Likelihood of confusion in just one part of the EU, EU trade mark infringement and prohibition order in that part of the EU only
On 22 September 2016, the Court of Justice of the European Union (“CJEU”) rendered an interesting judgment in case C‑223/15 regarding the question whether if a court finds that the use of a sign creates a likelihood of confusion with an EU trade mark in only one part of the EU while not creating such a likelihood in another part, that court must conclude that there is an infringement of that trade mark and issue an order prohibiting the use for the whole of the EU.
As the owner of several German and EU COMBIT trademarks in relation to software, Combit Software brought proceedings against the Israeli company Commit Business Solutions, which sold software bearing the word sign COMMIT. Principally, Combit Software sought an order based on its EU trade mark that Commit Business Solutions had to refrain from using the sign COMMIT for software in the whole of the EU. Alternatively, it requested an order based on its German trade mark that Commit Business Solutions refrain from using that word sign in Germany.
The OLG Düsseldorf found that there was a likelihood of confusion in the German-speaking EU countries but not in the English-speaking EU countries. But, based on this finding, it was uncertain whether there was an EU trade mark infringement and whether it had to issue a prohibition order for the whole of the EU or whether it could limit its prohibition order to, for example, the German-speaking EU countries without undermining the unitary character principle of EU trade marks. Hence, the OLG Düsseldorf decided to stay the proceedings for a preliminary ruling of the CJEU.
The CJEU first of all considered that if there is a likelihood of confusion with an EU trade mark in only one part of the EU, the function of the trade mark as an indication of origin is adversely affected and consequently there is an EU trade mark infringement. To guarantee the uniform protection of EU trade marks, the prohibition of EU trade mark infringing acts must as a rule extend to the whole of the EU. But if an EU trade mark court finds that the use of a similar sign for identical goods does not create any likelihood of confusion in one part of the EU and therefore cannot adversely affect the trade mark’s function of indicating origin in that part of the EU, that court must limit the territorial scope of its prohibition order. Because if there is no likelihood of confusion in a part of the EU, legitimate trade arising from the use of that sign in that part of the EU cannot be prohibited. It is important that the court identifies with precision which part of the EU is covered by such a prohibition order and which is not. Such a specified prohibition order for only a part of the EU does not undermine the unitary character of EU trade marks, since the trade mark owners’ right to prohibit all use that adversely affects the functions of their trade mark is preserved.
