The Court of Justice of the European Union (CJEU) gave a judgment yesterday which is good news for brand owners. The judgment handed down in DHL Express France SAS (formerly DHL International SA) v Chronopost SA makes clear the possibility of obtaining European Union-wide injunctive relief for infringement of a Community Trade Mark (CTM). However the position is not without a caveat:

"a prohibition against further infringement or threatened infringement [of a CTM] by a competent Community trade mark court must therefore, as a rule, extend to the entire area of the European Union ... However, the territorial scope of the prohibition may, in certain circumstances, be restricted"

Background

This case was a reference from the French Cour de cassation on the interpretation of Art 98 of European Council Regulation 40/94 (the Community Trade Mark (CTM) Regulation). The case concerned DHL's use of Chronopost's CTM and French mark "WEBSHIPPING" and where such use could be restrained. The relief provided was an injunction, with a penalty payment regime as a coercive measure to ensure injunction compliance. The order in respect of the CTM (as opposed to the domestic French mark) did not specify whether it was European Union-wide or limited to France.

Outcome

The reference was in relation to, in particular, Art 98 (1) of the CTM regulation which is headed "Sanctions" and says:

"where a Community trade mark court finds that the defendant has infringed or threatened to infringe a Community trade mark, it shall, unless there are special reasons for not doing so, issue an order prohibiting the defendant from proceeding with the acts which infringed or would infringe the Community trade mark. It shall also take such measures in accordance with its national law as are aimed at ensuring that this prohibition is complied with".

Other related parts of the CTM Regulation as well as the Brussels Regulation (44/2001) and Enforcement Directive (2004/48/EC) were also considered. Four questions were referred to the EJEU as follows.

Question one - injunctions

The court said:

"it must be observed that the territorial scope of a prohibition against further infringement or threatened infringement...... is to be determined both by the territorial jurisdiction of the Community trade mark court issuing that prohibition and by the territorial extent of the Community trade mark proprietor's exclusive right which is adversely affected by the infringement or threatened infringement as that extent results from [the CTM Regulation]" (emphasis added).

After much preamble as to the unitary character of a CTM and avoidance of inconsistent decisions the court stated: "...a prohibition against further infringement or threatened infringement issued by a competent Community trade mark court must, therefore, as a rule, extend to the entire area of the European Union." (emphasis added). This was the court's answer to question one.

Not included in the court's answer to question one was the continuation of its analysis, which amounts to a big "but" on the scope of the injunction extending throughout the EU.

After framing its answer to question one, the court continued:

"However, the territorial scope of the prohibition may, in certain circumstances, be restricted. The exclusive right of a Community trade mark proprietor, as provided for under Article 9(1) [of the CTM Regulation], is conferred in order to enable that proprietor to protect his specific interests as such, that is, to ensure that the trade mark is able to fulfil its functions [citing Google France C-236/08-C-238/08 [2010] ECR I-0000]. The exercise of that right must therefore be reserved to cases in which a third party's use of the sign affects or is liable to affect the functions of the trade mark...the territorial scope of that right, may not extend beyond what that right allows its proprietor to do in order to protect his trade mark, that is, to prohibit only uses which are liable to affect the functions of the trade mark. The acts or future acts of a defendant... which do not affect the functions of [the CTM] cannot therefore be prohibited...." (emphasis added).

The language of the judgment suggests that the prohibition against further infringement or threatened infringement should be EU-wide "as a rule", but may be cut down to particular parts of the EU, depending on the circumstances of the case. If this is true, it suggests that the onus is on the infringing defendant to show reasons why the prohibition should not apply in particular member states rather than the onus being on the claimant to prove that its injunctive relief should extend beyond the jurisdiction in which it brought its claim.

This interpretation is borne out by paragraph 45 of the judgment:

"if the territorial scope of that prohibition were...limited to the territory of the Member State in respect of which that court had found there to be an act of infringement or threatened infringement...there would be a risk that the defendant would begin to exploit the sign at issue afresh in a Member State for which the prohibition had not been issued"

Such separate proceedings arising as a result of this would increase the risk of inconsistent decisions relating to the CTM "in particular because of the factual assessment of the likelihood of confusion"

Question two

This question, which also centred on injunctions, did not need answering as a result of the answer to question one.

Questions three and four - coercive measures

These questions related to penalty payments and coercive measures in the event that the injunction was breached, as opposed to the injunctive prohibition itself.

The court decided that orders for such coercive measures and penalty payments should be recognised in member states other than that in which the order was granted, under the provisions of the Brussels Regulation. The court decided that in the event that a member state did not provide an equivalent to such coercive measures under its national law, it should have recourse to whichever of its national laws would ensure the objective of the coercive measure was achieved - i.e. whatever national rules it has for ensuring compliance with injunctions.

Comment

If, in future, injunctions granted in relation to CTMs will apply "as a rule" across the entirety of the European Union then this is great news for brand owners. Certainty can be achieved via one set of legal proceedings. The caveat to such optimism is the statement by the CJEU that such injunctions may be restricted if circumstances dictate. In reality the scope of any such injunction is likely to be hotly contested by any defendant at a final order hearing.

This case brings back into focus the question of Europe-wide relief in relation to CTMs, at the same time that the CJEU has to review these issues in relation to patents in the Honeywell reference. That case was aimed at resolving some questions left unanswered by the Roche v Primus and GAT v LuK decisions.

The unitary nature of CTMs has also been ventilated by the Dutch Hof den Haag in its reference 200.057.983/01 to the CJEU in relation to the ONEL/OMEL case. This centred on whether a CTM used in one member state can constitute genuine use throughout the EU.