No (Exotic) Protection of a Lapsed Trademark
Benelux Court of Justice of 23 December 2010
(Engels/Daewoo)
The Belgian company BVBA D. Engels has been active in the sales
of household machines since 1927. In 1997 DE filed a device mark
for, inter alia, electrical equipment, consisting of the stylized
letters DE:
In 2003 Daewoo Electronics, part of the well-known Korean
conglomerate, filed the following device mark, also for electrical
equipment:
In both cases the first letters of the company name are used,
and the stylization of these letters show considerable similarity.
Engels and Daewoo corresponded about the matter, resulting in
Daewoo going to the (Belgian) Court to have the DE trademark of
Engels declared lapsed for non-use. If during a period of five
years there has been no normal use of a trademark, without valid
reason, the lapse of that trademark can be invoked pursuant to
Article 2.26 (1) of the Benelux Treaty on Intellectual Property
(BTIP). The Belgian Court ruled in three instances that the
trademark had indeed to be declared lapsed for non-use. However,
another question (which eventually ended up before the Benelux
Court of Justice) was whether Engels may nevertheless invoke the
protection of the device it uses on other grounds.
Reliance on the Paris Convention
Engels argued that the DE sign it uses is not only a trademark, but
also a “company logo” that it uses as an indication of its company
(so not as a trademark). In Article 8 of the Paris Convention
("PC") it is stipulated that a trade name shall be
protected, whether or not it forms part of a trademark. In Article
10bis it is stipulated that protection must also be assured against
unfair competition, particularly against indications or allegations
that are liable to mislead the public (paragraph 3). The PC has
direct effect in the Benelux. It is explicitly stipulated in the
BTIP that the BITP shall not adversely affect the application of
the PC (Article 4.8). Engels is of the view that it is entitled to
separate protection on the basis of the PC, particularly because
the use by Daewoo of a sign that is similar to its company logo
might create confusion among the public, as meant in Article 10bis
(3) of the PC. According to Engels, the fact that the trademark has
lapsed cannot preclude this.
Question to the Benelux Court of Justice
The Court of Cassation in Belgium realized that there is a tension
between, on the one hand, the protection under the PC as invoked by
Engels, and, on the other hand, the obligation under the BTIP to
register trademarks (and to keep the registration valid). As is
explicitly stipulated in the BTIP, without registration there is no
protection of a trademark (Article 2.19 (1)). The only exception is
the ‘generally well-known trademark’ as meant in the PC, but that
situation was not at issue here. The Court of Cassation therefore
requested the Benelux Court of Justice to answer the following
question: can the holder of a trademark that has lapsed
not demand any protection anymore for the use of
that sign with regard to an undertaking that creates confusion by
using the same sign?
No Protection for Lapsed Trademark
The Benelux Court of Justice noted that a trademark is a sign that
is used to distinguish the goods or services of an undertaking from
those of goods or services of other undertakings (Article 2.21 (1)
of the BTIP), and that the protection of such a trademark shall
only be given after registration (Article 2.19 of the BTIP). It
follows from this that the holder of a lapsed trademark cannot get
protection for his trademark, i.e. for the sign that serves to
distinguish the goods or services of his company. After all,
because the trademark has lapsed he cannot invoke a registered
trademark anymore. In this situation, the Court of Justice stated
explicitly, there is no protection at all, neither under
trademark law, nor under general civil law.
The PC and the rule that the BTIP is not detrimental to the PC
do not alter this. The obligation of registration is a historical
part of Benelux law. The legislator purposefully wanted to
introduce a heavy sanction for not filing trademarks, for the
benefit of legal certainty; third parties must be able to be aware
of exclusive trademark rights by means of the trademark registers.
It also appears from the history of the PC that at the time (to be
exact: during a conference in 1926) the position of specific
countries was looked at (in this case Belgium), which countries
were of the opinion that the protection against unfair competition
of Article 10bis should not overlap the protection against
trademark infringement. Moreover, the BTIP (and before that time in
the Benelux Trademarks Act) included a specific exception to the
obligation of registration for the generally well-known trademarks
of Article 6bis of the PC, and a similar exception was not created
for the protection against unfair competition of Article 10bis of
the PC. All in all, Article 10bis of the PC does not preclude that
the Benelux prohibition of legal protection of a non-registered
trademark is fully applicable.
There Is Still an Opening…
Of course, the above-discussed does not mean that
the protection under Article 10bis of the PC has disappeared. Also
the holder of a non-registered or lapsed trademark may invoke this
protection, in other words: may oppose acts that constitute unfair
competition. The question is, however, what meaning this protection
still has if (as is the case here) the former proprietor of a
trademark actually wants to oppose the use of a sign that is
similar to that trademark. What is not possible in view of the
above in any case, is the creation of a kind of alternative
trademark protection under Article 10bis of the PC. What is
possible, according to the Benelux Court of Justice, is that acts
constituting unfair competition are opposed for which “the use
of that trademark or a similar sign is part of the acts that gives
rise to confusion.” This last consideration is not
particularly clear. Apparently, the use of a more recent sign may
be considered as a factor in the whole matter, but there must also
be other acts in order to receive protection under Article 10bis of
the PC.