The principle of the unitary character of the European union trademark is not absolute, and even when the infringement of a EU trademark is recognized by the courts, the geographical scope of sanctions must be assessed in terms of likelihood of confusion between the two marks for the relevant public.
Therefore, if the risk of confusion between the marks is limited to certain areas for linguistic reasons, the sanctions of infringement may be restricted to those territories. That’s what the Court of Justice of the European Union (CJEU) hast just made clear in a judgment of 22 September 2016 (Case C-223/15), ruling on Article L.102(1) of Regulation (EC) No. 207/2009:
« Where an [EU] trade mark court finds that the defendant has infringed or threatened to infringe [an EU] trade mark, it shall, unless there are special reasons for not doing so, issue an order prohibiting the defendant from proceeding with the acts which infringed or would infringe the [EU] trade mark. It shall also take such measures in accordance with its national law as are aimed at ensuring that this prohibition is complied with. »
This issue had been raised by a German court, hearing the case as an EU trade mark court, in an action for infringement brought by the owner of the EU word mark COMBIT, seeking to prohibit the use of a sign COMMIT for computing goods and services, having found that there was a likelihood of confusion between the signs COMBIT and COMMIT for German consumers of the goods concerned.
However, the court ruled that the likelihood of confusion would not exist for English speaking consumers, who would perceive the trade mark COMBIT as an abbreviation of the two terms COM and BIT, usual in the computer industry, as well as immediately understand the meaning of the word COMMIT, so that the phonetic similarity between the signs at issue would be offset by their difference in meaning.
Unsure as to the application of the principle of the unitary character of the EU trade mark in a situation where it is not possible to establish a likelihood of confusion for all Member States, the German court referred to the Court of Justice for a preliminary ruling.
The CJEU’s answer is logical and pragmatic. Where there is a risk of confusion, there is trademark infringement and the legal sanctions must be applied (prohibition of use, payment of damages, etc.). Where there is no confusion, there is no infringement and therefore no penalties.
The territorial scope of the prohibition must, in those circumstances, be restricted. This is an exception to the unitary character of the EU trade mark, which in such a case, does not have the same effects throughout the European Union.
This interpretation is in line with a common practice in the context of amicable settlements when disputes arise between European Union marks and National trademarks of a Member State. Despite the unitary character of the EU trademark, the coexistence is sometimes organized according to a territorial distribution of the use of each trademark.
However, when no agreement can be found and where an opposition against an EU trademark application is based on likelihood of confusion with an earlier EU trademark, although the risk of confusion is limited to a part of the Union:
- The EU trademark application is refused as a whole; and
- Any conversion of the EU trademark application is excluded, even in the countries where there is no likelihood of confusion between the marks, according to rule 45 (4) of Commission Regulation (EC) 2868/95:
“If the Office or a Community trade mark court has refused the Community trade mark application or has declared the Community trade mark invalid on absolute grounds by reference to the language of a Member State, conversion shall be excluded under Article 108(2) of the Regulation for all the Member States in which that language is one of the official languages. If the Office or a Community trade mark court has refused the Community trade mark application or has declared the Community trade mark invalid on absolute grounds which are found to apply in the whole Community or on account of an earlier Community trade mark or other Community industrial property right, conversion is excluded under Article 108(2) of the Regulation for all Member States” (the Community trade mark is now the EU trade mark).
The EU law defines and protects the principle of the unitary character of the EU trade mark administratively (as far as its registration is concerned) but not judicially (infringement of the EU trademark and prohibition of use).
The strategy of protection and defense of EU trademarks should be investigated and determined by taking into account these factors.