2022 – Barcelona

1. Counterclaims

Within the framework of Section 2 of the EUTM Regulation 2017 (“Disputes concerning the infringement and validity of EU trade marks”) Article 124(d) provides that EU trade mark courts have exclusive jurisdiction for counterclaims for invalidity of EU trade marks pursuant to Article 128. The only way to bring a claim for invalidity before an EU trade mark court is to file a counterclaim under Article 128. And the EU trade mark courts must in such cases rule on the counterclaim for invalidity before they rule on the claim for infringement of the relevant EU trade mark: Case C-425/16 Raimund EU:C:2017:776 at paras. [33] to [35].

The CJEU has recently determined in Case C-256/21 KP v TV  EU:C:2022:786 that:

1. although a counterclaim for invalidity or revocation under Article 128 is conditional on the bringing of the claim for infringement, it is a separate and self-standing claim and the procedural treatment of it is separate and independent from that of the main claim: paras [36] to [39];
2. the counterclaim is not merely a defence, the outcome of it does not depend on the outcome of the main action and it continues to exist even if the main action is withdrawn: paras. [40], [52] and [55] to [58];
3. within the framework of the EUTM Regulation, the jurisdiction to declare an EU trade mark registration invalid or revoke it is shared between the EU trade mark courts and the EUIPO and exercised in accordance with the principle of priority of the body seized: paras. [41] to [47];
4. “ … the possibility of bringing a counterclaim enables the parties, in the same proceedings and before the same court, to litigate all their claims against each other that have a common origin and, in so doing, seeks, inter alia, to avoid unnecessary multiple proceedings, entailing the risk of contrary judgments …”: para. [54].

The pending Order for Reference in Case C-654/21 LM v KP raises the question whether a counterclaim for invalidity under Article 128 can be wider in scope than the claim for infringement of the EU trade mark registration to which it relates. This appears to us to depend substantially on what is meant by “claims against each other that have a common origin” in para. [54] of the Judgment in Case C-256/21 KP v TV.

Many EU trade mark registrations cover a wide range of goods and services. It is very often the case that only a few of the listed goods and services are actually relevant for the purposes of the claim for infringement. We think it would be helpful for the CJEU to confirm in Case C-654 LM v KP that it is procedurally permissible and proportionate — even if it is not legally necessary in accordance with the Judgment in Case C-256/21 KP v TV — for EU trade mark courts to require claims for infringement and counterclaims for invalidity to be pursued relevantly in relation to the allegedly infringing activities on the basis of specifically identified categories of goods and services in the list for which the relevant trade mark is registered. So that:

1. the claim for infringement relevantly proceeds before the EU trade mark court on the basis of the specifically identified categories of goods and services; and
2. the counterclaim for invalidity is relevantly directed to those categories of goods and services.

2. Appeals to the CJEU

An appeal from the General Court cannot proceed without the permission of the CJEU under Article 58(a) of the Statute of the Court of Justice and Articles 170 (a) and (b) of the Rules of Procedure. The appellant must demonstrate that the proposed appeal raises an issue that is significant with respect to the unity, consistency or development of EU law. It appears that many applications for permission to appeal have been made in trade mark cases since the requirement for permission was introduced and all except one or two of them have been rejected.

The reasoned Orders refusing permission indicate that it is intended to be nearly impossible to appeal to the CJEU against determinations of the General Court involving assessments of mainstream issues in trade mark cases such as distinctiveness, descriptiveness, deceptiveness, use / non-use, similarity / relatedness of marks and goods or services, etc. etc. The degree of judicial supervision exercised by the CJEU seems to have been reduced to a level at which the General Court has for practical purposes become the first and last judicial instance for the determination of applications and claims originating in the EUIPO.

We note that in Case T-79/22 Puma SE v Court of Justice of the European Union (15 June 2022) the General Court peremptorily dismissed an application made under Article 263 TFEU for annulment of the reasoned Order of the CJEU  refusing permission to appeal in Case C-462/21 P Puma SE v EUIPO EU:C:2021:982. The application for annulment appears to have been intended to raise a general concern that the CJEU is being too strict in its approach to the question whether an issue is significant with respect to the unity, consistency or development of EU law.

We think the CJEU could address that concern with greater clarity in its reasoned Orders. For example: (i) it could explicitly state that the reasons given and factors referred to by the General Court for the purpose of substantiating a finding that the similarities between the marks and the goods or services in issue are or are not sufficiently significant to be regarded as unacceptable are to be treated as fact sensitive and case specific assessments of consumer perception, not rules of law; (ii) it could explicitly state that permission to appeal will be refused in cases where the CJEU considers that it was in relevant respects open to the General Court, on the evidence and materials before it, to come to the conclusions it did for the reasons it gave; (iii) it could explicitly state that permission to appeal will be given in cases where it appears to the CJEU to be clearly arguable that the Judgment of the General Court was vitiated by an error of approach which should not be repeated in other cases.

3. Territoriality (I)

We welcome the confirmation provided by the Judgment of the General Court in Case T-768/20 Standard International Management LLC v EUIPO EU:T:2022:458 at paras. [37] to [43] to the effect that an application to revoke the registration of an EU trade mark for non-use can be defeated by genuine use of the mark (in that case by means of advertising, promotion and offers for sale targeted at consumers in the EU) in order to create or preserve an outlet in the EU for goods or services (in that case hotel and ancillary services) that will be provided to such consumers outside the EU.

4. Territoriality (II)

The pending Order for Reference in Case C-104/22 Lannen MCE Oy v Berky GmbH, Senwatec GmbH & Co KG focuses on the geographical requirement for a finding of trade mark infringement by website targeting. The issues of particular concern to the referring Court in the context of the claim for infringement are whether “ … Since the advertising was not targeted at a single country, it was targeted at every country in which it was visible. …” and “In the event that it is held that the advertising was related to the whole world and thus also to the whole territory of the European Union, it is unclear whether it can be held that the advertising related to a single Member State.”

In Case C-9/93 IHT Internationale Heiztechnik GmbH EU:C:1994:261 at para. [22] the CJEU confirmed in accordance with the long-established principle that national trade mark rights are territorial, that “national law can only provide relief in respect of acts performed on the national territory”.

From that perspective, we would expect it to be emphasised by the CJEU that “website targeting” does not give rise to liability for infringement of registered trade mark if it does not involve communication of the content of a website in a context and manner amounting to use of the offending sign in relation to goods or services in the course of trade in the territory where the relevant trade mark is protected by registration. Trade is a bilateral activity. That should, in our view, be recognised by treating the “pushing and pulling” of goods or services into the relevant territory as an element of liability for trade mark infringement by website targeting.

5. Bad Faith (I)

In Conclusion 1 of our Meeting in 2014 (Bellinzona) and Conclusion 3 of our Meeting in 2016 (Trier) we identified the test for bad faith filing as objective and focused on whether the claim for protection was made for an improper purpose or in an improper manner.

Since then, the CJEU has ruled that there must be objective, relevant and consistent indicia tending to show that, when the application for a trade mark was filed, the trade mark applicant had the intention either of undermining in a manner inconsistent with honest practices, the interests of third parties, or obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark: Case C-371/18 Sky Plc v SkyKick UK Ltd EU:C:2020:45 at paras. [75], [77]; Case C-104/18 P Koton Magazacalic Textil Sanayi ve Ticaret v EUIPO EU:C:2019:724 at paras. [51], [52] and [53].

In Sky at para. [78] (following on from Koton at para. [45]) the CJEU made it clear that “in addition to the fact that, in accordance with its usual meaning in everyday language, the concept of ‘bad faith’ presupposes the presence of a dishonest state of mind or intention, regard must be had, for the purposes of interpreting that concept, to the context of trade mark law, which is that of the course of trade.”

The General Court refers to the need for a subjective motivation on the part of the trade mark applicant, namely a dishonest intention or other sinister motive involving conduct which departs from accepted principles of ethical behaviour or honest commercial and business practices: for example, Case T-663/19 Hasbro Inc. v EUIPO EU:T: 2021:211 at para. [41].

‘Bad faith’ is an autonomous concept of EU law which must be given a uniform interpretation within the European Union: Case C-320/12 Malaysia Dairy Industries Pte. Ltd EU:C:2013:435 at paras. [25] to [29]. We think that the legal requirement for dishonesty in the context of trade mark law establishes that ‘bad faith filing’ is stricter and more specific than the doctrine of ‘abuse of right’ which exists in various different forms in the laws of the Member States.

6. Bad Faith (II)

In Conclusion 3 of our Meeting in 2016 (Trier) we identified that the objection to bad faith filing is not intended to operate as a substitute for other substantive grounds of rejection. Since then, it has become increasingly clear that bad faith filing is a free standing basis of objection to registration on absolute grounds which is neither governed nor exhausted by the operation of the relative grounds of objection to registration: for example, Case T-167/20 Tornado Boats International ApS v EUIPO EU:T:2021:257 at paras. [49] and [76] to [78]; Case C-528/18 P Outsource Professional Services Ltd v EUIPO EU:C:2019:961 at paras. [71], [72]; Joined Cases T-3/18 and T-4/18 Holzer y Cia, SA de CV EU:T:2019:317 at para. [56].

The requirement for dishonesty in the particular context of trade mark law (see point 5 above) now appears to be the principal limitation on the scope of the objection to registration on the basis of bad faith filing. We think the concept of dishonesty should for that purpose be quite strictly interpreted and applied.