Acquiescence

In the Austrian legal system a concept or defence based on acquiescence or past tolerance of behaviour is unknown - only the statute of limitation exists. Acquiescence has been implanted into it as alien element only in Trade Mark Law and in the Law Against Unfair Competition as far as it regulates commercially used signs when Austria in 1999 finally implemented fully also Art. 9 of the EU Trade Mark Harmonisation Directive. No wonder that Austrian trade mark owners and courts still struggle with this concept.

The Austrian Supreme Court had the opportunity on 22 September 2009, in case 17 Ob14/09x, to give its view in a ruling on the Burberry check design. Burberry has trade mark protection for their check-design also for umbrellas. Defendant sells umbrellas with such a design in its hypermarkets. It buys them from a producer who is known to Burberry since 1994. But Burberry did not sue the producer but only its customers.

Defendant pleaded inter alia that Burberry cannot assert its trade marks because of acquiescence. The questions put before the Supreme Court were: What are the conditions of acquiescence for signs used in commerce (but not registered), and whether and under what conditions acquiescence with regard to the producer is also applicable for the vendors of his goods.

As to the second question, the Supreme Court had to start from the fact that the dealers and the producer were different legal entities. It stated that the legal consequences of acquiescence cannot be assigned to third parties. The defendant infringed the trade marks itself by its sales, so he would have to plead acquiescence of these sales which he could not do.

With regard to the first question, the Supreme Court looked at the explanation given to the law and found that for registered trade marks Art. 9 of the TM Harmonisation Directive apparently means that the 5 years of acquiescence start with registration of the younger mark irrespective of any prior use. For other signs, that can only mean that the time starts from the date when they achieve the status of a right akin to a registered trade mark. For signs used in commerce, such a qualified status of right can only be acquired through secondary meaning, which was not proven here. Therefore, this prior use does not count.

This decision expresses what many feel as unjust interpretation of Art. 9 TM Harmonisation Directive, namely that longstanding known prior use should not be taken into account. Therefore, the outcome of the request for preliminary ruling by the English Court of Appeal to the ECJ in case C-482/09 is eagerly awaited. It is about the trade mark Budweiser for beer and the honest concurrent use of this mark side by side by the Czech brewery in Budvar and Anheuser-Busch of USA for more than 30 years in the UK. Anything other than acceptance of acquiescence would be felt as far outside reality. But if accepted, then many other prior uses would also qualify for accepting acquiescence, which would be a blow to the hitherto leading interpretation of Art. 9 TM Harmonisation Directive.

DI Helmut Sonn