The matter at hand

KP is the proprietor of the EU word mark Apfelzügle, registered on 19 October 2017 for services in Classes 35, 41 and 43. An ‘Apfelzügle’ is a vehicle designed for the harvesting of apples, consisting of several trailers pulled by a tractor. On 26 September 2018, TV, a fruit farm operator, and the Municipality of Bodman-Ludwigshafen published promotional information regarding an activity involving the harvesting and tasting of apples as part of a ride on the Apfelzügle.

In response to this, KP brought an action for infringement of the Apfelzügle-mark before a Regional Court in Munich (Germany) seeking an order prohibiting TV and the Municipality of Bodman-Ludwigshafen from using the term ‘Apfelzügle’ for the services covered by that mark. Before that court, TV and the Municipality of Bodman-Ludwigshafen filed counterclaims for a declaration of invalidity of the contested mark. At the hearing before the Regional Court in Munich, KP withdrew its action for infringement. TV and the Municipality of Bodman-Ludwigshafen pursued their claims in spite of the withdrawal and the regional court declared the Apfelzügle-mark invalid in respect of the services in Class 41.

The Municipality of Bodman-Ludwigshafen appealed against that judgment before the Oberlandesgericht München (Higher Regional Court Munich, Germany), the referring court, seeking a declaration of invalidity of the contested mark also with regard to the services in Classes 35 and 43. The referring court states that it must first assess the admissibility of the counterclaims brought by defendants in light of the withdrawal by KP. It expresses doubts as to whether an EU trade mark court may rule on such a counterclaim if there has been a withdrawal of the action for infringement in response to which the counterclaim was brought. In the view of the referring court, the need to give the defendant an opportunity to defend himself or herself no longer exists where, as a result of a withdrawal, there is no longer any need for the EU trade mark court to rule on the action for infringement.

The referring court asked whether Article 124(a) and (d) and Article 128 of Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark must be interpreted as meaning that the EU trade mark court hearing an action for infringement based on an EU trade mark, the validity of which is challenged by means of a counterclaim for a declaration of invalidity, still has jurisdiction to rule on the validity of that mark, in spite of the withdrawal of the main action.

The judgment of the ECJ

The ECJ first notes that, in order to answer the preliminary question, it is necessary to define the meaning and scope of the term ‘counterclaim. The ECJ considers that “in the absence of a definition of the term ‘counterclaim’ in Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark […] that term is usually understood, […] as referring to a cross-action lodged by the defendant in proceedings brought against him or her by the applicant before the same court” (paragraph 36). The term ‘counterclaim’ should be interpreted within the meaning of Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark, in a manner consistent with those rules and the case-law relating thereto. With reference to Kostanjevec (C-185/15), the ECJ considers “that a counterclaim is not indissociable from a mere defence. Although brought in proceedings initiated by means of another legal remedy, it is a separate and self-standing claim the procedural treatment of which is independent of the main claim and which can thus be proceeded with even if the claim of the principal claimant is dismissed” (paragraph 38). The ECJ subsequently concludes “that the term ‘counterclaim’, within the meaning of Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark, must be understood as a legal remedy which remains conditional, admittedly, on the bringing of an action for infringement and which is, consequently, linked to that action. Nevertheless, such a legal remedy is intended to extend the subject matter of the dispute and to obtain recognition of a claim which is separate and independent from the main claim, inter alia in order to have the mark concerned declared invalid” (paragraph 39). Thus, the counterclaim is independent from the main action and continues to exist in the event of withdrawal of the main action.

The ECJ further considers that Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark reserves exclusive jurisdiction to EUIPO over registration of EU trade marks and opposition to such registration. However, that is not the case as regards the validity of those trade marks. The ECJ notes, with reference to Celaya Emparanza y Galdos International (C-488/10), that “Although Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark opts, as a rule, for the centralised treatment of applications for a declaration of invalidity or for revocation by EUIPO, that rule is nevertheless tempered and jurisdiction to declare an EU trade mark invalid or to revoke an EU trade mark is shared, pursuant to Articles 63 and 124 of that regulation, between the EU trade mark courts designated by the Member States, in accordance with Article 123(1) thereof, and EUIPO” (paragraph 42).

Against this background, the ECJ observes that the scope of the jurisdiction that the legislature intended to confer on EU trade mark courts would effectively be disregarded if the proprietor of an EU trade mark could, by withdrawing an action for infringement, deprive an EU trade mark court of the possibility of ruling on the counterclaim for a declaration of invalidity brought in the context of that action. The ECJ considers that “It is therefore apparent from the general scheme of Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark that such a claim continues to exist in the event of withdrawal of the main action” (paragraph 52). 

In addition to this, the ECJ notes that compelling “the party who filed a counterclaim to initiate proceedings before EUIPO in the event of withdrawal by the principal claimant in order to ensure that he or she no longer has to defend himself or herself in the future against the principal claimant would run counter to the principle of procedural economy” (paragraph 56). If it would no longer be possible for an EU trade mark court to rule on a counterclaim for a declaration of invalidity if the main action is withdrawn, the proprietor of an EU trade mark would be allowed “by withdrawing from infringement proceedings which he or she has himself or herself initiated, to continue to use, as the case may be in bad faith, an EU trade mark that could be registered in disregard of the absolute grounds for refusal of registration referred to in Article 7(1) of Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark. Such a situation would undermine the effective attainment of the objectives pursued by that regulation” (paragraph 57).  

The ECJ concludes the judgment by stating that “In the light of all the foregoing considerations, the answer to the question referred is that Article 124(a) and (d) and Article 128 of Trade Mark Regulation 2017/1001Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark must be interpreted as meaning that an EU trade mark court hearing an action for infringement based on an EU trade mark the validity of which is challenged by means of a counterclaim for a declaration of invalidity still has jurisdiction to rule on the validity of that mark, in spite of the withdrawal of the main action” (paragraph 58).