Netherlands: Court Of Justice Of The European Union Rules On Territorial Scope Injunction Based On CTM: Not Necessarily The Entire EU

Introduction

In its judgment of April 12, 2011 (DHL/Chronopost, C-235/09), the Court of Justice of the European Union ("ECJ") ruled on the scope of a trade mark injunction based on a Community trade mark. As a rule, this is stated to be the entire area of the European Union, but at the same time the ECJ notes that it may be restricted. 

In principle the entire area of the European Union

When jurisdiction is based on art. 97(5) Community Trade Mark Regulation ("CTMR"), so on the location of the (alleged) infringement, it is clear from the text of art. 98(2) CTMR that an injunction (if granted) can only cover the Member State where the addressed court is located.

This is different when jurisdiction is based on art. 97(1) to (4) CTMR (previously numbered art. 93(1) to (4)). In that case, an injunction can extend to all Member States (art. 98(1) CTMR). The question which then however arises, and which was posed by the French Cour de Cassation, is whether as a matter of law such an injunction has effect throughout the entire EU.

The ECJ responds in its April 12 decision that, as a rule, the scope of the injunction extends to the entire area of the European Union. Essentially, the unitary character of the Community trade mark and the interest in preventing inconsistent decisions are the reasons for this. 

...but not necessarily

The ECJ however also makes it clear, that the territorial scope of the injunction can in certain circumstances be restricted. It notes that a trade mark right aims to enable the trade mark owner to protect his interests and thus ensure that the trade mark can fulfil its functions. Therefore, the right can only be exercised when a third party's use of the sign affects or is liable to affect the functions of the trade mark.

This means that if the acts of infringement (or threatened infringement) are limited to a single Member State, or part of the EU, the court must limit the territorial scope of the issued injunction. Such limitation is stated to in particular apply, if the plaintiff has restricted the territorial scope of its action or the defendant proves that the use of the sign at issue does not affect or is not liable to affect the functions of the trade mark, for example on linguistic grounds. 

Comments

This decision is important because it makes it clear that the unitary character of the Community trade mark does not necessarily dictate an EU wide injunction.

It may be argued that in itself this is not surprising because already art. 97(5) CTMR notes that (if the jurisdiction is based on a particular ground) also territorially restricted injunctions can be granted. However, in particular the "unitary character" of the Community trade mark has often be used to argue that in all other circumstances an injunction must cover the entire EU.

Arguably the advocates of both sides have won: the "unitarians" because as a rule the injunction is EU wide and the others because the territorial scope must be limited if the infringement is limited to a certain territory.

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