This morning the European Court of Justice ("CoJ") handed down its long-awaited decision in the Chronopost case. This decision deals with the territorial scope of injunctions granted when a Community trademark court finds there is infringement.
The Regulation is clear about the possibility for a cross-border EU-wide injunction in cases where a Community trademark court derives its jurisdiction from Articles 93(1) to (4) and 94(1) of the Regulation. The CoJ ruled that in those cases the scope of the injunction extends, as a rule, to the entire area of the European Union. In those cases the cross-border effect is strengthened by the fact that other Member States are, as a rule, required to recognise and enforce the judgment under the Regulation on jurisdiction, recognition and enforcement. However, there are exceptions to this rule.
In order to determine whether an injunction should or should not cover the entire area of the EU the court should determine whether the defendant proves that the use of the sign at issue does not affect or is not liable to affect the functions of the trademark, for example on linguistic grounds. In those cases the court must limit the territorial scope of the prohibition which it issues.
The CoJ bases this reasoning on the fact that the exclusive rights granted by the Regulation are intended to protect the functions of the trademark. Where there is no (threat of) detriment to these functions, an injunction would not be justified, also territorially. There could be many reasons why an injunction would be limited in territorial scope:
- the trademark proprietor could simply limit the scope of his claims
- due to linguistic differences the use of a sign might not lead to a risk of confusion in another linguistic area, or the relevant public there might not draw a link between the sign and trademark
- distinctiveness and renown could differ from country to country
The burden of proof here is on the defendant. But if he is successful, the court must limit the territorial scope of an injunction (this is not optional).
The decision seems to do justice to reality, meaning the fact that the European Union is not a uniform territory, but still consists of many different markets and many different language areas. In theory a Community-wide injunction would be desirable, and this remains the principal rule, but circumstances on the market can lead to a more limited injunction.
We feel this does justice to the realities of the market place, and in fact Prof Tobias Cohen Jehoram defended such a solution in his inaugural address at the Erasmus University Rotterdam.
Of course we will be happy to discuss what this decision could mean for your business and/or practice.