Community trademarks offered greater protection after Nokia

Following a request for a preliminary ruling from the Swedish Supreme Court, the European Court of Justice (ECJ) has issued its first ever decision on the interpretation of Article 98(1) of the Community Trademark Regulation, which reads:

"1. Where a Community trademark court finds that the defendant has infringed or threatened to infringe a Community trademark, it shall, unless there are special reasons for not doing so, issue an order prohibiting the defendant from proceeding with the acts which infringed or would infringe the Community trademark. It shall also take such measures in accordance with its national law as are aimed at ensuring that this prohibition is complied with."

In 2002 an individual named Joacim Wärdell imported into Sweden from the Philippines 'flash stickers' (ie, adhesive stickers attached to mobile telephones and containing a light-emitting diode which flashes when the phone rings). A customs inspection revealed that a number of those stickers bore the mark NOKIA either on the product itself or on the packaging.

Nokia Corporation, which holds Swedish and Community rights in the mark NOKIA, brought a trademark infringement action against Wärdell before the Stockholm District Court with a view to prohibiting him from using, in the course of his business activities, signs capable of being confused with the Swedish and Community trademark NOKIA. The court found Wärdell guilty of trademark infringement, even though he stated that had no knowledge that the stickers would bear the NOKIA mark at the time of purchase. Further, as Wärdell indicated that he might import more stickers, the court found that there was a risk that he might infringe the NOKIA mark again. Accordingly, the prohibition order also carried a fine in case of failure to comply. Wärdell appealed.

The Svea Court of Appeal found that Wärdell had committed an act of infringement and that there was some risk that he might in the future commit the same infringement of Nokia's trademark rights. However, noting that Wärdell had never committed such acts before and that he could be accused only of carelessness, the court held that there was no need to impose on him a prohibition with a fine attached.

Nokia appealed to the Swedish Supreme Court. It argued that the mere fact that Wärdell objectively infringed its trademark rights was sufficient to impose on him a prohibition with a fine attached. However, the court decided to stay proceedings and refer the following questions to the ECJ for a preliminary ruling:

"1. Is the condition relating to 'special reasons' in Article 98 to be interpreted as meaning that a court that finds that the defendant has infringed a Community trademark may, irrespective of the other circumstances, refrain from issuing a specific prohibition of further infringement if the court considers that the risk of further infringement is not obvious or is otherwise merely limited?

2. Is the condition relating to special reasons in Article 98 to be interpreted as meaning that a court that finds that the defendant has infringed a Community trademark may, even if there is no such ground for refraining from issuing a prohibition of further infringement as contemplated in question one, refrain from issuing such a prohibition on the grounds that it is clear that a further infringement is covered by a statutory general prohibition of infringement under national law and that a penalty may be imposed on the defendant if he commits a further infringement intentionally or with gross negligence?

3. If the answer to question two is no, must specific measures, by which a prohibition is, for example, coupled with a penalty, be taken in such a case to ensure that the prohibition is complied with, even where it is clear that a further infringement is covered by a statutory general prohibition of infringement under national law and that a penalty may be imposed on the defendant if he commits a further infringement intentionally or with gross negligence?

4. If the answer to question three is yes, does this apply even where the conditions for adopting such a specific measure in the case of a corresponding infringement of a national trademark would not be regarded as fulfilled?"

The ECJ's answers were dictated by the necessity to have a uniform interpretation of EU law, as well as common sense.

In reply to the first question, the ECJ held that Article 98(1) is to be interpreted as meaning that the mere fact that the risk of further infringement or threatened infringement of a Community trademark is not obvious or is otherwise merely limited cannot be considered as a special reason for a national (Community trademark) court not to issue an order prohibiting the defendant from proceeding with those acts.

Turning to the second question, the ECJ noted that under Articles 44 and 61 of the Agreement on Trade-Related Aspects of Intellectual Property Rights the creation of national criminal sanctions against infringement is compulsory. Thus, the fact that the national law includes a general prohibition of the infringement of Community trademarks and provides for the possibility of penalizing further infringement or threatened infringement, whether intentional or due to gross negligence, does not constitute a special reason for a national (Community trademark) court not to issue an order prohibiting the defendant from proceeding with those acts.

Answering the third question, the ECJ stated that a national (Community trademark) court which has issued an order prohibiting the defendant from proceeding with infringement or threatened infringement of a Community trademark is required to take such measures, in accordance with its national law, as are aimed at ensuring that that prohibition is complied with, even if the national law includes a general prohibition of infringement of Community trademarks and provides for the possibility of penalizing further infringement or threatened infringement, whether intentional or due to gross negligence.

Therefore, the granting of specific measures becomes compulsory when a Community trademark is infringed, even if a national court is not forced to do the same thing when a national mark is infringed.

Although this answer is based on common sense, one may wonder if this part of the decision is consistent with the principles obliging national courts to consider equivalence and effectiveness when applying EU law.

The ECJ has created a situation where the owner of a Community trademark may be better protected than the owner of a national trademark and this is more clearly apparent in its answer to the fourth question. Here, the ECJ stated that a Community trademark court which has issued an order prohibiting the defendant from proceeding with infringement or threatened infringement of a Community trademark is required to take, from among the measures provided for under national law, such as are aimed at ensuring that that prohibition is complied with, even if those measures could not, under that law, be taken in the case of a corresponding infringement of a national trademark.

The apparent increased protection offered to Community trademarks following the Nokia decision may prompt mark owners to file Community trademarks instead of opting for national registrations.

Richard Milchior, Granrut Avocats, Paris