The CJEU on the coexistence of unregistered local earlier rights with later registered national trademarks
Written by Elena Martini and Francesca Perotti
In its June 2, 2022 judgment in C-112/21, the Court of Justice of the European Union (CJEU) ruled on the interpretation of Article 6(2) of Directive 2008/95/EC (now superseded by Article 14(3) of Directive 2015/2436/EU) which regulates the limitation of the effects of a registered trademark.
The case arose from a request for a preliminary ruling submitted by the Supreme Court of the Netherlands in a dispute between two coach companies: X BV, on the one hand, and Classic Coach VOF on the other hand. These belong respectively to an uncle and his nephews and both use their common surname as a distinctive sign.
In essence, X BV has been using the surname of its owner as a trade name since the 1970s, and had also registered it as a Benelux national word mark in 2008. The same surname has also been used in the last few years on the back of the buses of Classic Coach, founded in 1995 by the nephews of the owner of X BV. These had actually continued the business of their father, i.e. the brother of the owner of X BV, who had already been using the same surname on his buses.
X BV asked the Hague Tribunal to order Classic Coach to stop any infringement of its word mark and trade name. In its defence, Classic Coach cited, among other things, the national rule transposing Article 6 (2) of Directive 2088/95, according to which the owner of a registered trademark may not prohibit the use of an earlier similar sign of local significance recognised by the State.
The matter came before the Dutch Supreme Court, which decided to stay the proceedings and refer two questions to the CJEU for a preliminary ruling, finding that there was an interpretative doubt as to (i) the meaning and scope of "earlier right" with respect to a later registered mark within the meaning of Article 6 (2) of Directive 2008/95 and (ii) the hierarchical relationship between coexisting earlier rights.
On the first preliminary question, the referring court's doubt was whether the "earlier right" to which the provision refers is one that gives its owner the right to prohibit the use of the later registered mark. The CJEU answered in the negative, stating that, in order for an earlier right to be enforceable against the proprietor of the later registered mark, it must satisfy the requirements of seniority, commercial as well as local use, and be recognised as an industrial property right by the Member State in which it is enforced. Nonetheless it is not necessary that such a right is an obstacle to or cause the invalidity of the registration of the later mark.
On the second question, the referring court's doubt was whether a party can have such an "earlier right" where the owner of the later registered trademark also holds an even older right. In this regard, the CJEU clarified that EU law governs conflicts between registered trademarks and earlier rights, and not conflicts between signs that constitute "earlier rights" within the meaning of Article 6.2 of the Directive: the latter are to be assessed based on the national law of the Member State concerned. In essence, therefore, a right that is still prior to the "earlier right" in question may exclude the existence of that earlier right where the former is recognised by national law and is protected at the time it is invoked, which is for the national court to verify on the basis of its own national law. Should it turn out that the still earlier right cannot be asserted against the earlier trademark right, e.g., because of limitation in consequence of acquiescence, then there would be no impediment to the recognition of the "earlier right" of the third party under Article 6.2 above.