Case C-452/24 Lunapark Scandinavia Oy Ltd v Hardeco Finland Oy
Under the EU harmonized trade mark legislation, the proprietor of an earlier trade mark who has, for five consecutive years in a Member State, knowingly tolerated the use of a later trade mark registered in that Member State, can no longer seek a declaration of invalidity of the later trade mark on the basis of the earlier mark for the goods or services for which the later mark has been used, unless the application for registration of the later mark was made in bad faith.
By contrast, the Finnish principle applied by the Market Court requires that an action be brought within a reasonable time, failing which the right to bring the action is considered forfeited. In other words, the Market Court held that the provisions of trade mark legislation were not exhaustive and that other principles could also be taken into account.
Lunapark owns the registered trade mark DRACULA, filed on 29 August 2003 and registered on 14 August 2009 for confectionery products. The company imports and markets in Finland confectionery whose packaging bears the word mark DRACULA and figurative elements depicting the Dracula character.
A company called Karkkimies had previously imported and marketed confectionery bearing the sign DRACULA both before 2009 and after Lunapark’s trade mark registration. Karkkimies held no exclusive rights to the sign through registration or use, nor was there any agreement between Lunapark and Karkkimies regarding its use.
In 2019, Hardeco acquired Karkkimies and continued importing and marketing the same confectionery products. The packaging continued to feature the word Dracula and corresponding figurative elements.
Lunapark brought an action before the Market Court, claiming that Hardeco’s conduct infringed its exclusive rights to the DRACULA trade mark. Lunapark sought an injunction against the use of the mark and compensation for damages.
Hardeco argued that it was merely continuing the long-standing practice of its predecessor, Karkkimies, which Lunapark had never opposed. Therefore, Hardeco contended that the action should be dismissed because Lunapark had forfeited its right to bring a claim due to prolonged inactivity.
The Market Court found a likelihood of confusion between the signs but dismissed Lunapark’s claim on this point, holding that Lunapark had lost its right to bring an action under general principles of Finnish private law due to its previous inactivity.
Under Finnish private law, it is widely accepted that a claim must be brought within a reasonable time after the claimant became, or ought to have become, aware of the relevant facts.
Lunapark appealed to the Supreme Court, arguing, among other things, that this national principle could not be applied because it would unlawfully restrict the trade mark proprietor’s right of injunction under the Directive.
Lunapark further argued that its passivity towards Karkkimies should not be interpreted as passivity towards Hardeco and that it had acted within a reasonable time.
The Finnish Supreme Court requested a preliminary ruling from the CJEU because it was unclear whether the national principle could be applied in a trade mark infringement case.
The Supreme Court asked whether Article 10 of Directive 2015/2436 must be interpreted as precluding the application of a general principle of national law under which the proprietor of a registered trade mark may lose, in circumstances other than those expressly provided for in that Directive, the right to prohibit a third party from using an identical or similar sign.
The CJEU, referring to its own case law, held that the Directive fully harmonises the conditions under which the proprietor of a later registered trade mark may retain its right to prohibit use.
The Court found that an interpretation allowing a national court to restrict the exercise of trade mark rights beyond what is provided for in Article 18(1) and Article 9 would undermine the Directive’s objective of ensuring uniform protection for trade marks across all Member States.
According to the CJEU, the Directive precludes the application of the Finnish principle under which the proprietor of a registered trade mark could lose the right to prohibit a third party from using the mark in situations other than those expressly mentioned in the Directive.
In other words, a Finnish court cannot invoke other national principles applied in different types of disputes, such as property disputes, to alter the criteria for determining when the right to bring an action in a trade mark case is considered forfeited.
The CJEU’s guidance was brief but clear: in this case, “mixing” Finnish law with EU law was not permissible.
We now await with interest how the Supreme Court will ultimately decide the matter.