In brief
- The Court of Justice of the European Union ("CJEU") has confirmed that earlier rights relied upon in trade mark opposition proceedings, and by analogy invalidity proceedings, before the EUIPO must continue to be in existence at the date of the EUIPO's final decision.
- While the points discussed in the court's decision in EUIPO v Nowhere were through the prism of earlier unregistered rights in the UK and the impact of Brexit, it has more general application.
- Simply, if an earlier right relied upon in an EU trade mark opposition or invalidity dispute lapses, is revoked, is surrendered, or ceases to qualify under the relevant laws of an EU Member State before the EUIPO (including the Board of Appeal) issues its final decision, that challenge will now fail, even if the earlier right was in existence at the start of the proceedings.
- The decision will impact parties' strategies when conducting opposition and invalidity disputes before the EUIPO, including potentially the timing of those disputes.
Background
In 2015, the applicant filed EU Trade Mark Application No. 14319578 for covering various goods and services in Classes 3, 9, 14, 18, 25 and 35.
In 2016, Nowhere Co. Ltd filed an opposition at the EUIPO relying upon UK unregistered rights in three monkey related figurative marks.
Nowhere's opposition was based on Article 8(4) of Regulation No 207/2009 as, at the time of filing the opposition, these were earlier rights that existed pursuant to the law of passing off in the UK. In September 2017, the EUIPO rejected Nowhere's opposition, sparking a series of appeals.
By the time the EUIPO's Second Board of Appeal issued its decision in February 2021, the Brexit transition period had expired, and UK law was no longer a "law of a Member State", meaning that passing off rights no longer fell within the meaning of Article 8(4) and could no longer form the basis for EU opposition proceedings. The EUIPO Second Board of Appeal adopted the EUIPO's initial decision rejecting the opposition, on the basis that the rights relied upon were no longer in existence.
Following further appeals, and a complex procedural background, in March 2022 the General Court annulled the Board of Appeal's decision, relying on case law which suggested that the existence of an earlier right must be assessed as at the date of filing the EU trade mark application. The General Court concluded that events affecting an earlier mark after the application filing date were therefore irrelevant.
The EUIPO appealed to the CJEU, with support from the International Trademark Association (INTA) and Federal Republic of Germany as interveners. The decision is a rare example of a CJEU appeal judgment in IP matters, following changes to the criteria for allowing appeals to proceed.
The CJEU ruling
The CJEU overturned the General Court's decision and held that whilst the existence of an earlier right is assessed as at the application filing date, that earlier right must continue to confer the right to prohibit use until the EUIPO's final decision - including at the Board of Appeal stage. The decision also applies in national Member States.
Analysing Article 8(4), the CJEU noted that, whilst the provision uses the past tense regarding when "rights to that sign were acquired prior to the date of application", it employs the present tense when stating that the sign must "confer on its proprietor the right to prohibit the use of a subsequent trade mark".
While the CJEU's analysis was in the context of an opposition based on earlier unregistered rights, it applies equally to invalidity actions, and also any earlier right including registered trade marks.
Key takeaways
The CJEU decision has shifted emphasis from the existence of an earlier right at the filing or priority date of the contested application, to the prior right's existence at the decision date. If earlier rights are revoked, invalidated, surrendered or otherwise lapse during the course of proceedings, the basis of the proceedings falls away even if the earlier right was in existence at the filing or priority date of the contested application.
The CJEU emphasised that, if an earlier mark no longer enjoys legal protection, its essential function cannot be compromised by registration of the later EU trade mark, since its trade mark function no longer exists. The balance between protecting earlier rights and allowing third parties access to signs would be undermined if a mark without live protection could block registration.
In practice, this decision calls into question what is a "safe" right to rely on in any opposition or invalidity proceedings. If an opponent's rights are nearing the end of their five-year grace period, for example, or will become subject to use requirements during any opposition/invalidity proceedings (which before the EUIPO are now taking many years to complete), there is a risk that the earlier rights will be challenged by the proprietor of the later mark/application in the hope that the right relied on can be removed and the opposition/invalidity challenge rejected.
The decision may also, inadvertently, streamline EU opposition/invalidity proceedings, as earlier rights holders will not want to extend cooling-off periods (unless there is a genuine intention to settle) and will want to get to a decision quickly, if there is a risk that the rights they are relying upon could be challenged if proceedings are drawn out.
In contrast, defendants in opposition and invalidity actions may try to drag out proceedings if the prior right is edging close to the five-year grace period, to allow them to bring a revocation action against the prior right.
This decision reinforces that an EU trade mark opposition is not merely a snapshot assessment at the date of filing an application but requires continuing existence of earlier rights throughout the dispute to ensure the register reflects commercial realities.
The decision particularly confirms that UK rights can no longer be relied upon in EUIPO proceedings, where the EUIPO's final decision is issued after the Brexit transition period, even if the proceedings were filed before that date.
The decision also marks a divergence from the general UK position that earlier rights only need to exist at the filing or priority date of the contested application (see e.g. RIVERIA (O/214/03) and BUSINESS ZONES (O/364/07)).
Finally, it will also be interesting to see the impact of this decision on cases where enhanced distinctiveness and/or reputation are relied upon in proceedings and whether these must also exist at the date of decision. The CJEU will be considering enhanced distinctiveness in the SHOPIFY/SHOPPI proceedings following the General Court's decision that Shopify's use of its mark in the UK could not be relied upon because, at the date of the EUIPO decision, it was after the Brexit transition period.
If you have any questions, please contact our Intellectual Property team.