INTA Brief to CJEU Says Locally Significant Unregistered Trade Names Can Co-Exist with Later Registered National Trademarks

The International Trademark Association (INTA) last week submitted an amicus brief to the Court of Justice of the European Union (CJEU) providing its input on the topic of whether earlier unregistered rights of local significance, like trade names, can coexist with later registered national trademarks.

The case was referred by the Dutch Supreme Court, which is seeking guidance from the CJEU as to the following questions:

1. For the purposes of determining whether there is an ‘earlier right’ of a third party as referred to in Article 6(2) of the repealed Directive 2008/95/EC1
a) is it sufficient that, prior to the filing of the trade mark, that third party had made use in the course of trade of a right which is recognised by the laws of the Member State in question; or
b) is there a requirement that that third party, on the basis of that earlier right, under the applicable national legislation, is entitled to prohibit the use of the trade mark by the trade mark holder?
2. In answering Question 1, is it also relevant whether the trade mark holder has an even earlier right (recognised by the laws of the Member State in question) in relation to the sign registered as a trade mark and, if so, is it relevant whether the trade mark holder may, on the basis of that even earlier recognised right, prohibit the use by the third party of the alleged
‘earlier right’?

The case at hand involves two brothers who owned a coach company, Amersfoort’s Bloei 1968. Brother 1 founded M. Touringcars and M. Touringcars Amsterdam (M. Touringcars) in 1975, and subsequently left Amersfoort’s Bloei in 1977. Amersfoort’s Bloei continued to be run by Brother 2 and his wife, and then by their sons under a new name, Classic Coach Company (CCC). From 2006 on, the indication “J.M.” and designation ‘www.almeretours.nl’ has appeared on the back of CCC coaches.

In 2008, M. Touringcars registered and now owns the trademark ‘M.” for services provided by a coach company and sought an order that CCC cease and desist from using its “J.M.” trade name, claiming that it infringed the M. mark.  CCC responded that its use of the J.M. name since 2006 fell under a Benelux trademark law provision holding that “a registered trademark holder may not challenge the use in business of a similar sign which draws its protection from a prior right of local relevance, if such right is recognised by the legal provisions of any Benelux country, within the limits of the territory in which it is recognised.”

The first instance court found in favor of M. Touringcars, but the Court of Appeals reversed. Althought the Court of Appeals acknowledged that M. Touringcars has even earlier trade name rights, it said that M. Touringcars is estopped from prohibiting CCC’s use of J.M. because it had “failed to object to the prolonged coexistence  (over the course of many years) of both unregistered rights in the market.”

INTA’s view is that “the earlier right can co-exist with the later trademark registration and does not constitute a barrier to the registration of the later trademark, nor can the owner of the later trademark object to the older unregistered (trade name) right.” The Association explained:

Earlier rights in articles 6(2) of the Old Directive and 14(3) of the New Directive are unregistered rights, recognised under national law of the Member States, which are created through use in commerce. They are to be distinguished from the unregistered rights provided in Article 4(4)(c) of the Trade Marks Directive 2008/95/EC and Article 5(4)(b) of the Trade Marks Directive 2015/2436, which state that any Member State may provide that a trade mark is not to be registered or, if registered, is liable to be declared invalid where, and to the extent that, the use of the trade mark may be prohibited by virtue of an earlier right. The earlier rights of these last provisions refer to nationwide, use-based rights, which constitute a barrier to the registration of a later trademark. Contrary to the earlier rights provided in Article 4(4) of the Old Directive and 5(4)(b) of the New Directive, earlier rights provided in articles 6(2) of the Old Directive and 14(3) of the New Directive do not constitute a barrier to the registration of a later mark. The reason is that these earlier rights are of mere local significance, namely they do not extend geographically to such a wide area as a trademark registration, which covers the whole of the territory where it is registered. Such local rights, even though not capable of blocking the registration of a later trademark are however allowed to co-exist and be used concurrently with the later trademark registration. Such coexistence is provided for in the law and is therefore forced upon the registered trademark owners. The registered trademark owners are legally obliged to tolerate such use.

However, if the earlier right was “illegally” acquired, meaning that it infringed an unregistered prior right of the trademark applicant, the earlier rights under articles 6(2) of the Old Directive and 14(3) of the New Directive “cannot be forced by law to co-exist with the later trademark registration.” Additionally, if the unregistered earlier right is ‘illegally’ acquired, but the owner of the even earlier right “has acquiesced to its use or estoppel applies, then the rule of co-existence comes back into play.” INTA provided the following example to better illustrate:

Therefore, in a situation where trademark Z is registered after a local unregistered right Y, the holder of trademark Z shall be forced to co-exist with unregistered right Y. However, if by way of exception, unregistered right Y infringes an even earlier unregistered right X of the trademark registration owner, then it is an ‘illegally’ acquired right and the trademark registration owner is not forced to co-exist with it. If, however, the owner of the registered trademark Z and the earlier unregistered right X has acquiesced to the use of the later to it unregistered right Y or is estopped from enforcing its earlier rights X against right Y, then the rule of co-existence between unregistered right Y and trademark Z becomes relevant again. In such latter case therefore, trademark Z owner is again forced to co-exist with earlier right Y.

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