In a recent case the Prague Higher Court overturned a first instance decision and issued a preliminary injunction ordering the defendant to refrain from the assignment of its national and international trademarks. Further, the defendant was prohibited from granting or pledging licences for the trademarks in question.
The plaintiff had supplied the defendant with its products over a number of years, first on the basis of a distributor agreement and then without a written agreement. At all times the defendant acted as an exclusive and sole business representative of the plaintiff, although he was selling the plaintiff's products under his own name. For this reason, the first instance court held that the defendant could not be qualified as the plaintiff's agent, business representative or concessionary.
During their collaboration the defendant filed Czech national trademark applications and an application for an international trademark without the plaintiff's permission. The distributor agreement expressly prohibited the defendant from filing any trademark applications connected with the goods supplied by the plaintiff.
The first instance court relied on aspects of trademark law, particularly Section 20 of the Trademark Law which states that where a trademark enjoys protection in a country that is party to an international treaty and has been registered in the Czech Republic in favour of a trade or business representative or sales agent of the original owner, the latter may request that the court order the assignment of the trademark to him except where the trade representative proves that he was acting in good faith. The Patent Office registers the assignment of the trademark owner in the Trademark Register at the owner's request.
The appellate court granted protection to the plaintiff by means of preliminary injunction, stating that the Paris Union Treaty guarantees protection of industrial property and the Czech Republic is a member state of that treaty. According to Article 6 of the treaty, the right to the assignment of trademark of an unfaithful agent depends on the law of the relevant country. However, the treaty's protection can also be asserted in cases concerning unfair competition and protection of corporate name, the latter having been mentioned in the plaintiff's appeal.
The resolution illustrates a more sensitive approach by domestic courts to unfair competition and good faith aspects of trademark matters, and considerably extends the application of Article 6 of the Paris Union Treaty.
For further information on this topic please contact Karel Cermák at Cermák Horejš Myslilby telephone (+420 2 9616 7401) or by fax (+420 2 2494 6724) or by e-mail ([email protected]).
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