On 9 December, the Department of Civil Cases of the Supreme Court quashed the judgement of the Chamber of Civil Cases of the Supreme Court rejecting the claim of Swiss company “Société des Produits Nestlé S.A.” against “Sara Lee Baltic” Ltd., in the part regarding recovery of compensation in the case on “Red Mug”. The case is transferred for new examination under appellate procedure in Riga regional court.

In the judgement, the Supreme Court analysed case-law of the Court of Justice of the European Union, having pointed out that in cases, when a Directive is transposed into legal system of respective Member State with delay and when provisions of the particular Directive do not have direct effect, national courts, starting from the end date of transposition term, must interpret state law as much as possible in accordance with text and purpose of the respective Directive, to achieve the result determined therein. Domestic courts must also ensure legal protection following from legal provisions of the European Union in respect of parties to proceedings, and guarantee complete application thereof.  

The Supreme Court indicated in the judgement that there is no dispute in the case that the Directive 2004/48/EC of the European Parliament and of the Council had to be transposed in domestic legal provisions until 29 April 2006, but actually this task was executed on 1 March 2007 only. There is also no dispute on the fact that both parties to a case are private persons and the fact of violation of intellectual property law (unlawful use of trademark) and time of commitment of this violation as from 6 March 2006 until 20 June 2006 is established by the judgement of the Chamber of Civil Cases of 12 November 2009, which came into effect, and was upheld by the Senate in this part.  

Swiss company “Société des Produits Nestlé S.A.” (Nestlé) is the owner of three-dimensional EC trademark No. 002801702 (Red Mug). The claimant also possesses trademarks “Nescafe Classic” and “The Red Mug on a bed of coffee beans”. Since 1996, the company “Société des Produits Nestlé S.A.” has actively offered and advertised its products, including “Nescafe Classic”. Title “The Red Mug” has been used in advertising campaigns. On 6 February 2006, the company Nestlé launched extensive advertising campaign in Latvia with the slogan “Buy 500g of “Nescafe Classic” and get the Red Mug!” Advertisement “Nescafe Classic – excellent taste, excellent mugs!” was also seen on Latvian TV channels. One month later, on 6 March 2006, the company “Sara Lee Baltic” Ltd. launched similar advertising campaign “Open your eyes for warm looks!”, promoting R&G coffee in Latvia. The advertisement pointed out: “Buy Merrild, send SMS and get one red mug with cheerful drawings!” The claimant believes that red mug used in advertising campaign of “Merrild” coffee by impression, shape and colour, must be recognised as so similar to trademark used by Nestlé that it might be possible to mix them. In opinion of Nestlé, the advertising campaign also concords with advertisements of “Nescafe Classic” and makes one think that “Merrild” red mug was deliberately shaped and used in such way, so that it would associate in consumer’s mind with “Nescafe Classic” mug, which is well-known all over the world.

On 12 November 2009, having heard the case under appellate procedure for the first time, the Chamber of Civil Cases of the Supreme Court satisfied the claim filed by Nestlé and recognised that use of red mug in advertisement of “Merrild” coffee and organised campaign, when buyers were presented mugs, violated exceptional right of Nestlé as the owner of trademark. The court stipulated to discontinue unlawful use of trademark and prohibited unfair competition. The court ordered to eliminate any use of symbols similar to possessed dimensional trademark. The Chamber of the Supreme Court also recovered compensation of 26 716 Latvian lats from the respondent.

On 20 April 2011, having heard the case under cassation procedure, the judgement of the Chamber of the Supreme Court was quashed in part regarding recovery of compensation and transferred in this part for new examination.  


Information prepared by Baiba Kataja, the Press secretary of the Supreme Court

Telephone: 67020396; e-mail: baiba.kataja@at.gov.lv