ECJ: Trade names and trademark rights

The ECJ ruled in a conflict over similar trade names. The trade names had existed side by side - until one of them was registered as a trademark. An interesting ruling for all those involved in trade names, trademarks and product branding.

The initial dispute on this interesting ECJ decision (judgment of June 2, 2022, C 112/21, ECLI:EU:C:2022:428) is a conflict between several identical or similar trade names, all recognized under national law - and one of which was later registered as a trademark by its owner.

In this context, the court hearing this case (Hoge Raad der Nederlanden, Netherlands) asked the ECJ to interpret the "prior right" of a third party within the meaning of Article 6(2) of the repealed Directive 2008/95/EC.
Is it sufficient for a "prior right" of a third party that he has used a nationally right in commercial sense prior to the filing of the mark?
Or is it necessary for a "prior right" that this third party can prohibit the use of the mark based on this prior right?

The European court (ECJ) took this case as an opportunity to deal in detail with trade names and the so-called "prior right" in interpretation of Art. 6(2) of Directive 2008/95/EC.

ECJ: The concept of "prior right”

The court dealt with the concept of "prior right" within the meaning of Art. 6(2) of Directive 2008/95. It must be interpreted in the light of equivalent concepts contained in texts of international law and in a manner, the ECJ explained, which must also take into account the context of those concepts and the objective of the relevant provisions of the IP conventions.

The ECJ added that, moreover, under Article 4(4)(c). c of Directive 2008/95, the term "prior right" should be understood to mean, in particular, an IP right (para. 41).

From this, the court concluded that a trade name may constitute a prior right for the purposes of the application of Art. 6(2) of Directive 2008/95 (paras. 43 - 47).

Also, "prior rights" within the meaning of Art. 6(2) of Directive 2008/95 need only be of local significance (para. 48). This means, the ECJ explained, that they cannot extend geographically to an area as large as that covered by a registered trademark, which, after all, extends as far as a trademark is registered.

Finally, the ECJ answered the question referred for a preliminary ruling as follows: according to Art. 6(2), it is sufficient in principle that an earlier, prior right, such as a trade name, is recognized under the national law of an EU state and is used in the course of trade in order to be able to oppose the owner of a later trademark. It is therefore impossible for the owner of a trademark to prohibit a third party from using an earlier right of local significance in the course of trade.

However, if - as in the present case - the proprietor of the later mark has an even prior right which is also recognized under the law of the Member State concerned, then the decision must be made in accordance with the national rules and on the basis of the conduct of the parties. This is because if the owner of the younger mark relies on his still prior right, he may in fact oppose or limit the assertion of an earlier right. To examine this according to the relevant national law is a matter for the referring national courts, the ECJ added.

In any case, the "prior right" within the meaning of the EU Directive can be granted to a third party - even though the owner of the younger trademark has an even earlier and recognized right to the sign registered as a trademark - provided that the owner of the trademark and the prior earlier right can no longer prohibit the use of his later right by the third party.

Conclusion:

Trade names may thus constitute a prior right within the meaning of Art. 6(2) of Directive 2008/95. However, it should be noted that these "prior rights" within the meaning of Art. 6(2) of Directive 2008/95 are likely to be of local significance only. In the case of a trademark, on the other hand, the protection extends to the entire territory for which it has been registered. If you want to extend the protection of your trade name, it makes sense to apply for a trademark.

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