In its decrees delivered on the 13 May 2019 and the 6 June 2019 in the names of ‘Luca Selvaggi vs. Manouche Ltd’, the First Hall of the Civil Court, presided over by Mr. Justice Mark Chetcuti, considered, inter alia, the applicability of the measures and remedies made available to the parties in terms of the Enforcement of Intellectual Property Rights (Regulation) Act (Chapter 488 of the Laws of Malta), and also, the principle of ‘exhaustion of rights’ under Maltese intellectual property law.

In brief, the pertinent facts are as follows. The applicant and the defendant company were party to ongoing negotiations regarding the materialisation of a ‘craft bakery’ concept. On a prima facie basis, it transpired that the concept was initially conceived by the applicant, who, with the help of select individuals and the defendant company – which provided the necessary funding – fashioned the trade name of the craft bakery, and submitted a national trade mark application for ‘MANOUCHE’ on the 3  May 2018. The mark was subsequently registered on the 25 March 2019. 

On the basis of the evidence provided to it, the Court noted that the business had actually started operating under the trade name ‘MANOUCHE’ as early as January 2018, with the plaintiff’s consent. In this respect, the Court also noted that the parties had the intention of entering into a franchising agreement to regulate their relationship. This franchising agreement, however, never materialised. Subsequently, disputes arose between the plaintiff and the other parties involved, leading to the institution of the judicial proceedings under examination.

In his application to the Court, pending the outcome of the ongoing disputes, the plaintiff requested the granting of provisional measures made available under Articles 6(1) and 8(1)(a) of the Enforcement of Intellectual Property Rights (Regulation) Act. These are being reproduced verbatim below:

6. (1) The competent Court may, even before the commencement of proceedings on the merits of the case, upon an application by a person who has filed reasonably available evidence to support his claim that his intellectual property right has been infringed or is about to be infringed, order such prompt and effective provisional measures as it considers appropriate to preserve relevant evidence in respect of the alleged infringement, subject to the protection of confidential information. Such measures may include the detailed description, with or without the taking of samples or the physical seizure of the infringing goods and, in appropriate cases, the materials and implements used in the production and, or distribution of the said goods and the documents relating thereto. The competent Court may also, if it considers it necessary, order that such measures be taken without the other party having been heard, in particular where any delay is likely to cause irreparable harm to the right-holders or where the Court considers that there is an evident risk of the evidence being destroyed.

8. (1) Any person referred to in article 3 [including, pertinently, the holder of an intellectual property right] may by application request the Court to -

(a) issue against the alleged infringer of an intellectual property right a decree intended to prevent any imminent infringement of such intellectual property right, or to forbid, on a provisional basis and subject, where appropriate, to a recurring penalty payment where provided for by law, the continuation of the alleged infringements of that right, or to make such continuation subject to the lodging of guarantees intended to ensure the compensation of the rightholder. An interlocutory injunction may also be issued, under the same conditions, against an intermediary whose services are being used by a third party to infringe an intellectual property right;

In its original decree of the 13 May 2019, the Court rejected the plaintiff’s requests for the following reasons:

1.    The plaintiff’s requests were hindered by the provisions of Article 12(1) of the Trademarks Act (Chapter 416 of the Laws of Malta) [this has since been repealed and replaced by Chapter 596 of the Laws of Malta], in that a trademark shall not entitle the right-holder to prohibit its use in relation to goods bearing that trademark when these have been put on the market by the right-holder or with his consent. In this respect, the Court remarked that the mark ‘MANOUCHE’ had been used with the plaintiff’s consent;

2.    Any request for the granting of provisional measures in accordance with the Enforcement of Intellectual Property Rights (Regulation) Act ought to be in conformity with the principles of reasonableness and proportionality. In this sense, the Court noted that the plaintiff’s requests were being made at a very late stage, and therefore, could not be entertained.

Following an appeal from the decree abovementioned, the Court, on the 6 June 2019, made the following admissions/elaborations:

1.    In terms of the principle of ‘exhaustion of rights’ as emanating from Article 12(1) of the Trademarks Act, the Court noted that the contested mark related to the provision of bar and restaurant services, as opposed to goods. In this sense, the Court acknowledged that not only does the mentioned Article 12(1) make explicit reference to goods, but also, prevailing case-law of the Court of Justice of the European Union (CJEU) seems to indicate that the principle of exhaustion of rights shall only apply to goods - as opposed to services;

2.    Notwithstanding the above, the fact remained that use of the trademark ‘MANOUCHE’ had been made with the plaintiff’s consent even before its registration, and Article 9(1) of the Trademarks Act speaks of infringement of a right-holder’s exclusive rights where use of a mark is made by another party without the right-holder’s consent.

The Court thus went on to reiterate that the provisional measures requested by the plaintiff were insufficiently proven to be necessary on a prima facie level, and that therefore – subject to the Court’s findings in relation to the action instituted on the merits – the plaintiff’s appeal from its original decree was also being rejected.

 

Dr Luke Hili is an Advocate at GANADO Advocates