In today's climate, businesses are extending their trade to more than one territory by way of distributors, agents and other parties that enable their products to find their way into emerging and expanding markets. This in itself can open up legal issues with regard to agreements between parties. The recent case of Ursula Adamowski v OHIM (T-537 and 538/10) flags up one such issue that can arise.
Background to the Case
In 2003 Ursula Adamowski filed two Community Trade Mark applications for Fagumit (word) and Fagumit logo (see below) in Classes 12 and 17. Both CTM applications proceeded to registration.
In 2008, Fabryka Wezy Gumowych I Tworzyw Sztucznych Fagumit sp. Z.o.o. filed two separate declarations of invalidity at OHIM in respect of these two CTM registrations on the ground that they had been filed in bad faith, given that they had both been filed in an agent's name without the consent of Fabryka who is the proprietor of the following mark registered in Class 17 in Poland and also that it was Fabryka's business name which had been used in the course of trade to export goods into various EU member states, including Germany, since 1993.
The Cancellation Division rejected both applications for invalidity. These decisions were appealed to the First Board of Appeal who upheld both appeals and annulled the Cancellation Division's decisions.
In joint proceedings Ursula Adamowski appealed to the (European) General Court (GC).
The main part of this case turned on the evidence filed by Fabryke who showed that they had used the term Fagumit in the course of trade since at least 1997, exporting goods to Germany pursuant to a distribution agreement with the CTM proprietor (Ms Adamowski). All of the evidence produced by Fabryke, including the distribution agreement dated 10 April 1998 clearly showed that Ms Adamowski had no legitimate right to file the CTM applications, and did not obtain Fabryka's consent prior to doing so. Even though the CTM applicant was a distributor of Fabryka this did not give her the right to file CTM applications without Fabryka's consent. Consent for the purpose of Article 8(3) needs to be explicit and not implied and Ms Adamowski could not prove that there had been actual consent. The appeal was therefore dismissed.
Article 8(3) and related Article 53(1)(b) are not parts of Community law that arise every day, but they are certainly worth remembering. If a brand owner does find itself in a situation where a distributor, manager or agent has filed an application to register its mark then these provisions will be triggered. This case and others clearly state that, "consent for the purposes of registration of the mark in the name of the representative or agent must be clear, specific and unconditional". In this case, no consent was proven by Adamowski and she lost her registrations.
This is an important lesson commercially for brand owners. If they want to retain ultimate ownership of their brand this should really be written clearly in any agreement made with licensees, distributors or the like. If they do become aware of an application having been made without their consent then clearly this case highlights their ability to take action to prevent the third party from trying to obtain rights in their trade mark.
It is of course still the brand owner's responsibility to monitor their trade mark, preferably through a watching service, so they are made aware if any applications are filed. In the case in point, if Fabryka had had a watching service in place they would have become aware that Adamowski had filed these applications long before they even reached registration and time and money would have been saved, as well as the working relationship which the writer assumes was damaged irretrievably after this battle had taken place. Potential misunderstandings as to who has the right to protect a brand can be avoided at the outset by clearly identifying this in any agreement.