Responding to a reference from the French Cour de Cassation, the ECJ has clarified the territorial scope of injunctions and the coercive measures used to enforce such injunctions for infringement of a Community trade mark (CTM). It held that:
- the scope of the prohibition against further infringement or threatened infringement of a CTM extends, as a rule, to the entire area of the EU; and
- "coercive measures" ordered by a Community trade mark court to ensure compliance with an injunction will extend to all Member States in which the injunction is effective. The courts of those other Member States must ensure that the prohibition is complied with in an equivalent manner, where there is no power to impose coercive measures of the same type.
Additionally, the court recognised that there may be limited circumstances in which the prohibition ought not to extend across the whole of the EU.
- Injunctions prohibiting the infringement of a CTM which have been ordered in one jurisdiction will generally extend automatically across the whole of the EU.
- Litigants in CTM infringement proceedings should consider carefully the arguments for limiting the scope of an injunction and the evidence adduced in support of those arguments, for example in relation to confusion.
- Businesses may find themselves the subject of coercive measures imposed by the courts of other Member States.
Regulation (EC) No 40/94 (the "Regulation") provides the legal basis for the CTM – an intellectual property right which enables undertakings to file an application to register a single trade mark covering all 27 jurisdictions of the EU. It is popular particularly with large corporations which thereby avoid having to make filings with each of the individual national trade mark offices of the EU.
At the heart of the apparent success of the CTM system lies the principle set down at Article 1(2) of the Regulation, which states that: "A Community trade mark shall have a unitary character. It shall have equal effect throughout the Community: it shall not be registered, transferred or surrendered or be the subject of a decision revoking the rights of the proprietor or declaring it invalid, nor shall its use be prohibited, save in respect of the whole Community. This principle shall apply unless otherwise provided in this Regulation". This "unitary principle", reinforced by the recitals to and other provisions of the Regulation, thus requires the rights attached to a CTM to apply equally across the EU.
In DHL Express France SAS v Chronopost SA, Chronopost attacked the validity of an injunction imposed on DHL by the Cour d'Appel for infringement of Chronopost's CTM for "WEBSHIPPING" on the basis that, because the injunction only covered France, it did not comply with the unitary principle. The Cour de Cassation referred this issue to the ECJ.
Automatic EU-wide coverage?
The ECJ set out the legislation relevant to interpreting the questions referred to it, and emphasised in particular (a) the unitary principle under the Regulation and (b) that the effects of decisions regarding validity and infringement must cover the whole of the EU. The court concluded: "… the scope of the prohibition against further infringement or threatened infringement of a Community trade mark, issued by a Community trade mark court… extends, as a rule, to the entire area of the European Union" (emphasis added).
Questions of how this might work in practice have already been considered at the High Court in a hearing before Mr Justice Kitchin on 14 April 2011 in the Kingspan v Rockwool case (in which Herbert Smith acted for Rockwool) regarding the form of declaration and relief to be ordered following the decision on 24 February 2011 (please see our earlier newsflash on this case). Kitchin J imposed an injunction covering only the UK and Ireland, although Rockwool Limited (the Defendant in the action) has also undertaken not to infringe Kingspan's trade marks in the remainder of the EU. The decision suggests that the English courts, at least, are prepared to adopt a pragmatic approach.
Limiting territorial scope
The ECJ however recognised that in some situations it might not be practical for an injunction to cover the whole of the territory of the EU. The court suggested circumstances in which the territorial scope of an injunction may be restricted, including (1) where a claimant in some way limits the extent of its action; and (2) where there are differing conceptual or linguistic interpretations in determining confusion under Article 9(1)(b). It will be very interesting to see if similar arguments will be made in respect of Article 9(1)(c) regarding a CTM with a reputation, where that reputation does not cover the whole of the EU.
A defendant will need to present evidence to limit the territorial scope of the injunction at the time it is being granted, rather than following the breach of its terms.
The ECJ also considered questions referred to it about the territorial scope of "coercive measures" which may be imposed by a national court (acting as Community trade mark court) to enforce compliance with injunctions. It noted the provisions of Regulation 44/2001 on the recognition and enforcement of foreign judgements, and in particular the requirement of the courts of another Member State to recognise and enforce any coercive measures ordered by the court of the Member State seised of the relevant action. The ECJ decided that:
"…Where the national law of one of those other Member States does not contain a coercive measure similar to that ordered by the Community trade mark court, the objective pursued by that measure must be attained by the competent court of that other Member State by having recourse to the relevant provisions of its national law which are such as to ensure that the prohibition is complied with in an equivalent manner" (emphasis added).
The question that arises is how an English court, which has no power to order "coercive measures" of the sort ordered by the Cour d'Appel in DHL v Chronopost (ie, periodic penalty payments), could "ensure that the prohibition is complied with in an equivalent manner". It seems most likely that contempt proceedings would result in the English courts imposing fines for a failure to comply with the terms of an injunction imposed by a foreign Community trade mark court.