Unfair competition, case I ACa 1270/10

May 11th, 2010, Tomasz Rychlicki

The Warsaw Court of Appeal in a judgment case file I ACa 1270/10, held that a failure to enforce one’s trademark protection can lead not only to the expiration of the protection right but even to an entire forfeiture of the right.

The unfair competition dispute between the Croatian Podravka (and its Polish daughter company – Podravka Polska) and Marina Maziarny – Hungarian producer of the equivalent of the Podravka’s spice (Węgierska Virgin Przyprawka) has been on for quite some time. The claimant in this case – Podravka, raised that the Hungarians use marks that are dangerously similar to those used by Podravka in Poland for almost 20 years. The marks in question present a cook with a bouquet of vegetables on a blue background. The respondents claimed that this type of logo had become standard in the spice industry, hence loosing any distinctiveness, primarily due to the “lack of activity on the part of the Croatians”.

Vegeta Podravka

Additionally, they raised that any potential claim the Croatians might have had, had long expired. Pursuant to article 20 of the Polish Act of 16 April 1993 on Combating Unfair Competition – CUC – (in Polish: ustawa o zwalczaniu nieuczciwej konkurencji), Journal of Laws (Dziennik Ustaw) No. 47, item 211, with later amendments, the statute of limitation for the unfair competition claims arising under the Act shall be 3 years (very much the same as in case of trade mark infringements). In the meantime (in 2003), Podravka Polska became aware of the infringement. However, it waited to file the lawsuit for 5 years (sic!), and finally did in 2008. And because of that undue delay, the court of I instance dismissed the suit justifying that if the daughter company had been aware of the infringement, so must have had the mother company. Podravka stressed that when it came to this particular type of infringement, each and every violation (i.e. each subsequent pitch of illegally marked goods) constituted a separate infringement, from the date of which the statute of limitations ran anew. And because the last pitch of the infringing goods was sold by the respondents in 2007, the statute of limitation has not run yet. But the Court of Appeals held differently. According to the Court, it is only the very first infringement that matters when it comes to computing the 3 years’ statute of limitation. However, the Court emphasized that this should apply solely to the Polish daughter company as it could not be proved with certainty that the Croatian mother company had been aware of the infringements already back in 2003. As as result, the Court decided that this aspect of the case should be remanded for more thorough investigation.

Once again, it has been shown that the issue of the statute of limitation in unfair competition claims can be highly troublesome and complicated. It also teaches a lesson that every IP right holder should be aware of the fact that his inaction in terms of the enforcement might not only result in the expiration of the statute of limitation but also in the dilution of his right via the strengthening of the competitor’s brand.