In a recently issued judgment, the Court of Justice of the European Union (CJEU) has confirmed that a court order granting a pan-European injunction cannot extend to any part of the European Union where use of the sign in question does not amount to trade mark infringement.
This judgment does not herald the end of pan-European injunctions and the CJEU did point out that "as a rule" it is for the defendant, rather than the court, to prove that the offending sign does not infringe the EUTM in certain member states (which doesn't appear to have happened in the present case to date).
Nevertheless, the judgment has practical consequences for brand owners looking to enforce their EUTM on a pan-European basis.
The judgment in summary
The judgment addressed questions raised by the EUTM Court in Dusseldorf in order to determine whether the granting of a pan-European injunction was incompatible with its findings that there was a likelihood of confusion between an EUTM for COMBIT and the sign COMMIT in "German-speaking" Member States but not in "English-speaking" Member States.
The CJEU followed the line of reasoning adopted in the DHL (WEBSHIPPING) case and confirmed that the territorial scope of an injunction should be restricted when a likelihood of confusion can be excluded in specific territories for linguistic reasons (primarily those concerned with phonetic or conceptual differences).
The Court also went on to say that an EUTM Court must identify with precision the part of the European Union that is not covered by the prohibitive injunction. With specific reference to the present case, it determined that if the court intends to exclude from "English-speaking" areas of the European Union from the scope of the injunction then it must "state comprehensively which areas it intends that term to cover".
Finally, the CJEU elegantly tackled the thorny issue of uniform protection by declaring that the Judgment "does not undermine the unitary character of the EU trade mark […], since the right of the proprietor of the trade mark to prohibit all use which adversely affects the functions inherent in that mark is preserved".
Background to the Judgment
combit Software, a Germany company, sells COMBIT branded CRM software products through its online store and provides support services in connection with its software. Back in 2013, it sued Commit Business Solutions, an Israeli company offering online CRM software to German consumers under the brand COMMIT, for trade mark infringement.
The EUTM Court found that Commit Business Solutions had infringed combit Software's exclusive rights to its German registration for COMBIT for computer software but not its EUTM registration for the same mark in respect of support services on the basis that combit Software had failed to provide the requisite evidence of use for such services. The EUTM Court, in concluding that a likelihood of consumer confusion existed in Germany, found that the registered mark COMBIT and the offending sign COMMIT were visually and phonetically similar but conceptually neutral. In the Court's opinion, the German public would view both marks as neologisms deriving from the abbreviation for "computer" albeit that the offending sign COMMIT would also bring to mind the English word "commitment".
Combit Software appealed this decision on the basis that it had shown the requisite use to enforce its EUTM registration and was entitled to a European Union wide injunction.
The Appeal Court accepted that combit Software had, in fact, shown the requisite use of its EUTM but, curiously, decided that a likelihood of confusion did not extend to "English-speaking Member States". The Court took the view that any similarities between COMBIT and COMMIT were outweighed by the conceptual differences – the English-speaking consumer readily associating the latter with the English verb "to commit" and recognising the former as a combination of "Com" for computer and "bit" for binary digit.
In order to determine whether the granting of pan European injunction was incompatible with its findings, the Court referred the case to the CJEU.
Practical points arising from the Judgment
The possibility of a relatively cost effective pan-European injunction is always an attractive inducement when a brand owner decides to register a mark as an EUTM. However, the Judgment confirms that while this benefit is nice in theory, it may be difficult to achieve in practice.
The following (and inexhaustive) guidelines are designed to separate the fantasy from the reality:
Have you done your homework?
It is imperative that the prospective claimant identifies the scope of the claim and any potential limitation to the claim on linguistic grounds. At the very least, local advice should be obtained in respect of all member states where infringement is being alleged.
Is an interim injunction with EU-wide effect a possibility?
If any of the local advice indicates that the likelihood of confusion test is finely balanced in a given jurisdiction, it is almost certainly not practicable to get an EU-wide injunction. In these circumstances, consideration could then be given to restricting the territorial scope of the interim injunction to a Court in a member state where the infringing acts are most harmful and the chances of success are in the brand owner's favour.
Is an injunction with EU-wide effect cost efficient?
If there is doubt over the territorial scope of the claim due to linguistic grounds, then an EU-wide injunction is probably not cost efficient. In Watson v Boots, the case required, amongst other factors, that the distinctive character of SOLAIT and SOLEI be considered from the perspective of fourteen different member states (e.g. sun cream in France is crème solaire and it was submitted that SOLAIT would be pronounced very similarly) and the Judge decided that this was too complex to be heard by the Patents County Court (now the Intellectual Property Enterprise Court).
In these circumstances, the brand owner may need to get creative. The brand owner could pursue an injunction in a member state where the facts are straightforward, and the chances of success favourable, then leverage any resulting costs award or potential damages investigation to secure a settlement where the infringer undertakes not to infringe in the EU as a whole
Is pre-action pan-European settlement possible?
Similarly, it may be better for the brand owner to use the perceived strength of their best member state cases to reach an out of court agreement which prohibits the infringer's use in the EU as a whole.
In summary, leaving an EUTM court to consider whether a likelihood of confusion exists within the territory of each and every EU member states is likely to be undesirable.