A trademark protects any sign (such as words, images, etc.) of a product or service and grants the owner exclusive rights to use that sign. However, this protection is not absolute, and other businesses may be allowed to use the trademark under certain conditions.

According to the law [1], the trademark owner must tolerate the use of the trademark by a third party in commercial dealings if the third party uses it solely for the purpose of informing the public that it provides services or sells goods of the trademark owner. However, it must not create the impression that there is any commercial link between the trademark owner and the user of the trademark. An example of such a connection is the relationship between an authorized Ferrari car dealer, who has a contract with Ferrari and holds a certificate. This impression must not arise for the average consumer when using someone else's trademark. Additionally, the third party using the trademark must use the designation under which the product or service was introduced to the market.

The Supreme Court has also addressed the issue of trademarks in its case law. It concluded that if the designation of a vehicle, under which it is marketed, is protected as a trademark, its use by unauthorized car dealers is necessary to inform customers. According to the Supreme Court, using a trademark in a store is common practice even for unauthorized car dealerships (and not just for cars) if other legal conditions are met. Therefore, the Supreme Court confirmed the right of unauthorized dealers to use the trademark.

However, in each case, it is necessary to consider whether the use of the trademark in a given case creates the impression that there is a commercial connection between the trademark owner and the unauthorized dealer. The likelihood of confusion must also be assessed from the perspective of the average consumer.

A relevant decision involved a lawsuit filed by BMW Munich against an unauthorized BMW dealer. The unauthorized dealer had used an advertising pylon containing the BMW trademark and the phrase "specialized sales and service." The courts assessed whether such a pylon could create the impression for customers that the dealer was authorized. The courts concluded that it could not, even though the phrase "specialized sales and service" was written in smaller font than "BMW."

Although this case primarily concerned unauthorized car dealers, we believe this decision may have broader implications in other business areas where trademarked products or services are resold or services related to them are provided (e.g., branded electronics). From our perspective, the key takeaway is that if a trademark is used by unauthorized dealers in compliance with legal conditions, it is necessary to use the trademark to demonstrate that the dealer is qualified to provide the service. We believe these conclusions should apply to other industries as well, but it remains to be seen whether the courts will agree with this view in the future.

[1] Act No. 441/2003 Coll., on Trademarks, as amended.

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