In a reference for a preliminary ruling, the Federal Court of Justice (BGH) has asked the ECJ whether no-challenge clauses are valid (BGH, November 19, 2020 – I ZR 27/19).
Such no-challenge clausesare typically included in delimitation agreements, partial transfers of a trademark or license agreements. Accordingly, one party undertakes not to take action against the trademark of the other party. In some cases, this obligation is intended to apply in principle, in others it is limited to certain grounds, such as requests for cancellation due to non-use.
The question now is whether such clauses are invalid, for example, because the cancellation proceedings for non-use are by law available to anyone, or at least should be available to anyone. The admissibility of such no-challenge clauses is highly controversial and has also been the subject of various rulings in the past.
Reference of the Court
In its reference, the Federal Court of Justice takes the view that no-challenge clauses should be permissible in the case of cancellation proceedings for non-use against EU trademarks provided that the agreement in the specific case does not violate antitrust law. The fact that cancellation proceedings for non-use can in principle be initiated by anyone does not exclude that the filing of an application in a specific case may be abusive due to the violation of a contractual obligation. In Germany, such no-challenge clauses are therefore not generally considered inadmissible.
This reasoning of the Court is convincing, especially since such no-challenge clauses are not arbitrarily agreed on. Instead, they are part of delimitation or licensing agreements in which the affected party is granted certain rights and advantages as a counterweight or consideration, so to speak, which justify a no-challenge clause. If a trademark owner has to fear the cancellation of his trademark by his own contractual partner, he will hardly be willing to give his consent to the registration of a similar trademark by way of a delimitation agreement. Now, however, trademark owners will have to wait for the decision of the ECJ that will impact the practice regarding German as well as EU marks.