Monthly Archives: May, 2020

Does the COVID-19 pandemic excuse contract performance under the doctrine of force majeure?

A question often asked is whether businesses and individuals can avoid contract performance because of the COVID-19 pandemic? This question permeates all aspects of the business world, from office leases to product purchase and sale contracts to loan contracts and myriad other contractual arrangements.

Here are two recent white papers by some very esteemed lawyers that discuss the topic in detail:

http://www.cblg.biz/resources/force-majeure-and-covid-19/

https://www.bricker.com/resource-center/COVID19/publications/force-majeure-provisions-dusting-off-a-law-school-exam-topic-for-the-covid-19-pandemic

Please call us if you have any questions.

Should American Businesses be More Well-Versed In European Trademark Law?

Set forth below is a highly-recommended recent white paper by INLEX, one of our European trademark associates, about differences between trademark law in Europe and the United States.  Many thanks to Eric Schahl & Lou Marec of INLEX for this white paper.  The INLEX website is at http://www.inlex.com.

Please call us if you have any questions.

While trademark law follows the same logic across all countries, there are local specificities, and in particular differences between the American and European systems.

In the US and the EU, two different systems, in theory
The United States Patent and Trademark Office (USPTO) offers various options for trademark registration. The American system is based, on the one hand, on the choice of filing based on prior use or on the intention to use, and on the other hand, on a dual system. The “Principal register”, which is conditional on the distinctiveness of the trademark, offers maximum protection due to the presumption of ownership and the principle of incontestability. The “Supplemental register“, open to weaker trademarks, provides more limited protection. Is this American system so different from the European system?

At first glance, the European system seems very different. The European Union Intellectual Property Office (EUIPO) offers only a single procedure, based on a single mode of filing and a single regime. A trademark can be filed without any proof of use or even of immediate intention to exploit. Therefore, in order to avoid a third-party request for the lapse of the trademark registration, the trademark must never not be exploited for more than five consecutive years. No proof of exploitation of the trademark is required either at the time of filing, at the time of renewal of the trademark, or even during the registration process.

The necessary taking into account of European specificities
It seems that often, American companies, although theoretically aware of the differences in regimes, do not in practice take into account the particularities of the European system. This apparent ignorance of European law can lead them to undertake unsound strategies whenever a dispute arises between an American trademark and a European trademark (or a European national law). These choices can have farreaching consequences, sometimes even leading to the cancellation or revocation of the trademark.
Recent decisions have highlighted the importance for US companies of knowing European law in order to protect their trademarks.

BONOBO vs BONOBOS Case: French-speaking company court of Brussels, November 21st, 2019[1]

The American company BONOBOS INC. was blocked in its expansion into European market by the 2006 BONOBO trademark from the French group MAGELLAN.

The American company’s attempt to buy without exploiting, despite an ongoing dispute with its European opponent covering identical activities, ultimately backfired.
Specifically, MAGELLAN counter‐attacked in forfeiture for non‐use of the BONOBO WEAR trademark before the Belgian courts (and not in the field of fraud or bad faith).
As the American company was unable to report serious use of the trademark or even proof of any sale of the goods, the court ordered the revocation of the trademark BONOBO WEAR, which will be removed from the Belgian register.

  • It is essential that trademark strategy, both in attack and in defense, be correlated with usage.
  • The trademark revocation action was a judicious choice allowing the French group to reverse the burden of proof (and subsequently giving it the possibility of bringing a subsidiary action for fraud).
  • MONOPOLY vs DRINKOPOLY Case: EU Court of Appeal, July 22nd, 2019[2]

In 2011, HASBRO INC. filed an opposition against the DRINKOPOLY application by Kreativni on the basis of various earlier MONOPOLY trademarks and was successful.
In 2015, Kreativni brought an action for invalidity against the European trademark MONOPOLY, arguing that it had been filed in bad faith and that its registration was intended solely to counter the consequences of a possible revocation for failure to use the other earlier MONOPOLY trademarks.
The Cancellation Division rejected this request as unfounded. Kreativni appealed to the Board of Appeal, which ordered the partial cancellation of the European trademark MONOPOLY. It held that the “repeated” registration of the mark MONOPOLY did not follow a legitimate and justified commercial logic. The purpose of this practice was to extend indefinitely, in an abusive and fraudulent manner, the 5‐year time limit for evading the legal obligation of genuine use of the other MONOPOLY trademarks previously registered.

  • It is essential, in the case of repeated filings, to adopt a strategy that shows a real business logic and to keep any useful document that can demonstrate this.
  • This decision, which is symptomatic of a reversal of position in the European Union, makes the real intention to use the trademark, as a major element, a sine qua non condition.
  • SUPERMAC’S vs MCDONALDS Case: EUIPO, January 11, 2019[3]

In 2015, McDonalds opposed the registration of the Irish company Supermac’s trademark “Supermac’s”, claiming resemblance to its trademark “BIG MAC”.
In defense, Supermac’s filed a nullity action for non‐use of the “BIG MAC” trademark on the grounds that McDonalds had not made effective use of it as a product (sandwich) and service (restaurant) in the territory of the EU from 2012 to 2017.
To justify the use of its trademark, McDonald’s brought some documents (attestation of its own staff and screenshots of the website). However, the Cancellation Division of the Office considered that these elements were insufficient and that the serious use of the “BIG MAC” trademark on the market was not demonstrated (absence of data on turnover, receipts, survey on notoriety, link with customers via the Internet site, etc.).
Similarly, the EUIPO found that McDonald’s did not demonstrate the extent of use of the trademark and declared the Big Mac trademark invalid. As a result, the opposition filed by McDonald’s against Supermac’s could not succeed since it was based on a lapsed trademark. McDonald’s, of course, appealed this decision.

  • It is crucial to ensure that the trademark on which the invalidity action is based is being seriously used on the market, and not partially exploited.
  • No matter how well-known the trademark is, cancellation for non-use can be pronounced, if relevant documents related to use cannot be provided.
  • E&J GALLO WINERY vs SCEV CHAMPAGNE GALLO Case: Court of cassation, September 26th, 2018[4]

E&J GALLO WINERY is the owner of the 1998 Community trademark “GALLO”, claiming the seniority of the French trademark registered in 1968 which has since been abandoned by the company.
The company E&J GALLO WINERY has started to use its Community trademark (but not in France) and has sued SCEV CHAMPAGNE GALLO, producer of “Gallo” champagne since 1984, for infringement.

In defense, the SCEV CHAMPAGNE GALLO raised the “retroactive” revocation of the expired French trademark and obtained the cancellation of the trademark for lack of use. The claim was therefore no longer valid, and the 1996 Community trademark was cancelled on the basis of the SCEV CHAMPAGNE GALLO’s corporate name ‘Gallo’, which had been in use since 1984.

  • The seniority claim offers an attractive savings opportunity. However, it is necessary to be able to prove that the earlier national mark is not liable to be invalid or revoked at the time of the seniority claim.
  • Trademark protection, seniority claims, trademark abandonment and use constitute an alchemy that must be perfectly mastered.

The American and European systems, in practice similar
While European and American trademark laws seem far removed from each other, certain developments, both legislative and jurisprudential, have tempered the particularities of the European system.

In the name of harmonization of the law, the “Trademark Package” reform of 2015 has, in particular, reinforced the requirement of proof of use in opposition proceedings. From now on, the opponent must be able to prove the use of the earlier trademark on which the opposition is based for each of the goods and services concerned. Such a provision thus obliges the applicant to limit his application to the goods and services he actually uses.

The strict assessment of the use of the trademark
In that respect, the European Office very strictly assesses the exploitation of the sign. In addition to the sign, the goods and services, and the territory for which the trademark has been registered, proof of use must be dated and in sufficient quantity. The multiplication of the grounds for cancellation of the trademark thus requires the applicant to be vigilant both regarding the use of the trademark and the preservation of evidence of such use.
Such a novelty must obviously be interpreted in the light of the recent Skykick case law. On January 20th  2020, the Court of Justice of the European Union stated that the registration of a trademark without the intention of using it for each of the goods and services it concerns may constitute bad faith and consequently be annulled for said goods or services.

The severe penalties for fraudulent conduct by trademark applicants
In such a context, the applicant must therefore take care to exploit the trademark without acting fraudulently. It is illegitimate to obtain an exclusive right for purposes other than the functions of a trademark. Such an attitude, once it is established, is punishable by cancellation or revocation of the trademark. This is the case for the repurchase of an earlier mark which has not been used, the repeated registration of a mark to avoid the obligation to use it, the partial use of a trademark, or the Community application under claim of seniority of an abandoned mark.
The protection of a trademark requires thought and anticipation which should not be neglected. With legal support, these situations could have been prevented. It is therefore essential that the brand strategy developed by American companies be adopted in line with current European legislative and jurisprudential developments.

Eric SCHAHL & Lou MAREC

 

[1]https://app.darts-ip.com/darts-web/client/case-results.jsf : darts-999-461-H-en-2
[2]http://vmguidelines.dkpto.dk/media/131469/20190722_r1849_2017-2.pdf

[3]https://res.cloudinary.com/fieldfisher/image/upload/v1574435105/PDF-Files/PDFs%20from%20old%20website/euipo-decision_mzjvve.pdf

[4]https://www.legifrance.gouv.fr/affichJuriJudi.do?oldAction=rechJuriJudi&idTexte=JURITEXT000037495373&fastReqId=847777647&fastPos=1

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