The DRACULA Case Changes the Rules of Trademark Law

The judgment of the Court of Justice of the European Union (CJEU) in Lunapark Scandinavia Oy Ltd v Hardeco Finland Oy (Case C-452/24) is one of the most significant trademark decisions originating from Finland in recent years. The case examined whether a trademark owner may lose the ability to take action against infringing use of a trademark if it has allowed parallel use of the mark to continue for a prolonged period of time without taking legal action.

Decades of Parallel Use in the Background

Lunapark is the owner of the Finnish word trademark DRACULA, registered, among other goods, for confectionery products in class 30. The application was filed in 2003 and the registration was granted in 2009.  

At the same time, a competitor (originally Karkkimies Oy and later Hardeco Finland Oy) had been using the Dracula trademark for confectionery products already before Lunapark’s registration and continued using the mark after registration, despite not having its own registered trademark. For many years, Lunapark did not challenge Hardeco’s use of the Dracula name. Eventually, in 2020, Lunapark brought infringement proceedings seeking to prohibit Hardeco from using the Dracula name and character for confectionery products and claiming compensation for the use of the mark.

In Finland, courts have traditionally applied a private-law principle according to which a claim should be brought within a reasonable time after the claimant becomes aware of, for example, a trademark infringement.

The Market Court found that trademark infringement had indeed occurred but dismissed Lunapark’s claims on the grounds that Lunapark had, through its prolonged inaction, forfeited its right to pursue those claims (see MAO:36/2022).

The CJEU Decision

The case ultimately reached the CJEU through a request for a preliminary ruling referred by the Supreme Court of Finland. The CJEU held that the proprietor of a trademark cannot lose the right to prohibit a third party from using a sign merely because of prolonged inaction, where the third party’s sign is neither registered nor established through use.

The key message of the judgment was that Member States may not apply national principles that restrict the enforcement of trademark rights beyond the limitations expressly provided for in the Trademark Directive. The Court emphasized that delay or inaction alone does not automatically result in the loss of trademark rights. The Finnish principle of passivity, under which a trademark owner’s inactivity could lead to a loss of rights, cannot be used to expand the exhaustively regulated limitations contained in the Directive. National courts may not rely on general private-law principles to restrict trademark rights. Allowing such restrictions would undermine the uniform protection of trademarks throughout the European Union.

Practical Significance of the Judgement

The practical significance of the decision is substantial. Even trademark use that has continued for decades can be outweighed by a registered trademark right where the user does not possess its own registered trademark right or an established unregistered right.

As a result, the importance of trademark registrations is further reinforced. Businesses should not assume that years or even decades of use alone will be sufficient to protect an established market position. The judgment increases the incentive for companies to register the signs they use instead of relying solely on rights arising from use.

Likewise, the passivity doctrine that has previously been relied upon in Finnish case law may no longer provide an effective defence. Following the DRACULA decision, such arguments are likely to be considerably more difficult to invoke successfully in trademark infringement disputes. National arguments based on equitable considerations are expected to carry less weight where limitations on trademark rights are assessed primarily under EU law.

The DRACULA judgment further strengthens the role of EU law in trademark matters. National legal particularities must not lead to a situation where the protection afforded to a registered trademark varies substantially between Member States. The decision promotes greater legal certainty in trademark disputes by ensuring that available defences are based on harmonised EU law rather than a range of differing national principles.

A Reminder for Us All

For businesses, the judgment contains a clear practical lesson: trademark registration remains the most effective means of securing legal protection and avoiding trademark disputes. Registration not only enables the proprietor to prevent unauthorised use of an identical mark but also helps prevent others from registering and asserting exclusive rights to the same trademark in the future. For owners of unregistered marks, the case serves as a reminder that even long-standing use does not provide the same level of protection as a trademark registration.