ECJ: Counterclaim for a declaration of invalidity

In a counterclaim against a trade mark, may the subject-matter of the dispute be broader in terms of goods and services than in the related infringement action? With a clear "yes", the ECJ decided this question in the trade mark dispute about the Union trade mark Multiselect.

Case law on counterclaim for declaration of invalidity

This decision is not really surprising. The ECJ rather relied on previous case law, in particular from the recent ECJ decision Gemeinde Bodman-Ludwigshafen (judgment of 13 October 2022, Gemeinde Bodman-Ludwigshafen, C 256/21). In this decision, the ECJ ruled that a national court must decide on a counterclaim for a declaration of invalidity of a trade mark even if the infringement action has already been withdrawn.

It was thereby held that the term "counterclaim", which is not further defined in the EUMV (European Trade Mark Regulation, the EU Regulation 2017/1001), is in principle to be understood as a counterclaim brought by the defendant in proceedings brought against him by the plaintiff before the same court, but which is otherwise an independent application.

This is the general consensus also according to previous case law (e.g. ECJ judgment of 12 October 2016, Kostanjevec, C 185/15). Although the counterclaim is brought in the context of proceedings initiated by means of another appeal, according to the case-law it is a separate and independent application, the procedural treatment of which is independent of the application.

Counterclaim is not a mere defence

A counterclaim is different from a mere defence, the ECJ has now declared in the Multiselect decision (judgment of 8 June 2023, C 654/21). Rather, the counterclaim aims to expand the subject-matter of the dispute and to obtain recognition of a separate and independent claim from the action.

In this context, the ECJ referred to the principle of procedural economy. If a counterclaim for a declaration of invalidity could only lead to a partial declaration of invalidity of the trade mark on which the infringement proceedings in question are based, absolute grounds for invalidity (see Art. 59 of the EUTMR ("Absolute grounds for invalidity", inter alia, to deceive as to the geographical origin of the goods or services)) would possibly not be applicable in the counterclaim if they were not the subject matter of the infringement action.
This, however, would contradict any procedural economy. Moreover, the absolute grounds for refusal protect general interests and not only the economic interests of the defendant when defending against an infringement action, the court explained.

Moreover, a counterclaim may be based on any of the grounds for invalidity or revocation set out in the EUIPO. And these grounds have the same scope regardless of whether they are raised in an invalidity/ revocation application before the EUIPO or in a counterclaim before a national court (Art. 59(1)(a)).

Counterclaim: prerequisite and limitation

Indeed, a prerequisite for bringing a counterclaim for a declaration of invalidity is that it is brought by a natural or legal person, and that this is done in the context of infringement proceedings.

However, this is the only limitation. The ECJ ruled as a leading decision in the present Multiselect case that a counterclaim for a declaration of invalidity of a trade mark may concern all the rights of the trade mark proprietor, without any specification or limitation by the related infringement action.

The leading principle:

“Article 124(d) of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark, read in conjunction with Article 128(1) thereof,
must be interpreted as meaning that a counterclaim for a declaration of invalidity of an EU trade mark may relate to all the rights which the proprietor of that mark derives from its registration and that the subject matter of that counterclaim is not restricted by the scope of the dispute as defined by the action for infringement.”

The ECJ also pointed out that decisions on the validity of an EU trade mark always apply throughout the Union (the so-called principle of effect throughout the Union erga omnes). This principle is based on the 32nd recital of the Trade Mark Regulation, the court explained. And it applies to all decisions by both the EUIPO and the EU trade mark courts (see also judgment of 19 October 2017, Raimund, C 425/16).

Indeed, the EUIPO has sole jurisdiction for the registration of EU trade marks and for oppositions. However, for the declaration of invalidity or revocation of an EU trade mark (under Articles 63 and 124 of the EU Trade Mark Regulation), the EU trade mark courts and the EUIPO have joint jurisdiction.

More than that, the competences of the EUIPO and the national courts are interlocked and exercised according to the principle of priority of the body seised. Thus, if a counterclaim for invalidity or revocation is first brought before a national court, the EUIPO must, unless there are special circumstances, stay identical proceedings brought only later, and vice versa (cf. Art. 132 EUTMR).

In the court's view, this interlocking jurisdiction and likewise the principle erga omnes argue that a counterclaim can extend to all trade mark rights in the claimant's EU trade mark. The subject-matter of the goods and services in the counterclaim can therefore be broader than in the related infringement action, and in the interests of procedural economy it even should be.

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