The discussion explored the evolving role of courts across jurisdictions in shaping trade mark law, the impact of Brexit on judicial interpretation in the UK, and the broader question of how courts can learn from one another in a fragmented but increasingly harmonised international IP landscape.
Recent CJEU judgments: Bad faith and technical function. Territoriality of national trade marks
Judge Octavia Spineanu-Matei highlighted two recent preliminary rulings delivered by the CJEU earlier this year, addressing, on the one hand, the interplay between two grounds for annulment of the EUTM registrations and, on the other hand, on the territorial scope of the protection of national trade marks.
The first case CeramTec (C-17/24), arose from a dispute between CeramTec (Germany) and Coorstek (USA) concerning pink-coloured ceramic medical implants. Following the expiry of CeramTec’s European patent, it registered several EU trade marks all of them having in common that pink colour caused by chromium oxide. CeramTec sued Coorstek for infringement and Coorstek asked for the annulment of the trade marks. French courts annulled the trade marks for bad faith, finding that CeramTec sought to prolong its expired technical monopoly. The Court of Cassation referred preliminary questions to the CJEU on the interaction between technical-function invalidity and bad faith under the Regulation (EU) 2017/1001 (“EUTM Regulation”). Before that Court, CeramTec argued that it only discovered after the expiry of its patent and after filing the trade mark applications that the chromium oxide responsible for the pink colour in fact had no technical function, and that the trade marks were, therefore, valid.
The Court ruled that the two grounds for invalidity, i.e. registration of a technical solution (Article 59(1)(a) EUTM Regulation) and bad faith (Article 59(1)(b) EUTM Regulation), are independent and not mutually exclusive.
While an applicant’s belief that a sign has a technical function cannot alone establish bad faith, an attempt to extend patent protection through trade mark law is a relevant factor. The Court confirmed that bad faith must be assessed by examining all objective circumstances, including the origin of the sign, its use, the scope of the expired patent, the commercial strategy, and the sequence of events.
Crucially, what matters is the applicant’s intention at the date of filing and later scientific discoveries cannot retroactively alter that assessment.
The second judgment of Tradeinn Retail Services v PH (C-76/24), concerned the territorial reach of national trade marks and the interpretation of “stocking” under the Directive (EU) 2015/2436 (“Trade Mark Directive”). A German trade mark owner sued a Spanish online retailer selling allegedly infringing diving equipment via websites targeting German consumers, even though the goods were stored outside of Germany. German courts upheld the claim, and the Federal Court of Justice sought clarification from the CJEU on whether trade mark protection could extend to goods stocked abroad. The same Court asked for the clarification of the term “stock”, taking into account that other linguistic versions of the Directive use a term which means “possession”.
The Court answered that, although the protection of national trade marks is limited to the territory of the Member State where the protection was obtained, proprietors may prohibit not only offers targeted at consumers in their territory, but also the stocking of goods outside that territory when it serves as a preparatory step to such offers. This ensures that online traders cannot evade trade mark enforcement simply by locating their warehouses in another Member State.
The Court further clarified that “stocking” implies de facto power and, therefore, direct or indirect actual control over goods, and not necessarily a quantitative aspect regardless of differences between language versions of the Directive.
Post-Brexit divergence and convergence
Lord Justice Richard Arnold reflected on the UK’s position post-Brexit. While CJEU decisions prior to 31 December 2020 remain binding on lower courts, the Court of Appeal and Supreme Court now have discretion to depart from them in the same circumstances that the Supreme Court would depart from one of its own previous decisions – this is a very high bar.
Since Brexit, the Court of Appeal has considered exercising this power in four IP cases. It declined to depart from CJEU precedent in three but did so once, in Industrial Cleaning Equipment v Intelligent Cleaning Equipment & Another [2023] EWCA Civ 1451, diverging from the ruling in case Budějovický Budvar v Anheuser-Busch Inc (C-482/09) on the timing of acquiescence under the Trade Mark Directive 2015/2436.
The Court of Appeal held that it was sufficient that the proprietor of the earlier trade mark was aware of the use of the later trade mark after that the later trade mark has been registered. The Court of Appeal diverged from Budvar because:
- This question was not in issue in Budvar and was not argued by the parties in that case;
- Neither the Advocate General nor the CJEU gave any reasons for their interpretation;
- It is not what the legislation says and there are good reasons for interpreting the legislation literally; and
- There is a line of contrary case law in the EUIPO Boards of Appeal and General Court.
LJ Arnold thought that CJEU may reconsider the acquiescence point in Budvar later and take a different view.
By contrast, in Thatchers Cider Company Limited v Aldi Stores Limited [2025] EWCA Civ 5, the Court chose not to depart from the much-debated L’Oréal v Bellure (C-487/07) decision, citing the following reasons:
- Parliament had not changed the UK legislation since Brexit, and thus it remained harmonised with the EU legislation;
- It followed that the UK courts should strive for harmony with the EU courts unless convinced the latter were wrong;
- Deciding when use of a sign takes unfair advantage must be done on some principled basis. Aldi had not offered any alternative to L’Oreal;
- There was little prospect of the CJEU reconsidering L’Oreal;
- Aldi’s reliance upon prior English judicial criticism of L’Oreal was misplaced for a number of reasons; and
- Departure would cause uncertainty, whereas L’Oreal had not caused any real problems.
LJ Arnold emphasised that UK courts remain attentive to European and international judgments, given IP law’s paradoxical nature: it is both deeply territorial and yet heavily internationalised through harmonisation projects.
Language, legal concepts and comparative dialogue
Both speakers underlined the challenges posed by language and legal translation in judicial dialogue.
Judge Spineanu-Matei noted that while the CJEU’s working language is French, the language of the procedure, depending on the case, can be any of the 24 official languages of the European Union. The judgement drafted in the language of the procedure is the authentic one and is translated in all other languages. The EU legislation is drafted in all EU languages and all linguistic versions are authentic. This sometimes results in interpretative difficulties across multiple linguistic versions and legal traditions.
LJ Arnold added that differences often arise not from mistranslation but from the absence of exact equivalents between common law and civil law legal concepts. In such cases, judicial dialogue is essential to build common understanding across jurisdictions.
Looking ahead: The role of dialogue in IP law
The panel also discussed the emerging role of the Unified Patent Court (UPC) and the need for courts to engage with one another in the absence of a supranational authority on substantive patent law. For LJ Arnold, “nobody has a monopoly of wisdom, and the best way forward is through dialogue between courts.”
The session closed with reflections on judicial styles. While the CJEU favours an impersonal and rather uniform style in the drafting of its judgments, the UK tradition values detailed, individualised reasoning.
Both approaches have strengths and limitations, but the exchange underscored the importance of openness and transparency in developing coherent IP jurisprudence.
Time is a judge of the merits of the legal decisions. Judges should be open to the problems with previous case law and adopt a different line of reasoning if necessary.