Heitec AG is the proprietor of the trade name "HEITEC" with priority from 1984 as well as an identical European Union word trademark with German seniority from 1991. In 2008, Heitec AG first became aware of the application for and use of an European Union trademark with the word element "Heitech" by Heitech Promotion GmbH, and, in 2009 sent them a warning to that extent. In response to the warning, Heitech Promotion GmbH proposed a coexistence agreement but there is claimed to have been no further exchange between the parties. Heitec AG filed an action for an injunction with the Nuremberg-Fürth Regional Court three years later, and in March 2013, the court notified the plaintiff that the advance payment for court costs and the original copy of the statement of claim were still pending.
Heitec AG turned down a coexistence agreement in September 2013 and instead offered to enter into a license agreement. At the end of the year the plaintiff paid court costs and filed a new statement of claim. At the court’s request, the plaintiff also filed the original statement of claim in original form in February 2014. However, the plaintiff was then notified that the motions contained in the originals now submitted did not match those in the statement of claim submitted in 2012.
The Nuremberg-Fürth Regional Court awarded Heitec AG a claim for payment of the warning costs and dismissed the action in all other respects. The plaintiff's appeal against this was dismissed on grounds of forfeiture. The Nuremberg Higher Regional Court stated that Heitec AG, aware of the defendant's uninterrupted use of the "Heitech" mark over a period of five years, had not taken sufficient measures to prevent such use. The five-year period of acquiescence had not been interrupted by the action brought by Heitec AG, as this action had only become pending after the expiry of the time limit.
Heitec AG appealed against this ruling to the German Federal Court of Justice (BGH) which stated that the decisive factor was an interpretation in conformity with the Directive of Section 21 of the German Trademark Act, which governs forfeiture under German law. Any forfeiture depends on the question of whether Heitec AG tolerated this use during the five years from the date of knowledge, which in turn depends on the effect of the filing of the action. The relevant standards were based on those of the Trademark Directive and the EU Trademark Regulation (Article 61 EUTMR), which is why the BGH considered a referral to the CJEU necessary in order to clarify whether, a) according to the relevant EU regulations, a warning also leads to the exclusion of acquiescence and b) whether, for the calculation of the forfeiture period in the case of a lawsuit, only the filing of the proceedings with the court or the receipt of the document by the defendant is relevant.
The CJEU ruled that a serious judicial assertion is required to interrupt the toleration and that, for example, a warning without legal measures credibly aimed at bringing about a legally binding solution does not terminate the toleration. Nor is forfeiture prevented by filing a lawsuit if the document initiating the proceedings is filed before expiry of the forfeiture period but is inadmissible, due to the plaintiff's lack of diligence, and the deficiencies are not remedied until after expiry of the forfeiture period. Although, in principle, a warning can also interrupt the forfeiture period, this only applies if this warning leads to a formal assertion. A certain seriousness of the legal action must be manifested, which unambiguously shows that the right holder wants to defend himself against the infringement.
If forfeiture has occurred, this also prevents assertion of subsequent claims. Recital 12 of the Trademark Directive, according to which the legal certainty of the economic operators is of particular importance. Economic operators should be able to rely on the fact that they can no longer be held liable by a trademark right holder who tolerates the use for a "longer period of time". This situation was taken into account in the decision. The duration of this longer period is specified as five years by Art. 9 of the Trademark Directive, and Article 54 of the EU Trade Mark Regulation, which regulates forfeiture by acquiescence, also sets the same period.
The CJEU clarifies that only a correctly-prepared and potentially effective prosecution of rights interrupts the forfeiture period. Although this interruption can also be triggered by the service of a warning notice, it must be followed by measures to ensure a legally binding termination of the alleged trademark infringement. In light of this opinion, mere "saber rattling" will therefore no longer be sufficient to interrupt the forfeiture period and any action aimed at the legally binding termination of the trademark infringement must meet the requirements of national (procedural) law. Timely initiation of proceedings is essential, but so too is carrying out the due diligence required to ensure that nothing stands in the way of a timely lis pendens.
The question that remains open is whether negotiations to end the dispute that follows a warning notice have the effect of interrupting the five-year forfeiture period. The wording chosen by the CJEU suggests that this could be the case if the owner of the earlier rights has adequately worked towards a solution. However, if the latter has not pursued the negotiations, as in this case, then such settlement negotiations after warning do not help.
This approach of the CJEU to an adequate pursuit of counter-infringements has already been applied in this way by the Court of Justice in the context of invoking a justification for the non-use of a trademark in the context of Article 18 EUTMR (ECJ in Case C-668/17 P, Boswelan) and has been applied again here.
Authored by Andreas Renck and Thorsten Klinger.