Austria: Cancellation of trademark licences proves difficult

The owner of the trademarks "Miss Austria", "Miss Oberösterreich" (Miss Upper Austria) and further Miss-marks granted a licence to the defendant to use these marks for five years. These trademarks – as one can guess – are registered for an organisation handling beauty contests and the elections of the most beautiful women in an area. The contract contains a clause that allows immediate cancellation of the licence if there is violation by the licensee of any contractual duty. It also prohibits competition by the licensee in this field outside the licence and the use of similar trademarks to those licensed.

The trademark owner and licensor declared two years later the immediate cancellation of the licence for breach of contract and sued for cessation of use of his trademarks by the licensee and defendant in connection with the announcement and promotion of beauty contests. All three instances dismissed the complaint and held the contract in force.

What had the licensee done? He had organised and promoted in Oberösterreich (Upper Austria) a beauty contest under the name "Miss Countess". The licensor was of the opinion that this action violated the prohibition on competitive activities since it lacked an intimate connection with Upper Austria. It also violated the prohibition on use of similar trademarks.

The court did not find this convincing. It found out that the beauty contest "Miss Countess" was an official preliminary contest to the final beauty contest "Miss Oberösterreich" (Miss Upper Austria) and therefore was not an event in competition with "Miss Oberösterreich" and also did not lack an intimate connection with Upper Austria as stated by the plaintiff. With regard to the use of similar trademarks, it was held that here the use of "Miss Countess" as a denomination for the pre-contest was not as a trademark and also the plaintiff from the beginning did not see it as such. Therefore, this point was irrelevant.

This decision shows that in Austria, it is not easy to dissolve a contract which is no longer wanted by one of the parties. Of course, if both parties concur, they can easily rescind the entire contract.

Helmut Sonn

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