Under French law, the owners of French trademarks are strongly recommended to register their licence with the National Industrial Property Institute (INPI). This simple administrative formality in effect entitles them to bring proceedings for any infringement of their rights. Failure to do so means they are either at the whim of the licensee's proactivity - or inertia, as the case may be -, or reduced to bringing a case on the grounds of unfair competition.
In European law, the situation is not as clear-cut. When questioned about how to interpret Article 23(1) of Regulation 207/2009 of 26 February 2009 on the Community trade mark1, the Court of Justice of the European Union (CJEU) ruled in favour of a negligent licensee (CJEU, 4 February 2016, C-163/15, Youssef Hassan v. Breiding Vertriebsgesellschaft mbH).
The company Breiding was the holder of a Community licence2, the terms of which authorised it to assert its rights arising from any infringement. It thus brought proceedings against Mr Youssef Hassan, whom it accused of having sold bedding items in violation of its licence. However, since this licence had not been registered with the European Union Intellectual Property Office, the Higher Regional Court of Düsseldorf decided to stay the proceedings and ask the Court of Justice, "Does the first sentence of Article 23(1) [...] preclude a licensee who is not entered in the Register … from bringing proceedings alleging infringement of a Community trade mark?"
Interpreting this sentence in light of the context and the aims pursued by the Regulation, the CJEU responded in the negative stating that this provision did not preclude a licensee from bringing proceedings for infringement even if the licence has not been entered in the register. Following a thorough analysis, the CJEU concluded that the lack of effectiveness against third parties, of legal acts which have not been entered in the Register is intended to protect a person who has, or may have, rights in a Community trade mark as an object of property, and not the third party.
Consistent with the purpose of the regulation, which in particular is designed to combat infringement, this solution will be the envy of French licensees, who do not benefit from such forbearance.
1 "Legal acts [including licensing] concerning a Community trade mark shall have effects vis-à-vis third parties in all the Member States only after entry in the Register".
2 Since the introduction of Regulation 2015/2424 of 16 December 2015, "Community" trademarks have become "European Union" trademarks.