CJEU: requirement of unanimous decision of co-owners for licensing depends on national law
In a judgment dated April 27, 2023 (ref. C-686/21), the CJEU considered a preliminary question from an Italian court, which wondered whether, under EU law, the unanimity of co-owners of a trademark is necessary for the granting of a license. The Court ruled that this issue is left to the national laws of each member state.
The subject of the dispute before the Italian court:
Four persons remain co-owners of the EU and national trademark LEGEA. They unanimously decided to license the Legea Company to use the mark, but in late 2006, one of the four co-owners objected to further licensing of the mark.
The Company filed an action against this person, while the co-owner objecting to further licensing filed a counterclaim. The court of first instance ruled that the Company lawfully used the trademark until the end of 2006, but after that time the use became unlawful due to the opposition of the co-owner.
The court of second instance amended this ruling. It held that the unanimity of the co-owners was not required, and consequently the Company continued to use the mark lawfully even after 2006.
The Italian Court of Cassation, to which the case was ultimately referred, asked the CJEU whether, under EU law, unanimity of co-owners is necessary to effectively license the use of a national or EU trademark.
In the judgment under review, the Court held that the question of whether the granting or termination of a license to use a national trademark or an EU trademark under co-ownership requires a unanimous decision by the co-owners or a decision made by a majority of them falls within the scope of the applicable national law.
The Court reasoned that the provisions of EU law are silent on the exercise of powers by the co-owners of a mark, but only provide that such co-ownership may exist. Thus, according to the CJEU, the issue must be regulated by national law.
Polish law, with regard to the rules for the use of a trademark by co-principals, refers (unless an agreement on the commonality of protective rights provides otherwise) to the provisions of the Civil Code (see Article 159(2) of the Act of June 30, 2000 – Industrial Property Law). Pursuant to Article 199 of the Civil Code, the consent of all joint holders is required for the disposition of joint protective rights and for acts exceeding the scope of ordinary management. In the case of acts of ordinary management, on the other hand, the consent of the majority of the joint holders is sufficient, in accordance with Article 201 of the Civil Code. The literature indicates that the granting of a license should rather be treated as an act exceeding the scope of ordinary management, and therefore requiring unanimity (see K. Szczepanowska-Kozłowska [in:] Prawo umów handlowych. System Prawa Handlowego. Tom 5B, red. M. Stec, p. 505).
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