Second Supreme Court decision in STOLICHNAYA Case

The Supreme Court of Estonia has issued a second ruling in the case of Stol-I AS v Liviko AS, which involved the unauthorized use of the trademark STOLICHNAYA between 1994 and 1995 (Case 3-2-1-109-08, December 17 2008).

In the first decision, which was issued on May 20 2007, the Supreme Court had ruled that where a trademark licensee files suit for trademark infringement, it must prove that the trademark owner at the time of filing the action (and not at the time of the infringement) had refused to file the action on its own behalf (for further details please see “Supreme Court clarifies licensee rights to infringement claims”).

Although the lower courts have now recognized the right of licensees to bring infringement actions and demand damages from the infringer, the Supreme Court still had to rule on the issues of damages and time limits.

In the second decision, the court held as follows:

As the claim for damages in the initial infringement action was based only on the sub-licence fees that should allegedly have been paid to the licensee, the latter was entitled to amend its claim for damages in the further proceedings. The initial filing of the claim had suspended the time limits for the same types of damages (including interests).
As the licensee’s right to bring an infringement action results from the principle of legal succession, the licensee can demand damages as if it were the trademark owner - that is, the licensee can claim damages for the period during which it was not yet established as a legal person and the licensing agreement had not been concluded.
The licensee may claim damages from the filing date of the trademark application, provided that the trademark has since been registered.
A licence may be registered with the Patent Office only after final registration of the trademark. However, the licensing agreement is considered to be valid as of the filing date of the trademark application.
The licensee may also seek payment of interest on damages (at the rate applicable to bank deposits).

The decision shows that the basis for the damages claim should be disclosed as early as possible in the proceedings in order to suspend the time limits for such claims (currently three years from the date on which the plaintiff becomes aware of the damage).

The case was remanded to the Tallinn District Court for further consideration.

Almar Sehver, AAA Legal Services, Tallinn

Second Supreme Court decision in STOLICHNAYA Case

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