GREECE: Supreme Court’s Plenary Session clarifies auctioning of trade marks in bankruptcy proceedings 25 Oct 2018

Other than infringement matters, Areios Pagos, the Greek Supreme Court, rarely addresses IP issues. Also rare is for the Supreme Court’s Public Prosecutor to exercise his/her right to file an appeal “in favour of the law”, an exceptional right mainly used in cases, where a final appeal is no longer available to the parties to the dispute and the Prosecutor considers that an appellate judgment has erroneously interpreted or applied the law in a matter of wider jurisprudential importance.

Supreme Court’s Plenary Session judgment No. 4/2018 marks the coincidence of those two rarities. The dispute revolved around the validity of the auction of 53 trade marks, for which the Bankruptcy Trustee requested the permission of the Bankruptcy Judge Rapporteur, based on the general bankruptcy law provisions, and not of the Bankruptcy Court.

Both the first instance and the appellate court ruled the auction void for this reason. They held, in similar reasoning, that trade marks should be dealt with under the provisions of the Greek Civil Procedure Code for compulsory enforcement process of “particular categories of assets” (arts. 1022 et seq.), which expressly includes intellectual property rights. The said provisions allow the “seizure” and later auctioning of IP assets, in compulsory enforcement proceedings, following petition to the Single-Member First Instance Court. The judgments appear to have found a legal void in the handling of IP rights in bankruptcy, which should be “filled” via the application, by analogy, of the said provisions of arts. 1022 et seq. of the Greek Civil Procedure Code. Under this approach, it is the Bankruptcy Court that should have dealt with the fate of those 53 trade marks and the Judge Rapporteur had no competence to allow the auctioning. In essence, the lower courts weighed the particular nature of the assets more than the legal surroundings, namely that the dispute arose in the context of bankruptcy proceedings, not of the enforcement of an individual claim.

The Plenary Session of the Supreme Court unanimously disagreed with the lower courts. It reiterated that (at the stage of bankruptcy proceedings where the issue arose) bankruptcy law allows the Bankruptcy Trustee to auction “merchandise and movable assets” of the bankrupt business, following permission by the Bankruptcy Judge Rapporteur.

At what is the heart of its judgment, the Supreme Court held that “merchandise and movable assets” should be interpreted broadly, so as to include all bankruptcy assets, except real estate, including, therefore, intellectual property assets and trade marks, in particular. Under this prism, there is no legal void to be filled and, consequently, no room for application of art. 1022 of the Greek Civil Procedure Code.  The Supreme Court contrasted these provisions, which relate to individual prosecution of individual debtor assets with the fact that bankruptcy is a collective enforcement procedure and that the auction of the trade marks took place within that very procedure. Accordingly, the permission of the Bankruptcy Judge Rapporteur suffices for the auctioning of trade marks (or any other intellectual property rights) in bankruptcy proceedings.