The Danish Western High Court issues interesting ruling on the use of the "Alicante Torpedo" in the field of design

Background

Within the field of trademarks, the Alicante Torpedo stems from Article 132(1) of the EU Trademark Regulation. The purpose of this provision is to avoid that both an EU trademark court and the EUIPO simultaneously decide on the validity of the same trademark. Therefore, the provision requires the EU trademark court to stay its proceedings until the EUIPO has rendered a decision, when an application for revocation or invalidity of the trademark has “already” been filed with the EUIPO.

In Danish case law, there has been some discussion as to what is meant by ‘already’ in relation to Article 132(1) of the EU Trademark Regulation. However, the Danish Supreme Court effectively ended this debate with the ruling in U.2022.2025 H (CRUZ). According to the Supreme Court, “already” simply means that a counterclaim must be filed before an invalidity claim is filed in the proceedings before the EU Trademark Court. Generally, it is not decisive when the case is filed, but when the claims are filed.

In other words, the Alicante Torpedo can be launched even after an action has been brought before the EU Trademark Court, provided that an application for invalidity is first submitted to the EUIPO, and only then an invalidity claim is made before the EU Trademark Court. A stay of proceedings can then be requested until the EUIPO has rendered a decision, which can take a long time, among other things because the EUIPO's decision can be appealed to the Board of Appeal and then on to the CJEU. Great for those wishing to sabotage a lawsuit; not so great for the EU trademark holder who wants to proceed with litigation. Moreover, the legal position contrasts with, for example, the situation in Sweden where it is generally required that an application for invalidity is submitted to the EUIPO before the overall lawsuit is filed.

However, there have - until now - been no Danish cases concerning the use of the Alicante Torpedo in the field of design. Therefore, caselaw within this area becomes particularly interesting as indicated in the introduction, and the Danish Western High Court's ruling in this case is likely to be the first example of such caselaw.

Legal Context

The Community Design Regulation contains a provision that corresponds to Article 132(1) of the EU Trademark Regulation, namely Article 91(1). This would lead one to believe that, without further ado, exactly the same applies in the area of the Community Design Regulation, and that there was nothing to discuss in the matter at hand.

However, there is a difference between Article 128(4) of the EU Trademark Regulation and Article 86(2) of the Community Design Regulation, which inform Article 132(1) of the EU Trademark Regulation and Article 91(1) of the Community Design Regulation respectively.

Article 128(4) of the EU Trademark Regulation reads as follows: 

”The EU trade mark court with which a counterclaim for revocation or for a declaration of invalidity of the EU trade mark has been filed shall not proceed with the examination of the counterclaim, until either the interested party or the court has informed the Office of the date on which the counterclaim was filed. The Office shall record that information in the Register. If an application for revocation or for a declaration of invalidity of the EU trade mark had already been filed before the Office before the counterclaim was filed, the court shall be informed thereof by the Office and stay the proceedings in accordance with Article 132(1) until the decision on the application is final or the application is withdrawn.”

(markup added in this context)

In comparison, Article 86(2) of the Community Design Regulation reads as follows: 

”The Community design court with which a counterclaim for a declaration of invalidity of a registered Community design has been filed shall inform the Office of the date on which the counterclaim was filed. The latter shall record this fact in the register.”

Article 86(2) of the Community Design Regulation does not contain a third sentence corresponding to Article 128(4) of the EU Trademark Regulation on the obligation to stay proceedings (marked in bold above).  

It was thus - at least according to this author - an open question how the Danish Maritime and Commercial Court and the Danish Western High Court would interpret Article 91(1) of the Community Design Regulation in the specific case.

The Concrete Case 

The case before the Danish Maritime and Commercial Court concerned a wide range of issues, of which only two out of 47 claims concerned or related to the defendant's potential infringements of the plaintiff's registered Community designs.

The plaintiff had filed an action for an injunction on 22 December 2021, while the main action was filed on 22 August 2022, after which the applications for invalidity were filed with the EUIPO on 27 September 2023, i.e. more than a year and a half after the injunction action was filed and more than a year after the main action was filed, as illustrated below: 

On 1 October 2023, the defendant then filed independent claims before the Danish Maritime and Commercial Court, claiming that the plaintiff's Community design registrations be declared invalid, just as the defendant requested that the case, pursuant to Article 91(1) of the Community Design Regulation, be stayed pending the outcome of these invalidity proceedings before the EUIPO. Not surprisingly, this gave rise to discussions between the parties.  

At first instance, the Danish Maritime and Commercial Court found that there was no legal basis for staying the case. The case was then appealed to the Western High Court with the permission of the Process Granting Board

The Danish Western High Court’s Ruling

Unlike the Danish Maritime and Commercial High Court, the High Court found that Article 91(1) of the Community Design Regulation had to be interpreted in the same way as Article 128(4) of the EU Trademark Regulation, cf. Article 132(1), and that Article 91(1) of the Community Design Regulation essentially has the same wording as Article 132(1) of the EU Trademark Regulation.

The Danish Western High Court also stated that the difference between the provisions of Article 86(2) of the Community Design Regulation and Article 128(4) of the EU Trademark Regulation could not, in the opinion of the Court, lead to a different interpretation.

The starting point was thus that the case should be stayed unless there were special grounds for continuing the case, which, according to the Court, was the case.  

With regard to “special grounds”, the Court initially stated that the Community Design Regulation does not describe in detail what constitutes special grounds. Thus, in the Court's opinion, this had to be based on a specific assessment of all the circumstances of the case, including its course. 

The Danish Western High Court then considered, among other things, i) that it was undisputed during the injunction proceedings that the plaintiff's Community design registrations were valid, ii) that only two of the 47 claims filed by the plaintiff related to these Community design registrations, iii) that more than one and a half years had passed since the injunction proceedings were initiated before the applications for invalidation were filed with EUIPO, and iv) that EUIPO had already suspended the proceedings related to the applications for invalidation with reference to the pending case before the Danish Maritime and Commercial High Court.

Perspective

As far as this author is aware, this is the first time that a Danish court has ruled on the issue of staying a case due to the use of the “Alicante Torpedo” in the design field. It is probably also the first time that a Danish court has found that the Alicante Torpedo was not applicable due to “special grounds”, both in the trademark and design area.

With the Court's ruling, it has now been established that the Alicante Torpedo works in the same way in the field of trademarks and designs. One may agree or disagree with this, but it is difficult to interpret the Court's ruling differently.

It has also been established that there is a lower limit to when the Alicante Torpedo can be used to torpedo a litigation. In the case at hand, the Alicante Torpedo was deployed as a rather obvious and disproportionate attempt to sabotage proceedings without real substance, which was not accepted.

By Søren Danelund Reipurth