13 Dec
2016

Litigation procedures and strategies: Denmark

In Denmark, trademark protection is regulated by the Trademark Act (341/1991), as amended up to March 1 2016 (Consolidated Trademarks Act 192/2016). The act implemented the EU First Trademarks Directive (89/104/EEC) (now replaced by Directive 2008/95/EC). The EU Trademark Regulation (207/2009) has direct effect in Denmark.

Legislative framework and causes of action

In Denmark, trademark protection is regulated by the Trademark Act (341/1991), as amended up to March 1 2016 (Consolidated Trademarks Act 192/2016). The act implemented the EU First Trademarks Directive (89/104/EEC) (now replaced by Directive 2008/95/EC). The EU Trademark Regulation (207/2009) has direct effect in Denmark.

Both administrative causes of action and court proceedings are available under Danish trademark law.

Opposition proceedings are dealt with by the Danish Patent and Trademark Office (PTO) as administrative proceedings.

Applications for cancellation of registered trademarks may be dealt with by the court or the PTO.

Decisions of the PTO may be appealed to the Patent Board of Appeal and can subsequently be further appealed to the courts.

A request for cancellation may not be filed with the PTO if any proceedings are pending before the courts. By contrast, either party to pending proceedings at the PTO can initiate court proceedings on the same matter (save for opposition proceedings); the PTO will then stay the administrative proceedings until the court has issued its decision.

The courts have sole jurisdiction over infringement claims, requests for injunctions and search proceedings, all of which are regulated by the Administration of Justice Act (90/1916), as amended up to November 16 2015 (Consolidated Administration of Justice Act 1255/2015).

Alternative dispute resolution

The preferred avenues for dispute resolution in trademark disputes in Denmark are either administrative proceedings at the PTO or civil court proceedings, primarily injunction proceedings. However, Danish legislation also offers alternative dispute resolution.

Arbitration

The most popular form of alternative dispute resolution in Denmark is arbitration, which is regulated by the Arbitration Act (05/2004), as amended up to June 24 2005 (Consolidated Arbitration Act 553/2005). The act implements the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

The Danish Institute of Arbitration is qualified to deal with both national and international matters, including trademark matters.

However, arbitration is rarely used in trademark disputes or in any other IP disputes, and it requires consent – either contractually or ad hoc when the dispute arises – from both parties. Arbitration costs are higher than those of court proceedings.

Mediation

Unlike the EU Intellectual Property Office, the Danish PTO offers no mediation service. That said, under the Administration of Justice Act, parties to civil court proceedings can request the court to appoint a mediator, in which case the parties enter into judicial mediation.

The appointed mediator is usually a lawyer or a judge. Despite the mediator being court appointed, he or she has no enforcement powers and cannot act as a judge in the case subsequently.

The parties can at any point request for the mediation to end and continue litigation. The court covers the cost of the court-appointed mediator.

Mediation is rarely used in trademark disputes in Denmark.

Litigation venue and formats

Ordinary court proceedings and litigation venues

The Maritime and Commercial Court is the court of first instance in ordinary court proceedings relating to EU trademarks.

The district courts are generally the courts of first instance for ordinary court proceedings; however, a case involving national trademark rights may be brought before the Maritime and Commercial Court provided that:

  • trademark law is essential to the case;
  • the claimant submits the case to the Maritime and Commercial Court or one of the parties requests that the case be referred from the district courts; and
  • the parties have not entered into a conflicting prior agreement.
Forum shopping

The possibilities for forum shopping are limited with regard to subject-matter jurisdiction: as explained above, if the matter involves national trademarks the district courts are generally the courts of first instance for ordinary court proceedings and the Maritime and Commercial Court is also competent if the abovementioned conditions are met.

Forum shopping is also limited in relation to territorial jurisdiction when the case involves national trademarks. Thus, court proceedings must, as a general rule, be commenced before the court of the defendant’s residence.

However, the Administrative Act provides some exceptions – the most important of which is that proceedings can be commenced before the district court where the infringement has taken place. The ‘tort jurisdiction’ exception does not apply if an infringement occurs in a contractual relationship.

Forum shopping is possible with regard to neither subject-matter jurisdiction nor territorial jurisdiction if the case involves EU trademarks. In such cases, the Maritime and Commercial has exclusive jurisdiction at first instance.

Damages and remedies

Damages and penalties

Under the Trademark Act, any person or legal entity that intentionally or negligently commits trademark infringement is liable to pay reasonable compensation for the exploitation of the trademark and damages for any further injury caused to the mark owner.

Damages and compensation are awarded based on the Danish liability standard (culpa). Liability under the Trademark Act corresponds to the general principles of liability in tort, requiring negligence, causality and adequacy.

When granting compensation and damages, the courts must take into consideration any loss of profit suffered by the injured party and any illicit profit gained by the infringer. In practice, however, the compensations and damages granted are usually inadequate – often not even matching the infringer’s profits.

The courts may also impose penal sanctions on any person or legal entity that intentionally or negligently commits trademark infringement. The penalty for criminal infringement under the Trademark Act is a fine or, if the infringement was committed in aggravating circumstances, imprisonment for up to 18 months. If the infringement was committed in exceptionally aggravating circumstances, the penalty is imprisonment for up to six years according to the Criminal Code.

Injunctions

Injunctions are among the most efficient and commonly used remedies under Danish law in relation to trademark infringement; they are governed by the Administration of Justice Act.

The venue at first instance is the same as in ordinary court proceedings involving trademark infringement. Hence, the Maritime and Commercial Court is the first-instance court in injunction proceedings involving EU trademarks. The district courts are generally the courts of first instance in injunction proceedings involving national trademarks. However, a case may be brought before the Maritime and Commercial Court provided that:

  • trademark law is essential to the case;
  • the claimant submits the case to the Maritime and Commercial Court or one of the parties requests that the case be referred from the district courts; and
  • the parties have not entered into a conflicting prior agreement.

The Administration of Justice Act stipulates the following requirements for an injunction to be granted:

  • The applicant holds the right for which protection is sought by way of a prohibitory or mandatory injunction;
  • The conduct of the opposing party necessitates the grant of an injunction; and
  • The ability of the applicant to enforce its right will be lost if the applicant has to wait for a decision in an ordinary full trial.

Additionally, the purpose of the injunction must be proportional to the inconvenience and damage likely to be suffered by the opposing party.

The burden of proving that the above requirements are met lies with the applicant.

The Danish courts tend to be generous in their granting of applications for injunctions. However, they may (and usually do) make the granting dependent on the plaintiff paying a security deposit for any detriment or disadvantage inflicted on the defendant as a result of the injunction.

The court usually notifies the defendant before the injunction proceedings take place. The court may, however, omit this prior notification if:

  • it has no reservations about holding the hearing without prior notification of the defendant; or
  • the purpose of the injunction may be deemed to be lost if the defendant is notified.

The process generally takes one to 10 weeks from filing of the application to grant of an injunction. If the plaintiff proves urgency, though, the injunction can be granted within a couple of days.

When the injunction proceedings involve EU trademarks, the Maritime and Commercial Court may grant either a national or a pan-EU injunction. Case law shows that the Maritime and Commercial Court is willing to grant pan-EU injunctions even in cases where the infringement has been committed in Denmark only.

If proceedings concerning the right that has allegedly been infringed have not already been commenced in a Danish or foreign court, or before an arbitral tribunal, the party applying for an injunction must commence such proceedings within two weeks of the decision to grant the injunction becoming final. In these main proceedings, the court must decide whether the grant of the injunction was justified. The court will deliver its judgment within one or two years of commencement of the proceedings.

If the main proceedings are not commenced within two weeks, the injunction order will be overturned and the defendant will be awarded costs.

Evidencing the case

Search proceedings

Search proceedings are also commonly used remedies in trademark infringement cases. The Administration of Justice Act sets out the rules for search proceedings.

Following the amendment of the Administration of Justice Act in 2013, the rules on litigation venues in search proceedings are no longer identical to the rules on litigation venues in injunction proceedings. Hence, a request for search proceedings must be filed with the bailiff’s court, while a request for injunction proceedings must be filed with the Maritime and Commercial Court (or the relevant district court). This change causes practical difficulties in coordinating search and injunctions proceedings, as well as judicial difficulties since the same subject matter is presented before two different courts and judges.

A search order may be granted if the rights holder proves or renders probable that an infringement has taken place and that evidence of the infringement is in the defendant’s possession. As a general rule, any evidence may be presented.

The court may (and usually does) make the grant of a search order conditional on the plaintiff providing security for any detriment or disadvantage inflicted on the defendant as a result of the search proceedings.

The process generally takes one to six weeks from filing of the application to the search taking place (if granted). However, if the plaintiff proves urgency, the search can take place within a couple of days. The defendant is rarely notified before the search proceedings in order to avoid the removal or destruction of evidence.

The court will appoint an impartial expert to carry out the search and subsequently write a search report to be approved by the court and then presented to both the defendant and the plaintiff. The expert appointed will be appropriately qualified for the specific search.

The plaintiff must file a lawsuit within four weeks of the court finalising the search proceedings. Appeals in search proceedings may suspend the main proceedings.

Expert inspection and expert report

In trademark disputes, expert reports can be valuable evidence. For instance, an expert report can be used to determine whether a trademark has acquired distinctiveness through extensive use.

The Administration of Justice Act states that a party to civil proceedings may request that the court commission an expert report on one or more questions. The request must include details about the subject matter of the expert report, as well as the purpose of the exercise. A copy of the request must be sent to the other party at the same time.

If the court decides to commission an expert report, the party that initially requested the expert inspection and expert report will submit its questions to the court. These questions will be presented to the other party, along with the opportunity to submit questions to the expert. The court sets a timeframe during which the parties may submit further questions.

The parties may suggest possible experts to the court, although the court is not bound by these suggestions. Once the court has selected a possible expert, the court must inform the parties of the name of the person whom it intends to appoint and allow the parties to submit their comments.

The expert will conduct an inspection, if necessary, and write an expert report on the basis of the parties’ questions. The expert report will not be an opinion on a question of law, but on facts relating to his or her field of expertise.

Expert opinions and witnesses

Instead of an expert report, any party to civil proceedings may, as a rule, request an expert opinion. An expert opinion is especially useful when no inspection is needed and an assessment can be based solely on the knowledge of the expert. The person producing the expert opinion is often called as an expert witness in the court proceedings.

There are no specifications or rules on expert opinions and expert witnesses under the Administration of Justice Act. Consequently, the use of expert opinions and expert witnesses is regulated by case law.

In general, the Danish courts will accept the submission of expert opinions obtained by only one of the parties if the opinion was produced before the court proceedings begin. If the opinion is produced after the court proceedings have started, the court will likely reject any submission that has not been approved by the other party.

Available defences

Trademark Act

The Trademark Act contains some exceptions to the mark owner’s exclusive rights, all of which can be used as defences.

One of these is that the mark owner is not entitled to prevent third parties from using the trademark in non-commercial activities.

Furthermore, the trademark owner may not prohibit third parties from using:

  • their own name and address;
  • signs or indications that concern the kind, quality, quantity, intended purpose, value, geographical origin, time of production of goods or rendering of the service, or other characteristics of the goods or services; and
  • the trademark for the purpose of identifying or referring to goods or services, especially where use of that mark is necessary to indicate the intended purpose of a product or service as accessories or spare parts.
Passivity/acquiescence

Another available defence in trademark infringement disputes is passivity/acquiescence. The general principles and standards of passivity and acquiescence also apply in trademark disputes. These principles and standards specify no minimum period of time to have lapsed to make a finding of passivity. However, the Trademark Act states that where a rights holder has acquiesced, for a period of five successive years, to the use of a later trademark while being aware of such use, it shall no longer be entitled to apply for a declaration that the later trademark is invalid, unless the later trademark was registered in bad faith.

Appeals process

In Denmark, it is possible to appeal all final judgments and, in special circumstances, further appeal is allowed to a third instance.

As a rule, decisions of the Maritime and Commercial Court may be appealed to the high courts. However, a case may be appealed directly to the Supreme Court if:

  • the outcome of the case is of fundamental legal importance and of general importance to the application and development of the law or has significant societal implications in general; or
  • there are other special reasons why the case should be heard by the Supreme Court as the appellate court.

District court decisions may be appealed to a high court as second-instance appellate court.

Further appeal from the high court to the Supreme Court requires permission from the Appeals Permission Board.

Bech-Bruun

Langelinie Allé 35

2100 Copenhagen

Denmark

Tel +45 7227 0000

Fax +45 7227 0027

Web www.bechbruun.com

Claus Barrett Christiansen
Partner

[email protected]

Claus Barrett Christiansen is a partner in Bech-Bruun’s IP and technology group, and head of the firm’s Chinese desk IP section. He specialises in design law, copyright, trademarks, patents, marketing, and IP contracts and litigation. He is external professor of international copyright, trademark and marketing law at the University of Aarhus and has published commentaries on the EU Trademark Regulation and global design protection, among other subjects.

Mr Christiansen is a member of the International Trademark Association and the IP Committee of the Association of Danish Law Firms, among others; he sits on the expert user panel of the Danish Trademark and Patent Office and the Danish Maritime and Commercial Court.

He is one of the most widely sought-after and experienced IP litigators in Denmark.