Case background

On 8 June 2012, the owner of the French mark SAINT GERMAIN, registered mainly for alcoholic beverages, brought a trademark infringement action before the Regional Court of Paris against Cooper International Spirits, St Dalfour and Établissements Gabriel Boudier, after finding that they were distributing and manufacturing a liqueur under the name "St-Germain".

However, while the infringement proceedings were ongoing, the Regional Court of Nanterre in parallel revocation proceedings brought by a third company declared that the mark SAINT GERMAIN had not been genuinely used and was therefore revoked retroactively with effect from 13 May 2011, i.e. on the date of expiry of the five-year grace period after registration of the mark. This decision was later confirmed by the Court of Appeal of Versailles and became final.

In the infringement proceedings, the owner still argued that he was entitled to claim trademark infringement for the period prior to the revocation of the mark, i.e. from 8 June 2009 (date of the offense which was not time-barred) and 13 May 2011 (date when the revocation had effects).

Both the Regional Court and later the Court of Appeal of Paris dismissed the owner's claims on the ground that the mark SAINT GERMAIN had not been used since it had been filed. As argued by the defendants, a trade mark performs its essential function of indicating origin only if it is actually used in the course of trade. For that reason, the owner could not successfully argue that his trademark had been adversely affected by the use of the sign St-Germain.

The owner decided then to bring an appeal in cassation against the judgment of the Court of Appeal on the grounds that it had incorrectly dismissed its claims since neither the EU law nor the French law provide that during the five-year grace period the proprietor of a mark has to prove use in order to benefit from trade mark protection.

Why did the French Court refer the question?

Back in 2016, in its judgment in case Länsförsäkringar the CJEU had already confirmed that the proprietor of a mark does not have to demonstrate use of its mark during the five years following registration in order to exercise its use prohibendi on grounds of likelihood of confusion.

However, in that case the mark was still not subject to the use requirement.

The question which remained open and was therefore key to the case at issue was whether the proprietor of a mark which had not been used during the five years following registration and, as a result, had been revoked of its exclusive right, could still claim damages in an infringement action for injuries occurred in that period even though his mark had been cancelled.

What did the CJEU say?

In its findings in judgment of 26 March 2020 in Case C-622/18 – Reference for a preliminary ruling, the CJEU recalls that pursuant to Directive 2008/95 relating to trademarks the Member States are free to determine the effects of revocation and invalidity of trademarks, including the date on which it takes full effects.

The Court agreed with the Advocate General that the French law, using its margin of discretion, had chosen to establish such effects solely on the date of expiry of the five-year grace period. Therefore, by doing so, the French law had left the door open for the proprietor to validly rely on its revoked mark to bring an action against infringements occurred before that date.

In answer to the request for a preliminary ruling, the Court consequently held that, as far as allowed under national law, the proprietor of a trade mark, whose rights have been revoked on expiry of the five-year grace period due to lack of genuine use, still retains its right, on the grounds of its revoked mark, to claim compensation for the injury caused by the use of an identical or similar sign by a third party before the date on which the revocation took effect.

Would the outcome have been different if based on an EUTM?

In the EU, the consequences of revocation (and invalidity) are set out in Article 62 of Regulation (EU) 2017/1001 which establishes the following:

The EU trade mark shall be deemed not to have had, as from the date of the application for revocation or of the counterclaim, the effects specified in this Regulation, to the extent that the rights of the proprietor have been revoked. An earlier date, on which one of the grounds for revocation occurred, may be fixed in the decision at the request of one of the parties.

It follows that under EU law, the period during which the owner could have claimed damages would have been longer (i.e. until the date the revocation action was filed). Yet a similar outcome is still possible if the applicant of the revocation action expressly requests to bring back the effects of the revocation to the moment when the mark could have been revoked (i.e. after expiry of the five-year grace period). 

Next steps and impact the ruling

Even though the CJEU did not exclude the possibility of claiming damages on the basis of a revoked mark, and rightly so however strange it may sound, it stressed an important fact to bear in mind. Although the fact that a mark has not been used does not preclude the proprietor from seeking compensation in an infringement action, its use or lack of it is still an important factor to take into account in determining not only the existence and the extent of the injury suffered by the proprietor but also the amount of damages that he might claim.

This is because Directive 2004/48 on the enforcement of intellectual property rights provides that the damages must be appropriate to the actual prejudice suffered by the proprietor. It therefore remains to be seen to what compensation the proprietor is finally entitled, if any, and whether it compensates the costs of bringing such action.

Authored by Bianca Worbes