“Ketofit”

• 1. It should be guaranteed that a person who first entered the market with his or her goods or services and uses them in good faith in such manner as to distinguish them from the goods or services of another entity, and who continues with the lawful use of such sign, may continue using its sign free from interferences even after another person applies for the formal protection of an identical (or similar) sign (prior user defence).

• 2. Prior user defence is a trademark limitation imposed on the owner of a trademark to tolerate such use and thus does not constitute a subjective right. Consequently, it cannot be subject to a limitation period (prescription of right).

• 3. Prior use differs from the creation of a priority right (trademark priority) as a result of an application being filed in a different member state of the Paris Union.

• 4. The overall scope of the limitation of a (registered) trademark pursuant to Sec. 10(2) of the Trademarks Act must be linked to the moment of the filing of the trademark application.

• 5. The prior user defence applies only to such users of a senior unregistered sign who were using the sign under the conditions set forth by Sec. 10(2) of the Trademarks Act at the moment of the trademark application filing and only for those categories of goods and services for which these persons were using the sign in question at the decisive moment.

• 6. The transfer of the legal position is only permissible in connection to the transfer of the commercial enterprise (or the relevant part thereof) of the original beneficiary, or based on similar legal fact, as a result of which another person enters the market position of the original beneficiary concerning the relevant categories of goods or services (thus replacing the original beneficiary in the relevant market).

• 7. The effect of trademark right’s exhaustion under Sec. 11 of the Trademarks Act must be applied by analogy also to products marked by a previous user, provided that the conditions under Sec. 10(2) of the Trademarks Act are met. However, unlike the EU concept of the territorial scope of exhaustion of trademark rights within the meaning of Sec. 11 of the Trademarks Act, the prior user defence under Sec. 10(2) of the Trademarks Act is applicable only to products placed on the market in the Czech Republic and used there.