Prague, Městský soud – Court of Appeal of the city of Prague

1. Negotiated Dispute Resolution
Art. 151(3) EUTMR 2017 confirms that the EUIPO “may provide voluntary mediation services for the purpose of assisting parties in reaching a friendly settlement”. In the last quarter of 2023, the Office will be launching a Mediation Centre committed to assisting parties to solve IP disputes (not limited to disputes involving EU Trade Marks and Designs) through mediation, conciliation and expert determination procedures.
We are aware that some Member States are more proactive than others in encouraging and assisting the parties to civil and administrative proceedings to settle their disputes by agreement.
We think it is important for all courts and tribunals dealing with civil and administrative proceedings involving trade marks, trade names and other IP rights to actively ensure that litigants understand the advantages of participating in confidential procedures for negotiated dispute resolution.
As well as saving time and money, such procedures can help the parties to agree a modus vivendi on ‘tailor made’ terms which the court or tribunal concerned would not have had the power to impose upon them by way of legal decision. That is, for example, the case in situations where — as often happens — the dispute can be satisfactorily resolved by entering into a trade mark, trade name and domain name co-existence agreement.
Experience has shown that parties who were not expecting to settle their dispute quite often succeed in doing so with the assistance of a trained mediator. The mediator aims to facilitate a dialogue between the parties without giving advice or deciding on the outcome. A process of “independent neutral evaluation” may be used in cases where both parties would prefer to receive an objective opinion on the merits of their respective positions from an experienced lawyer who has no connection with the case.
We note that the confidentiality of the dispute resolution process should always be guaranteed.
2. Orders for Reference to the CJEU
The CJEU has repeatedly emphasised that judges at all levels of the court systems in the Member States have the right to request a ruling on EU law under Art. 267 TFEU if and when they consider it necessary to do so in order to enable them to give judgment in proceedings pending before them: see, for example, Case C-564/19 IS EU:C:2021:949 at paras. [67] to [82] and the case law cited.
We think it is particularly useful for lower courts to make Orders for Reference under Art. 267 in cases where the ruling of the Court of Justice may identify matters on which the parties would want to submit evidence (or further evidence) to the referring court before it gives judgment.
3. Trade Mark Infringement : Website Targeting
In the Judgment of the CJEU delivered on 27 April 2023 in Case C-104/22 Lannen MCE Oy v Berky GmbH, Senwatec GmbH & Co. KG EU:C:2022:343 the Court ruled that the “International jurisdiction” provisions of Art. 125(5) EUTMR 2017 permitted the proprietor of an EU trade mark to bring an action for infringement before an EU trade mark court of the Member State where “consumers and traders targeted by [online] advertisements or offers for sale are located” against a defendant who “has made use of [a sign identical to the EU trade mark] by means of paid referencing on a search engine website which uses a national top-level domain name of that Member State.”
This was described in para. [49] of the Judgment as the third party “enabling a specifically targeted public to access its product offering” and identified in para. [50] of the Judgment as “a sufficient connecting factor” for the purpose of enabling a claim for infringement to be brought before an EU trade mark court of that Member State under the “International jurisdiction” provisions.
We regret that the Court did not take the opportunity provided by that case to emphasise that “website targeting” does not give rise to liability for infringement of trade mark under the provisions of Art. 9 EUTMR 2017 or Art. 10 TMD 2015 if it does not involve presentation 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.
4. Legitimate Reasons to Oppose Further Commercialisation
Art. 15(2) EUTMR 2017 and Art. 15(2) TMD 2015 enable the proprietor of a trade mark “to oppose further commercialisation” of “goods which have been put on the market in the European Economic Area under that trade mark” by him or with his consent if he has “legitimate reasons” for doing so.
The CJEU re-affirmed in Case C-59/08 Copad SA v Christian Dior couture SA EU:C:2009:260 at para. [55] that “damage done to the reputation of a trade mark may, in principle, be a legitimate reason … allowing the proprietor of the mark to oppose further commercialisation of luxury goods which have been put on the market in the EEA by him or with his consent (see Parfums Christian Dior, paragraph 43, and Case C-63/97 BMW …).”
This principle is not confined to situations where the physical condition of the goods has been changed or impaired, nor is it confined to situations where the further commercialisation involves a likelihood of deception or confusion. It is also not confined by the language of the EUTMR 2017 and TMD 2015 to luxury goods. That makes it a principle with potentially far-reaching effects.
We consider that more guidance is needed from the CJEU as to the criteria for determining whether and when it may be found that there is damage to the reputation of a trade mark simply by virtue of the context and manner in which unchanged and unimpaired goods are further commercialised by a reseller without giving rise to deception or confusion.
We also consider that it should be made clear that such goods may remain in circulation subject to the imposition of appropriate conditions in accordance with the requirements of the General Obligation set out in Art. 3 of the Enforcement Directive (2004/48/EC)
5. Replacement Parts
The outcome of the pending reference to the CJEU in Case C-334/22 Audi AG v GQ ultimately depends on how willing or reluctant the Court will be to accept that if a component part for a vehicle physically incorporates a representation of the vehicle manufacturer’s trade mark, it can — for commercial purposes — be replaced with a component part from another manufacturer which in the same way physically incorporates a representation of that trade mark.
We recognise that it is possible for a representation of a mark to be physically incorporated in the appearance of goods in a way which is liable to be perceived by consumers as ‘origin neutral’ rather than ‘origin specific’ (see by analogy Case C-408/01 Adidas-Salomon AG v Fitnessworld Trading Ltd EU:C:2003:582 at paras [39] and [40]).
It remains to be seen whether the CJEU is prepared to accept that a trade mark physically incorporated in the appearance of a replacement part can be regarded as ‘origin neutral’ from the perspective of a reasonably well-informed and reasonably observant and circumspect consumer in a marketplace where replacement parts are by their nature expected to be identical in appearance to the component parts they are intended to replace (Joined Cases C-397/16 and C-435/16 Acacia Srl and Rolando D’Amato EU:C:2017:992 at paras [74] and [75]).
6. Operators of Online Marketplaces
Joined Cases C-148/21 and C-184/21 Louboutin v Amazon raised the question whether the trade marks under which goods are offered for sale in an online marketplace can be found to have been “used” directly by the platform operator as part of its own commercial communication if a reasonably well-informed and reasonably observant user of the website may have the impression that it is marketing the goods concerned in its own name and on its own account.
We think that the reasonably well-informed and reasonably observant internet user should be regarded as a person who understands and respects the fact that platform operators are entitled to facilitate the activities of online sellers of goods in accordance with the exemptions from liability created by Arts. 12 to 15 of the e-Commerce Directive (Directive 2000/31/EC). Otherwise, those exemptions would be deprived of effet utile by applying an internet user test for liability which ignored them.
The reasoning of the Advocate General in paras. [91] to [100] of his Opinion delivered on 02 June 2022 (EU:C:2022:422) did not detract from that proposition: he considered that the platform operator would not be “using” the trade marks with reference to which the online sellers’ goods were offered for sale in situations where “it remains clear to reasonably well-informed and reasonably observant internet users that it is the third party seller alone who intends to offer the goods and put them on the market”: para. [93].
However, in paras. [47] to [53] of its Judgment delivered on 22 December 2022 (EU:C:2022:1016), the Court does not appear to have integrated any understanding of the e-Commerce Directive exemptions from liability — only a strict need for transparency — into the mindset of the relevant internet user: “Advertisements displayed on an online sales website incorporating an online marketplace must … be presented in a way which enables a reasonably well-informed and reasonably observant user to distinguish easily between offers originating, on the one hand, from the operator of that website and, on the other, from third-party sellers active on the online marketplace which is incorporated therein …” : para. [50].
The District Court of The Hague has subsequently decided in its Judgment of 30 August 2023 in Case C/09/622304/HA ZA 21-1105 Audi AG and Volkswagen AG v Fruugo.Com Ltd that there is no general rule that the perception of the reasonably well-informed and reasonably observant internet user must be taken into account for the purpose of determining who, as between the platform operator and a seller of goods on that platform, is actually offering the goods in question for sale under the trade mark in question or for the purpose of determining whether the platform operator can rely on the “hosting” exemption from liability provided by Art. 14 of the e-Commerce Directive.
In our view, there is a need for the CJEU to consider and clarify whether, as the District Court of The Hague envisaged, the ruling in Louboutin should be regarded as specific to the particular facts of Joined Cases C-148/21 and C-184/21.
7. Acquiescence
In Case C-466/20 Heitec AG v Heitech Promotion GmbH EU:C:2022:400 the CJEU considered the operation and effect of the rule that the proprietor of an earlier trade mark or other earlier right is time-barred from seeking a declaration of invalidity or opposing the use of a later mark applied for in good faith, where for a period of five consecutive years, while being aware of such use, “it failed to carry out an act that clearly expressed its wish to oppose that use and to remedy the alleged infringement of its rights” : para. [50].
We support the view that the Judgment in that case indicates that it is generally impossible to prevent limitation on the basis of acquiescence without actually opposing the use of the later mark in proceedings validly and effectively commenced for that purpose prior to expiry of the five-year period.
8. Characteristics and Descriptiveness
The CJEU adopted a restrictive approach to descriptiveness in Case C-488/16 P Bundesverband Souvenir – (NEUSCHWANSTEIN) EU:C:2018:673 at paras [44], [45] where it linked the concept of descriptiveness to “an objective characteristic inherent in the nature of that product” and stated that “The fact that they constitute souvenirs through the mere affixing of that name is not, in itself, an essential descriptive characteristic of those goods.”
We think that “characteristics” should be understood more broadly to mean “attributes” and include “attributes” which goods may “optionally” possess. Such as their subject, theme, content or ingredients. For example: Case T-435/05 Danjaq LLC v OHIM (DR NO); Case T-234/06 Giampietro Torresan v OHIM (CANNABIS); Case C-51/10P Agencja Wydawnicza Technopol sp. zo. o v OHIM (1000); Case T-633/13 Reed Exhibitions Ltd v OHIM (INFOSECURITY); Case T-157/20 Gabriele Bachmann v EUIPO (LICHTYOGA).
Three cases pending before the Grand Board of Appeal at the EUIPO have the potential to clarify what is meant by “characteristics” and — on further appeal — enable the supervising courts in Luxembourg to ensure that the “descriptiveness” objection to registration is fully and correctly applied:
- ANIMAL FARM (EU Trade Mark Application No. 017869420). Grand Board Appeal R 1719/2019-G. Referred by the Fifth Board of Appeal in Decision R 1719/2019-5 dated 29 June 2020 on the issue of descriptiveness/distinctiveness of the sign for goods and services listed in Classes 9, 16, 28 and 41.
- 1984 (EU Trade Mark Application No. 017869425). Grand Board Appeal R 1922/2019-G. Referred by the Fifth Board of Appeal in Decision R 1922/2019-5 dated 02 July 2020 on the issue of descriptiveness/distinctiveness of the sign for goods and services listed in Classes 9, 16 and 41.
- GEORGE ORWELL (EU Trade Mark Application No. 017869417). Grand Board Appeal R 2248/2019-G. Referred by the Fifth Board of Appeal in Decision R 2248/2019-5 dated 02 July 2020 on the issue of descriptiveness/distinctiveness of the sign for goods and services listed in Classes 9, 16 and 41.
For goods of a kind or character with respect to which a sign is ‘origin neutral’ rather than ‘origin specific’, we think it is appropriate to say that there is a failure to function as a trade mark.