Rights of the licensees of EU trademarks and Community designs in the light of the Court of Justice judgments

This year, the CJEU has issued two important rulings on the rights of EU trademark and Community design licensees. These interpretations are undoubtedly beneficial for the licensees. They take into account not only a literal interpretation of the provisions, but also their context and objectives.

CJEU judgments concern the right of the licensees of EU trademarks (formerly Community trademarks) and Community designs to bring a legal action for the infringement of rights to the licensed trademark and design, respectively, despite the license not having been entered in the Register of Community trademarks/designs. They were issued as a result of the German court in Düsseldorf referring questions for a preliminary ruling.

The first judgment was issued on 4 February 2016 in the case of Youssef Hassan v. Breiding Vertriebsgesellschaft mbH, C-163/15, and it provided that the first sentence of Article 23(1) of Council Regulation (EC) No 207/2009 of 26 February 2009 on Community designs must be interpreted as meaning that the licensee may bring proceedings alleging infringement of a Community trademark which is the subject of the license, although that license has not been entered in the Register of Community trademarks.

On 22 June 2016, the CJEU decided similarly in the case of Thomas Philipps GmbH & Co. KG v Grüne Welle Vertriebs GmbH, C-419/15, where it referred to the first sentence of Article 33(2) of Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs. Moreover, it indicated that Article 32(3) of Regulation No 6/2002 must be interpreted as meaning that the licensee can claim damages for its own loss in proceedings for infringement of a Community design brought by it in accordance with that provision.

Entities under special supervision

It should be noted that Article 23(1) of Regulation No 207/2009 provides that the transfer of the right to an EU trademark, the establishment of property rights related to the trademark and grating the license (actions specified in Articles 17, 19 and 22 of the Regulation, respectively) have an effect on third parties only after having been entered in the Register. Similar provisions are contained in Article 32(2) of Regulation No 6/2002. The Court ruled the purpose of these provisions is to protect the entity which acquired the rights to a Community trademark and it cannot be interpreted in a way that helps protect the infringer against their accountability for actions related to unauthorized use of the trademark.

Therefore, it would be contrary to the purpose of the regulation to treat the lack of the registration as the grounds for the infringer to effectively reject the licensee’s infringement claims. To sum up, the interpretations issued by the CJEU are undoubtedly beneficial for the licensees. They take into account not only a literal interpretation of the provisions, but also their context and objectives.

The CJEU on national trademarks and industrial designs

In terms of a possibility for the design licensee to claim damages, the Court found the provisions of Regulation 6/2002 allow the licensee to either bring an action – through initiation of infringement proceedings with the consent of the design right holder or, in the case of an exclusive license, if the design right holder does not bring an action in due time despite having been called to do so, or through an intervention – by joining an infringement action brought by the design right holder.

The latter way is the only option available for a non-exclusive licensee who has not obtained the consent of the design holder for an independent action. Thus, since the licensee may claim compensation for the damage they suffered by joining an infringement action brought by the design right holder, nothing stands in the way for the licensee to bring an infringement action upon the consent of the design right holder or – if they are an exclusive licensee – without the right holder’s consent, if the right holder fails to take a legal action despite having been called to do so.

This ruling should also be referred to the provisions for national trademarks and industrial designs in terms of licensee’s rights. Namely, the second sentence of Art. 76(6) of the Industrial Property Law (hereinafter IPL) provides that the holder of an exclusive license recorded in the Register may, to the same extent as the patent holder, enforce their claims in the event of infringement, unless the license agreement stipulates otherwise. This provision applies to trademarks under Article 163(1) of the IPL and to industrial designs under Article 118(1) of the IPL. The legislation alone is more precise than the provisions of EU Regulations, but the licensee’s rights are more stringent. The Law explicitly states that the condition of redress is an entry in the appropriate Register.

EU judgments versus the (judicial) Polish reality

Will these CJEU judgments affect the practice of Polish courts under national law? The Court of Appeal in Poznań in case No I ACa 21/13 expressly pointed out that the licensee having an exclusive license (which also applies to the holder of a non-exclusive license) does not acquire rights to seek redress for infringement of the right licensed, without entering the license in the Register.

There are also other outstanding concerns about the right of a non-exclusive licensee entered in the Register, e.g. the question of their right to bring an action against the infringing entity. An open question remains as to whether the holder of an exclusive license entered in the Register can assert claims of infringement which was made before the entry in the Register, but within the term of the license agreement.