Trade Mark Litigation

Gassauer-Fleissner Rechtsanwälte GmbH Mag Barbara Kuchar and Dr Michael Wolner

1. SOURCES OF LAW

1.1 What are the principal sources of law and regulation relating to trade marks and trade mark litigation? (Briefly describe the role of international, federal or state laws and relevance of court decisions, list and briefly describe relevant statutes and international treaties).

The Austrian Trade Mark Protection Act of 1970, as amended in particular by the Amendment of 1999 and of 2006 (implementation of the ‘Enforcement Directive’ EC/2004/48) is the central codification of Austrian trade mark law.
The Product Piracy Act of 2004 implements (i) the Council Regulation EC/1383/2003 of 22 July 2003 concerning customs action against goods suspected of infringing certain intellectual property rights and the measures to be taken against goods found to have infringed such rights and (ii) the Commission Regulation EC/1891/2004 laying down provisions for the implementation of EC/1383/2003.
Additionally Austria is a signatory of numerous international conventions, inter alia the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) of 15 April 1994, the Madrid Agreement Concerning the International Registration of Marks of 14 April 1891 (Stockholm version), the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957 (Geneva version and Stockholm version), the Paris Convention for the Protection of Industrial Property of 20 March 1883 (Stockholm version) and the Protocol of 27 June 1989 Relating to the Madrid Agreement Concerning the International Registration of Marks.

1.2 What is the order of priority of the relevant sources, ie which take precedence in the event of a conflict?

Generally under the Austrian legal system statutory law takes precedence over judicial opinions. In this area of law, however, decisions by the Austrian Supreme Court and – to a lower extent – by the Supreme Patent and Trade Mark Senate can be highly persuasive. The decisions of these Austrian authorities are in line with the case law of the ECJ and the CFI.
The Austrian Trade Mark Protection Act of 1970 is determined by European Community Law. Thus it has to be interpreted against the background of the pertinent decisions of the ECJ and CFI.

2. COURT AND ADMINISTRATIVE SYSTEM

2.1 Can third parties oppose/request cancellation of a national or supranational (eg Benelux, Madrid Agreement and Protocol, Community Trade Marks) trade mark application/registration in your country? If so, on what grounds? Please briefly describe the opposition/cancellation procedure(s).

The Trade Mark Protection Act does not provide for opposition proceedings; post-grant cancellation proceedings may be lodged before the Austrian Patent Office for national trade marks and the Austrian bundle-part of an IR trade mark. The grounds for cancellation are harmonised along the lines of the Trade Mark Directive.
The following are grounds for cancellation petitions, which may be filed:

1. by the proprietor of an earlier trade mark if the two trade marks and the goods/services are identical or confusingly similar; furthermore, based on the reputation of the earlier trade mark, if the trade marks are identical or confusingly similar and used for bisimilar goods/services, provided the use of that sign takes unfair advantage of or is detrimental to the distinctive character or the repute of the well-known mark;
2. by a person having acquired rights to a sign abroad, if the proprietor of the trade mark was committed to looking after the business interests of the petitioner (‘agent’) and has registered the trade mark without consent and proper justification;
3. by the owner of an unregistered sign (distinctive and known in relevant business circles);
4. by an entrepreneur if his/her name, his/her firm name or the special designation of his/her business or a similar designation was registered as a trade mark or as the part of a trade mark without his/her consent, provided the use of the trade mark leads to a likelihood of confusion in trade;
5. by anyone on any of the grounds for cancellation ex officio;
6. by anyone if the trade mark was not genuinely used in Austria during the last five years before the filing date of the cancellation petition;
7. by anyone, if the trade mark due to acts or inactivity of its proprietor has become the common name in trade for a product or service in respect of which it is registered;
8. by anyone, if the use of the trade mark is able to mislead the public in particular regarding the nature, quality or geographical origin of the goods or services the trade mark is registered for;
9. by anyone if the proprietor was acting in bad faith when filing the application for the trade mark.
10. In the cases mentioned under (i), (iii), (iv) above the petition for cancellation will be dismissed by the Nullity Division of the Austrian Patent Office for the regarding goods/services, if the petitioner – while being aware of such use – has acquiesced for a period of five successive years in the use of the trade mark.

Cancellation proceedings generally are dealt with by the Nullity Division of the Austrian Patent Office in first instance and the proceedings are inter partes. Any decision may be appealed before the Austrian Supreme Patent and Trade Mark Senate, a panel consisting of senior Patent Office members and Supreme Court Judges.

2.2 In which courts are trade marks enforced? Are they specialised trade marks courts? If not, what level of expertise can a trade mark holder expect from the courts?

Trade marks are enforced before the commercial divisions of the competent County Courts (‘Landesgerichte’), in Vienna before the Commercial Court. Generally, the judges are not specialised specifically in trade mark matters; still the level of expertise is fair.

2.3 To what extent are courts willing to consider, or are bound by, the opinions of other national or foreign courts that have handed down decisions in similar cases?

As all trade mark infringement matters ultimately follow the same route of appeal, domestic decisions in parallel cases are usually of high relevance, though not formally binding. Decisions from other national courts are generally considered in infringement litigation, great importance is, however, regularly only attributed to the rulings of German courts in parallel proceedings due to the very similar IP systems in the two countries.

2.4 Do the courts deal with infringement and invalidity simultaneously? Or must invalidity actions be brought in separate proceedings? If so, before which court or national or supranational government agency shall they be brought (eg the national Trade Mark Office or the OHIM in Alicante)?

Any civil court may (and normally will) autonomously assess the validity of a trade mark. The filing of cancellation proceedings is thus not required in raising the defence of nullity. The foregoing does, however, not apply to CTMs (article 100 CTM Regulation).

2.5 Who can represent parties before the courts handling trade mark litigation and/or the national or supranational government agency dealing with trade mark validity issues?

According to the rules of the Austrian Civil Procedure Code (‘ZPO’), which are applicable in infringement proceedings before court, all parties have to be represented by an attorney-at-law authorised to practice in Austria.
Attorneys-at-Law, Patent Attorneys and – interestingly enough – Notaries authorised to practice in Austria may represent before the Patent Office.

2.6 What is the language of the proceedings? Is there a choice of language?

The language of the proceedings is German. There is no choice of language.

3. SUBSTANTIVE LAW

3.1 To what extent are unregistered trade marks protected under your country’s laws?

Unregistered trade marks can enjoy legal protection in Austria provided they are distinctive and have a reputation.
The owner of an unregistered trade mark therefore can file a claim for infringement of his unregistered right if he/she can evidence that his/her sign is considered as a designation of his/her undertaking’s goods/services within the relevant fields of trade before the date of the application of the (younger) trade mark, unless the trade mark was used at least as long as the unregistered sing has been used by the proprietor.

3.2 How is trade mark infringement assessed? Does protection extend to translations or to conceptually identical but graphically different trade marks?

A registered trade mark gives the owner exclusive rights to prevent others in the course of business from:

• using a sign identical to the registrant’s trade mark in relation to identical goods or services;
• using a sign identical or similar to the registrant’s trade mark in relation to identical or similar goods or services and there exists a likelihood of confusion on the part of the public including the likelihood of association between the sign and the trade mark;
• using a sign identical or similar to the registrant’s trade mark in relation to dissimilar goods or services if the trade mark has a reputation in Austria and its use takes unfair advantage of or is detrimental to the distinctive character or the repute of the trade mark.

In general, the confusion analysis under Austrian law corresponds with the pertinent case law of the ECJ and CFI. Details can only be assessed on a case-by-case basis.
The similarity of signs – according to the established court practice in Austria and Europe – depends on the overall impression evoked in the mind of the average consumer. Since trade marks are usually perceived as a whole it is not permissible to dissect the sign, however, distinctive and dominant elements are to be given greater weight (also see ECJ C-251/95 – Sabèl/Puma). Similarity includes visual, phonetic and semantic similarity whereby already one of these factors can be determinative under Austrian practice.
Protection generally extends to translations if the relevant circles of trade are capable of understanding the basic meaning of a term in a foreign language. For the phonetic similarity the marks are pronounced in ‘German’ respectively the common language within the related public.
Generally, Austrian trade mark law only confers rights in the particular expression of a graphic sign and not in the underlying motif. Thus, in case of conceptually identical but graphically different signs likelihood of confusion cannot be established (see ECJ C-251/95 – Sabèl/Puma). That might not apply in the context of less distinctive motifs and greater graphical similarities (see 4 Ob 1070/92 – Stephansdom – a decision by the Austrian Supreme Court involving a graphic representation of Vienna’s St Stephen’s Cathedral).
As to the similarity of goods/services, all relevant factors relating to these goods or services should be taken into account (also see ECJ C-39/97 – CANON). These factors include, inter alia, the nature of the goods, their purpose or whether or not they are complementary.

3.3 Are there other causes of action for trade marks (eg dilution)?

There is a dilution-based cause of action if a sign which is identical or similar to a trade mark in relation to dissimilar goods or services if used provided the trade mark has a reputation in Austria and its use takes unfair advantage of or is detrimental to the distinctive character or the repute of the trade mark is used. The reputation of the trade mark in Austria has to be given on the application date of the younger trade mark at the latest, if applicable also on the priority date of the younger trade mark.

3.4 Can a trade mark be enforced against a domain name, a trade name, a pseudonym or other distinctive signs?

Domain names according to established court practice are enjoying similar legal protection as a denomination provided the domain name is distinctive. Infringements of a trade mark by a domain name therefore can be pursued in the same way as the infringement of the denomination of a business or a name.

3.5 On what grounds can a trade mark be invalidated?

Apart from the cancellation petitions described under question 2.1 above, a trade mark also can be invalidated if the renewal fee was not effected in time. Also the Patent Office ex officio can invalidate a trade mark based on an initial or later emerged ground for refusal of trade mark protection.

3.6 Must use requirements be satisfied to maintain the trade mark registration? If so, is there any definition of what constitutes use?

Trade marks that are not used are not cancelled ex officio, however, anyone may request the cancellation of a trade mark that was not genuinely used for the designation of goods or services in respect of which it is registered within a period of five years.
The required use in this context corresponds with the ‘essential function’ principle of trade mark use established by the ECJ. Furthermore, such use has to be a ‘genuine’ one which excludes certain token uses and can only be defined on a case-by-case basis.
Genuine use of a registered trade mark can also be relevant in the enforcement context. In order to be entitled to file for a preliminary injunction, the owner of a trade mark which has been registered for more than five years has to show that the trade mark at issue was genuinely used within the last five years.

3.7 What other defences, if any, are available to an alleged infringer? Does your country’s law provide for prior user rights?

The registered trade mark does not entitle the proprietor to prohibit a third party from using, in the course of trade: (i) his/her own name or address; (ii) indications concerning the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of goods or of rendering of the service, or other characteristics of goods or services; (iii) the trade mark where it is necessary to indicate the intended purpose of a product or service, in particular as accessories or spare parts, provided he uses them in accordance with honest practices in industrial or commercial matters.
Finally, the Austrian trade mark does not entitle its proprietor to prohibit a third party from using the trade mark in Austria in relation to goods, which have been commercialised in the EEA under the trade mark with the proprietor’s consent.
With regard to prior user rights we refer to question 3.1 above.

3.8 To what extent can enforcement of a trade mark expose the trade mark holder to liability for an antitrust violation?

Generally enforcement of a trade mark cannot expose the trade mark holder to liability for antitrust violation unless the trade mark is being used for example to exploit a dominant market position. As far as can be seen no cartel law precedents based on trade mark infringement actions exist in Austria.

3.9 Can a court only partially invalidate a trade mark?

Courts never can invalidate a trade mark – only the Austrian Patent Office. Full or partial (with regard to certain goods and/or services) invalidation by the Austrian Patent Office is possible.

3.10 Is it possible to amend a registered trade mark during a lawsuit?

A trade mark registration can be amended only with regard to the goods and services, never in respect to the graphic representation of the trade mark. Such amendment only can be filed with the Austrian Patent Office.

3.11 Are there any grounds on which an otherwise valid trade mark can be deemed unenforceable, owing to misconduct by the trade mark holder, or for some other reason (eg expiry of time limit)?

A trade mark can be deemed unenforceable if the trade mark owner – while being aware of such use – has acquiesced for a period of five successive years in the use of the trade mark. This regulation, however, does not apply in particular where the younger trade mark was registered in bad faith or by a former agent. The expiry of time limit or no genuine use of the trade mark also can make a trade mark unenforceable.

3.12 Can a trade mark holder bring a lawsuit claiming both trade mark infringement and unfair competition for the same set of facts? Is it possible to bring parallel unfair competition proceedings, whether or not the trade mark is registered?

Trade mark law takes precedence over the Unfair Competition Act. The same set of facts with regard to trade mark infringement only can be claimed once, under trade mark law, parallel unfair competition proceedings are not possible.

4. PARTIES TO LITIGATION

4.1 Who can sue for trade mark infringement (trade mark holder, exclusive licensee, non-exclusive licensee, distributor)? Does a licensee need to be registered to sue?

The parties having capacity to sue, ie those who are entitled to bring an action before the courts, include the trade mark owner, the holder of an exclusive licence, the holder of an exclusive sublicense and also the non-exclusive licensee in case the licence agreement stipulates capacity to sue. Licence rights need not be registered with the trade mark register for establishing capacity to sue but merely have to be evidenced if an action is lodged. The same applies to the transfer of a trade mark to a new (not yet registered) owner.

4.2 Under what conditions, if any, can an alleged infringer bring a lawsuit to obtain a declaratory judgment on non-infringement?

Generally, the alleged infringer has to demonstrate legal interest in a declaratory judgment. According to Austrian doctrine, this is the case when the infringer receives warning letters specifically alleging infringement by a trade mark owner.

4.3 Who can be sued for trade mark infringement? Can the company directors be sued personally? Under what conditions, if any, can someone be sued for inducing or contributing to trade mark infringement by someone else?

The ‘infringer’ interfering with the protected rights has capacity to be sued. The trade mark owner is entitled to enforce its claims against all persons committing any of the infringing actions set out in section 10 of the Trade Mark Protection Act. Therefore, cease and desist claims exist against the infringing manufacturer and/or dealer. Besides the enterprise charged with a trade mark infringement, the responsible bodies (managing directors, members of the board) are also liable jointly and severally.
Moreover, an infringement action may be directed not only against the direct offender but (in line with the general rule on civil liability pursuant to section 1301 of the General Civil Code) also against accomplices, instigators and accessories. In the opinion of the Supreme Court a liability of the supplier based on section 1301 is also to be considered in cases where ‘means for infringement’ are supplied, whereby malice aforethought on the part of the accomplice in respect of the deliberate promotion of a (later) infringement is essential in the Court’s view. Thus, the ‘obviousness’ per se of the use of the supplied ‘means’ for the purpose of an infringement does not give rise to liability.

4.4 Is it possible to add or subtract parties during litigation?

Generally, and besides a withdrawal of the claim with precedence, new parties can only join the proceedings as a consequence of a succession in law under the relevant Austrian statutes, such as in case of mergers, spin-offs etc or in case all parties to the litigation consent to the changing of parties. Besides that, an adding or subtracting of main parties is not possible, persons who have legal interest in the litigation may however join as supporting parties on either plaintiff’s or defendant’s side; a judgment will not be enforceable against such supporting parties but is a binding precedent with regard to the factual grounds for future litigation involving the supporters.

5. ENFORCEMENT OPTIONS

5.1 What options are open to a trade mark holder when seeking to enforce its rights in your country?

The enforcement options are civil proceedings, criminal proceedings and border measures.

5.2 Are criminal proceedings available? If so, what are the sanctions?

Criminal proceedings are available. Wilful trade mark infringement constitutes a criminal offence and may be subject to a fine of up to €180,000 – or up to two years of imprisonment. In addition, further sanctions equivalent to the final remedies under civil law (destruction, monetary compensation etc) are provided for.

5.3 Are border measures available?

According to the Austrian Product Piracy Act and in accordance with the applicable European Regulations, border protection is possible; Austrian border control has been successful in setting up an effective system to stop and destroy counterfeited products at the borders. To benefit from this system, an application for permanent surveillance, accompanied by adequate information to allow the identification of counterfeits, may be filed with the national customs authorities by trade mark owners and exclusive licensees.

5.4 To what extent are courts willing to grant cross-border or extra-territorial injunctions?

Cross-border injunctions are granted on the basis of a claim under article 2 of Council Regulation (EC) No 44/2001 of 22 December 2000 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters.

5.5 To what extent do courts recognise the blocking effect of ‘torpedo’ actions abroad?

In our experience ‘torpedo’ actions abroad in trade mark matters do not play any significant role in Austrian trade mark enforcement actions.

5.6 To what extent are alternative dispute resolution (ADR) methods (such as arbitration or mediation) available to resolve trade mark disputes? How widespread are ADR methods and in which sectors? If arbitration is available to assess invalidity, will your Trade Mark Office recognise and execute an arbitral award declaring a trade mark invalid?

Arbitration is available but rather uncommon in trade mark infringement matters, although the Vienna Chamber of Commerce offers an experienced and professional arbitration tribunal; a trade mark’s nullity would not be eligible for arbitration under the respective Austrian provisions.

6. PROCEDURE IN CIVIL COURTS

6.1 What is the format of trade mark infringement proceedings?

The proceedings are initiated by a brief of action lodged by the plaintiff; such brief in the first phase of the proceedings is served upon the defendant, who – within a period of four weeks – is ordered to file a reply with the court. Following this exchange of briefs (more briefs can be filed until one week before the introductory hearing), the court will set a date for a first hearing, which exclusively serves the purpose of setting up the further programme for the proceedings, including, inter alia, the decision on which witnesses to hear before court. Further hearings serve the purpose of taking evidence, upon completion of this process the court will close the proceedings and normally render a judgment in writing.

6.2 Are disputed issues decided by a judge or a jury?

There is no jury system available for trade mark infringement proceedings in Austria. The cases are heard by a single judge.

6.3 To what extent are documents, affidavits, witnesses and/or (court-appointed or private) experts used? Is it possible to cross-examine witnesses? To what extent is survey evidence used (eg to support acquired distinctiveness, likelihood of confusion)? What is its relevance in proceedings (eg party allegation, evidence)? Who decides which consumers are questioned in the survey (eg the court, court expert)? What level of cost should one expect to incur to carry out a survey? Are these costs recoverable from the losing party?

Austrian law offers a broad range of means of evidence, such as all kinds of documents, witnesses, which may be cross-interrogated (though not in a formalistic way comparable to common law systems), and private expert opinions. Survey evidence is used with regard to the proof of secondary meaning; in conjunction with likelihood of confusion surveys are not admitted but may influence a court’s opinion if presented. With regard to surveys concerning secondary meaning the court decides on the format of the survey (possibly also together with an independent expert). The costs for a survey can range between €5,000 – and €20,000 – depending on the complexity of the survey. If the survey was instructed by court, the losing party also has to bear the costs for the survey.

6.4 Is evidence obtained for criminal proceedings admissible in civil proceedings, and vice versa?

Yes.

 

6.5 To what extent is pre-trial discovery permitted? If it is permitted, how is discovery conducted? If it is not permitted, what other, if any, mechanisms are available for obtaining evidence from an adverse party or from third parties?Until very recently, it has been a specific problem of the Austrian system that evidence from the defendant only hardly could be obtained; Austrian law did not provide for a discovery procedure. Frequently the only remaining way was to apply for a house search in criminal proceedings, a mode of operation which often was felt to be inadequate in standard cases. Following the implementation of the Enforcement Directive, there now exists the option to apply for a preliminary injunction for the purpose of securing evidence; also, the provisions of the Directive relating to the defendant’s obligation to provide documentation under certain circumstances are generally viewed as a certain improvement to the plaintiff’s position as compared to the previous legal situation.

6.6 What level of proof is required for establishing infringement or invalidity?

In main proceedings plaintiff is held to prove highest probability (near certainty) of the infringement; the court needs to be convinced that an infringement has taken place. This applies mutatis mutandis to nullity proceedings before the Patent Office.

6.7 How long do trade mark infringement proceedings typically last? Is it possible to expedite this process?

Trade mark infringement proceedings usually take between one and two years at first instance. There is no specific legal instrument to speed up the proceedings.

6.8 What options, if any, are available to a defendant seeking to delay the proceedings? Under what conditions, if any, can proceedings be stayed? How can a plaintiff counter delaying tactics of defendant?Unlike in patent proceedings, courts in most cases will not stay a proceeding because of a pending nullity action before the Patent Office, because the infringement of a trade mark is a legal question to be assessed by the judges. The validity of a trade mark may be assessed autonomously by the courts. Therefore in trade mark matters not many options to delay proceedings are available outside the usual options of bringing many witnesses, submitting a lot of material and asking for opinions of court sworn experts.

7. FINAL REMEDIES

7.1 What remedies are available against a trade mark infringer (final injunction, delivery up or destruction of infringing goods, publication of the decision, recall-order, monetary remedies, etc)?

The Trade Mark Protection Act provides for a broad range of final remedies as follows:

• Permanent injunction. An injunctive order under Austrian law regularly not only covers delivery of products but also takes effect over infringing products already in the market; thus, the injunctive order generally also works as a recall-order and makes the infringer under obligation to immediately implement a recall of infringing products to the best of his possibilities.
• Removal and destruction of infringing products provided that this does not interfere with third party rights.
• Rendering of accounts in preparation for the calculation of the payment claims; this includes the right to have the accounts reviewed by independent auditor.
• Monetary remedies are available as described below.
• Publication of judgment, whereby the respective media for publication are determined by application of a retaliatory principle considering the publicity the infringing products have found and the way such products have been promoted. Generally a publication in more than one media is possible, if this is equivalent to the way the infringing products had been advertised.

Claims to cease and desist – irrespective of whether included in a final order or in a preliminary injunction – are enforced in accordance with section 355 Court Enforcement Act (‘EO’), whereby a petition shall be filed with the court of enforcement in respect of each act of non-compliance following the enforceability of the claim (ie in case of a preliminary injunction, after its service) and the court shall then impose a fine on the liable party without prior warning. For each further act of non-compliance the court shall impose a further fine or a custodial sentence up to a total duration of one year. The party at risk may also request that the court orders the provision of security in respect of the damage incurred by further non-compliance. In accordance with section 359 EO the fine imposed must not exceed €100,000 for each individual petition. The petition for enforcement must include a concrete and conclusive allegation of the act of non-compliance with the preliminary injunction; it is not required to submit prima facie evidence for the allegation, and no examination of its content is carried out; the so-called ‘enforcement permission’ based on which the bailiff will enforce the claim, is granted solely on the basis of the petitioner’s allegation. The liable party in enforcement proceedings can (essentially) choose one of two counterstrategies. On the one hand, an appeal can be filed against incorrect enforcement permission, eg if it is not in accordance with the petitioner’s allegations or if the alleged infringements were committed prior to the service of the preliminary injunction. Objections to the claim itself or to the enforcement permission, on the other hand, must be raised not by way of an appeal but by way of a separate ‘opposition’ or ‘impugnation’ action pursuant to sections 35, 36 EO. In such case, separate proceedings before the court of enforcement will be instituted in which the plaintiff (being the defendant in the trade mark infringement proceedings) is liable to prove that it is not guilty of any non-compliance with the enforcement order (other than alleged in the enforcement petition).
Payment claims (which include the claim to payment of the costs in connection with the publication of the judgment by plaintiff in accordance with the court’s decision) are collectible in various ways (enforcement against movables, enforcement against personal property and salary, etc). Claims to rendering of accounts are enforced (comparable to the enforcement of cease and desist claims) by the imposition of coercive fines in accordance with section 354 EO.

7.2 To the extent it is possible to obtain a final injunction against future infringement, is it effective against the infringer’s suppliers or customers?

Any final injunction will cover (only) future infringement; it is never effective against suppliers or customers, as these have not been a party to the litigation.

7.3 What monetary remedies are available against a trade mark infringer (reasonable royalty, lost profits, account of profits, or some other basis)? Are punitive damages available? If so, under what conditions?

Payment claims under the Trade Mark Protection Act are to be calculated at the trade mark owner’s sole discretion alternatively in one of the following modes:

• adequate remuneration, regularly established by reference to a hypothetical market standard licence fee;
• damages in case of a culpable infringement, including loss of profits, a calculation which is only rarely used to the problems associated to the proof of causation; or
• profits achieved by the infringer as a consequence of the unauthorised use of the trade mark in case of a culpable infringement.

Whilst Austrian law generally does not provide for punitive damages, the trade mark owner may claim the double amount of adequate remuneration if the infringement is a consequence of gross negligence.

8. PRELIMINARY RELIEF

8.1 Is preliminary relief available? If so, what preliminary measures are available (eg preliminary injunction) and under what conditions?

In cases of trade mark infringement an immediate remedy is often required; in order to provisionally secure the plaintiff’s claims legislation provides for a preliminary injunction, which can be obtained in preliminary proceedings.
The law does not provide for an exhaustive list of the relevant means of security, ie the instruments available to the court for putting a stop to further unlawful actions. As a rule a cease and desist claim is secured by the court’s order to the alleged infringer to forthwith cease and desist from committing further infringing actions. Claims for removal of infringing products are secured by a preliminary injunction ordering the provisional impounding of the infringing articles.
Other than the main proceedings, a petition for a preliminary injunction is decided on in summary proceedings, which do not require full proof of the trade mark infringement but merely prima facie evidence. It is also not required to evidence the risk to which the petitioner is exposed in respect of the cease and desist claim. The legislator accommodates the trade mark owner insofar as the law expressly provides that preliminary injunctions shall be issued even in the absence of a risk. The ‘urgency’ problem under German law, which requires the trade mark owner to act with utmost swiftness so as to not lose its claims, is therefore not relevant under Austrian law.

 

8.2 Is ex parte relief available, where defendant is given no notice at all? If so, under what conditions?

Ex parte relief is available, but granted in very rare cases only; one of the few scenarios in practice is the stopping of infringements at a trade fair if there is not sufficient time to enter into regular inter parte proceedings.

8.3 Is plaintiff entitled to ask for an order that defendant’s premises are searched and a description of the infringing goods (and the accounting relating thereto) is made in order to establish proof of infringement (saisie-contrefaçon)? If not, what other mechanisms, if any, are available for seizing and preserving evidence for trial?

As mentioned above, such orders were – with the exception of house searches in criminal proceedings – practically not available in the past (whilst it needs to be mentioned for the sake of completeness that in one single case the Vienna Court of Appeals has granted a seizure injunction in a copyright counterfeiting scenario). Following the implementation of the Enforcement Directive, respective legal instruments will be available in the future, but it remains to be seen in which way these new instruments will be applied by the courts.

8.4 Can the defendant put the validity of a trade mark at issue in preliminary injunction proceedings?

Yes.

8.5 What is the format of preliminary injunction proceedings?

Upon receipt of a petition for the issuance of a preliminary injunction the court may – but is not obliged to – forward it to the opponent for filing a reply. The period stipulated by the court for filing a reply is usually between three and 14 days. This period can basically be extended upon application by the opponent. In the rare cases where the court does not instruct the opponent to file a reply and the requested preliminary injunction is issued, the opponent is entitled not only to file an appeal as the ‘regular’ legal remedy but also to file a protest within 14 days from being served the decision. In the protest proceedings the original court shall conduct an oral hearing to examine whether the issuance of the injunction is admissible and shall then decide whether the injunction shall be upheld or the petition shall be dismissed on the basis of the prima facie evidence submitted by the opponent.
Following the court’s decision in injunction proceedings the unsuccessful party has the right to file an appeal within 14 days of the service of the decision. It should be noted in this context that an appeal filed against a preliminary injunction does not have a suspensive effect on its enforceability; where reasons of particular relevance exist, however, such suspensive effect may be petitioned for.
Preliminary injunctions are usually issued for the entire duration of the main proceedings, they may be lifted under certain circumstances however. Whichever grounds may be invoked for such dissolution of a preliminary injunction, they are admissible only if they have become applicable after the injunction has been issued; if already the issuance of the injunction was erroneous, such claim must be raised in an appeal or protest. A dissolution of the preliminary injunction is possible inter alia in the following cases: (i) dissolution due to subsequent change of circumstances: the preliminary injunction is to be dissolved if following its issuance the circumstances on the basis of which it was granted change to such an extent that the injunction is no longer necessary for securing the party upon whose petition it was granted; (ii) dissolution upon extinguishment of the claim: the injunction is to be dissolved if the claim of the party at risk has been settled or finally denied or if the extinguishment of such claim has been finally determined by the courts.
The court may optionally suspend a preliminary injunction if the opponent provides adequate security. The suspension of a preliminary injunction upon the provision of security by the opponent, which may also be effected for a limited period, is subject to the filing of a petition setting out the grounds for suspension in sufficient detail. In accordance with prevailing judicial practice the value of the claim to be secured is to be used as a basis for the determination of the discharge amount; the plaintiff is deemed to be sufficiently secured if the amount enables the reestablishment of the former state if the plaintiff should be successful in the proceedings. The discharge amount should not be too low as this might tempt the opponent to pay the amount and nevertheless continue its unlawful conduct. The suspension order by the court does not dissolve the preliminary injunction itself but only stops its enforcement; therefore the right to exercise legal remedies against the injunction is not affected. It is also possible to challenge the suspension order by an independent appeal; since the injunction itself is not dissolved it will again become enforceable if the appeal is granted.
Even though the instrument of a preliminary injunction is the most effective means of legal protection against further trade mark infringements it nevertheless involves a considerable risk that should only be assumed if it appears certain that the petitioner will win the main proceedings. This is due to the provisions of section 394 EO, pursuant to which the opponent is entitled to claim damages if it is found that the issuance of the preliminary injunction was not justified. Section 394 EO reads as follows:
‘If the party at risk is finally denied the alleged claim in respect of which the preliminary injunction had been granted, if such party’s petition is otherwise found to be unjustified, or if such party fails to comply with the delay for filing a complaint or instituting enforcement proceedings, the party upon whose petition the preliminary injunction had been granted shall be liable to pay damages to its opponent in respect of any and all property loss incurred by such opponent as a result of the preliminary injunction. The amount of damages shall be determined by the court in its discretion upon a relevant petition (section 273 ZPO) by way of a decision. If such decision has become final it shall be enforced against the property of the party that petitioned for the preliminary injunction’.
Moreover, if the preliminary injunction has obviously been obtained maliciously the court may impose an additional fine for abuse of process on the petitioner upon application by the opponent.
A liability under section 394 EO is therefore subject to the prerequisite that the opponent has suffered a property loss essentially caused by the preliminary injunction. A claim to damages exists not only if the petition for the issuance of a preliminary injunction is found to have been unjustified but also if the opponent obtains the dissolution of the injunction by way of an appeal or protest, also on the grounds of insufficient prima facie evidence of the claim. Damages are payable for any and all property losses including lost profits, such as in particular lawyers’ fees and other costs of the proceedings to the extent they were necessary for an adequate defence in the injunction proceedings. In accordance with section 273 ZPO the amount of damages shall be determined by the court in its discretion, whereby any evidence submitted by the opponent relating to individual items of the loss incurred shall only provide clues as to the determination of the amount. The greatest risk of a property loss in connection with claims under section 394 EO concerns expenditures incurred by the opponent in complying with the preliminary injunction, eg in connection with the discontinuation of the sale of alleged infringing articles or the adaptation of production facilities.

8.6 To what extent are documents, affidavits, witnesses, survey evidence, and/or (court-appointed or private) experts used in preliminary injunction proceedings?

Documents, affidavits and private expert opinions are the most important factors in preliminary proceedings; as provided by the regulations of the EO, there will be no oral hearings and if (very rarely) witnesses are interrogated, then there is no formal hearing and no possibility for cross-examination, as the parties’ representatives are not admitted to the interrogation sessions by the judge in preliminary proceedings.

8.7 What level of proof is required for establishing infringement or invalidity in preliminary injunction proceedings?

In preliminary proceedings, prima facie proof is sufficient, which generally is understood as a proof that the infringement is more likely than the non-infringement.

8.8 How long do preliminary injunction proceedings typically last?

Depending on the complexity of the case the duration of preliminary proceedings typically ranges between one and three months in the first instance.

8.9 Where a preliminary injunction is granted, is it necessary to start main proceedings to confirm the preliminary injunction?

Traditionally, the application for injunctive relief and the main action are filed together in the same brief. Where this is not the case, the court will set a deadline for the subsequent filing of the main action (usually four weeks); if this deadline is not complied with, then the injunction loses effect automatically.

9. APPEAL PROCEDURE

9.1 What avenues of appeal are available for a defeated party in main proceedings or preliminary injunction proceedings? Under what conditions?

Any first instance decision – be it in main or in preliminary proceedings – can be appealed before the Regional Appeal Courts (‘Oberlandesgerichte’). If the questions at stake are of general importance and interest, there is the possibility to file a third instance appeal to the Supreme Court.
The appeal deadlines generally are four weeks in main proceedings and 14 days in preliminary proceedings; within the same periods of time the opponent to the appeal may file counter-statements. Oral proceedings in the appeal stage are very rare.
Basically, legal reasoning is open to appeal both before the Regional Appeal Courts and the Supreme Court; factual questions, may, however, not be brought before the Supreme Court.

9.2 How long do appeal proceedings typically last?

Appeal proceedings typically last between three and nine months.

10. LITIGATION COSTS

10.1 What level of cost should one expect to incur to take a case through to a first instance decision, preliminary injunction proceedings and/or appeal proceedings?

Generally, litigating trade marks in Austria is relatively inexpensive. The actual costs will naturally depend on the complexity of the case and the value of the litigation. In most cases, the value of the litigation is low irrespective of the actual scope of the case, this being a consequence of the guiding principles of the Austrian law on procedural costs. Traditionally, a cease and desist claim is valued at €36,000 and a full scale action €75,000 to €100,000 whereby the value of the litigation can be assessed higher at the plaintiff’s reasonable discretion (which is subject to court review).
The court fees amount approx to 0.2 per cent of the value of the litigation. The actual lawyers’ fees in most cases depend on the time spent, the value of the claim and the respective fee arrangements, which typically exceed the minimum fees awarded by the Austrian Attorneys Tariff (‘RAO’), as described below.

10.2 Are costs recoverable from the losing party?

A refund of a part of the lawyer’s fees by the losing party is available, which refund is calculated on the basis of the minimum fees defined by the RAO. With standard values in litigation, a refund would normally range between €4,000 to €10,000 – in preliminary proceedings and €7,000 to €15,000 – in main proceedings, always considering that the amount of refund may differ hugely from case to case depending on the complexity of the proceedings, the number of briefs filed and the number of hearings.

11. FORTHCOMING LEGISLATION

11.1 What are the important developing and emerging trends in your country’s trade mark law?

No considerable amendments to the Trade Mark Protection Act are to be expected in the near future; Austrian law is in line with the prerequisites of the EC and the applicable international conventions and follows a traditional continental European path.

11.2 To the extent it relates to trade mark enforcement, please outline any major trade mark legislation in the pipeline.

As mentioned above, the Enforcement Directive has already been implemented; thus, there is no substantial forthcoming legislation in this respect.

12. USEFUL REFERENCES

12.1 Please identify any useful works of reference relating to trade mark law and trade mark litigation in your country, including useful websites.

There is a variety of reference works in Austria, the following of which are of high relevance in day-to-day practice:
Kucsko, marken.schutz (2006)
Engin-Deniz, Markenschutzgesetz und weitere kennzeichenrechtliche Bestimmungen (2005)
Grünzweig, Österreichisches, europäisches und internationales Markenrecht (2005)
Puchberger, Markenrecht (2000)
Kucsko, Markenschutzgesetz 1970 (1999)
Schanda, Markenschutzgesetz (1999)
Furthermore, the website of the Austrian Patent Office provides useful information (www.patentamt.at) and the complete body of Austrian law is accessible for free at www.ris.bka.gv.at.