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TWO DECISIONS CONFIRM THAT FORMER DEALERS AND INDEPENDENT WORKSHOPS CANNOT USE ANOTHERS’ TRADEMARKS IN WAYS THAT LEAD TO CONFUSION AS TO THEIR MEMBERSHIP IN AUTHORISED NETWORKS AND NEED TO TAKE AFFIRMATIVE ACTION TO DISPEL CONFUSION

Thursday, October 29, 2020

In the first case, the first Plaintiff is the manufacturer of vehicles and spare-parts and proprietor of well-known trademarks distinguishing these products and related services, whereas the second Plaintiff is a wholly owned subsidiary of the first Plaintiff and authorized to set up and maintain a selective distribution network in Greece for the products and services. The Defendant, a car dealer and workshop, was an authorized member of the second Plaintiffs’ official dealer / workshop network in Greece. The Dealer Agreements clearly stipulated that the well-known trademarks were to be used in specific manner which is uniform to the EU distribution system of the products and services and that upon termination the Defendant was obliged to remove immediately and stop using all signs and trademarks related to the Plaintiffs and the contractual products and any sign or trademark that would suggest that the defendant is still operating an authorized member of the distribution network in Greece or is still affiliated with the Plaintiffs in any way.

In 2017, the second Plaintiff lawfully terminated the Agreement by giving a two-year notice of regular termination to the Defendant. Following the notice of termination in 2017 but prior to the termination’s effective date came to the attention of the second Plaintiff that the Defendant had gone into liquidation and the main facilities that were used to serve the function of the Agreements had been confiscated by a Bank. The second Plaintiff immediately terminated the Agreements for cause. Following termination, the Defendant made a number of changes to the signs at the former authorized facilities, such as adding the indication “specialized service” below the signs containing the famous trademarks. The Plaintiffs sought injunctive relief on grounds of contract law, trademark law, unfair competition law and advertising law.

The Single Member First Instance Court of Athens delivered its judgement in Case 4893/2020, ruling that the changes made by the Defendant did not fulfill her post-contractual obligations to avoid confusion with the authorized network set up by the second Plaintiff. The Court also went a step further holding that the indication added, namely that the Defendant was “specialized” in the products and services was insufficient to dispel confusion as without the indications “unauthorized trader” and “unauthorized workshop” it was not absolutely clear to the consumers that the Defendant no longer belonged to the official network. The Court also held that the above actions, and especially the fact that the Defendant purposely kept the signs containing the famous trademarks, constitutes exploitation of the fame and advertising functions of said trademarks, while this way, the Court continued, the Defendant was unfairly competing with the Plaintiffs by using the well-known trademarks to mislead and attract consumers.

In the second case the Defendant was an independent vehicles’ workshop and spare parts who used of the Plaintiffs’ well-known trademarks and distinctive features. He also sold original spare parts of the make in question and proclaimed he specialized in the particular vehicles’ repair.

The First Instance Multi-Member Court of Athens handed down judgement 2790/2020 ruling that, although the Defendant had the right to make use of the Plaintiffs’ trademarks for the purpose of declaring the nature of the legitimate trade in their goods and services provided by him, he did not ultimately use those trademarks fairly and honestly, and did not act in accordance with good faith since its use of the trademarks involved the exploitation of their reputation and advertising function. More to the point the Court held that a trader lawfully in the business of trading products can use the respective trademarks to indicate that he trades in the specific products, but has to clearly inform the public that the workshop is "unauthorized”. It is therefore not sufficient, the Court ruled, for the Defendant to simply omit stating that he is an authorized repairer or a “specialist workshop”, but he is required to affirmatively declare that he is not an authorized repairer of the plaintiffs' vehicles.

Dimitrios Giannimaras, Associate at Ballas, Pelecanos & Associates LPC argued for Plaintiffs