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24-03-2015 » The European Law in questions

Every national Court is entitled to apply to the European Court of Justice (ECJ) for a preliminary ruling regarding the interpretation of Community law, such as a Directive, when the Court considers that this interpretation is required to solve a dispute. The decision issued by the ECJ binds not only the national Court but also every Court of a Member State.

The ECJ annual report has not been published yet, but some statistics are already available in the press release n°27/15 on the Curia website. Last year, the number of preliminary questions has slightly decreased from 450 in 2013 to 428 in 2014, whereas the length of proceedings has improved and is now rising up to 15 months instead of 16.3 in 2013.

In the intellectual property area, preliminary rulings may be submitted to the ECJ by national Courts whenever they have to enforce national law that was adopted based on a Harmonization Directive, or to interpret such a Directive, or whenever they have to apply a Community Regulation or the Treaty itself to the dispute at stake. These decisions should not be confused with the ones delivered during an appeal procedure before the ECJ, which are final instance decisions following a judgment brought by the General Court of the European Union after the appeal of a decision of either the OHIM or the Community Office for the Protection of Plant Variety Rights.

Since the beginning of the year 2015, some questions in the field of industrial property rights that have been submitted for a preliminary ruling deserve our particular attention.

Case C-567/14, February 13, 2015, Request for a preliminary ruling submitted by the Paris Court of Appeal (France) on December 9, 2014 – Genentech Inc. / Hoechst GmbH, formerly Hoechst AG, Sanofi-Aventis Deutschland GmbH.

By judgment delivered on the 23th of September 2014, the Paris Court of Appeal decided to stay the proceedings in a dispute between a licensor, the Behringwerke company, and a licensee, Genentech Inc., concerning the termination of a worldwide non-exclusive license agreement on a technology for which the patents had been cancelled, which led the licensee, Genentech Inc., not to pay some of the license fees. However, the license agreement provided i) that the license fees had to be paid until the termination of the contract even if the patents, subject matter of the agreement, were to be cancelled after the signature of the contract, ii) that the interpretation and the performance of the contract were governed by the laws of the Federal Republic of Germany, iii) that any litigation would be settled through arbitration of the International Chamber of Commerce (ICC).

In his decision, the arbitrator ruled that the fees specified in the contract were to be paid during the entire period of validity of the contract even if the cancellation of the patents had a retroactive effect. The Court of Appeal, to which an application for annulment of this decision was referred, asserted that requiring the licensee to pay fees without cause, since the patents were cancelled, could enter in conflict with the principle of free competition, or could at least place the licensee in a competitive disadvantage, since the technology at stake was accessible without conditions.

The Court referred to the ECJ the following question on December 9, 2014 : “Must the provisions of Article 81 of the Treaty (now Article 101 TFEU) be interpreted as precluding effect being given, where patents are cancelled, to a license agreement which requires the licensee to pay royalties for the sole use of the rights attached to the licensed rights?”

The affair is currently ongoing and the Court of Appeal is divested from the case until the ruling of the ECJ. The Court will take back the case once the ECJ decision has been issued, upon the request of either one of the parties to the dispute.   

Case C-500/14, January 23, 2015, Request for a preliminary ruling submitted by the Tribunale ordinario di Torino (Italy), on November 10, 2014 – Ford Motor Company / Wheeltrims srl.

In this case, the litigation opposed the company FORD, car manufacturer and owner of the FORD trademark, and Italian supplier of spare parts and accessories who sells hubcaps reproducing this trademark without the owner’s agreement.

This dispute raises the issue of the identification of spare parts and accessories when they are not manufactured by the manufacturer itself. In addition to that, the question at stake is whether the trademark of the initial manufacturer can be affixed on these products.

Indeed, such a reproduction constitutes trademark infringement when done without the owner’s agreement. However, in this case, the car maker was affixing its trademark on the automobile spare parts and accessories themselves, which means that the trademark has to be reproduced for these parts being identical so that the car maintains its original appearance.

In these conditions, it seems quite difficult to find a compromise allowing the maintenance of competition on the spare parts and accessories market, between the wish of spare parts providers to offer such products to the consumer and the exclusive right of the owner.

As we know, Article 14 of the Directive on designs, called “repair clause”, defines the spare part as “a component part used for the purpose of the repair of a complex product so as to restore its original appearance”. Article 110 of the Regulation gives a similar definition which effect is to exclude component parts from Community design protection, and to prevent Member States from changing existing national laws, except for the purpose of liberalizing the market. However, the European authorities never defined the conditions of application of these provisions.

In reality, the issue raised goes further than the interpretation that could be given to Articles 14 and 110 of the Directive and the Regulation : it is to know that, as it is possible to use the repair clause to counter design law, it could also be possible to counter trademark law by arguing that the spare part has to be faithfully reproduced in order to maintain the car’s original appearance, which means reproducing the trademark if it is visible on the product.

This tricky request for a preliminary ruling, submitted by the Torino Court, is the following:

“Is it compatible with [EU] law to interpret Article 14 of Directive 98/71 1 and Article 110 of Regulation (EC) No 6/2002 2 as conferring on producers of replacement parts and accessories the right to use trademarks registered by third parties in order to allow the end purchaser to restore the original appearance of a complex product and, therefore, also when the proprietor of the trade mark applies the distinctive sign in question to a replacement part or accessory intended to be mounted on the complex product in such a way that it is externally visible and thus contributes to the external appearance of the complex product?

Is the repair clause set out in Article 14 of Directive 98/71 and Article 110 of Regulation (EC) No 6/2002 to be interpreted as constituting a subjective right for third-party producers of replacement parts and accessories and, if so, does that subjective right include the right for such third parties to use the trade mark registered by another party in respect of replacement parts and accessories, by way of derogation from the rules laid down in Regulation No 207/2009 3 and Directive (EEC) 89/104 4 and, therefore, when the proprietor of the trade mark also applies the distinctive sign in question to a replacement part or accessory intended to be mounted on the complex product in such a way that it is externally visible and thus contributes to the external appearance of the complex product?”

It will be reminded that in France, these spare parts can still be protected by design rights or copyrights (droits d’auteur) when they meet the criteria of protection provided for by the law, whereas in many Member States of the European Union, they cannot be protected anymore.

Case C-491/14, January 9, 2015, Request for a preliminary ruling submitted by the Madrid Juzgado de lo Mercantil n° 3 (Spain) on November 5, 2014 – Rossa dels Vents Assessoria S.L. / U Hostels Albergues Juveniles S.L.

Finally, in the last case concerning trademarks, the Madrid Court asked the following question: “Must Article 5(1) of Directive 2008/95/EC 1 of the European Parliament and of the Council of 22 October 2008, which approximates the laws of the Member States relating to trade marks, be interpreted as meaning that the exclusive right of the proprietor of a trade mark to prevent all third parties from using, in the course of trade, signs identical or similar to its trade mark shall extend to a third-party proprietor of a later trade mark, without the need for the litigious mark to have been declared invalid beforehand?

In France, litigations on trademark invalidity are dealt at the same moment as infringement actions and requests for prohibition of use filed in Court. Even today case law considers that it is possible to apply for trademark invalidity before the Courts, even if the trademark has not been registered by the French Patent and Trademark Office.

In other Member States of the European Union, the question of trademark invalidity is not addressed by the Courts but by the National Office, which may force the applicants to initiate multiple actions to reach their goal. This situation should however change with the new Trademark Directive, currently under discussion.

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