mechanism with intersecting axes allowing each of the six faces to rotate independently, thus giving shape to a six-colour puzzle.

Given the worldwide success it rapidly achieved, the puzzle inevitably inspired the appearance in the marketplace in the course of the years of a multitude of other models made of various materials and in a range of shapes and colours.

In these circumstances appropriate protection naturally had to be sought for the Rubik’s Cube and was obtained through intellectual property rights such as those afforded by EU trademark No. 162784.

EU trademark No. 162784, the mark in dispute

A conflict arose in connection with that trademark in 2006, when a famous German toy manufacturer filed an application for a declaration of invalidity on the ground, essentially, that the mark embodied a technical function consisting of the rotatable nature of the product and that third parties were thus prevented from selling similar puzzles which necessarily incorporated that mechanism and took a shape essential for the proper functioning thereof.

Up to now the EUIPO and the General Court had maintained that the representation of the Rubik’s Cube with its grid structure had sufficient distinctive character to perform the function of a trademark and that the internal mechanism could not, in any event, be perceived therein. However, in a judgment published on 10 November 2016 (C-30/15 P) the Court of Justice has overturned those previous rulings.

In that judgment, which is in line with the conclusions previously drawn by the Advocate General, the Court holds that the essential characteristics of a shape must be assessed in the light of the technical function of the actual goods at issue (a three-dimensional puzzle), also taking into account the elements which are not visible in the graphic representation of that shape and the rotatability of the individual elements of a three-dimensional puzzle of the Rubik’s Cube type. Thus, for want of arbitrary or decorative elements, the shape of the Rubik’s Cube does not qualify for registration as a trademark, as such a registration severely limits the freedom of other traders to market products characterized by the same or a similar technical result, i.e., that of a three-dimensional puzzle to be resolved through positioning moveable elements in a logical order.

Now the EUIPO will have to deliver a fresh decision taking into account the findings of the Court of Justice.

N.B. A Spanish version of this article was published in the economic newspaper Expansión


Author: Soledad Bernal Montes

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Brexit: Prospects for data protection

The decision made by the British people in the 23 June 2016 referendum has multiple consequences, many of them legal. Some have already been addressed, but the issue of what Brexit could mean for European citizens’ privacy and data protection rights has been pushed to the background.

The regulatory framework for data protection in the European Union conferred total freedom of circulation on data within the 28 Member States.  The United Kingdom’s exit from the EU, and consequently from that legislative environment, will therefore mean that its citizens will be considered as established in a third country, and issues such as those currently existing with the United States will have to be contended with.  Basically, sending data from any EU country to the UK will constitute an international data transfer, with the legal effects that this entails.

    

Obviously, given the importance of massive data processing for a company from any sector, the UK is not going to remain aloof from its former fellow Member States, since not interacting with the EU in this field would leave it out of the game in a sphere that is vitally important for the economy.   

This situation obviously gives rise to uncertainty -which will have to be cleared up by the British government in the coming months- concerning the decision to be made on the subject of data protection in the island State.

Increase in number of counterfeit goods seized by customs authorities in the EU in 2015

On 23 September, the European Commission published its report on the results of the border measures against infringement of industrial and intellectual property rights in 2015.

According to the report, in 2015 a total of 40,728,675 products suspected of infringing IP rights were seized at customs in the EU, representing a 14% increase with respect to the 35,568,982 products seized in 2014. The value of the goods seized in the EU in 2015 was more than 642 million euros.

In the case of Spain, the increase in the number of goods seized in 2015 was even greater: the number increased by 17% with respect to 2014 (1,893,019 products seized in 2015, compared with 1,619,264 products seized in 2014). Spain is still in the top 10 of EU countries with the largest number of items seized, specifically in 9th position.

The level of effectiveness of the border measures provided for under (EU) Regulation No. 608/2013 is very high: the goods detained were destroyed in 80% of cases, legal proceedings were undertaken in 9% of cases and the goods were only found to be genuine in 2.7% of cases.

China continues to be the main country of provenance of goods seized by customs in the EU (40%). By category, the main countries of provenance for the goods were the following: Benin (foodstuffs), Mexico (alcoholic beverages), Morocco (other beverages), Malaysia (body care products), Turkey (clothing), Hong Kong (mobile telephones and accessories, memory cards, computer equipment, CDs/DVDs and lighters), Montenegro (cigarettes) and India (medicines).

Products for daily use that could pose a danger to the health and safety of consumers (such as foods, beverages, toiletries, medicines, electrical appliances, toys, etc.) make up 25.8% of the total seizures.

The most used modes of transport, per number of seizures, are still postal and courier deliveries (77% of seizures), commonly in response to purchases made online.

The principal categories of goods seized in 2015 were cigarettes (27% of seizures), other goods, such as batteries, glue, furniture and lamps, manuals and other documents, magnets, pesticides, etc. (10%), toys (9%), labels, tags and stickers (8%) and foodstuffs (7%).

It is striking that labels, tags and stickers have risen to the top 5 on the list of goods seized in 2015, which would appear to confirm the latest technique used by criminal counterfeiting organizations of importing unbranded articles, separately importing branded labels and stickers and subsequently affixing the brands to the articles once in the EU. This technique was highlighted by Europol and the EUIPO in their 2015 Situation Report on Counterfeiting in the European Union of April 2015.

Author: Juan José Caselles


Visit our website: http://www.elzaburu.es/en

Infringement of an EU trademark... but not in the whole of the EU

The Court of Justice of the European Union has recently delivered its judgment in case C-223/15, combit Software (judgment of 22 September 2016, ECLI:EU:C:2016:719) concerning the interpretation of the unitary character of the European Union trademark in relation to the scope of infringement actions against confusingly similar signs.

In the case that prompted the Oberlandesgericht Düsseldorf to make a reference for a preliminary ruling, that court considered that a company’s use of the word sign “Commit” for computer programs gave rise, on the part of the average German-speaking consumer, to a likelihood of confusion with the EU trademark “combit”.  However, in the German court’s view, there was no such likelihood of confusion on the part of the average English-speaking consumer, who could easily understand the conceptual difference between the English verb “to commit” and the term “combit”, comprised of the letters “com” for computer and “bit” for binary digit.

In those circumstances, the Oberlandesgericht Düsseldorf asked the CJEU for guidance as to which of those two consumer groups should be taken into account in order to assess the likelihood of confusion, and whether the EU trademark should be considered as infringed throughout the whole of the EU or whether the Member States should be differentiated individually.  

In response to the referring court’s question, the CJEU indicated that where there is a likelihood of confusion in one part of the European Union, it must be concluded that the EU trademark has been infringed, even if that likelihood of confusion does not exist in other parts of the EU. This solution is in keeping with the approach followed for oppositions to EU trademark applications, where the existence of a likelihood of confusion with an earlier trademark in one part of the European Union will suffice in order for the application to be refused.     

The Court of Justice nevertheless goes one step beyond the question referred by the German court and analyses the consequences of the declaration of infringement. Here, the CJEU is supported by the case-law established in its earlier judgment of 12 April 2011, DHL Express France (C-235/09, ECLI:EU:C:2011:238).  In that judgment, the Court of Justice had ruled that a prohibition on proceeding with acts which infringe or would infringe an EU trademark must, as a rule, extend to the entire area of the EU.  However, it established the exception (paragraph 48 of the judgment) that where the defendant proves that the use of the sign at issue does not affect, particularly on linguistic grounds, the functions of the trademark in part of the EU, the EU trademark court must limit the territorial scope of the prohibition that it issues.

Based on that reasoning, the Court of Justice has now concluded that in a situation such as the one raised by the Oberlandesgericht Düsseldorf, the EU trademark court must issue an order prohibiting use of the infringing sign for the entire area of the European Union with the exception of the part in respect of which there has been found to be no likelihood of confusion. In the CJEU’s opinion, this solution, which initially seems to contradict the principle of the unitary character of the EU trademark, is imposed by the need for exclusive rights to be exercised only in cases where the use of a similar sign by a third party adversely affects the functions of the trademark.

Author: Carlos Morán

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FRAUD ALERT

Please be informed that certain letters have been detected in which the addressees are informed that they have won a (fake) lottery prize and that a law firm is responsible for the process of verifying the payment of the lottery prize. To claim the prize, addressees are asked to send to a stated fax number their bank details, a copy of their passport and their telephone number.

Please note that these letters use the names and addresses of professional law firms, with false stamps and letterheads. In the event of any such letter purportedly being sent from ELZABURU SLP, we wish to state that our firm has no connection whatsoever with the parties sending the letters and does not undertake any kind of verification work in relation to the fake lottery prizes. 

Any parties receiving such letters should therefore refrain from providing any of the requested information and should notify their country’s relevant authorities of the attempted fraud.

Should you have any further questions, you may contact us as follows:

E-mail: antipirateria@elzaburu.es

Tel.: +34 91 7009400

Fax: +34 91 3193810


Author: Elzaburu SLP

Confirmed! The holders of licenses in Community designs may also bring claims themselves even though the license has not been entered in the register

Only some months after having given a ruling (case C-163/15)  to the effect that the holders of licenses in Community trademarks (or, rather, “European Union trademarks”, as they now are)  were entitled to bring actions for infringement against third parties even though their licenses had not been entered in the register, the Court of Justice of the European Union was asked to give a preliminary ruling on whether the holders of licenses in Community designs (as they are still called) in turn had that right.

The CJEU has given its judgment in case C-419/15 which stemmed from a request for a preliminary ruling made by the Oberlandesgericht Düsseldorf (the German court of appeal) in connection with a dispute between two German companies. The first of the two, the plaintiff, was the holder of an exclusive unrecorded license in a Community design. The defendant was the distributor of a product which allegedly infringed that design.

In these circumstances the German court referred the following questions to the CJEU: 

• May a licensee who has not been entered in the register bring claims for infringement of the rights in a registered Community design? 

• In the affirmative, may the exclusive licensee also bring an action claiming damages on its own, or may it only intervene in an action brought by the rightholder itself?

Recent creation of EUROPOL's Intellectual Property Crime Coordinated Coalition (IPC3)

On 12 July 2016 EUROPOL’s headquarters in The Hague witnessed the launch of the Intellectual Property Crime Coordinated Coalition (IPC3).
This organization constitutes the EU’s response to offences against intellectual property and stems from the joining of the strengths of EUROPOL and the EUIPO in this area.

The IPC3 arose out of a strategic agreement between EUROPOL and the EUIPO signed in 2013. It has been incorporated into the current structure of EUROPOL and receives financial support from the EUIPO in the amount of 500,000 euros per year.

The organization provides technical and operational support for law enforcement agencies and other partners both inside and outside the EU by:

• a) facilitating and coordinating cross-border investigations;
• b) monitoring and reporting on trends in on-line offences and watching for the appearance of new modus operandi;
• c) improving the harmonization and standardization of legal instruments and operating procedures to fight intellectual property crime globally;
• d) reaching the public and law enforcement agencies by enhancing awareness and providing training in this specific area of knowledge. 

The creation of the IPC3 is more than warranted if we consider the impact of counterfeit or pirated goods within the EU, which account for 5% of imports with a total value of 85,000 million euros. The fight against offences of this nature has to be given priority in order to provide consumers with protection against dangerous or defective products and to tackle the organized criminal networks engaging in these illicit activities which are frequently also linked to other serious forms of transnational crime (smuggling, illegal immigration, labour exploitation, tax evasion, money laundering, financing terrorist activities, etc.).

The Joint Task Force Observatory EUIPO-INTA of INTA’s EU Anti-Counterfeiting Subcommittee, of which ELZABURU forms part, had for some time been strongly advocating the setting up of a specific organization within EUROPOL to combat crime of this nature.

Author: Juan José Caselles

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Brexit in IP? Not so fast

The decision of the United Kingdom to “withdraw from the Union” – in the language of the much mentioned article 50 of the Treaty on European Union – appears to have opened up The Gate of the Hundred Sorrows, to borrow the title of the story by the British writer Rudyard Kipling. Lamentations and cries of alarm abound. However, the fact is that the gate is not open yet (the UK has not notified the European Council of its intention and will probably take some time to do so) and it remains to be seen on what conditions the withdrawal will take place and, therefore, what degree of suffering it may actually cause.

As regards intellectual property it is clear, at least on paper, that the withdrawal of the UK will test the strength of the systems so laboriously constructed over more than half a century to achieve unification and harmonization in the fields of trademarks, designs, geographical indications, designations of origin, plant varieties, trade secrets and patents. Trademarks and designs registered at the European Union Intellectual Property Office (EUIPO) in Alicante will cease to have effects in the UK and means will have to be put in place to determine what will happen to the existing registrations and the applications under prosecution. A similar situation will arise with regard to geographical indications, designations of origin and plant varieties, while the harmonization of trade secrets which was recently agreed upon will not be applicable in the UK.

The European patent with unitary effect, a project to which Spain has not adhered, loses one of its most prominent partners. A future unitary protection for patents will no longer be able to extend to the UK. In addition, the proposed International Agreement on a Unified Patent Court will require a different form of ratification and will also need to be reworked, given that London was the seat chosen for one of the three sections of the Central Division: that dealing with chemistry, metallurgy and life sciences.

While companies will have to assess, within the context of their intangibles strategies, the impact that opting for systems which leave out so relevant a territory may have, there would not appear to be any need, for the moment, to take decisions hurriedly. It is true that when the time comes the unitary effect of the trademarks and designs and the actions of the courts of the EU will no longer extend to the UK, but that is the way it used to be not too long ago and companies and practitioners were able to live with that situation.

However, the departure of the UK will also have consequences which are less foreseeable but could prove of undoubted importance for industrial property and also for copyright. It is undeniable that in many sensitive areas the UK embodied a manner of seeing things which on no few occasions conflicted with the more European or continental view. The tensions between the two visions of intellectual property, or even of unfair competition, emerged plainly in the very gestation of Community law and in the interpretation thereof by the Court of Justice. Upon the waning of the British influence, the situation could change in the future and the delicate balance which has been achieved in certain areas could be lost for ever. 

To conclude, as we began, by quoting (loosely) from a work by Kipling, on this occasion his famous poem “If”, in the phase which is now commencing the European Union will need to endeavour to keep its head when all about are losing theirs, and watch the things it gave its life to, broken, and stoop and build ‘em up with worn-out tools.

Author: Luis Baz

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The European Commission launches the EU-U.S. Privacy Shield

On 12 July 2016, the European Commission adopted a new arrangement for international exchanges of data between the United States and the European Union, namely, the “Privacy Shield”.

The need for this new framework arose from the judgment rendered by the CJEU last October in the Schrems case. In its decision, the European Court pointed out the serious deficiencies in the previous “Safe Harbor” arrangement, to the extent that it was ruled invalid. [see our article on Safe Harbor]

In that regard, in February 2016 it was announced that there would be a new framework that would provide the necessary guarantees for the transatlantic flow of EU citizens’ personal data.  Just this month, the French data protection authority (the Commission Nationale de l’Informatique et des Libertés –CNIL-) asked Facebook to stop compiling the data of users who did not have an account with the social media site and to stop transferring that data to the U.S., thus creating a growing awareness of transatlantic data transfers throughout the whole of Europe.   

For this reason, this new arrangement has been in the spotlight in a number of sectors ever since it was conceived.

The final wording of the arrangement seeks to reflect the following principles: 

• Robust obligations on companies that handle data
• Transparency and clear safeguards on U.S. government access                
• Effective protection of individual rights
• Annual joint review mechanism              

Those principles will be implemented by the following means: U.S. companies handling European citizens’ data will have to register to be on the “Privacy Shield” list and self-certify that they meet the standards set out by the arrangement; there will also be dispute resolution mechanisms that may be accessed by citizens who consider their rights to have been violated within the context of this system; and there will be cooperation between the European Commission and the U.S. Department of Commerce.                                        

The above measures merely seek to ensure an adequate level of protection of the personal data of EU citizens, as well as assurances for U.S. companies which, as market operators, handle that data. 

The adequacy decision is now in force, though U.S. companies will not be able to register to be on the aforementioned list until 1 August 2016. As regards EU citizens, the European Commission has announced that it will be publishing a guide to help get complaints procedures against companies underway.  For the time being, information has been provided in FAQ format along with the press release.

As is typically the case where such momentous issues are concerned, the terms of this new arrangement have been subject to heavy debate.

Figures such as the Euro MP Jan–Philipp Albrecht consider that although the arrangement might, at first glance, appear to provide guarantees, the practical application of its mechanisms could render it meaningless.  He highlights the intricate and complex nature of the rules for legal redress for unauthorised use of citizens’ personal data due to the large number of intermediaries involved, such as arbitration bodies and national authorities.  Also, a number of sectors have pointed out that the wording concerning mass surveillance echoes the “Safe Harbor” framework almost word for word.

It should nevertheless be noted that the “Privacy Shield” has been tweaked throughout the drafting process to accommodate the suggestions and opinions of the many authorities on the subject, such as the Article 29 Working Party, the European Parliament and the European Data Protection Supervisor.  

This provides another tool to promote trade between the European Union and the United States, one that is based on a vision that offers more guarantees as far as citizens’ rights are concerned.

Authors: Fernando Díaz y Martín Bello

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Updating the design protection system

Two studies were recently commissioned by the European Commission for the purpose of reviewing and assessing the effectiveness of design protection systems in Europe. One was conducted from the economic standpoint and the other from the legal perspective.

Directive 98/71/EC of the European Parliament and of the Council of 13 October 1998 on the legal protection of designs sought to approximate and harmonize the laws of the Member States relating to designs. Subsequently, in 2001, the creation, in line with that Directive, of the system for the protection of Community designs constituted a milestone in that it permitted unitary protection to be obtained in all the countries of the EU through a single application. The first applications were filed at the EUIPO (then OHIM) in 2003.

The purpose of the study carried out from the legal perspective was to determine whether the current EU design protection framework is contributing to the strategy as regards innovation and, if appropriate, to make recommendations. The goal of that strategy is to create an environment wherein it will be easier to transform ideas into products, thus favouring economic growth and employment. 

One very positive conclusion arising out of the study is that a high degree of harmonization has been reached in various aspects of the design system thanks, to a large extent, to the power of convergence resulting from the practice and decisions of the EUIPO relating to designs. In this regard reference is made to the convergence programmes of the EUIPO and to the agreements between the EUIPO and various national patent offices of EU Member States for the establishment of common practices in the field of designs.

The study team also highlights the efforts made by national patent offices and courts to bring their decisions into line with the interpretations of the EUIPO and the EU Court of Justice.  

At the same time, some controversial points have emerged, among them the very definition of design, the concept of functionality and the notions of disclosure and scope of protection.

Among the recommendations made by the study team, the need to clarify the concepts of individual character and industrial sector may be highlighted. It is suggested that, when determining the individual character of a design, national patent offices and courts should also refer to the nature of the product, the manner of use thereof, the purpose for which it is intended and the industrial sector to which it belongs or where it circulates.

Another recommendation is that the current notions of visibility and normal use be reviewed and that the definition of design should signify that all designs should be visible in order to qualify for protection. Also noteworthy are the recommendations made with respect to the graphic representations. In this regard, the EUIPO's CP6 Convergence Programme has already addressed the issue of corvengence in the graphic representaation of a design.

The study also deals with two key issues connected with design protection: 3D printing and spare parts. 3D printing is a relatively recent area of technology whose impact extends not only to designs but also to other forms of IP such as patents, trademarks and copyright. The study team takes a very cautious approach to this subject, stressing the need for deeper analysis from all standpoints and making recommendations regarding the possible adoption of provisions on direct or indirect design infringement. 

The question of spare parts had already been addressed in Directive 98/71/EC which put in place the transitional “freeze plus” solution. This system allowed each country to maintain its existing legal provisions on the subject but also to make changes provided that their goal was to liberalize the market for component parts used for the purpose of repairing complex products. However, national laws are not harmonized. In some countries, and in the case of EU designs, it is not possible to exercise the rights derived from the design of component parts of complex products upon whose appearance the protected design  is dependent for repair purposes. In contrast, it is possible in other countries, such as France and Germany. The study team strongly suggests that this situation be remedied and recommends that the spare parts issue be addressed in conjunction with that of 3D printing, as this technology may impact the manufacture and distribution of spare parts.

As Directive 98/71/EC is about to come of age and over 13 years have elapsed since the system for the protection of Community designs was implemented at the EUIPO, an updating process was by now called for. What the Commission has therefore done is call a pause in order to evaluate the current situation and propose improvements for the consideration of all parties with an interest in the design protection system.

N.B. Article originally published in Iuris & Lex.

Author: Pedro Saturio

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The lessors of physical premises also infringe trademark rights

If you are going to let premises or a sales point in a market hall to a trader who could be infringing intellectual property rights, bear in mind that you could end up being sued by the rightholders.

The CJEU, in a judgment published yesterday (7 July 2016) in case C-494/15, considers lessors as an “intermediary” against whom an injunction can be issued.

The judgment stems from legal proceedings brought by Tommy Hilfiger, Lacoste and Burberry against Delta Center.  The defendant is the tenant of the marketplace ‘Pražská tržnice’ (Prague market halls), which sublets to market-traders the various sales areas in that marketplace.

The plaintiffs basically asked Prague City Court to order Delta Center to refrain from concluding or extending contracts for the rental of sales areas in the market halls with persons who infringe intellectual property rights.

The judgment concludes as follows: “The third sentence of Article 11 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 meaning that the tenant of market halls who sublets the various sales points situated in those halls to market-traders, some of whom use their pitches in order to sell counterfeit branded products, falls within the concept of ‘an intermediary whose services are being used by a third party to infringe an intellectual property right’ within the meaning of that provision.”

The judgment goes on to specify that the conditions established for action against intermediaries in an online marketplace also apply to action against intermediaries in a physical marketplace, i.e., “injunctions must be equitable and proportionate. They must not therefore be excessively expensive and must not create barriers to legitimate trade. Nor can the intermediary be required to exercise general and permanent oversight over its customers.  By contrast, the intermediary may be forced to take measures which contribute to avoiding new infringements of the same nature by the same market-trader from taking place.”

Although the judgment calls for a fair balance to be struck, the subjective extension of the concept of “intermediary” to actions for intellectual property infringement in the physical marketplace seems clear.

Author: Antonio Castán

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Damages in cases of EU trademark application infringement

In the main proceedings from which the questions referred to the CJEU stem (judgment of 22 June 2016, C-280/15), the plaintiff –the holder of an EU trademark- filed a complaint for unlawful use of her trademark as a “hidden keyword” on an Internet website. The use in question had allegedly commenced prior to the publication of the plaintiff’s trademark application and had continued after publication of the registration of the mark.   

The plaintiff sought three orders, namely: (i) a declaration of infringement of her trademark; (ii) compensation for the advantage improperly obtained by means of the infringement, calculated by multiplying the duration of the infringement by the fee established in the licensing agreement; and (iii) compensation for the moral damages suffered on account of the infringement.

The relief sought by the plaintiff gave rise to some uncertainty, and so the court decided to refer the following three questions to the CJEU:

• First of all, the referring court asked whether Art. 102.1 EUTMR must be interpreted as meaning that an EU Trademark Court must issue an order which prohibits a third party from proceeding with acts of trademark infringement even though the trademark holder did not apply to the court for such an order.       

   

In reply to that question, the CJEU stated that Art. 102.1 EUTMR does not preclude an EU Trademark Court from refraining, pursuant to certain principles of national procedural law, from issuing an order which prohibits a third party from proceeding with acts of infringement on the grounds that the trademark holder concerned has not applied for such an order before that court.

• The referring court’s second and third questions concern the second sentence of Art. 9.3 EUTMR on compensations and specifically question the following two aspects: 

(i) Whether the holder of an EU trademark may claim compensation in respect of acts of third parties occurring before publication of the application for registration of the trademark concerned; and 

(ii)Whether, in the case of acts occurring after publication of the application for registration of that mark, but before publication of the registration, the concept of “reasonable compensation” in that provision means damages intended to compensate for all the harm suffered by that holder, i.e., recovery of the usual value derived by the third party from use of the mark and compensation for the moral damages suffered. 

The answer to the first question is clear: the second sentence of Art. 9.3 EUTMR establishes a strictly circumscribed exception to the rule that an EU trademark cannot prevail against third parties prior to the publication of its registration (Art. 9.3, first sentence). Therefore, no compensation can be demanded for acts that take place prior to the publication of the application for registration of the trademark.  

In order to reply to the second question, the CJEU makes an interpretation of the concept of “reasonable compensation”, based on the following points:

• The rights conferred by an application for registration of an EU trademark are conditional in nature, since at that point there is no certainty that the mark applied for will be granted.                                                       
• It thus follows that the reasonable compensation that may be claimed in an action based on a trademark application must be smaller in scope than the damages that may be claimed by the holder of a registered trademark. 
• Furthermore, a distinction is drawn in Art. 96 EUTMR between the actions in each case, i.e., (a) refers to any infringement action, whilst (b) refers to any action brought as a result of acts referred to in Art. 9.3, second sentence, EUTMR.  
• Also, Art. 13 of Directive 2004/48 establishes rules on the subject of damages which, on the one hand, provide for full compensation for the harm suffered, which may include moral damages, in the event of acts of infringement committed knowingly and, on the other, recovery of profits or the payment of damages which may be pre-established where the acts of infringement have not been committed knowingly. 

All this confirms that the “reasonable compensation” provided under Art. 9.3, second sentence, EUTMR must be smaller in scope than the damages that can be claimed by the holder of an EU trademark for acts of infringement committed after the registration of the trademark, and must be limited to the recovery of profits actually derived by third-party infringers from use of the mark during that period, with moral damages being ruled out.  

In light of the above points, the CJEU replied to the referring court’s questions as follows:

1)      Article 102(1) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark must be interpreted as not precluding an EU trade mark court from refraining, pursuant to certain principles of national procedural law, from issuing an order which prohibits a third party from proceeding with acts of infringement on the ground that the proprietor of the trade mark concerned has not applied for such an order before that court.
2)      The second sentence of Article 9(3) of Regulation No 207/2009 must be interpreted as precluding the proprietor of an EU trade mark from being able to claim compensation in respect of acts of third parties occurring before publication of an application for registration of a trade mark.  In the case of acts of third parties committed during the period after publication of the application for registration of the mark concerned but before publication of its registration, the concept of ‘reasonable compensation’ in that provision refers to recovery of the profits actually derived by third parties from use of the mark during that period.  On the other hand, that concept of ‘reasonable compensation’ rules out compensation for the wider harm which the proprietor of the mark may have suffered, including, as the case may be, moral prejudice.

Author: Ana Sanz

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EU Trademarks: CJEU obliges EUIPO to accept staggered partial renewal requests

In its judgment in case C-207/15 P, published on 22 June 2016, the CJEU found in favour of Nissan Jidosha KK and against the EUIPO in ex parte proceedings relating to the possibility of renewing an EU trademark in two stages.

Nissan had requested, within the six months preceding the due date, the partial renewal, in two classes, of a trademark registered in three. Subsequently, within the six-month grace period after the due date, the registrant submitted a further request for renewal in the remaining class, which the Office turned down.

Why was that? According to the EUIPO, the request for partial renewal in just two of the three classes in which the trademark had been granted registration entailed the surrender of the third class. The Office also maintained that reasons of legal certainty entered into play, given that the partial renewal in two classes had already been entered on the records, Nissan had been notified thereof, erga omnes effects had consequently been created and Nissan could therefore not be allowed to go back on its initial decision not to renew the trademark in the third class.

The EUIPO thus interpreted article 50 (relating to surrender) broadly and article 47 (relating to renewal) narrowly, contrary to the interests of Nissan in both cases.

However, in its judgment the CJEU has held that “it is not apparent from those provisions that the submission, during the periods referred to in Article 47(3) of Regulation No 207/2009, of requests for renewal of an EU trade mark, staggered over time and relating to different classes of goods or services, is prohibited”.

It seems strange that both the EUIPO and the General Court should have interpreted those provisions in a manner adverse to the interests of the trademark owner, rather than in favour thereof, when the controversy arose out of a gap in the regulations and the registrant and its representative acted entirely within the bounds of the law (at least according to the German, Portuguese, Finnish and Dutch language versions of article 47.3)

It is also rather surprising that the EUIPO should have come out so strongly in defence of legal certainty when we all know perfectly well that there is a six-month grace period for the renewal of an EU trademark and, therefore, that one should never assume that the registration may have lapsed until that term has expired. It appears to us that we should be equally cautious and draw no conclusions until after the expiry of that term in cases where the registration has been renewed but only partially.

We all look for legal certainty, but in doing so we ought to be consistent. From this standpoint, to deny a trademark owner the right to renew a registration in two stages, while the grace period is still running, would not seem logical when, in contrast, insufficient attention is paid to the need to keep the information on the status of the trademarks in the EUIPO databases current. On occasions updates are subject to delays of some months and this circumstance evidently generates uncertainty.

Author: Ramón Cañizares

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