Four EU court rulings from last week and why they matter

Last week WIPR reported on several important rulings from senior courts in Europe, with Aldi, Rolex and O2 just some of the brands featuring. Below we explain why they are important for IP lawyers.

A speedy approach to trademark litigation

On Monday we reported on the Court of Justice of the European Union’s (CJEU) decision in Hansruedi Raimund v Michaela Aigner, an application of the law designed to avoid delays and reduce costs in trademark proceedings.

The court said complaints for trademark infringement can be resolved only after counterclaims based on absolute grounds have been upheld. It added that national courts can go on to dismiss the case even though the decision on that counterclaim might not be final.

Roland Mallinson, partner at Taylor Wessing, said national courts that qualify as EU trademark (EUTM) courts must deal with counter-claims for invalidity as a preliminary point in the same proceedings and, if the trademark is held invalid, dismiss the infringement claim.

“They should not wait for their preliminary decision on invalidity to be appealed before ruling on infringement. Using the court’s words, to rule otherwise would render the enforcement of EUTMs ‘impossible in practice or excessively difficult’ due to delays from appealing any decision in the counter-claim.”

Mallinson said that while it may appear encroaching on matters of judicial procedure, which is normally left to member states, “this is a sensible application of EU law that will avoid delays and reduce costs from multiple proceedings”.

A badge of quality

As we reported on Tuesday, the EU General Court backed the European Commission in clearing a string of luxury watch makers of any wrongdoing in relation to their selective repair systems.

According to Morag Macdonald, joint head of the international IP group at Bird & Bird, the ruling is a welcome outcome for luxury brand owners.

It’s now clear that luxury brands, such as Rolex and Louis Vuitton, can control the quality “not only of their branded goods but also any services offered in relation to those brands”.

The decision is the latest in a dispute spanning over 13 years, following a complaint from the Confédération Européenne des Associations d’horlogers-Réparateurs (CEAHR), which represents independent watch repairers.

CEAHR alleged that an agreement between watch makers including Rolex and Louis Vuitton to refuse to continue supplying spare parts to independent repairers constituted an “abuse of a dominant position”.

Macdonald added: “It is an important economic aspect of a luxury brand that it can act as a badge of quality to the consumer not only on sale of the original product but also in relation to any after service offered for it.”

Lawyers should keep an eye out for knock-on effects in other markets, such as the car industry, she concluded.

The battle between telecoms and retail

On Monday we reported on a trademark dispute pitting a well-known telecoms company against one of Europe’s most popular budget retailers.

The decision, in a case between Sky and Aldi, is nuanced but does provide clarity for practitioners, according to one lawyer.

The General Court ruled that the European Union Intellectual Property Office (EUIPO) must dismiss Aldi’s ‘Skylite’ trademark application as it causes a likelihood of confusion with Sky’s registered marks.

Bill Lister, partner at Fieldfisher, said the opponent Sky had a practice of re-filing identical trademark registrations to artificially extend the grace period that started afresh with each filing.

In so doing, he said, the court concluded that in opposition proceedings, the EUIPO could not consider the absolute grounds for refusal under article 7(1) and article 52(1)(a) of the EU trademark regulation and had to assume validity.

“The result is that the court ruled that the EUIPO was correct in not ordering Sky to provide proof of five years’ continuous genuine use of the trademark ‘Sky’  in the relevant classes and was right not to consider grounds of invalidity.”

He said the decision makes clear that neither article 41 nor article 42 provide a procedural mechanism allowing the validity of an earlier trademark to be contested with regard to the bad faith of the opponent, but he added: “Whether it could be contested on any other basis is left open.”

On likelihood of confusion, Lister said the decision is “somewhat nuanced” as it applied to opposition proceedings and not to invalidity, with the door being held “slightly open as to whether in the latter case it might have come to a different conclusion”.

How the cookie crumbles

Spanish biscuit company Galletas Gullón had the General Court firmly on its side earlier this week, in a battle against telecoms company O2 and the EUIPO over 3D trademarks.

The two decisions, which annulled findings by an EUIPO appeals board that two contested 3D marks had not been put to genuine use, provide a “helpful refresher on how genuine use is assessed”, according to the brand protection team at Taylor Vinters.

“The EUIPO will complete a global assessment, considering a variety of factors from the scale and frequency of use of the mark to the volume of goods sold or services provided,” said the team.

They advised EUTM owners to keep detailed and up-to-date records of all use of a mark—for example, marketing, promotional and advertising material, as well as copies of invoices and notes of sales figures and channels.

Taylor Vinters added that the General Court rulings in these cases are “by and large very positive ones for EUTM owners”, providing them with “some scope to evolve a registered mark to better meet the changing commercial and marketing requirements of the relevant goods or services”.

But the team warned that owners should carefully consider any changes they do make and whether it is worthwhile to get registered protection for the revised mark.

“It’s always a possibility that any changes in use to the ‘core’ registered mark may open the door to an attack on the grounds of non-use by an unhappy third party,” the firm concluded.

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