Dancing to a different tune: the CJEU's approach to trademarks
In February, the Court of Justice of the European Union delivered a decision that could create an important precedent for the relationship between two similar trademarks of different ages, both registered. The decision may shake practitioners’ conceptions about how ‘solid’ a trademark registration is.
This article presents some considerations about the possible implications for national procedures, since in Romania Article 9(1) of the Community Trademark Regulation (CTMR) has an identical content in national trademark law.
In Case C‑561/11, the Spanish court requested a preliminary ruling concerning the interpretation of Article 9(1) of CTMR. The question was essentially whether Article 9(1) of the regulation must be interpreted as meaning that the exclusive right of the proprietor of a Community trade mark (CTM) extends to a third party proprietor of a later CTM without the need for that latter mark to have been declared invalid beforehand.
In the judgment delivered on February 21, 2013 the CJEU held that in relation to the two CTMs at issue in Spain:
“…In the light of the foregoing, the answer to the question referred is that Article 9(1) of the regulation must be interpreted as meaning that the exclusive right of the proprietor of a CTM to prohibit all third parties from using, in the course of trade, signs identical with or similar to its trademark extends to a third-party proprietor of a later registered CTM, without the need for that latter mark to have been declared invalid beforehand …”
Romania has a trademark system traditionally based on a strong and vigorous ex officio examination for prior rights. The amended Trademark Law waived the ex officio examination for relative grounds in May 2010.
"It appears that the impact of this judgement in the long run may be in the opposite direction towards increasing legal uncertainty and costs for all parties involved."
Clearly the traditional system helped trademark holders, because a mark, although obtained with greater effort, conferred a comfortably strong level of protection. Indeed the number of cancellation cases lodged before the Municipal Court of Bucharest was among the lowest in EU member states.
Romanian trademark owners, the majority of them small and medium-sized enterprises (SMEs), were happy with this, as the cost of legal services was maintained at a reasonably low level. Strangely enough, the old system was in line with many of the aims of the recent proposal for revision of the CTMR as published by the European Commission (EC) in March 2013, that it should be: “accessible and efficient for businesses in terms of lower costs and complexity, greater predictability and legal security”. Only “increased speed” was missing from the picture.
An uncomfortable change
When the amended Trademark Law came into force in 2010, the comfortable life of trademark owners was seriously shaken by a wave of new applications, many of them very similar to old registered marks, some made in good faith, others in bad faith, for example by applying for registration for similar goods in other classes or in the same class, if not covered by the old registration.
Romanian trademark owners had to multiply their legal expenses to monitor publications, oppose them in the shortened legal period (thus incurring extra fees) and prosecute oppositions. Obviously the opposition rate grew, possibly multiplied by three. The solidity of the trademark registration suffered a first attack.
In November 2012, the Romanian State Office for Inventions and Trademarks (OSIM), noticing the large number of applications similar to registered trademarks, issued an instruction to complete the implementing regulation of the law. This included sending information to the owners of the earlier-registered trademarks about the later applications and a disguised version of ex officio examination for prior rights, well wrapped in the clothes of the absolute grounds.
As for the courts, there was a consistent view before and after the revised law in 2010, that a trademark registration confers the rights to the owner in respect of unregistered signs used by third parties. Consequently, each time the owner of a later trademark invoked his rights, for example in an enforcement case, the owner of the prior trademark had to file a request for cancellation of the later trademark, and infringement proceedings could resume only once the latter trademark had been cancelled.
If the impact of the recent judgment is to be followed closely by Romanian courts, this would trigger, in my view, further weakness to the trademark system in general.
Everybody can obtain registration more easily now, knowing that the owners of earlier rights who can afford to monitor constantly and oppose are companies with large legal budgets. But once the registration is obtained, it is no longer worth as much. At any time the owner can face an interdiction from any of the previous owners of similar trademarks, in the absence of any previous cancellation proceeding against the mark.
The requisite of a preliminary cancellation proceeding was good because, due to its costs, it made potential claimants think twice before acting. Now, legal suits targeting the use of later marks will most probably multiply, many of them by abuse of right from the owners of the earlier rights.
Under these circumstances, one could expect higher uncertainty in respect to the validity of any trademark registration and higher legal costs to defend it against newer and older trademarks.
Turning back to the aims of the EC, namely increasing legal certainty, or making the trademark system more accessible and efficient in terms of low costs and complexity, it appears that the impact of this judgment in the long run may be in the opposite direction: towards increasing legal uncertainty and costs for all parties involved.
And, since the judgment is expected to produce effects in all EU member states, the most-affected will be the SMEs, as they have obviously fewer resources for protecting and defending their trademarks.
Raluca Vasilescu is a partner at Cabinet M. Oproiu. She can be contacted at: raluca@oproiu.ro
