There are no limits to trade mark invalidity counterclaims
Updated: Aug 29
The EU Court of Justice has ruled that a counterclaim for invalidity of an EU trade mark (EUTM) can cover more goods and services than those on which the infringement action is based. In other words, the scope of the invalidity counterclaim has no limits.
The Court said that the EUTM Regulation:
must be interpreted as meaning that a counterclaim for a declaration of invalidity of an EU trade mark may relate to all the rights which the proprietor of that mark derives from its registration and that the subject matter of that counterclaim is not restricted by the scope of the dispute as defined by the action for infringement.
The judgment came in Case C-654/21 LM v KP.
The Court was ruling in a referral from the Warsaw Regional Court in Poland in a case concerning an EUTM for Multiselect, owned by LM.
The mark is registered for goods and services in classes 9, 41 and 42 including vocational guidance (education or training advice), education information, installation of computer software, maintenance of computer software, publication of texts and providing online electronic publications.
LM brought an action for infringement against KP, who offers a guide for prospective police offers to prepare them for the psychological test covered by the contested mark.
KP filed a counterclaim for invalidity of the mark, on the grounds that it lacked distinctiveness and was a customary term.
In October 2021, the infringement action was dismissed, but the referring court had doubts about the counterclaim as it covered other goods and services than those involved in the main action. It referred two questions to the CJEU.
The Court ruled that a counterclaim “is a separate and self-standing claim the procedural treatment of which is independent of the main claim and which can thus be proceeded with even if the claim of the principal claimant is dismissed”. It is therefore distinguished from a mere defence and cannot be restricted by the action for infringement.
The CJEU added that it would run counter to the principle of procedural economy to hold that a counterclaim based on one of the grounds of invalidity may only lead to a declaration of partial invalidity of the EUTM. Moreover, it noted that jurisdiction to declare an EUTM invalid or to revoke an EUTM is shared between EUTM courts and EUIPO.
What does this mean?
Defendants in EUTM infringement cases often counter by attacking the validity of the trade mark being asserted. This judgment confirms that this could result in the trade mark being invalidated in full, meaning that a counterclaim is comparable to an invalidation action at EUIPO.
Claimants in trade mark cases should therefore beware of the risk that an unsuccessful infringement action could backfire with their trade mark being invalidated in full.
Whichever position you are in, if you require further advice about EUTM litigation strategy, please contact us.