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A judgment of the European Court of Justice (ECJ) challenges German practice of modernisation of trade marks.
In the course of modernising trademarks, German companies often register the new form of the existing mark as a separate mark to ensure protection for the new version if the new form of the existing mark differs significantly from the older form of the mark. However, by doing so the proprietor of the mark unwarily puts the older mark at risk, which due to its priority has an incomparably higher value. The risk to this older mark results from the fact that German trademark law is not in conformity with the European Directive harmonising European trademark law. An ECJ judgment of last September (C-234/06P) suggests: if the old registered form of the mark remains unused for five years, it lapses. It is not protected by the use of the newly registered mark.
In the ECJ-case an Italian financial service provider, “Il Ponte Finanziaria“ took legal action against the trademark „Bainbridge“. Il Ponte relied on an unused old registered trademark and claimed that the use of the old mark was achieved by the use of a later registered but only slightly modified trademark. The ECJ did not, however, follow this argument. If two marks are registered, they must both be used independently. If the old registered mark has not been used for five years, it lapses, irrespective whether the later registered modified mark has been put to genuine use.
“Companies have not yet become aware of the risks emerging for German trade mark portfolios“ warns Professor Dr. Paul Lange, partner at Siebeke Lange Wilbert in Düsseldorf. He has repeatedly referred to the impact of the „Il Ponte decision“. But the complexity of the legal matter as well as the widespread trust in the ongoing applicability of the German trademark law seems unshakeable. However, “the denial of protection for modified registered marks, which have not been used for more than five years, puts the practice of German trademark modernisation completely in question“ explains Professor Lange.
Section 26 (3) of the German trademark law expressly protects the modified version of a mark. It permits its use in a form “that deviates from the registration, provided that the alteration does not change the distinctive character of the trademark“. But trademark owners and their advisors are reluctant to rely on the wide scope for discretion associated therewith. Accordingly, if a company modernises its trade mark, it applies for registration of the new modified form as well, in order to ensure protection. Such practice is even expressly permitted by German trademark law, in sentence 2 of the same section which reads: „Sentence 1 [of Section 26 (3)] is also applicable if the mark is additionally registered in the form in which it is being used.“
“It is this second sentence which seems to conflict with the European Directive and therefore may not be applicable following the ECJ judgment,“ explains Professor Lange, author of the standard work, “Marken- und Kennzeichenrecht” (Trademark and Sign Protection).
"Many undertakings now run a considerable risk of losing their old, far more valuable, marks in favour of younger modifications! They are threatened by significant losses in relation to the value and security of their mark.”
Professor Lange’s summary is unambiguous: “Unless the highest courts confirm, that in this particular case the confidence of trademark owners in their national trademark laws outweighs the objective of European harmonisation, undertakings only have one choice to ensure continuing protection of their older marks: they are strongly advised to use each of their registered marks genuinely."
