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Thursday, 14 June 2007

ECJ rules on when and how you can "non-use" a trade mark

This morning the European Court of Justice reached the culmination of a frenetic week for trade mark owners and their professional representatives when it handed down its ruling in Case C‑246/05, Armin Häupl v Lidl Stiftung & Co. KG, a reference for a preliminary ruling from the Oberster Patent- und Markensenat (Austria).

In short, Lidl registered a figurative trade mark containing the words "Le Chef DE CUISINE" in Germany in July 1993, designating Austria in its International Registration in October 1993. Those registrations took effect in Austria as of December 1993. Armin Häupl sought revocation in October 1998. Citing "bureaucratic obstacles" over which it had no control and that interfered with its commercial strategy, Lidl didn't start using those marks till November 1998, but maintained that it had until December 1998 before the expiry of the five year period within which it had to make use of its mark. What the Austrians want to know is (i) whether, when considering whether there has been a continuous period of five years non-use, is that period measured from October or December 1993? Also, (ii) was Lidl entitled to rely on its reason for non-use or should it have changed its business strategy?

Since different EU Member States appear to have different means of computing the five-year non-use period, this question is ripe for harmonisation. After weighing up the pros and cons of the different solutions, Advocate General Damaso Ruiz-Jarabo Colomer considered that, in Community law, the date that can be objectively and easily determined, ie the date when the registration procedure is finished, is best.

As to proper reasons for non-use, on which Directive 89/104 is silent, the AG gained inspiration from Art. 19 of TRIPs, which says that the circumstances preventing use must be (i) an obstacle to using the mark which is (ii) independent of the owner’s will (eg import restrictions or public health issues). On this basis, if Lidl could have shifted its commercial strategy and used the mark, failure to do so would be Lidl's and no-one else's.

Today the ECJ has ruled as follows:

"1. The ‘date of the completion of the registration procedure’ within the meaning of Article 10(1) of ... Council Directive 89/104 ... must be determined in each Member State in accordance with the procedural rules on registration in force in that State.

2. Article 12(1) ... must be interpreted as meaning that obstacles having a direct relationship with a trade mark which make its use impossible or unreasonable and which are independent of the will of the proprietor of that mark constitute ‘proper reasons for non-use’ of the mark. It is for the national court or tribunal to assess the facts in the main proceedings in the light of that guidance".
On the first question the ECJ stated:
"25 ... that several legal systems are involved when a trade mark is registered internationally .... Both the provisions of the Madrid Agreement, which in the main establishes the part of the registration taking place before the International Bureau, and the national legal provisions, which must comply with Community law, in particular the Directive, apply. In that respect, Article 1 of the Directive provides that it ‘shall apply to every trade mark … which is the subject of … an international registration having effect in a Member State’.

26 Further, ... the Directive ... is not intended to approximate fully the trade mark laws of the Member States. ... ‘… Member States … remain free to fix the provisions of procedure concerning the registration, the revocation and the invalidity of trade marks acquired by registration; … they can, for example, determine the form of trade mark registration and invalidity procedures, decide whether earlier rights should be invoked either in the registration procedure or in the invalidity procedure or in both and, if they allow earlier rights to be invoked in the registration procedure, have an opposition procedure or an ex officio examination procedure or both …’. It is thus apparent from those recitals in the preamble to the Directive that it does not harmonise the procedural aspect of trade mark registration.

27 Account must be taken of those recitals for the purpose of interpreting Article 10(1) of the Directive. ... [T]hat provision does not determine in an unambiguous manner the beginning of the period of use and therefore the starting point of the five-year period for which it provides. Indeed, its wording defines that starting point in relation to the registration procedure, and thus an area which is not harmonised by the Directive. ...[T]hat wording makes it possible to adapt that period to the specific features of national procedures.

28 It follows that the Member States are free to organise their registration procedure and, accordingly, they can decide in particular when that procedure is to be regarded as having been completed.

29 In the case of international registration ... it is thus for the Member State for which the registration application has been filed to determine the time at which the registration procedure comes to an end in accordance with its own procedural rules".
On the second question, the ECJ affirmed that, while there should be a uniform interpretation of the meaning of the term 'proper reasons for non-use', that did not mean that there should be a uniform application of that term to the facts: it was for each country's courts to apply it, on the facts of each case, as it saw fit. The IPKat thinks this must be right and doubts that the de facto establishment of different permitted excuses for non-use in different national markets will undermine the level playing field of the Single Market.

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