Trademark Protection against Infringements – What Issues Arise in Challenging the Registration of a National Trademark

A registered trademark enables its owner to object to the use of the trademark for the same products by other persons within the territory for which the trademark has been registered. Under certain conditions, the protection might affect also signs that are similar or identical to the trademark or signs used for products for which the trademark has not been registered. Since it is used to denote products or services in commercials and other places and it is of paramount importance for the business operations of many companies, the trademark is an exceptionally valuable asset that needs to be protected against infringements and the remedies should be effective and fast. Then what is the way for such protection to be obtained for national trademarks (EU trademarks have their specific features which go beyond the scope of this article) and what are the practical difficulties that you might encounter?

Typically, the infringement of a trademark is a conscious, deliberate action and therefore one could hardly expect any out-of-court settlement of the dispute with the infringer. Of course, there exists the option to seek protection from the Patent Office or to report the offence to the public prosecutor. Still, serving a claim in court proceedings is the realistic option to stop the infringement and the only option to be paid damages.

There are many questions which need to be answered in the course of these proceedings and the burden of proof falls primarily on the trademark owner claiming that an infringement has been committed. These questions include, for instance, whether there is full or partial match between the trademark and the sign used by the infringer (i.e. whether the two marks are similar or identical), who is actually the infringer, whether the sign is actually used in the infringer’s business activities, etc.

The defendant in the proceedings, in his turn, has a number of ways to prove that the alleged trademark infringement has not been committed. As well as arguments concerning the justification of the claims, challenging the trademark registration is another option which the infringer can use with arguments that the trademark did not have to be registered in the first place or that it was no longer subject to protection due to action or inaction of the owner after its registration. In the former case, the trademark registration would be retroactively deleted in accordance with the Trademarks and Geographical Indications Act (TMGIA), i.e. as if it has never existed at all, while in the latter case it would be repealed as from the date on which the claim was served or as from the date on which the trademark was not used for five years.

There are several issues arising in this challenging of the registration. Firstly, the Bulgarian legislation does not provide for an option in which a civil court is able to delete or repeal the registration since the court judgment cannot be entered into the State Register of Trademarks at the Patent Office. Therefore separate proceedings should be opened at the Patent Office. A possible decision of the Patent Office, regardless of whether it rules on the deletion/repeal of the trademark or not, is subject to appeal before the Administrative Court of the City of Sofia and, subsequently, before the Supreme Administrative Court. In this case, the question is what should happen to the trademark infringement claim while the claim on the deletion/repeal of the trademark is examined.

The deletion/repeal of the trademark is relevant to the infringement claim because if there is no registered trademark there is no way for it to be infringed upon. Therefore the court ruling on the infringement claim should definitely consider the decision of the Patent Office on the deletion/repeal if and when it becomes enforceable. But should the civil court suspend the hearing of the infringement claim and wait until the decision becomes enforceable?

The answer to this question is “no” but it should be derived from a prior review of the objectives and principles of trademark registrations in the broader context of civil law and civil proceedings. In the first place, the main task of the judiciary in hearing cases is to uphold consistent and non-contradictory acts. Therefore when there is a judicial act affecting a dispute indirectly, this act should be taken into consideration when the dispute is resolved. Even if it is clear that such an act will be issued in future, i.e. when the proceedings are pending, the court should take it into consideration, staying the relevant case in accordance with Article 229(1)(4) of the Civil Procedure Code (CPC). It will be possible to resume the pending proceedings only when that other act is issued or it becomes clear that it will not be issued.

The logic of the law-maker is obvious, although it creates the opportunity for a litigant to procrastinate by opening new cases which are at least ostensibly related. The issue is even more complicated when trademarks are involved for a number of reasons, leading to a different legislative solution and a different approach to the proceedings concerning a trademark. The difference stems from the law-maker’s understanding that once registered and entered into the State Register of Trademarks at the Patent Office, the trademark is an asset that has to be protected until the time when an enforceable act repeals the registration or deletes the trademark. The existence of this remedy is of special importance to businesses which might sustain huge losses from every day of the infringement and if the unauthorized use of the trademark persists, other persons might also decide to infringe upon it for the simple reason that they see that the initial infringer is not punished. Therefore a fast remedy against trademark infringements is of paramount importance. Otherwise the rights holders might be faced with the need to open a large number of proceedings against a large number of infringers.

There is one more aspect of the issue. Even if the claim to delete/repeal the trademark is rejected, the infringer may serve further claims to repeal the trademark. The repeal concerns the activities of the trademark owner after its registration and, for this reason, at any point of time new circumstances may occur and warrant further proceedings relating to the trademark registration. The continuous litigation of this kind might fully thwart the protection of a trademark. Moreover, a decision to reject a claim to delete/repeal the trademark is binding only to the parties in the proceedings, i.e. the trademark owner and the infringer. There exist no obstacles to another party serving a claim at any time after a previous claim was rejected.

The law-maker has not entirely ignored this possibility, providing for two remedies in regulating the consequences of the deletion/repeal of the registration in Article 28(4) TMGIA. A retroactive effect of the deletion/repeal will not affect either enforced court judgments on infringements or license agreements which have already been implemented. In these cases, the law-maker has recognized that the trademark was registered and acting in good faith implied respect for the related rights up until the time of the deletion/repeal. Therefore the legislation does not provide grounds for revisiting previous completed relationships in connection with the deletion/repeal.

It might seem at first glance that Article 28(4) TMGIA does not give an answer to the question what would happen to a pending trademark infringement case when a claim was served to delete/repeal the registration of the trademark. However, the suspension of proceedings under Article 229(1)(4) CPC is intended to prevent contradictory judgments that would have to be rescinded later on. As the deletion/repeal does not affect judgments which have already been enforced, no conflict arises and it is not necessary to repeal any of these judgments subsequently. Therefore there exist no reasons for the court hearing alleged trademark infringements to wait for the decision on the deletion/repeal. In case it is issued, this decision will have to be taken into consideration in the infringement proceedings and the infringement claims should be rejected. But in all other cases the court will have to provide protection of a registered trademark in the proceedings.

The same conclusion can be drawn from the case law of the Supreme Court of Cassation (SCC). Although it is available on this matter, there were cases of suspending trademark infringement proceedings until a decision is made on the claims to delete/repeal the trademark. Therefore the SCC issued two rulings in 2019 to state explicitly that pending a decision on the deletion/repeal of a trademark, its effects are not to be taken into consideration by the court and hence the owner of the challenged trademark has all the rights and remedies provided by the law (Ruling No 323 of 17 July 2019 in Interpretative Case No 1587/19 of the SCC and Ruling No 371 of 9 August 2019 in Interpretative Case No 1589/19 of the SCC, 1^st Commercial Law Division).

A new bill on trademarks and geographical indications has been submitted to the National Assembly. The proposal retains the current wording of Article 28(4) of the existing TMGIA in the new Article 38(4). Therefore it can be concluded that the law-makers have not changed their views on this matter and that the SCC case law will remain relevant also after a possible adoption of a new law on trademarks and geographical indications.