The General Court ruling squarely contradicts the Communication No 2/20 of the Executive Director of EUIPO of 10 September 2020 according to which the EUIPO will treat all UK rights to cease to be ‘earlier rights’ for the purposes of inter partes proceedings. The judgment will have significant implications far beyond the UK angle because the General Court makes clear that in opposition proceedings the only relevant date for the existence of an earlier right is the filing date of the junior mark. This means that any subsequent changes to the earlier mark which do not retroactively affect its validity at the time (such as for example revocation actions, as well as limitation or surrender of the earlier mark) will be totally irrelevant for the outcome of opposition proceedings. This marks a significant change in practice for the EUIPO and we expect that the EUIPO will appeal the decision to the Court of Justice.
Background
On 30 June 2015 the applicant filed the below EUTM in classes 3, 9, 14, 18, 25 and 35:
On 08 March 2016 Nowhere, Co. Ltd. opposed the application inter alia based on a claim of passing off invoking its prior use of the following marks in the UK:
In 2018 the Board of Appeal rejected the opposition due to lack of substantiation. The Opponent appealed to the General Court however before the Court heard the case on 17 July 2019 the Board revoked its 2018 decision saying that it may have contained a substantial procedural violation. Accordingly the GC proceedings were terminated and the case went back to the Board of Appeal.
Over one and a half years later, on 10 February 2021 the Second Board of Appeal adopted a new decision which we report on now. The Board reached the same finding and held that the earlier rights were not substantiated. Importantly however the Board added that this issue has also become irrelevant because meanwhile the Brexit transition period has ended and the UK rights relied on by the Opponent were no longer valid earlier rights in the EU.
Without an extended panel of five judges, the GC took a major decision which may have numerous and very significant impacts on the European trade mark system and on procedural strategies of trade mark owners.
The GC holds that, in the context of opposition proceedings, the existence of a relative ground for refusal must be assessed as at the time of filing of the EUTM application. The fact that the earlier trade mark could lose the status of a trade mark registered in a Member State at a time after the filing of the opposed EUTM application, including for example because of a withdrawal of that Member State from the European Union, is in principle irrelevant to the outcome of the opposition.
This means that the EUIPO could have been wrongly refusing oppositions based on UK rights against EUTMs applied for before 1 January 2021. This also means that live oppositions where UK rights were relied on in relation to such EUTM applications should be reviewed and UK rights may be reinstated as valid grounds on which opposition decisions can be based.
This marks a significant departure from the existing practice of the EUIPO and the Communication No 2/20 of the Executive Director of EUIPO of 10 September 2020, which has been routinely dismissing UK rights in EUIPO oppositions after 1 January 2021.
While the GC in Nowhere makes specific reference to the fact that the application in this case was filed both before the entry into force of the withdrawal agreement and the expiry of the transition period, it is not clear whether that had any influence on the decision itself. However, the GC’s statements are clear and seem to apply to any case where the EUTM application was filed before the end of the transition period i.e. before 01 January 2021. There may be room for argument that EUTM applications filed after 01 February 2020 and up to and including 31 December 2020 (when the UK had already left the EU but the UK was in a transition period) cannot be validly opposed by earlier UK rights, however this does not change the very general statement of the GC that the relevant date for the assessment of the existence of an earlier right in opposition proceedings (and the same must apply to invalidity proceedings) is only the date of filing of the contested EUTM application. Such a general statement has wide ranging consequences for EUIPO procedure and for the outcome of invalidity and opposition cases going far beyond oppositions based on UK rights.
Comment
It is true that the GC already indicates that this may be the correct legal position in three previous decisions in 2020 and 2021 but in all those cases the question was left unanswered as it was irrelevant for the outcome of those specific cases and the Court left a final decision on the topic open (see judgments of 30 January 2020, Grupo Textil Brownie v EUIPO – The Guide Association (BROWNIE), T‑598/18, paragraph 19; of 23 September 2020, Bauer Radio v EUIPO – Weinstein (MUSIKISS), T‑421/18, paragraph 34; and of 1 December 2021, Inditex v EUIPO – Ffauf Italia (ZARA), T‑467/20, paragraph 58).
Similarly the legal issue was considered to be irrelevant in the Court´s judgment of 6 October 2021, Indo European Foods v EUIPO – Chakari (Abresham Super Basmati Selaa Grade One World’s Best Rice), T‑342/20. In that case the question arose in a different context, namely whether the withdrawal of the UK from the EU had any impact on proceedings pending before the General Court. In that case the decision of the Board of Appeal relating to an opposition based on earlier UK rights was taken before the end of the transition period. The question then was whether the GC needed to terminate the proceedings because at the time that the case came before the GC, the UK right was no longer an “earlier right” in a Member State. However, the answer in that case was more straightforward since GC case law confirms that the GC must only review the legality of the decision of the Board of Appeal at the time the decision was taken. Facts coming into existence after the Board of Appeal decision was issued are in principle irrelevant and so in Indo European Foods the GC confirmed that the fact that the UK rights ceased to have effect in the EU after the Board issued its decision was irrelevant. The EUIPO has appealed this judgment to the Court of Justice and the case is pending admission under C-801/21.
It should finally be mentioned that directly contrary to the position taken here, in 2019 the General Court in case T-162/18, Beko v. EUIPO, paragraph 41 took the view that the earlier mark on which the opposition is based must be valid not only at the time of the publication of the application for registration of the mark applied for but also at the time when the EUIPO gives a decision on the opposition (similar for invalidity proceedings the GC in its judgment of 02 June 2021 in case T-169/19 (Representation of a Polo Player), paragraph 30). Moreover this position is better aligned with previous EU case law which has indicated that the earlier rights relied on in opposition or invalidity proceedings must continue to produce their effects in the EU at the date on which a decision is taken by the EUIPO as otherwise there is no more interest to bring the proceedings (case C-268/12 Zydus, paragraphs 32-33; case T-7/15, LEOPARD true racing, paragraphs 21-22; case T 191/04 – Metro, paragraph 33).
Next steps
It now remains to be seen if the EUIPO will appeal and if so how the CJEU will decide on the issue. It can only be hoped that the CJEU will find the appeal in this case admissible, in particular given the diverging case law of the GC as set out above.
If the judgment of the GC in Nowhere is confirmed the impact would be wide-ranging, for example:
- The EUIPO would need to rule on all pending inter partes opposition and invalidity proceedings relating to EUTMs filed before 1 January 2021 where an action was brought on UK rights. This could lead to the absurd situation that an EUTM may be refused by EUIPO based on such earlier UK rights but can then be converted into national marks in all 27 current EU Member States.
- The EUIPO would need to consider evidence of reputation relating to the UK for earlier EUTMs invoked against EUTMs filed before 01 January 2021.
- Any subsequent changes to the earlier mark due to revocation actions (with effect only ex nunc), limitations of the mark or even its surrender would henceforth be totally irrelevant for the outcome of inter partes proceedings before the EUIPO. This means that:
- The EUIPO would have to revise its practice on granting suspensions in opposition and invalidity cases where the earlier rights are at risk of revocation where the effective date of the revocation post-dates the filing date of the attacked mark.
- The EUIPO would have to decide in all opposition and invalidity actions where the earlier mark has ceased to exist before a decision on the actions is issued and with an effect post-dating the filing date of the attacked mark. The invalidity applicants would no longer have to show a legitimate interest to obtain such a decision.
- The EUIPO would need to revisit the view, stated in its Guidelines, that reputation of an earlier mark in opposition and invalidity proceedings must subsist until a decision of the EUIPO is issued.
This would significantly impact on trade mark defence strategies adopted over years.
Please feel free to contact us if you would like us to review your opposition and invalidity strategies in view of this judgment.
Authored by Iza Junkar and Andreas Renck.
