Beware: not every infringement of a renowned brand is actionable | In Principle

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Beware: not every infringement of a renowned brand is actionable

The court may refuse to find unfair competition even if the grounds are met, if the facts in the case show that the holder of a renowned trademark did not take action against infringements for an extended time.

In a recent case (Polish Supreme Court judgment of 14 October 2009, Case No. V CSK 102/09), a renowned producer of air fresheners designed to hang from the rear-view mirror of a car filed a civil suit against a producer of similar items. The allegations included trademark infringement as well as unfair competition. The case went back and forth before reaching the Supreme Court on a cassation appeal filed by the plaintiff.
The Supreme Court denied the appeal, but made a number of important comments in the justification that will make the ruling significant for holders of intellectual property rights.
The Supreme Court stressed that because the court of second instance had found that the defendant had violated good practice by exploiting the plaintiff’s renown, which could result in loss of the distinguishing nature of the plaintiff’s trademark and thus of its commercial appeal and value, the threat to the plaintiff’s interests was clear and required no further proof.
According to the justification by the Supreme Court, infringement of a renowned mark constitutes an act of unfair competition for purposes of Art. 3(1) of the Act on Counteracting Unfair Competition, regardless of the risk of confusion, if the user could obtain undeserved gain or the use could harm the distinguishing nature or renown of the prior mark.
The Supreme Court accepted some of the plaintiff’s arguments, particularly that use of a trademark belonging to someone else constitutes an act of unfair competition, but it nonetheless denied the cassation appeal, finding that the plaintiff had condoned the defendant’s practices for nearly 5 years, and thus allowed the defendant to develop its business in the belief that it was not threatening anyone else.
This is another in a series of rulings in which the Supreme Court has considered the efforts by the holder of a trademark to enforce its rights and denied a claim because the holder had waited too long to assert its rights, even though the statute of limitations had not expired.