In today’s world, trademarks play an extremely important role in shaping business reputation, protecting brands, and ensuring competitive advantages. A trademark is not only an element of commercial success, but also an important asset subject to legal protection. However, the existence of a registered trademark does not guarantee its unconditional protection — its active use is an important factor. In a dynamic market and with constant changes in the ownership of intellectual property, the importance of legal culture and awareness of the obligations associated with the ownership of these rights is growing. One of the most pressing issues is the responsible use of trademarks and compliance with the deadlines set by law, as failure to do so may result in the loss of legal protection.
Circumstances of the case
At the initiative of the IP Office, the Grand Chamber of the Supreme Court put an end to the issue of applying the procedure for calculating the five-year period of non-use of a trademark by its owner as grounds for early termination of its validity by a court decision.
In 2023, Eurocash S.A. filed a lawsuit with the Commercial Court of Kyiv against DOMINUS-K Limited Liability Company and the IP Office for early termination of the trademark certificate and obligation to make the relevant changes to the State Register of Trademark Certificates. The claims were based on the fact that the trademark had not been used by the owner in Ukraine for the last five years, which prevented the plaintiff from obtaining legal protection for its trademarks in Ukraine under international registrations.
By a decision of the Commercial Court of Kyiv dated April 30, 2024, in case №. 910/8781/23, the claim was dismissed in its entirety on the grounds that from the date of receipt by DOMINUS-K LLC the rights to use the disputed mark from the previous owner and as of the date of the Plaintiff’s application to the court, the five-year period of continuous non-use of the mark provided for by law had not expired, and therefore there were no legal grounds provided for by the Law of Ukraine dated December 15, 1993, No. 3689-XII “On the Protection of Rights to Marks for Goods and Services” for early termination of the certificate. No. 3689-XII “On the Protection of Rights to Marks for Goods and Services” for early termination of the certificate.
By the decision of the Northern Commercial Court of Appeal dated August 22, 2024, the appeal of Eurocash S.A. was partially upheld and a new decision was adopted, which upheld the claims regarding the early termination of the Ukrainian trademark certificate in Ukraine for all services in classes 35 and 42 of the International Classification of Goods and Services, for which legal protection was granted.
The court of appeal, partially granting the claims, stated that both Law No. 3689-XII and the Association Agreement establish a requirement for the continuous use of the trademark in Ukraine, rather than the continuous use of the trademark by a specific owner, who may change from time to time. The current legislation of Ukraine does not make the early termination of a certificate for a trademark for goods and services dependent on a change in the owner of the certificate, while DOMINUS-K LLC should have assessed the existing risk when concluding the agreement with the previous owner regarding the transfer of rights and, immediately from August 25, 2020, taken its own measures aimed at using the disputed trademark in Ukraine.
LLC “DOMINUS-K,” disagreeing with the decision of the court of appeal, appealed to the Commercial Court of Cassation within the Supreme Court with a cassation appeal.
During the cassation proceedings, with a view to establishing a uniform practice of law enforcement in the field of intellectual property in similar legal relations, the IP Office initiated the transfer of the case to the Grand Chamber of the Supreme Court for consideration.
Legal opinion of the Grand Chamber of the Supreme Court
The Grand Chamber of the Supreme Court (hereinafter referred to as the SC) concluded that Ukrainian legislation does not make the early termination of a trademark certificate dependent on a change in the owner of the certificate. When concluding a relevant agreement on the transfer of exclusive intellectual property rights to a trademark, the acquirer of the trademark ownership rights assesses the risks associated with the terms of the previous owner’s exercise of their rights to the trademark.
The Grand Chamber of the SC stated that, based on a systematic interpretation of the provisions of part four of Article 18 of Law № 3689-XII and Articles 198 and 200 of the Association Agreement, the five-year period of continuous non-use of the trademark begins to run from the date of filing the application and the date of publication of information about the issuance of the certificate (granting legal protection to the trademark under international registration in Ukraine) and does not depend on a change in the owner (authorized user) of such trademark, although this procedure may be accompanied by the issuance of a new certificate.
The purpose of Law № 3689-XII and the Association Agreement suggests that their adoption was motivated by the desire to encourage the owner (authorized user) of a trademark to actually use it to identify the relevant goods/services. The opposite approach, whereby with each change of owner (authorized user) of a trademark, the five-year period of non-use starts from the beginning, would make it impossible to apply the aforementioned legal provisions (including as a result of the deliberate transfer of ownership of the trademark in order to prevent the expiry of the specified period), which would not be in line with the purpose of introducing the specified period.
The Grand Chamber of the Supreme Court referred to similar provisions on the cancellation of trademark rights on the grounds of failure to put them into genuine use within a five-year period, contained in Regulation (EU) № 2017/1001 of the European Parliament and of the Council of June 14, 2017, on the European Union trademark (Article 58). 2017 on the European Union trademark (Article 58).
The practice of applying these provisions by the Court of Justice of the European Union shows that the five-year period of use of a trademark includes the periods of its use by all owners, and not only the last one, which also allows conclusions to be drawn about the calculation of this period from the date of publication of information about the issuance of a certificate or the granting of legal protection to a trademark under international registration in Ukraine, regardless of the change of ownership of such a trademark.
Considering the above, the Grand Chamber of the Supreme Court left unchanged the decision of the Northern Commercial Court of Appeal dated August 22, 2024, in case № 910/8781/23, which terminated the validity of the Ukrainian trademark certificate in Ukraine for all services in classes 35 and 42 of the International Classification of Goods and Services.
This court case once again emphasizes the importance of timely and actual use of a registered trademark. Failure to comply with this obligation, in particular within the five-year period established by law, may result in the loss of legal protection, even if the owner of the trademark changes. The Grand Chamber of the Supreme Court clearly stated that the new owner assumes all legal risks associated with the previous non-use of the trademark and is obliged to take this into account when acquiring rights.
This once again emphasizes that trademark registration is not just a formality, but a responsible step in strategic intellectual property management.
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