Articles

Intellectual Property: Trademarks - Unsuccessful opposition does not prevent subsequent invalidity action

Release Date:

12 February 2007

The Court of Appeal has decided that L'Oreal was not prevented from challenging the validity of the SPECIAL EFFECTS trade mark on the same grounds that it had previously unsuccessfully opposed its registration.

This overturned a previous High Court decision and found decisions of the Trade Mark Registry are not final against the party who has lost in those proceedings.

The High Court had controversially concluded that Trade Mark Registry oppositions could create an estoppel in subsequent infringement proceedings. This estoppel would prevent L'Oreal from making a counterclaim for invalidity in response to an infringement application by Special Effects against L'Oreal's use of the mark 'Special FX' because L'Oreal had previously challenged the registration of Special Effects' mark.  The High Court maintained that the grounds for invalidity were the same as those for opposition and therefore that cause of action estoppel applied. This is a rule that prevents claimants claiming on the same facts and legal grounds more than once.  The impact of this decision was to view the UK Registry as part of the court framework.

On appeal, the Court of Appeal found in favour of L'Oreal and held that opposition proceedings before the Trade Mark Registry do not involve a cause of action. Its decisions against a party do not constitute cause of action estoppel in subsequent legal proceedings in the High Court.  Therefore the same arguments can be raised both in opposition and subsequent invalidity proceedings. This decision is welcome as it means that parties can allocate appropriate resources to opposition proceedings knowing that they will not be precluded from challenging validity on the same grounds.

If the High Court decision had stood as a result, oppositions to registration were likely to be approached either in a much more substantial way or not at all to avoid compromising future actions. This would have presumably applied to patent as well as trade mark claims.