Court of Justice of the EU has given a preliminary ruling concerning compensation for the infringement of a trademark which has lapsed due to non-use.

Judgment of 26 March 2020, Case C-622/18

The CJEU was to answer a question whether a trade mark owner who has never used the mark and it has been revoked for non-use may obtain compensation for damages resulting from the infringement.

The proceedings took place between AR (the claimant – as a natural person) and 3 companies (i.e. Cooper International Spirits LLC, St Dalfour SAS and Établissements Gabriel Boudier SA) On 5 December 2005, the claimant filed an application for registration of the word and figurative mark SAINT GERMAIN, which has been registered on 12 May 2006. In 2012, the claimant filed a lawsuit for trade mark infringement. However, in the parallel proceedings, the judgment of 28 February 2013 stated that the claimant’s trade mark rights had expired as of 13 May 2011 due to non-use.

The CJEU, referring to the judgment of 21 December 2016 in Länsförsäkringar, Case C-654/15, held that the mark owner may delay the commencement of the genuine use of the mark. The scope of the exclusive right which is taken into account in infringement proceedings is that which is granted, i.e. a court examines the goods and services for which the registration was granted, and not those for which the trademark holder could have used the mark in the period of the infringement. This means that a trademark holder may claim infringement even the mark is not used.

The CJEU ruled similarly in this case, despite the fact that the plaintiff’s mark was revoked for non-use. However, the Court stated that although the fact that a trade mark has not been used does not, in itself, preclude compensation in respect of acts of infringement that have been committed, that remains an important factor to be taken into account in determining the existence and, as the case may be, the extent of the injury sustained by the proprietor and, accordingly, the amount of damages that he or she might claim.

The judgement is correct and reasonable. There are no obstacles for the trade mark owner to seek protection of the mark, even if it has not been used. However, it can be difficult to show that the trademark owner has incurred a damage. If the claimant does not use the trade mark, a third party using a similar trade mark cannot interfere with the claimant’s trade mark’s basic function, i.e. indicating the origin of the goods or services and no loss occurs. However, such situations cannot be ruled out, e.g. if the claimant could not start using the trade mark because of unfair actions of the defendant. In addition, the issue of claiming compensation in the form of the so-called hypothetical license fee remains open. It seems that such compensation could be sought, even if the mark has not been used. The fact that someone else’s mark has been used without the consent of the trademark owner could be considered as an event causing damage, and the failure to obtain adequate remuneration as damage.