In 2019 The Hague Court of Appeal overruled(1) a first-instance court decision even though that court had followed an earlier German higher court decision based on the principle of loyalty under EU law.
EU principle of loyalty and lis pendens
The principle of loyalty entails that EU member states should not act in a way that contravenes EU objectives. As EU directives and regulations also embody these objectives, the principle of loyalty additionally entails that EU member states should act in conformity with directives and regulations, as they must remain 'loyal' to the European Union. This principle also regards national courts.
The embodiment of EU objectives by directives and regulations relevant in the case at hand follow from Recitals 32 and 33 of EU Trademark Regulation (2017/1001), which imply that contradictory judgments should be avoided, and Article 36 of the recast EU Brussels Regulation (1215/2012), which entails that judgments given by other EU member states should be recognised. The principle of lis pendens is also incorporated in Article 29 of the recast EU Brussels Regulation. It thus follows from the foregoing and the principle of loyalty that a judgment of the first court to which the case at hand was brought should be followed by other courts if it involves the same cause of action between the same parties.
G-Star is an international clothing chain that holds several EU and Benelux trademarks regarding clothing, footwear and headgear, including RAW, G-RAW, RAW ESSENTIALS, G RAW and G-STAR RAW (DEMIN) (hereinafter jointly referred to as the 'RAW trademarks'). TM25 holds several figurative marks of G-Star.
RAW BLUE is a hip-hop clothing brand which operates under the EU and German trademark RAW BLUE. RAW BLUE clothes have been on the EU market since 2003. Since 2012, the German company Brandzbase has been the holder of several web domains, including 'www.topstreetwear.com', which sold RAW BLUE clothing.
German first-instance court decision
In 2008, the German first-instance court (Landgericht Düsseldorf) denied an injunction sought by G-Star International BV regarding the trademark, trade name and domain name RAW BLUE. According to the court, there was no likelihood of confusion regarding G-Star's RAW trademarks and RAW BLUE given the low degree of similarity between the signs. Moreover, the marks did not have a reputation in the European Union, which entailed that there was no infringement on the rights of G-Star International BV.
At appeal in 2012, the higher court concluded similarly by reiterating that there was no likelihood of confusion that would lead to an infringement of G-Star International BV's rights. Moreover, the court opined that the RAW trademarks had only a minimal distinctive character and were rather descriptive. G-Star International BV's infringement claims were therefore denied.
Dutch first-instance court decision
In 2015, G-Star RAW CV and TM25 brought the case against, among others, Brandzbase and Topstreatwear to a Dutch court. With regard to the use of RAW BLUE (by RAW BLUE) on certain types of clothing, the Dutch court referred to Recital 3 and 17 of Regulation 207/2009 (in the meantime recast by (EU) 2017/1001)). According to these recitals, "contradictory judgments should be avoided in actions which involve the same acts and the same parties and which are brought on the basis of a Community trade mark and parallel national trade marks". According to the Dutch court, deciding on an infringement question that was already decided for the entire European Union by another EU member state court would not be in line with the foregoing. Therefore, the Dutch court decided to follow the judgment of the German higher court based on the principle of loyalty and did not carry out an infringement assessment.
As to the use of the trademark RAW BLUE (by RAW BLUE) on other types of clothing, the Dutch court was of the opinion that an assessment was needed as such use constituted a different act than those that had been assessed in the judgment of the German court. Given the purposes of this article, the answer to the infringement-questions will not be discussed here.
Dutch court of appeal decision
The Hague Court of Appeal stated that the German higher court's decision should be considered based on the principle of loyalty. However, it rejected the first-instance court's reasoning that no assessment should take place at all based on the principle of loyalty for the following reasons:
- The German higher court's decision did not apply to the same parties as the Dutch case. The parties in the German case were G-Star International BV, RB Europe GmbH and Hussain, whereas the following entities were part of the Dutch case: G-Star RAW CV and TM25 Holding BV on the one hand and Brandzbase GmbH, BADAM GmbH (previously known as Topstreetwear) and YUKKA Limited (hereinafter jointly referred to as 'Topstreetwear') on the other. Therefore, the principle of res judicata, which entails that the concluded judgment is the final judgment, of the German case did not apply as such to the parties to the Dutch case.
- The German case took place in 2010 and the level of distinctiveness of the RAW trademarks in 2006 was used as the point of reference for the assessment. However, according to The Hague Court of Appeal, levels of distinctiveness can increase or decrease over time, which entails that the outcome of an infringement assessment can also differ over time. As the infringement claim in the Dutch case is based on the use of the RAW BLUE mark from 2015 onwards, it is highly questionable whether the level of distinctiveness in 2006 would still be representative for the current situation in the market.
- Unless there are specific reasons for an ex tunc decision, infringement assessments should always be carried out on the basis of the ex nunc principle, which entails that all relevant information should be taken into account. This includes information applicable to the infringement period and information applicable to the period of the decision, and also follows from the general function of appeal in Dutch law – namely, reassessing the first-instance court's decision.
Based on the foregoing, The Hague Court of Appeal rejected the first-instance court's opinion on the grounds that the infringement assessment should have been based on information stemming from 2015 onwards because G-Star RAW had based its claim with the Dutch court on acts of Topstreetwear that took place in 2015.
The court of appeal concluded that Topstreetwear's use of the RAW BLUE mark constituted an infringement of G-Star RAW's and TM25's rights with regard to their Benelux RAW trademarks.
The Dutch judgment demonstrates that trademark law specifics can easily stand in the way of the EU principle of loyalty. It is also a useful reminder that, in the context of trademark infringement assessments, a trademark's level of distinctiveness is a substantial aspect; however, this aspect can be subject to changes due to evolving market circumstances.
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