Facts
Metropolitan Tribunal
Metropolitan Court of Appeal
Supreme Court
Comment
The claimant was the owner of the device mark SATEL (764 044), registered in Class 9. The defendant registered the domain name "satel.hu". Both parties were active in the information security market. The claimant sued the defendant for trademark infringement.
The Metropolitan Tribunal suspended the case in light of a procedure before the Hungarian Intellectual Property Office (HIPO) in which the defendant had requested the cancellation of the claimant's mark. The claimant had referred to acquiescence in this procedure. The defendant withdrew his cancellation request, as acquiescence could be stated in favour of the claimant. The HIPO ceased the cancellation procedure.
After that, the tribunal rejected the claim. Section 17(1) of the Trademark Act 1977 provides that if a trademark owner tolerates the use of its mark for five years, this constitutes acquiescence. The claimant had been aware of the defendant's use of the domain name. The use was in relation to goods indicated in the claimant's trademark register. The tribunal stated that before the priority date of the claimant's mark, the defendant had used the domain name without registration. As both parties had been producing identical or similar goods, the claimant ought to have known about the defendant's use of the domain name.
The claimant filed an appeal with the Metropolitan Court of Appeal against the tribunal's judgment. The Metropolitan Court of Appeal overturned the first-instance judgement and convicted the defendant of trademark infringement. The Metropolitan Court of Appeal stated that the tribunal had correctly established the facts but had applied the law erroneously, since section 5(2)(a) of the Trademark Act mentions "identical signs" rather than "similar signs". As a result, the Metropolitan Court of Appeal held that the exceptional provision of section 17 of the Trademark Act on acquiescence should not have been applied.
The defendant requested an appeal with the Supreme Court. The appeal was granted and the Supreme Court overturned the judgment of the second-instance court. In its judgment, the Supreme Court said that the Metropolitan Court of Appeal's interpretation of section 5(2)(a) of the Trademark Act was incorrect as it could not be concluded from this provision that the conflicting signs had to be identical. Therefore, the application of section 17 of the Trademark Act on acquiescence could not be excluded and the provision, which was adopted by the Trademark Act to harmonise with EU law, had to be applied (Pfv IV 21 187/211).
After Hungary signed a declaration on accession to the European Community, the legislation started to harmonise several laws with EU directives. This was the context in which the present Trademark Act was drafted and precisely when the rules on acquiescence were adopted.
It is not surprising that the judges of the Metropolitan Court of Appeal and those of the Supreme Court interpreted the words of the Trademark Act in a different way. In this regard, the saying "Rome has spoken; the matter has finished" applies; the Supreme Court's interpretation will be leading for further cases.
This interpretation is favourable for trademark owners and, so far, it is also in conformity with the rule of ratio legis.
For further information on this topic please contact Alexander Vida at Danubia Patent & Law Office LLC by telephone (+36 1 411 8700) or email ([email protected]). The Danubia Patent & Law Office LLC website can be accessed at www.danubia.hu.