The decision of the Court of Justice strengthens the protection of Community trademarks throughout the entire territory of the European Union. The court ruled that the owner of a Community trademark is entitled to cease and desist claims that cover the complete territory of the Union. It also found that coercive measures for the enforcement of such cease and desist claims will be ordered by the court that issued the injunction and that the enforcement of such coercive measure rests with the courts in the country where the enforcement shall take place.

Chronopost is the owner of a French and a Community trademark for "WEBSHIPPING", registered for, among others, postal services. Chronopost brought an infringement action in France against DHL concerning the use of "WEBSHIPPING" and a very similar term. The French court, the Tribunal de Grande Instance in Paris, decided in favor of Chronopost, based on its French trademark. The parallel Community trademark was disregarded by the court and did not play a role in the decision. The appeal court, the Cour d'Appel in Paris, confirmed the decision and imposed a periodic penalty payment in the event of infringement of the prohibition. Upon further appeal by Chronopost, the French Cour de Cassation referred two questions to the Court of Justice of the European Union. The first question concerned the geographical scope of judgments against the infringement of Community trademarks. The second question concerned the courts' competency to impose coercive measures and to enforce them.

Territorial Scope of Cease and Desist Orders

In its first question, the Cour de Cassation asked whether a prohibition in accordance with the Community Trademark Regulation would have effect "as a matter of law" throughout the entire area of the European Union. The Court of Justice confirmed this with a particular view to the uniform effect of the Community trademark throughout the Union. The court stressed that any prohibition that was limited to the territory of a member state could be circumvented by further infringements in another member state. The plaintiff would then need to react by bringing yet another action. Such further action would also increase the risk of a conflicting decision, something that should be avoided by all means. The court also mentioned that any cease and desist order should be limited to activities that affect the function of the Community trademark. Therefore, exceptions to the pan- European scope of the prohibition may apply in specific cases, for example in cases where no confusion exists in certain territories of the Union. The burden of proof for such exceptions to the principle of EU-wide injunctions rests with the defendant. In this context, the Court of Justice also mentioned that the plaintiff is always free voluntarily to restrict any infringement action to one or several member states. Another interesting aspect of the decision referred to the proof of infringement that the plaintiff is required to provide. The court took the view that it is sufficient to prove an act of infringement in only one member state. Even a danger of infringement may be sufficient at any such single place. To the contrary, it is not necessary to prove an act of infringement in every member state for which injunctive relief is sought. The EU-wide injunction can be obtained even though the infringement only occurred in a limited area of the Union.

Coercive Measures

The French court had imposed – in accordance with French law – a penalty payment in the event of infringement of the prohibition. Such coercive measure, imposed under the French law, does not exist in all member states. Consequently, the Cour de Cassation wanted to know from the Court of Justice whether such penalty provision in accordance with French law had any effect in all other member states.

The Court of Justice responded that any coercive measures imposed by the court that decided about the infringement would have effect in the entire territory for which the prohibition applies. Therefore, the coercive measure applies in the entire territory of the Union if the prohibition was granted for the complete European Union. Other member states would need to enforce such coercive measure in accordance with the rules of the Brussels Regulation. Furthermore, every member state is obliged to enforce the coercive measure in its own country and in accordance with its national rules of enforcement.