The European Court was asked whether it was possible to withdraw consent given for the concurrent use of a trade mark for leather goods and handbags. Its preliminary ruling (Martin Y Paz Diffusion SA v David Depuydt and another (Case C-661/11, 19 September 2013)) was that a trade mark proprietor cannot be deprived of the possibility of asserting its exclusive rights in its marks. It must therefore be able to withdraw its consent for a third party to use signs identical to its marks, in relation to identical and similar goods for which the marks are registered, even where the trade mark proprietor had previously consented to such use.
The case concerned two Belgian parties (Martin Y Paz and Gauquie) who had used the same marks for many years for similar goods; Martin Y Paz (the trade mark proprietor), sold small leather goods, whilst Gauquie sold leather handbags and shoes. Martin Y Paz consented to Gauquie's use of its marks, and the two companies co-existed for many years, even selling each other's goods in their respective shops. However, the relationship deteriorated and litigation was commenced in Brussels by Gauquie in 2005, seeking invalidity of Martin Y Paz's marks, or alternatively, that the specification be limited to small leather goods only. Martin Y Paz applied for a ruling that Gauquie cease using its marks for identical or similar goods. The litigation progressed through the Belgian Court of Appeal and up to the Cour de Cassation, which in turn referred the case to the European Court (CJEU) for a preliminary ruling.
The European Court determined that if a national court finds that a trade mark proprietor has withdrawn its consent to the third party's use of identical signs, then that withdrawal of consent must be upheld unless the third party has a defence for such use (eg the 'own-name' defence or because the sign is descriptive), or where such use is not liable to adversely affect a function of the mark. The underlying rationale is that a trade mark proprietor cannot be deprived of the possibility of asserting its exclusive rights in its marks against a third party. In this case, the exclusive right in question was that set out in Article 5(1)(a) of Directive 89/104, namely where a proprietor of a mark opposes the use, without his consent, by a third party of a sign which is identical with that trade mark in relation to goods which are identical with those for which the trade mark is registered.
A practical effect of this decision is that where consent that was previously given by a trade mark proprietor is subsequently withdrawn, a third party may continue to sell goods bearing signs identical to the marks that were put on the market in the EEA with consent (since by giving its consent, the trade mark proprietor has exhausted its exclusive right in respect of those particular goods). However, once that consent has been withdrawn, the third party must not put any further goods on the market in the EEA under those signs.
Unfortunately Martin Y Paz and Gauquie had not documented their terms of co-existence at the outset. If they had done so, they could potentially have avoided lengthy litigation and legal costs. The case has been referred back to the Belgian national court for a final ruling.
The author Georgina Shaw is part of Burges Salmon’s trade marks team led by Jeremy Dickerson. The team includes IP specialist dispute and non-contentious lawyers and trade mark attorney Chris Morris.