Infringement proceedings are possible with non-registered license

Submitted by Thomas Baudewijn on February 10, 2016
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It’s a problem that occurs more often than most are willing to admit: forgetting to register a community trademark license in the register. Although this is a simple formality, not taking care of it means the license will not have effect vis-à-vis third parties and this can result in some very annoying consequences.

If for instance you’re a licensee and want to start proceedings alleging infringement you are basically powerless since your trademark rights don’t have any effect vis-à-vis the infringer and thus you are not able to start proceedings. That is however the old point of view, because the Court of Justice has issued a judgment on February 4, 2016 according to which the lack of a registration should not be a hindrance at all.

The court acknowledges that the trademark regulation indeed states that registration is required to have effect vis-à-vis third parties, but that the interpretation of provisions of EU law also needs to take into account the context in which it occurs as well as the objectives pursued by the rules.

First and foremost the Court refers to a nuance in the trademark regulation that makes a trademark license have effect vis-à-vis third parties before its registration if these third parties have acquired rights in the trademark and are aware of the license. This supports the idea that the provision only intends to govern the enforceability in respect of third parties who have rights in the trademark or are likely to have. Apart from that the Court also notes that the provision only serves the creation or transfer of a right in respect of a trade mark and moreover the trademark regulation only requires the licensee to have the permission of the trademark holder to start proceedings for infringement.

Additionally the Court stated that unlike what is required in the event of a transfer of a trademark, the trademark regulation does not impose the registration of a license before the successor in title may invoke the rights arising from the trademark.

All of this leads to the conclusion that the obligation to register the license is intended to protect the licensee. As a consequence its does not apply when a third parties infringes the trademark rights and thus the license can start proceedings for infringement without any hindrance.

In practice this will be a very useful judgment. Whoever forgot the register his license in the register no longer needs to be in despair when confronted with infringement and will be able to enforce its rights to the fullest extent.

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