Isn't Martial Law an Excuse for Trademark Non-use? Supreme Court Affirms Early Termination of Trademark Rights

Published on Oct 21, 2024

We often hear a question from our trademark clients whether the full-scale invasion of Russia serves as an excuse for trademark non-use. The Supreme Court of Ukraine has issued an important decision on early trademark termination due to its non-use for five consecutive years. As you can imagine, about three years of this period is covered by the full-scale invasion.

The Supreme Court's decision underscores that, even in the context of wartime, early trademark termination remains legally viable. The Supreme Court's detailed analysis reaffirms the importance of assessment on a case-by-case basis and emphasizes that force majeure cannot automatically be presumed as a valid excuse for failure to comply with trademark use obligation. Crucially, the Supreme Court also clarified that the imposition of martial law does not inherently suspend IP deadlines, including the period required for proving continuous trademark use. Trademark owners cannot rely solely on wartime as a blanket justification for trademark non-use. The wartime does not provide extended protection for unused trademarks.

Regulation

Article 18 of the Law of Ukraine, "On Protection of Rights to Trademarks for Goods and Services" (the "Law”), provides for the possibility of early termination of a trademark certificate by an interested person if it has not been used continuously for five years.

Pursuant to Article 18 of the Law, a trademark certificate cannot be terminated if the trademark owner provides legitimate reasons for non-use or if, between the expiration of the five-year non-use period and the filing of a lawsuit for early termination, the use of the trademark either commenced or resumed. An exception from the outlined eligible preparations is when the preparations for the commencement or resumption of use began within three months before the lawsuit was filed and after the trademark owner became aware of the possibility of filing such a lawsuit.

Court case

In case No. 910/10377/23, which was initiated by Carlsberg Ukraine (the "Plaintiff") against New Products LLC (the "Defendant"), the Plaintiff sought invalidation of the Defendant's trademark certificate No. 203534 for the "BATTERY" trademark (word mark, in Latin) ("Trademark") due to its non-use.

The Defendant argued that the Trademark is used under a license agreement by a third party, New Products of Ukraine LLC, and provided a license agreement, as well as other evidence to confirm that the third party was preparing for the Trademark use. Defendant also stressed that the production facilities of the third party were suspended as a result of the Russian full-scale invasion, which, in the opinion of Defendant, constitutes a force majeure and, therefore, within the meaning of Article 18 of the Law, is a legitimate reason for the Trademark non-use.

The court of first instance

The court of first instance granted the claim in full, noting that:

  1. most of the evidence provided by the Defendant and the third party to confirm the Trademark use was inadequate, i.e., not specifically related to the Trademark but to some trademark use. The court also emphasized that the license and sublicence agreements cannot serve as evidence of the actual Trademark use, nor can other evidence provided confirm preparation for the Trademark use before the lawsuit.
  2. the Defendant has failed to provide evidence to confirm the suspension of production or prove the impact of any force majeure on its business activities.
Court of appeal
The court of appeal overturned the first-instance decision entirely, citing the following reasons:
  1. the evidence provided by the Defendant and the third party was admissible and sufficient, as it demonstrated that preparations for the Trademark use commenced on February 10, 2022, long before the lawsuit was filed.
  2. the appeal court accepted the Defendant's arguments regarding legitimate reasons for the non-use of the trademark due to the suspension of business activities caused by force majeure, which was confirmed by a letter from the Ukrainian Chamber of Commerce and Industry (the "UCCI"), dated February 28, 2022, attesting to the fact of Russia's military aggression as a force majeure event.
  3. it also referred to the Law of Ukraine, "On Protection of Persons in the Field of Intellectual Property during Martial Law in connection with Military Aggression of the Russian Federation against Ukraine" (the "IP Deadlines Law"), which suspends deadlines for protecting intellectual property rights during martial law.
Supreme Court
The Supreme Court annulled the decision of the appeal court in full and upheld the first-instance decision, providing the following reasoning:
  1. in the first instance, the court correctly assessed the scope of evidence. Arguments of the appeal court do not refute the conclusions of the first instance court in terms of evidence assessment;
  2. regarding the existence of legitimate reasons for the Trademark non-use, the Supreme Court stated that the UCCI letter, dated 28 February 2022, cannot automatically confirm the existence of force majeure for all entities. Each business entity must individually prove the occurrence of force majeure and its direct connection to the impossibility of fulfilling specific obligations.
    The Supreme Court noted that "these circumstances (the waras aforce majeure) are not prejudicial and, if they arise, the party relying on them as a basis for the impossibility of proper performance of the obligation must prove not only their existence, but also that they were force majeure for this particular case; the party relying on force majeure must prove the causal link between force majeure and the inability to fulfill a particular obligation."
  3. regarding the reference of the court of appeal to the provisions of the IP Deadlines Law, the Supreme Court noted that such a reference without proper motivation is not justified. When relying on the IP Deadlines Law, the court should consider the established circumstances of the case and their relation to Article 18 of the Law.
Thus, according to the Supreme Court, the Defendant has failed to prove the fact of the Trademark use.