2012/7/25 - 23 Cdo 4909/2009 (summary)

Czech Republic – Supreme Court – Decision No. 23 Cdo 4909/2009 – July 25, 2012

(trademark rights – Council regulation (EC) No 44/94 on the Community trade mark)

The Plaintiff, a German corporation, sought protection of trademark rights against the Defendant, a Czech corporation, requesting that the Defendant be ordered to refrain from manufacturing, advertising and marketing hot-air furnaces. The Plaintiff based its claim on its position as an owner of Community trade marks. The courts of both instances arrived at the conclusion that the Defendant had the right of prior user, as defined in Section 10(2) of Act No. 441/2003 Coll. on trademarks, since the Defendant had manufactured and marketed the furnaces prior to the establishment of the right of priority in respect of both trademarks of the Plaintiff. The first-instance court dismissed the claim. The appellate court (a High Court) held that according to the established case law of the Court of Justice of the European Union, the essential function of a trademark is to guarantee the identity of origin of the trademarked goods or services to the customer by enabling him, without any danger of confusion, to distinguish the goods or services from others that have another origin. The appellate court arrived at the conclusion that the conduct of the Defendant lacks the capacity of inducing the danger of confusion or a false impression of the parties and of their productions, and that it was therefore not possible to infer conduct contrary to good morals or to law. The appellate court therefore upheld the judgment of the first-instance court.

The Supreme Court of the Czech Republic held that the courts of both instances had incorrectly assessed the relationship between Act No. 441/2003 Coll. on trademarks and Council Regulation (EC) No 40/94 on the Community trade mark. The appellate court inferred that Regulation No 40/94 does not provide for any limitation of the right of a trademark owner by the right of a holder of an unregistered mark, and therefore applied Section 10(2) of the Act on trademarks. However, a national law determined by the rules of conflict of laws may be applied only where the issue in question is not dealt with by the Regulation, which was not the case in this dispute. The Supreme Court agreed with the opinion of the appellate court that the information provided by the Plaintiff in the petition was a description of a functional technical solution, not of a shape protected by a shape trade mark, and the wording of the petition therefore did not correspond to the specification of the facts of the case and to the claims. As a result, the petition was unintelligible. The Court vacated both judgments and remanded the case for further proceedings.