The CJEU determined that a counterclaim for cancellation of a right to an EU trademark raised in a case for infringement case may concern the entirety of the rights that the owner of that trademark derives from the registration. Thus, a counterclaim is not limited in terms of its subject matter by the litigation framework specified in the trademark infringement action.
(CJEU judgment of June 8, 2023, ref. C-654/21)
A Polish intellectual property court (Regional Court in Warsaw), while hearing one of the cases, was in doubt as to how to interpret the provisions on counterclaims provided for in intellectual property proceedings. According to Article 479122 of the Code of Civil Procedure, a counterclaim in trademark or industrial design infringement cases is allowed if it includes a demand for the cancellation or revocation of a trademark protection right or includes a demand for the cancellation of an industrial design registration right. However, it follows from Article 204 of the Code of Civil Procedure that the counterclaim must be related to the main claim. The counterclaim is filed with the court that hears the case.
The Polish Court enquired, among others, whether the term counterclaim for cancellation in these provisions could mean a demand for cancellation only to the extent that it is related to the claimant’s claim for infringement of an EU trademark or with respect to all goods and services for which the mark is registered.
Setting the scene:
The Claimant is the owner of the word mark Multiselect. It brought an action against the Defendant, alleging that the Defendant infringed the trademark by placing the mark on guidebooks published by the Defendant.
In reply, the Defendant filed a counterclaim, claiming the cancellation of the disputed mark.
The referring court’s doubts arose from the fact that the main action concerned only goods and services placed on the market by the Defendant, while the counterclaim concerned all goods and services covered by the mark’s registration. The referring court argued that the broader outlining of the subject matter of the dispute by the counterclaim makes the proceedings somehow dominated by this counterclaim. In the court’s view, the counterclaim is intended to be a means of protection available to the Defendant, and in this state of facts, it represents a more far-reaching means.
In a judgment dated June 8, 2023 (Ref. C-654/21), the Court ruled that Article 124(d) of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trademark, in conjunction with Article 128.1 of the Regulation must be interpreted as meaning that a counterclaim for cancellation of a European Union trademark may relate to the entirety of the rights that the owner of that trademark derives from its registration, and that this counterclaim is not limited, as to its subject matter, by the framework of the litigation determined by the action for infringement.
The CJEU argued that adopting a different interpretation would be contrary to the principle of procedural economy, which is one of the purposes of the existence of the counterclaim mechanism.
The CJEU’s ruling is correct and in defendants’ favour. It enables, in a single proceeding, by use of defence tools provided by law, not only to effectively challenge the arguments raised by the claimant, but also to cause the claimant to lose protection for the trademark in question. Restricting the possibility of filing a counterclaim only as to a part of the goods and services covered by the trademark registration, i.e., those that are directly related to the claims of the main suit, would certainly be contrary to the principles of procedural economy.