Supreme Court settles stirred-up CAPPUCCINO dispute

The Supreme Court has annulled the Metropolitan Court's controversial decision to cancel the CAPPUCCINO trademark (Pfv.IV.21753/2001), and remanded the case back to the lower court for further consideration. In a landmark case involving trademark rights, moral rights and copyrights, as well as unfair competition, the Supreme Court clarified the relative grounds for cancelling a trademark other than the existence of prior trademark rights.

The complainants are the producers of a popular radio show called 'Cappuccino'. They had requested that the Hungarian Patent Office (HPO) cancel the broadcaster's registration of the CAPPUCCINO trademark on the grounds that the programme and its title constitute their work of art. The HPO denied their request.

When the case was brought before the Metropolitan Court, the complainants restated their original claim but also launched a separate lawsuit for copyright infringement. The court annulled the HPO's resolution and ordered the cancellation of the trademark. The court ignored the question of whether the radio programme and its title qualify for copyright protection under the Copyright Act. Most importantly, it made the following three findings:

• Pursuant to the Civil Code - which protects any intellectual property (IP) that can be widely used and has not become part of the public domain - the complainants had acquired prior rights which served as grounds for cancelling the respondent's trademark, regardless of whether the respondents had acquired copyright in the radio programme and its title under the Copyright Act.
  
  
• The respondent's registration infringed the complainants' moral rights because the general public associates the 'Cappuccino' title with the complainants and therefore the title embodies the complainants' reputation.
  
  
• The respondent's unauthorized use of the complainants' unregistered prior mark constituted unfair competition.

The respondent requested extraordinary judicial review of the Metropolitan Court's decision. The Supreme Court made the following three clarifications in response to the Metropolitan Court's above findings:

• It is not possible to cancel a trademark on the grounds of a prior IP right that is based on the Civil Code's general clause. Rather, cancellation must be based on a specific IP right regulated by a specific regulation (such as the Copyright Act or the Patent Act). Therefore, the lower court should have stayed its proceedings until a final resolution regarding the complainants' copyright in the programme and its title.
  
  
• The mere registration of the trademark did not infringe the complainants' moral rights.
  
  
• The Metropolitan Court should not have considered the complainants' effective prior use of the unregistered mark because they had not requested cancellation of the CAPPUCCINO mark on such grounds.

As a result of these findings, the Supreme Court ordered the Metropolitan Court to stay the trademark cancellation proceeding until the copyright infringement lawsuit has been decided. In the meantime, the CAPPUCCINO dispute continues to brew.

Péter Sipos, Martonyi és Kajtár Baker & McKenzie, Budapest