The Court of Justice rules that passivity does not preclude trade mark proprietor’s rights in a trade mark case (C-452/24, Lunapark v. Hardeco)

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On 1 August 2025, the Court of Justice of the European Union (CJEU) issued a judgment in case C‑452/24 concerning the preclusion of trade mark rights resulting from acquiescence. The case was based on a request for a preliminary ruling from the Supreme Court of Finland, specifically concerning the interpretation of Article 10 of the Trade Marks Directive (2015/2436), which harmonises the laws of the Member States relating to trade marks. As the case did not concern an EU trade mark, the EU Trade Mark Regulation (2017/1001) was not applied in the case.

The Supreme Court referred the matter to the Court of Justice of the European Union to clarify whether in situations other than those provided for in the Trade Marks Directive, the proprietor of a trade mark may, on the basis of its passivity, forfeit the right to prohibit a third party from using an infringing unregistered sign (a so-called unregistered trade mark).

The CJEU stated that the proprietor’s right to prohibit third-party use of a registered trade mark has been harmonised across Member States by the Trade Marks Directive. Therefore, national provisions that restrict this right and are not based on the Directive cannot be applied. According to the Court, any other interpretation would undermine the objective of the Directive to ensure uniform protection of registered trade marks in the Member States. Consequently, the relatively well-established principle in national private law that an action must be brought or a claim made within a reasonable time after the claimant became or should have become aware of the facts on which the claim is based, cannot be applied, as such a principle is not provided for as a ground for preclusion in the Trade Marks Directive.

Background to the case and proceedings before the national courts

The case concerned confectionery goods marketed and imported by Lunapark Scandinavia Oy Ltd (“Lunapark”) and Karkkimies Oy (“Karkkimies”) bearing the sign DRACULA. Karkkimies had used the DRACULA sign for several years without registering it or entering into an agreement concerning the use of the sign. In 2009, however, Lunapark decided to register the sign as its trade mark. When Hardeco Finland Oy (“Hardeco”) acquired Karkkimies’ business in 2019 and continued marketing the sweets under the same sign, Lunapark brought an action before the Market Court, claiming infringement of its exclusive rights conferred by its registered trade mark. In its response, Hardeco demanded that the action should be dismissed due to Lunapark’s years of passivity.

Even though the Market Court found that there was a likelihood of confusion between the signs, it nevertheless rejected Lunapark’s claims. The Market Court noted that Hardeco had not registered the sign it used, which meant that the provisions of the Finnish Trademarks Act concerning the consequences of the trade mark owner’s passivity could not be applied. However, in its decision, the Market Court based its ruling on the well-established legal principle in Finnish national private law, according to which an action must be brought or a claim made within a reasonable time after the claimant became or should have become aware of the facts on which the claim is based.

Following an appeal from Lunapark, the case was referred to the Supreme Court, which requested a preliminary ruling from the Court of Justice of the European Union. The request for a preliminary ruling from the Supreme Court was essentially limited to the question of whether Article 10 of the Trade Marks Directive prevented the application of the preclusion principle based on the general national legal principle described above.

CJEU Judgement

The Court of Justice of the European Union noted that Articles 9, 10, and 18 of the Trade Marks Directive harmonise the grounds on which the proprietor of a trade mark may prohibit others from using, without its consent, the same or a similar sign in the course of trade, as well as the exceptions to this prohibition – i.e. the exclusive right conferred on a registered trade mark. According to the CJEU, the exceptions to the exclusive right of the proprietor are listed exhaustively in the Trade Marks Directive. Furthermore, the Court held that the five-year limitation rule under Articles 9 and 18 of the Directive applies only to the use of a subsequently registered trade mark, and therefore it cannot be inferred that the proprietor of a trade mark has lost its rights where it has allowed an unregistered sign to infringe its registered trade mark for a continuous period exceeding five years.

In its ruling, the CJEU therefore concluded that a national court cannot restrict the rights of a trade mark proprietor under the Trade Marks Directive beyond what is expressly provided for in the directive. The CJEU justified its position by stating that any other interpretation would undermine the objective of the Directive to ensure uniform protection of registered trade marks in the legal systems of the Member States. As a result of the rule of interpretation confirmed by the CJEU, the proprietor of a registered trade mark cannot suffer the aforementioned loss of rights on the basis of the established general principle of national law applied by the Market Court, as that legal principle is not consistent with Article 18(1) of the Trade Marks Directive, including Article 9(1) or (2).

Key implications of the preliminary ruling and remaining issues

Although the judgment of the CJEU, as expected, emphasises the primacy of EU legislation over national legislation, it appears to be partly inconsistent with the preamble to the Trade Marks Directive. According to recital 40 of the preamble, the directive should not prevent Member States from applying national provisions on unfair competition, civil liability, or consumer protection to trade marks. It is noteworthy that this recital of the preamble was not addressed at all in the judgment, which raises the question of the extent to which, if at all, national courts can continue to rely on general principles of private law in trade mark law matters.

Another question that remains open concerns the scope of application of the rule of interpretation confirmed in the judgment. Both the Trade Marks Directive and the EU Trade Mark Regulation expressly refer to national legislation insofar as EU regulations do not address the matter. In the EU Trade Mark Regulation, such a reference is found not only in the preamble but also in the operative part of the regulation itself. The judgment thus raises an interesting question as to whether the rule of interpretation it establishes applies to EU trade marks as well as to national trade marks. If the answer is negative, the prevailing legal position could be problematic, for example, from the perspective of the uniform protection of national and EU trade marks. If the same interpretation were not applied to EU trade marks, this would lead to a somewhat peculiar situation in which national trade marks would be subject to more harmonised rules than EU trade marks. The appropriateness of such a legal position could be questioned, for example, from the perspective of the principle of subsidiarity.

Finally, it should be noted that the judgment has weakened the protection of unregistered trade marks. Based on the ruling, the proprietor of a registered national trade mark could in future even deliberately refrain from challenging the use of a similar sign, for example with the aim of benefiting from the goodwill accumulated to it by another party, while at the same time being aware that it could prohibit the use of the sign at any time. Although the broader implications of the judgment for the protection of unregistered trade marks remain to be seen in subsequent cases, it appears that the holder of an unregistered trade mark can no longer rely on the protection of legitimate expectations based on the passivity of the proprietor of a registered trade mark. The ruling also raises a profound question about the legal significance of unregistered trade marks in the future. Consequently, organisations should review and possibly reevaluate their brand protection strategies against the above-described background.

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