The Court of Justice of the European Union has issued a significant Judgment on a preliminary ruling raised by the Spanish Community Trade Mark (CTM) Court.

This matter was raised as a result of a lawsuit filed by the proprietor of a CTM vs the holder of another CTM. The defendant argued that, as holder of a trademark, he is entitled to use such CTM until the respective Court declares its nullity.

The Spanish CTM Court then turned to the Court of Justice of the European Union (hereinafter referred to as the “ECJ”) raising the question on whether the exclusive right granted by the registration of a trade mark may be asserted against a third party that holds a subsequently registered CTM.

So far there are two different interpretations about such matter. One states that a Community trade mark shall not empower the proprietor of such CTM to prohibit the holder of another subsequent CTM to use its trademark until this is declared invalid. The other position is that the exclusive right can be enforced against anyone, whether these are holders of a CTM or not.

The Court's argument is based on the following reasons:

  • On the one hand, Article 9 of the CTM Regulation does not distinguish whether the third party is a holder of a trade mark registration or not.
  • Pursuant to Article 54 of the mentioned Regulation, the revocation action against subsequent holders can be exercised as a nullity action or as a violation action.
  • Neither Article 12 of Regulation nor further Articles therein expressly limits the exclusive right of the proprietor of a trade mark in favor of the third party holder of a subsequent trade mark.

Based on the foregoing, the judgment concludes that the Regulation provides that the holder of a trade mark may be entitled to prohibit the holder of a later Community trade mark to make use of it.

The judgment also uses other arguments supporting this thesis:

  • Firstly, the principle of priority, thus, the holder of an earlier CTM takes precedence over the holder of a subsequent trade mark.
  • On the other hand, the registration procedure does not prevent the registration of a sign that may infringe an earlier CTM.
  • The doctrine established for Community Design considers the possibility that the holder of an earlier Community Design may bring an action for infringement against a subsequent Community Design.
  • Finally, the essential function of a trademark is to guarantee to consumers the origin of the product.

Therefore, the judgment, issued on February 21st, 2013, stated that the proprietor of a Community trade mark may prohibit the use to a holder of a later Community trade mark, without the need for a declaration of invalidity of the mark.

The aforementioned decision has important practical effects. The most direct effect is that actions for damages may extend to the time of the infringement and not from the time of the declaration of nullity of the infringing trade mark. Furthermore, this could end up with the current interpretation of the criminal courts which decide to close the criminal proceedings when the infringer holds a registry, and this is a quite a relevant effect that this decision may involve.

Obviously, given that the decision deals with CTM, its effects would just extend only to such CTM, however, given that the fundamentals of our Trademark Act are very similar to those of the Regulation, a broad interpretation of actions related to national and international trade marks should not be considered as inconvenience by Courts.