Lithuanian court finds Nestra guilty of 'trademark theft'

Lithuania

In Stada Arzneimittel AG v Nestra Limited (Case 2A-317/2002), Lithuania's Appeal Court has, for the first time, affirmed a district court's decision that a UK company's registration of the trademark PFEIL ZAHNSCHMERTZ-TABLETTEN is invalid on the grounds of unfair competition.

In 1999 Stada, a German pharmaceutical company, began selling in Lithuania a dental preparation for sensitive teeth under the trademark PFEIL ZAHNSCHMERTZ-TABLETTEN. Before Stada was able to apply to have its trademark registered in Lithuania, Nestra, a UK company, applied for and was granted registration of the same mark for a similar product in Lithuania. Based on this prior registration, Nestra sought to stop Stada from selling its product in Lithuania under the PFEIL ZAHNSCHMERTZ-TABLETTEN mark. Stada, meanwhile, sued Nestra for trademark infringement based on Stada's prior use of the mark in Lithuania.

Because Nestra's trademark was granted under Lithuania's old trademark law, which did not provide for the cancellation of a trademark on the grounds of unfair competition, Stada brought an action based on violation of Lithuania's Law on Competition and the Paris Convention for the Protection of Industrial Property.

Both the district court and the appellate court found that Nestra had registered Stada's previously used trademark with the specific aim of hindering Stada's use of the mark in Lithuania, in violation of the Law on Competition and the Paris Convention. As a result, Nestra's registration in Lithuania was held to be invalid.

Both Stada and Nestra are party to two pending cases involving two different trademarks - GRIPPOSTAD and KAMISTAD. It is highly likely that Stada will prevail and Nestra will again be found guilty of unfair competition or 'trademark theft'.

Vilija Viesunaite and Marius J Jason, AAA Legal Services, Vilnius

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