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4 February 2016Trademarks

CJEU says unregistered CTM licences can be enforced

Europe’s highest court has ruled that a licensee can enforce a valid Community trademark (CTM), despite the licensing agreement not being registered with the Office for Harmonization in the Internal Market (OHIM).

The question arose from a claim filed by Germany based furniture company Breiding Vertriebsgesellschaft against rival Youssef Hassan.

Hassan, managing director of another company called OVL Onlinevertrieb, used the CTM ‘Arktis’ in connection with beds and covers.

The owner of the ‘Arktis’ CTM is KBT & Co. The CTM covers bedding and baggage materials and was approved by OHIM in 2004.

In 2011, KBT agreed a licensing deal with Breiding allowing it to use the CTM, but did not register the agreement with OHIM.

Breiding sent Hassan a cease-and-desist letter concerning the infringing use. A lower court in Germany initially sided with Breiding but Hassan appealed against the decision.

The Higher Regional Court of Düsseldorf, unsure about whether a third-party could assert a CTM claim if the licensing deal was not on OHIM’s register, referred the case to the Court of Justice of the European Union (CJEU).

According to article 23(1) of Regulation 207/2009 legal acts concerning a CTM “shall have effects vis-à-vis third parties in all member states only after entry in the register”.

But the CJEU, citing recital 11 of the regulation, took the view that the regulation is “intended to protect a person who has, or may have, rights in a CTM as an object of property”.

The court referred to section two of article 23 which it said establishes an exception in situations where parties have acquired a CTM right through a licensing deal.

“Article 23(1) ... must be interpreted as meaning that the licensee may bring proceedings alleging infringement of a CTM which is the subject of the licence, although that licence has not been entered in the register,” the CJEU concluded.

The case will now return to the regional court.

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