An EU trade mark court still has jurisdiction to rule on the validity of a trade mark in a counterclaim, even if the action for infringement is withdrawn. That was the judgment of the EU Court of Justice in Case C-256/21, KP v TV and Gemeinde Bodman-Ludwigshafen, published on 13 October.

The Court was ruling in response to a question referred by the Munich Higher Regional Court. The question arose after KP, which owns an EU trade mark for Apfelzügle for services in classes 35, 41 and 43, brought an infringement action against TV, which operates a fruit farm, and the Municipality of Bodman-Ludwigshafen .

Apfelzügle denotes a vehicle for harvesting apples in German. The defendants filed a counterclaim for a declaration of invalidity of the trade mark.

At the hearing, KP withdrew his action, but the defendants pursued their counterclaim. The Regional Court of Munich found the claims were admissible and declared the mark invalid for services in class 41.

On appeal, the Higher Regional Court referred the question to the CJEU.

The Court’s ruling was based on three main reasons.

First, it said that a counterclaim “becomes independent of the main action and continues to exist in the event of withdrawal of the main action”. It is therefore distinguished from “a mere defence”.

Second, it noted that both EUIPO and EU trade mark courts have jurisdiction to review the validity of EU trade marks. If it were the case that the proprietor of an EUTM could deprive an EU trade mark court of the possibility of ruling on a counterclaim for invalidity purely by withdrawing their infringement action, the scope of the jurisdiction conferred on EU trade mark courts “would effectively be disregarded”.

Third, an EU trade mark court must be able to rule on a counterclaim for invalidity to achieve the objectives of avoiding unnecessary proceedings and the risk of contradictory judgments. The alternative (compelling the party to initiate proceedings before EUIPO) “would run counter to the principle of procedural economy” and could allow the trade mark proprietor to continue to use “as the case may be in bad faith, an EU trade mark that could be registered in disregard of the absolute grounds for refusal of registration”.

The Court therefore ruled: “Article 124(a) and (d) and Article 128 of Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark must be interpreted as meaning that an EU trade mark court hearing an action for infringement based on an EU trade mark the validity of which is challenged by means of a counterclaim for a declaration of invalidity still has jurisdiction to rule on the validity of that mark, in spite of the withdrawal of the main action.”