Does EU law say anything regarding the exercise of IPR joint owners' rights? Not according to AG Campos ... but is that it?

Joint ownership of IP rights is one of the areas that, in practice, may generate some of the biggest headaches, in particular when it comes to determining what each and every joint owner can do independently of the other owner(s). It is also an area in which historically different legal systems have had different rules in place. 

But when it comes to EU law, is there any guiding principle or even rule that imposes a (more) harmonized and uniform approach across the various Member States?

This (fascinating) question is currently at the centre of Legea, C-686/21, a referral for a preliminary ruling to the Court of Justice of the European Union (CJEU) made by the Italian Supreme Court.

Yesterday, Advocate General (AG) Campos Sánchez-Bordona issued his Opinion in this case, advising the Court to rule that, no, what each joint owner of a trade mark can do independently of the other owner(s) is a matter of national law.

Let’s see what this case is about and how the AG did reason.

Background

The case concerns joint ownership of a national and (unspecified) EU trade marks by several persons belonging to the same family. In 1993, the joint owners agreed to license the use of that trade mark to a company for an indefinite period and free of charge.

Subsequently, in 2006, one of the owners sought to terminate that contract against the will of the other owners.

In 2014, the Naples Court of First Instance ruled that use of the trade mark by the company was to be considered lawful until 31 December 2006, that is until all joint owners consented to that use, and unlawful after that date, due to the removed consent of one of the trade mark proprietors.

In 2016, the Naples Court of Appeal partly reversed the first instance decision, notably holding that use of the trade mark after 31 December 2006 would be also lawful given that 75% of the trade mark owners still consented to its use. According to that court, unanimous consent would not be required.

A final appeal to the Italian Supreme Court did follow. This court is tasked with ensuring the correct interpretation and application of the law and is not a court on the merits. The Supreme Court considered that the Italian Civil Code governs joint ownership of property - including property of a trade mark – and withdrawal from a contract. Nevertheless, such rules must be interpreted in the light of EU trade mark legislation, which does not set forth any rules on the exercise of the rights relating to joint ownership of a trade mark. The Italian court was unsure whether its provisional reading would be correct, so it decided to make a referral to the CJEU asking for guidance.

The AG Opinion

The AG noted at the outset that it is unclear from the order of reference what the trade mark registrations at issue would be and even whether the provisions of the current EUTMR and EUTMD would be applicable to the background dispute. Nevertheless, he considered the questions referred by the Italian court admissible.

Turning to the substance of the referral, AG Campos highlighted that joint ownership of a property has been raising issues since Roman law. The resulting questions have received different responses.

Insofar as EU trade mark law is concerned, the AG noted that this “has maintained a significant (and cautious) silence on the joint proprietorship of trade marks, which must comply with the relevant national legislation”:

• Insofar as EU-wide trade marks are concerned, the EUTMR considers them objects of property and expressly allows for joint ownership thereof. 
• Turning to national trade marks, the EUTMD contains no explicit reference to the joint ownership of such objects of property, and does neither prohibit nor require national legislation to permit a national mark to be an object of joint property. Put it simply: the EUTMD does not provide any harmonized approach to this matter.

Turning to the core of the referral, that is whether the unanimous or majority agreement of joint proprietors is required to license the use of a mark to a third party, the AG distinguished between EU trade marks and national trade mark.

A relaxed discussion between IP co-owners ...

For the former, the EUTMR expressly provides for the possibility to license use of a trade mark, but does not stipulate the conditions applicable to the conclusion, or termination, of such licence. According to the AG, “That silence implies that those conditions are to be governed by national law, both where the EU trade mark is owned by a sole proprietor and where it is shared by several persons.” For national trade marks, such a conclusion applies a fortiori.

Comment: isn’t there a different way to approach the issues raised by this referral?

The analysis conducted and conclusions reached by AG Campos appear correct. I think it is unlikely that the CJEU could hold otherwise, especially if the Court also approached the questions referred from a trade mark perspective (which, incidentally, is precisely what the Italian Supreme Court has asked it to do).

This said, the issues raised by the Italian Supreme Court can (and perhaps should) be seen from a perspective other than that of EU trade mark law.

Indeed, a different way to see the referral could entail a fundamental rights lens, specifically that offered by Article 17 of the EU Charter of Fundamental Rights concerning protection of property (paragraph 2 is specifically dedicated to intellectual property). In its case law on Article 17, the CJEU has held that Article 17 concerns not just the ‘static’ protection of property – that is: the very existence and acknowledgment thereof – but also its exercise. Indeed, in Sky Österreich, C-283/11, the CJEU held that - since Article 17 allows a person to ‘own, use, dispose of and bequeath’ their possessions, in accordance with Article 1 Protocol 1 ECHR - that provision "applies to rights with an asset value creating an established legal position under the legal system, enabling the holder to exercise those rights autonomously and for his benefit."

Could this Charter lens thus be a suitable basis to hold that EU law has actually something to say – at least in the form of some guiding principles – regarding the way in which co-ownership of an IP right – including but not limited to trade marks – can be exercised, including through contracts, under national law?

It seems to me that the answer could be yes.

If this was correct, then the Charter could offer a suitable legal basis for a more harmonized approach to the exercise of rights of IP co-owners, well beyond the realm of trade mark law.

It is unlikely that Legea is the right opportunity for the CJEU to consider and apply this different lens though. Joint ownership of IP and the exercise of the rights of the various joint owners remains a thorny issue (as I wrote at the end of this contribution) and the AG acknowledged that has been the case since Roman times. 

All this is fair enough, but isn't the time ripe for some guidance if not a response to come from the EU? After all, recent examples – notably the contract law provisions in the DSM Directive – show that there might be indeed an appetite for harmonizing areas of IP that, until very recently, were regarded as falling within the remit of national legislatures.