The matter at hand
In a case concerning the alleged infringement of Mr Raimund’s EU word mark Baucherlwärmer by Ms Aigner through the use of an identical sign for identical products, the Supreme Court in Austria referred the matter to the ECJ for a preliminary ruling on the interpretation of Article 99(1) of Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark, which provides that a trade mark must be treated as valid unless its validity is put in issue by the defendant with a counterclaim for revocation or for a declaration of invalidity .
In the matter at hand, Ms Aigner had disputed infringement alleging that Mr Raimund had registered the mark in bad faith and had instituted a counterclaim for a declaration of invalidity of that mark. The first instance court had stayed the proceedings in respect of the counterclaim until a final ruling on the action of infringement, and had dismissed Mr Raimund’s infringement claim on the ground that he had registered the mark in bad faith. This decision had been confirmed in appeal, after which Mr. Raimund had appealed to the referring court, arguing that the two lower courts were not allowed to rule on the question of bad faith in the infringement proceedings, when there was no final decision on the counterclaim for a declaration of invalidity.
In these circumstances, the referring court asked, in essence, whether an action for infringement may be dismissed on the basis of the existence of an absolute ground for invalidity only if the trade mark concerned is, at the very least simultaneously, declared invalid on the basis of the counterclaim.
The judgment of the ECJ
The ECJ considers that in circumstances where an EU trade mark court dismisses an action for infringement because of the existence of an absolute ground for invalidity without first having ruled on the counterclaim for a declaration of invalidity, the decision regarding the existence of the absolute ground for invalidity is binding only on the parties to that action, whereas a decision on the counterclaim would have effect erga omnes throughout the EU (paragraph 32). The ECJ rules that in such circumstances, the objective of Article 99(1) is not met, which is to ensure that the decision of an EU trade mark court regarding the existence of an absolute ground of invalidity has effect erga omnes throughout the EU, thus safeguarding the unitary character of the EU trade mark (paragraph 29). “(…) it must be pointed out that, given the unitary character of the EU trade mark and the objective of preventing inconsistent decisions in such matters, the declaration of invalidity of an EU trade mark based on such an absolute ground for invalidity must have effect throughout the Union and not only vis-à-vis the parties to the infringement action. That requirement means that the EU trade mark court concerned must rule on the counterclaim for a declaration of invalidity before ruling on the action for infringement” (paragraph 33)
Consequently, the ECJ rules that Article 99(1) of Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark “must be interpreted as meaning that an action for infringement brought before an EU trade mark court in accordance with Article 96(a) of that regulation may not be dismissed on the basis of an absolute ground for invalidity, such as that provided for in Article 52(1)(b) of that regulation, without that court having upheld the counterclaim for a declaration of invalidity brought by the defendant in that infringement action, pursuant to Article 100(1) of the regulation, and based on the same ground for invalidity.”
The ECJ notes that this does not mean that an action for infringement may be dismissed on the basis of an absolute ground for invalidity only if the decision on the counterclaim has become final. The ECJ explains that if the outcome of an infringement action were to depend on a definitive decision on the invalidity issue, this would enable the parties, through successive appeals, to delay the invalidity proceedings and, consequently, the infringement proceedings (paragraph 45). On this basis, the ECJ rules that an EU trade mark court is not precluded from being able to dismiss an action for infringement on the basis of an absolute ground for invalidity, even though the decision on the counterclaim for a declaration of invalidity has not become final.