C‑622/18 – AR v Cooper International Spirits LLC and Others - Damages for trade mark infringement possible where trade mark revoked for non-use

On 26 March 2020, the Court of Justice of the European Union (CJEU) handed down a preliminary ruling in which they considered whether the owner of a national trade mark registration could claim damages for an infringement where his trade mark has been revoked for non-use.

Background

The appellant AR (“Owner”) owned a semi-figurative trade mark SAINT GERMAIN registered for alcohols and spirits. When the Owner learnt that Cooper International Spirits was distributing liqueur manufactured by St Dalfour and Établissements Gabriel Boudier, under the name ‘St-Germain’, the Owner brought proceedings for trade mark infringement (main proceedings).

The Defendants brought parallel cancellation proceedings which led to the revocation of the Owner’s trade mark on the basis that the Owner had failed to demonstrate that its mark had been used during the relevant five year period.

The Owner maintained its infringement claims for the period prior to the revocation and sought damages for the infringement. The lower courts dismissed the claim concluding that the Owner could not successfully argue the infringement of his trade mark since there was no evidence of the genuine use of the mark.

Finally, the Owner brought an appeal on the basis that neither EU law nor French Intellectual Property Code provides that during the 5 years grace period, the owner of a registration must prove that its mark is in use in order to benefit from trade mark protection.

Preliminary question and decision of the CJEU

In light of the above, the French Court of Cassation decided to stay proceedings and asked the CJEU, whether a trade mark owner can claim damages for infringement of the trade mark, when the third party used a similar or identical mark, even though the trade mark has never been used and is already revoked. The question was based on Article 5(1)(b), Article 10 and Article 12 of Directive 2008/95/EC.

The CJEU held that it is up to the national legislator to decide whether a trade mark owner is entitled to compensation in such a scenario since the so-called IP Enforcement Directive (No. 2008/95) leaves this issue to Member States[1]. The Court emphasized that lack of genuine use remains an important factor to be taken into account while determining the extent of the injury sustained by the owner and amount of damages which can be claimed.

Comment

The fact of this case are very unusual in that it is rare for a trade mark owner to pursue trade mark infringement proceedings in circumstances where it knows that it has failed to use the mark at issue and that its registration is therefore at risk of revocation. It is even more rare for a trade mark owner to pursue a damages claim despite its registration having been revoked.

However, the decision of the CJEU is interesting since it has left it open for the French Court to award damages to this trade mark owner notwithstanding that its trade mark rights have been revoked. In doing so, the CJEU is effectively further strengthening the position of trade mark owners during the so-called grace period, being the first 5 years immediately following registration.

However, in practice it may be difficult to obtain compensation for an infringement as the amount of damage is based on an abstract analysis considering that there was no use of the earlier right.

[1] The IP Enforcement Directive No. 2008/95 is now superseded by Directive (EU) No. 2015/2436. Additionally, under the trade mark Regulation (EU) 2017/1001, currently in force, a defendant in proceedings for EUTM infringement can allege that the EUTM is invalid or is revocable for non-use, without having to make a counterclaim (Article 127(3)).