Protecting non-registered trademarks in Cyprus: overview and commentary of the relevant legal framework
If one decides to do business with the public, then one of the most important concerns to such venture, is to be presented to the public with a distinctive brand which will be remembered and associated by the general audience with that business.
On this basis, a person or a group of people who use a mark to conduct his/her/their business and the mark is connected in the minds of the public with that business, he/she/they would also subsequently wish to protect it. The reason for that would be to prevent any unauthorised use thereof and to stop others from using such mark or similar marks to gain - in commercial terms - from its business reputation and fame. A proactive way to protect a mark is of course to register it as a trademark in accordance with the scope of protection sought as prescribed in applicable laws. The registration of trademark grants its holder the right to protect such trademark in the event where a third party infringes its right to its exclusive use. For more information on trademark registration, please refer to our earlier article of September 2020 here.
Nevertheless, what happens when someone's mark is not registered? The purpose of this editorial is to set out the legal rights attributed to non-registered marks adopted in the course of business and especially comment on the methods through which a holder of a non-registered mark may be protected and prevent other persons from using the non-registered mark used in the course of business.
- Cyprus legal framework
In Cyprus, when a third party uses and takes advantage of the goodwill and fame of a non-registered trademark which is already used in the course of trade, without being authorised, the rightful proprietor of the non-registered trademark may protect its right to exclusively use it by invoking article 35, of the Civil Offences Law, Cap. 148, that is the civil offence of "Passing off".
Article 35 of the Civil Offences Law, Cap. 148, states as follows:
"35. Any person who by imitating the name, description, sign, label or otherwise causes or attempts to cause any goods to be mistaken for the goods of another person, so as to be likely to lead an ordinary purchaser to believe that he is purchasing the goods of such person, shall commit a civil wrong against such other person:
Provided that no person shall commit a civil wrong by reason only that he uses his own name in connection with the sale of any goods."
In summary, the holder of the non-registered mark may protect it from unauthorised use based on article 35, of the Civil Offences Law, Cap. 148, if it can prove that it is the rightful holder of the non-registered mark and can exclude others from using it due to the fact that the mark has developed goodwill as regards the goods and/or services it provides, that a third party imitates that mark and presents its goods and/or services as if they were those of the holder of the non-registered mark, that such imitation causes confusion to the ordinary buyer, and that as a consequence the holder of the non-registered mark has suffered or is likely to suffer damages. Though, it must be noted that to be able to invoke article 35, of the Civil Offences Law, Cap. 148, the civil wrong must have been committed in Cyprus.
The latter provision is a codification of the common law tort of "passing off". In general, it can be said that the civil offence of "passing off" in Cyprus, while it does not protect the mark, composition or presentation, service or merchandise, as such, - as it does, respectively, from its registration as a trademark -, protects the right to an acquired goodwill. That is, the benefits and advantage of sound, good name, reputation and connection with a business, acquired and existing. In an action for "passing off" in Cyprus, a plaintiff must, in principle, prove its goodwill or reputation associated with the goods or services it supplies to the buying public. Commercial goodwill can result from a trade name or trademark, from marking and packaging characteristics, or from a trade description or sales name of the goods or services.
The passing-off type of claim has been brought up before the courts, since many years ago, where the courts have established the concept that "nobody has any right to represent his goods as the goods of somebody else."
The case of Spalding v. A.W. Gamage Ltd., (1914 - 1915) All E.R. Rep. 147, is one of the landmark cases on the matter. Many cases were to follow, as well as Cypriot ones, which established that the goodwill of a business can be injured by someone else who sells/ provides a product/ service which can be easily mistaken as products/ services of another business.
A case brought up before the Cypriot courts, where the plaintiff brought an action against the defendants because they intended to import goods with the same tradename, is the case of MALIBU HEALTH PRODUCTS LTD ?.?. ?. CHARILAOU BROS LTD, Civil Action No.: 1403/2010, 30/1/2015. Products bearing the name MALIBU and MALIBU SUN could certainly cause misrepresentation or deceit to the general public, in that the defendants' products were the same as the plaintiffs' products. After all, both products were cosmetic goods for skin protection against the sun. The Court stated in its decision that both plaintiffs' products and the defendants' products were similar products intended for similar or same use and would reach the final customer from the same distribution line. The conclusion of the Court was that the defendants were indeed offending the plaintiffs' rights according to article 35 of the Civil Offences Law, Cap. 148.
In another case, 1. LACOSTE, 2. NOTOS(CYPRUS) LTD v. D&L TOURIST ENTERPRISES LIMITED Civil Action: 981/2010, 21/2/2014, the facts were that the defendants were selling products that had the "LACOSTE" signature and its signature sign (the crocodile) on them, and the public could easily get confused and take the defendants' products for those of the plaintiffs'. The Court made a reference in the Adidas v Jonitexo Ltd (1987)1 CLR 383, and citated the following:
«For a plaintiff to succeed in a passing off action he must prove:
(a) A right to use the mark to the exclusion of the defendant established by reference to the association of the mark to the products of the plaintiff.
(b) Imitation or copying of the mark of the plaintiff by the defendant in the process of manufacture or sale of the products.
(c) Likelihood of confusion on the part of the ordinary purchaser arising from the imitation of the mark, and lastly
(d) damage resulting therefrom. »
In that case, the Court accepted that there was a likelihood of confusion on the public from the imitation of the LACOSTE mark and signature and the reputation of the plaintiff could be damaged because of the low quality of the defendant's quality of products.
To substantiate its determination, a plaintiff in a "passing off" claim, must therefore prove all of the above elements in order to succeed and protect its non-registered mark and the goodwill of its business pursued through the use of that mark.
- European trademarks
The European Union Intellectual Property Office ("EUIPO") clearly states that in some Member States, it is possible to protect a trademark even if it is not registered. Cyprus is one of these Member States, given that as previously explained one may invoke a "passing off" claim. The main characteristic to be taken under consideration in these cases is that a trademark can be protected as long as it is used.
The relationship between the European Union trademark system and national law is characterised by the principle of coexistence. It means that when the EUIPO receives an application either in opposition or cancellation proceedings, the legal basis of the application must be laid down, not only derived by EU laws but may include a legal basis derived from the national law.
Relevant in this context, is Regulation (EU) 2017/1001 ("EUTMR") and specifically articles article 8(4), 46(1)(c) and 60(1)(c) of the EUTMR. The foregoing provisions provide the opportunity to the holder of a non-registered mark who uses it in the course of trade but not only locally, to protect it by initiating opposition or cancellation proceedings against the applicant or holder, as the case may be, of the European trademark (EUTM).
Conditions to protect a non-registered trademark used in the course of trade - Article 8(4) EUTMR
In fact, article 8(4) of the EUTMR recognises the existence of such rights in Member States and grants the proprietors of non-registered marks the possibility of preventing the registration of an EUTM application where they would succeed in preventing use of the mark being subject of an EUTM application pursuant to the relevant national law, by showing that the conditions set by the national law for prohibiting use of the latter EUTM or application for an EUTM, are satisfied as well as other conditions of article 8(4) of the EUTMR.
Hence, number one on the list when initiating opposition or cancellation proceedings, is to define the existing rights and the grounds of opposition or invalidity, accordingly, that an opponent/cancellation applicant, that is the proprietor of the non-registered mark, may rely on.
Article 8(4) states that:
« Upon opposition by the proprietor of a non-registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for shall not be registered where and to the extent that, pursuant to Union legislation or the law of the Member State governing that sign:
(a) rights to that sign were acquired prior to the date of application for registration of the EU trade mark, or the date of the priority claimed for the application for registration of the EU trade mark;
(b) that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.»
Based on the Article 8(4), EUIPO Guidelines have isolated three conditions which must be proven, as follows:
- The opponent must be the proprietor of a non-registered trademark or of another sign used in the course of trade.
- Use the non-registered trademark in the course of trade of more than mere local significance.
- Right to prohibit the use of a subsequent trademark under the applicable law governing that sign.
The Applicant must 1) set out all the relevant with the case facts, reasoning and detailed arguments on which the opposition/application is made and 2) provide the EUIPO with information and evidence in support. The opponent/applicant must also prove that its rights were acquired by the applicant prior to the date of application for registration of the EUTM or date of claimed priority thereof.
As regards Cyprus law (point c above) the opponent/cancellation applicant must prove: 1) the provisions of the applicable law, and 2) the particulars proving fulfilment of the conditions a) of the acquisition and b) of the scope of protection.
In the case where opposition or cancellation proceedings to an EUTM based on article 8(4) of the EUTMR, are successful, then the EUTM is not registered and as a result the non-registered mark is protected.
A right to a name - Article 60(2)(a), EUTMR
In addition to the above, another way to protect a sign or a mark is the right that any business/ company/ association has to a company or trade name. In Cyprus, according to article 18 of the Cyprus Company Law, Cap. 113, "No company is registered with a name that in the opinion of the Council of Ministers is undesirable".
Therefore, owners of a Cyprus company or a trade name registered in Cyprus may base an application of cancellation of an EUTM on article 60(2)(a) of the EUTMR.
It has been well established in Cyprus courts, that if a name has striking similarity with a previous company name, the Registrar of Companies may interfere to examine the similarity and decide whether or not there has been a breach of this right. The Registrar of Company's decision may also be challenged in the administrative court, based on Article 146 of the Constitution of the Republic of Cyprus.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.