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Advocate General gives opinion that use of registered mark can infringe earlier registered mark
Practical Law UK Legal Update Case Report 0-522-4561 (Approx. 5 pages)
Advocate General gives opinion that use of registered mark can infringe earlier registered mark
by PLC IPIT & Communications
| Published on 15 Nov 2012 • European Union |
Advocate General Mengozzi has given an opinion in response to a request for a preliminary ruling on the question of whether the right to prevent the use of a registered Community trade mark (CTM) extends to the use of a later registered CTM, where that use creates a likelihood of confusion. (Fédération Cynologique Internationale v Federación Canina Internacional de Perros de Pura Raza, Case C-561/11, 15 November 2012.) (Free access.)
Speedread
Advocate General (AG) Mengozzi has advised the ECJ to rule that the proprietor of a Community trade mark (CTM) can enforce it against infringers even if the infringing acts arise from the exercise of their rights to use a later CTM, and that there is no requirement for the earlier trade mark proprietor to first have that later mark declared invalid before initiating infringement proceedings. The AG emphasised the primacy of the priority principle, which dictated that an earlier registered CTM took precedence over rights that were established subsequently. He considered that the owner of the later registered rights could adequately protect itself against abusive infringement proceedings by bringing a counterclaim for cancellation of the earlier mark. The AG also pointed out that the system of trade mark protection had to give the earlier proprietor the means to obtain a ban on the use of the later mark as swiftly as possible, since use of the later mark on the market could undermine the essential function of the earlier mark to guarantee origin. The longer the two marks co-existed on the market, the greater the actual or potential prejudice to the earlier mark. He therefore considered that making the owner of the earlier rights wait until it had obtained a declaration of invalidity before it could bring infringement proceedings would raise a risk of disproportionate delay. This opinion is consistent with the ECJ's decision in Celaya Emparanza y Galdos, in which it applied similar reasoning in respect of registered Community designs. It is, however, inconsistent with section 11(1) of the Trade Marks Act 1994, which provides that a registered trade mark is not infringed by the use of another registered trade mark. If the ECJ follows the AG's opinion (in which he expressly applied the same reasoning in relation to national marks as well as CTMs), it seems likely that any future attempt to rely on section 11(1) as a defence in proceedings for infringement of a UK registered mark will fail due to the incompatibility of that section with Article 5 of the Trade Marks Directive. (Fédération Cynologique Internationale v Federación Canina Internacional de Perros de Pura Raza, Case C-561/11, 15 November 2012.)
NOTE: On 21 February 2013, the ECJ agreed with the Advocate General’s opinion that a registered mark can be infringed by the use of another registered mark (see Legal update, ECJ confirms that use of registered mark can infringe earlier registered mark).
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Background
Article 9(1) of the Community Trade Mark (CTM) Regulation (207/2009/EC) provides that a CTM confers exclusive rights on its proprietor, and that those rights are enforceable against "all third parties". For more information about trade mark proprietors' rights against infringers, see Practice note,Trade marks: Infringement and offences.
Article 54 of the CTM Regulation provides that where the proprietor of a CTM has acquiesced, for a period of five successive years, in the use of a later CTM in the Community while being aware of such use, he is no longer entitled on the basis of the earlier trade mark either to apply for a declaration that the later trade mark is invalid or to oppose the use of the later trade mark.
Section 11(1) of the Trade Marks Act 1994 (TMA) provides that a registered trade mark is not infringed by the use of another registered trade mark in relation to goods or services for which the latter is registered, unless and until the later mark is declared invalid. There is no equivalent provision in the CTM Regulation or the Trade Marks Directive (2008/95/EC), which harmonises the law relating to registration of trade marks on the national registers of EU member states.
Facts
The Fédération Cynologique Internationale (FCI), an international association set up in 1911 to support dog breeding, obtained in 2006 CTM registration of a logo containing the acronym FCI. The Canina Internacional de Perros de Pura Raza (FCIPPR) was the owner of several Spanish registered word marks relating to its name. It applied in 2009 to register a similar figurative logo containing the initials FCI. FCI opposed that application in February 2010, but its opposition failed because it did not pay the opposition fee in time. FCIPPR's logo therefore proceeded to registration in September 2010.
In June 2010, FCI applied to the Office for Harmonisation in the Internal Market (OHIM) for a declaration of invalidity of FCIPPR's word marks, based on relative grounds arising from its earlier registered logo. It also alleged infringement of its logo. FCIPPR counterclaimed for a declaration of invalidity of FCI's registered logo on the grounds of bad faith and likelihood of confusion with an earlier Spanish mark registered by FCIPPR.
In November 2010, FCI applied to OHIM for a declaration of invalidity of FCIPPR's logo registration, but in September 2011 OHIM stayed that action pending the outcome of the Spanish court case.
The Spanish court stayed the proceedings before it while it referred a question to the ECJ for a preliminary ruling. The question was framed as follows:
In proceedings for infringement of the exclusive right conferred by a Community trade mark, does the right to prevent the use thereof by third parties in the course of trade provided for in Article 9(1) [of Regulation No 207/2009] extend to any third party who uses a sign that involves a likelihood of confusion (because it is similar to the Community trade mark and the services or goods are similar) or, on the contrary, is the third party who uses that sign (capable of being confused) which has been registered in his name as a Community trade mark excluded until such time as that subsequent trade mark registration has been declared invalid?
Decision
Advocate General (AG) Mengozzi advised the ECJ to rule that "third party" in this context included the proprietor of a later registered CTM whose use of it was allegedly infringing, and that there was no requirement for the earlier trade mark proprietor to first have that later mark declared invalid before initiating infringement proceedings.
The AG's reasoning can be summarised as follows.
- He began by referring to the ECJ's decision in Celaya Emparanza y Galdos Internacional, Case C-488/10 (see Legal update, ECJ rules on whether use of registered Community design can infringe earlier registered design), in which it ruled that the owner of a registered Community design could bring infringement proceedings to prevent the use of a later registered Community design.
- There was a doctrine of Spanish trade mark law known as immunidad registral which gave trade mark owners immunity from infringement proceedings in respect of use of a registered mark. The ECJ's ruling in the Celaya design-related judgment ran counter to this doctrine, and had therefore given rise to much debate in the Spanish legal community as to whether, where there was a dispute between the proprietors of registered trade marks, it was necessary for the owner of the earlier mark to obtain a declaration of invalidity of the later mark before it could begin infringement proceedings.
- It was clear that there were significant differences between the procedure for obtaining a registered design, and that for obtaining a registered trade mark. The essential difference was that trade mark legislation provided for a more detailed examination of an application, including a stage where third parties could submit observations or file an opposition, whereas design registration happened almost automatically and its merits were not subject to examination. The more complex application process that was in place for trade marks reduced the likelihood of conflicting marks being registered, but they did not make it impossible. For example, an owner of earlier conflicting rights might fail to oppose, or its opposition might fail because of purely procedural errors. It was for this reason that the legislation provided for the possibility of obtaining a declaration that the later conflicting mark was invalid, and the alternative possibility of suing for infringement to protect the earlier mark.
- The AG then went on to say that in order to answer the referred question, he had to assess whether the right to prevent the use of an infringing sign should take precedence over the right of the owner of the later mark to exercise its duly registered rights. The CTM Regulation had to be interpreted in light of the fundamental principle that an earlier registered CTM took precedence over rights that were established subsequently. This "priority principle" meant that the scope of protection of a later mark was dependent on there being no earlier rights that conflicted with it. If there were indeed such earlier conflicting rights, the system of trade mark protection had to give the earlier proprietor the means to obtain a ban on use of the later mark as swiftly as possible, since use of the later mark on the market could undermine the essential function of the earlier mark to guarantee origin. The longer the two marks co-existed on the market, the greater the actual or potential prejudice to the earlier mark. Making the owner of the earlier rights wait until it had obtained a declaration of invalidity before it could bring infringement proceedings would raise a risk of disproportionate delay.
- Once infringement proceedings had been brought, the owner of the later mark could protect itself against any abusive proceedings by invoking any opposition that had been substantively rejected by OHIM, or (if the claimant had not filed an opposition) by counterclaiming for revocation or invalidity of the earlier mark.
- The AG added that the text of the Regulation supported this interpretation, as it referred in Article 9(1) to "all third parties", with no explicit rule protecting the owners of later registered CTMs. He also noted that Article 54 limited the bar on actions for invalidity and infringement against the owner of a later CTM to proprietors who had acquiesced for a five-year period, suggesting that such actions were permitted in situations where the acquiescence requirement was not fulfilled. There was also no express rule in the Regulation that the bringing of a claim for infringement was contingent on the claimant having applied for a declaration of invalidity, or vice versa.
- The AG acknowledged the concern that a mark could remain on the register even after its use had been declared infringing, leaving uncertainty about its status. He said, however, that it was unlikely that successful infringement proceedings would follow on from an opposition that failed on the merits, since OHIM's finding that there was no conflict would act as significant evidence in the infringement proceedings. Conversely, it was unlikely that the proprietor whose use had been found to be infringing would continue to use the mark as before, even if it was still formally valid; and in any event, if it did so, the owner of the earlier conflicting mark could apply to have it declared invalid.
- The AG then added that the unitary nature of a CTM meant that his interpretation would also apply to owners of later-registered national marks, regardless of the substance of the relevant national legislation. His comments therefore applied to the interpretation of the equivalent provisions in Article 5 of the Trade Marks Directive.
Comment
When the TMA was enacted, the UK trade mark registration authorities routinely examined applications to ensure that they did not conflict with earlier rights, but it stopped doing so in 2007, moving towards a registration procedure more similar to that used for CTMs, which places responsibility on owners of existing trade marks to protect them against later conflicting applications (see Legal update, Goodbye to relative grounds examination). The current system has made it more likely that marks will become registered even though they conflict with earlier registered rights. As the AG points out in this opinion, obtaining a declaration of invalidity of a later mark can take a very long time, and the continued confusing use of the later mark in the meantime can cause irreparable damage to the distinctiveness and reputation of an established brand. If the ECJ follows the AG's opinion (in which he expressly applied the same reasoning in relation to national marks as well as CTMs), it seems likely that any future attempt to rely on section 11(1) as a defence in proceedings for infringement of a UK registered mark will fail due to the incompatibility of that section with Article 5 of the Trade Marks Directive.