The trade mark system reform: a closer look at the ‘intervening rights’ as a defence
As readers may know, on 23 and 24 December last, the Directive 2015/2436 and the Regulation 2015/2424 (hereinafter referred to as EUTMR) were respectively published in the Official Journal of the European Union. The amending Regulation and the recasting Directive are to supersede the actual Regulation 207/2009 as of 23 March 2016 and the Directive 95/2008 as of 12 January 2016 (this latter shall apply from 15 January 2019, following the transposition into national law).
The new legal instruments introduce important changes to the functioning of the Community trade mark system (afterwards renamed either as European Union or EU trade mark). In the present post, we will discuss one of these major changes: the new Article 13a of EUTMR that, for the first time, provides for a rule on conflicts between an earlier and a junior mark in relation to infringement proceedings.
This provision enshrines a sort of legislative coexistence within infringement proceedings either when the earlier trade mark is an EU trade mark or a national trade mark. This provision establishes that while the proprietor of the earlier trade mark is not entitled to prohibit the use of the later mark, as a consequence of either its previous consent to the junior mark’s registration, acquiescence, or lack of use of the earlier trade mark at the filing of such junior mark, the owner of this latter is not entitled to prohibit the use of the earlier mark in infringement proceedings.
The purpose of this new provision is expressed in 22nd Recital of the EUTMR, “[…] In order to ensure legal certainty and safeguard trade mark rights legitimately acquired, it is appropriate and necessary to lay down, without affecting the principle that the later trade mark cannot be enforced against the earlier trade mark, that proprietors of European Union trade marks should not be entitled to oppose the use of a later trade mark when the later trade mark was acquired at a time when the earlier trade mark could not be enforced against the later trade mark”.
Among the cases where the referred provision can be applicable, we deem that it is particularly relevant to focus on the application of Article 13a in connection with Article 53.3 of EUTMR.
This latter Article has not been changed and keeps reading as follows: “A Community trade mark may not be declared invalid where the proprietor of a right referred to in paragraphs 1 or 2 consents expressly to the registration of the Community trade mark before submission of the application for a declaration of invalidity or the counterclaim”.
The key point in the interaction of these provisions is the definition and interpretation of the concept of “consenting expressly” to the registration of the later mark. In this regard, it is worth mentioning the judgment of the European Court of Justice of 20 November 2001, in joined cases C-414/99 to C-416/99, “Zino Davidoff”, whereby it is established that the consent is expressed where the trade mark proprietor’s intention to renounce its exclusive rights is unequivocally demonstrated.
That being said, we would like to highlight two practical scenarios where it can be difficult to assess whether the trade mark proprietor has granted its consent expressly. The first scenario relates to the exchange of communications between the holders of the conflicting marks, and the second one concerns the breach of coexistence agreements those holders may conclude. All the foregoing entails those preliminary contacts between trade mark holders during the negotiations preceding administrative and/or judicial proceeding.
In respect of the first situation, we refer to the case where the holder of an earlier mark has contested the prospective registration of an EU trade mark application. In this circumstance, it is common that the parties start negotiating in order to solve the trade mark conflict amicably. If those negotiations did not have a positive outcome it would be important that the proprietor of the earlier mark put an end to negotiations by sending a closing communication. In this way such a proprietor would avoid that an expressed consent to the registration of the later mark could be inferred from previous correspondence. Indeed, as far as no indication on how to interpret the concept of “expressed consent” in cases such as the one under analysis, the closing communication would help prevent the holder of the later mark from successfully opposing its “intervening rights” as a defence if the proprietor of the earlier mark filed a trade mark infringement action.
As regards coexistence agreements between the holders of conflicting marks, whereby the proprietor of the earlier mark consents to the registration of the later mark while limiting its use, either in respect of certain jurisdictions or certain goods and services, what will it happen if the holder of this later trade mark breaches the contract in relation to the use prohibitions included therein and the proprietor of the earlier mark brings a trade mark infringement action without questioning the contract breach? In these circumstances, the defendant could invoke its intervening rights as a defence, in that the contract keeps in force and, therefore, there still exists an expressed consent, at least to the registration of the later mark. In order to avoid this possibility and to enforce adequately our clients’ interests, we consider that it is important to include safeguard clauses in coexistence agreements, providing that in case of breach of contract the expressed consent to the use of the later mark is revoked. In this way, it should be possible to conclude that there is no possibility that the holder of the later mark could successfully oppose its intervening rights in an infringement proceeding.
Related Posts:
- According to the CJEU, The period of 5 years following registration constitutes a grace period for the trademark holder
- What is the Scope of the “Reasonable Compensation” for a Trademark Infringement Established in Art. 9.3 EUTMR? – CJUE Judgment of 22 June 2016, C-280/15, “Nikolajeva”
- European Union Trademark Licenses do not Need to be Registered for Licensees to Pursue Infringers, Says CJEU, as Opposed to the Interpretation of the EU Trademark Court of Alicante
- The ECJ Decision on “Pie Optiek” and the concept of prior right licensee