Is a warning letter all you need to avoid acquiescence?
The EU Court of Justice (CJEU) has answered questions referred from Germany concerning the concept of “acquiescence” in European trade mark law (Case C-466/20 HEITEC AG v HEITECH Promotion GmbH, RW).
The dispute in this case arose under the 2008 Trade Marks Directive. Article 9 of that Directive provides that, where a trade mark proprietor has acquiesced in the use of a later trade mark for five years, they can no longer invalidate or oppose the use of the later mark, unless there is bad faith.
A convoluted dispute
This dispute involved a relatively straightforward infringement claim, which became complicated due to the length of time that elapsed and the number of actions that took place.
The case was brought by Heitec, which traces its origins to 1984 and applied for an EU trade mark for HEITEC on 18 March 1998, claiming seniority from 13 July 1991.
Another company, Heitech, applied for a German figurative mark including the words “heitech promotion” on 17 September 2002. It also owns an EUTM containing the word “heitech”, which was registered on 20 November 2008. Both marks have been used since shortly after the filing dates.
The real dispute arose in April 2009 when Heitec sent Heitech a warning letter. (Heitech had already contacted Heitec back in November 2002 seeking a coexistence agreement. Heitech proposed this again in response to Heitec’s letter, but its offer was rejected.)
In December 2012 Heitec initiated legal proceedings for infringement of its rights. However for its own reasons it did not immediately file the necessary documents or pay all the required fees, meaning that it was not until May 2014 that the defendants were served with proceedings.
On appeal, the Nuremberg Higher Regional Court held that Heitec’s action was time-barred as Heitech had used its later signs for five years and Heitec had acquiesced in that use; the court action had not interrupted the period of limitation since it had been served on the defendants only after five years had elapsed since the warning letter was sent.
On further appeal, the Federal Court of Justice found that Heitech’s use dated from 6 May 2009 at the latest and that Heitec was aware of that use on the same date. It referred four questions to the CJEU asking, essentially, whether acquiescence can be excluded not only by an administrative or court action, but also through other conduct such as sending a warning letter – and if so what are the implications of this?
The CJEU said that the relevant legislation must be interpreted:
“as meaning that an act, such as a warning letter, by which the proprietor of an earlier mark or other earlier right opposes the use of a later mark without taking the necessary steps to obtain a legally binding solution, does not stop acquiescence and, consequently, does not interrupt the period of limitation.”
It said that the alternative interpretation (i.e. that sending a warning letter is sufficient to interrupt the period of limitation) would mean that the owner of an earlier mark would be able to undermine the regime simply by repeatedly sending a warning letter every five years.
The Court added that the period of limitation may not be prevented where proceedings are launched before the date of expiry of the period of limitation, but the trade mark owner did not meet the requirements for service through its own fault.
Finally, where a trade mark owner is time-barred from bringing an invalidity action or opposing the use of a mark, it is also time-barred from bringing other related claims, such as for damages, provision of information or destruction of goods.