EU General Court annuls EUIPO decision in ‘basmati’ dispute
The EU General Court yesterday annulled a decision by the European Union Intellectual Property Office (EUIPO) in a case centring on basmati rice.
In 2017 an Austria-based individual, Hamid Ahmad Chakari, applied to register a trademark with the EUIPO. Chakari’s figurative mark depicts two packets of rice within a red rectangle. He sought to register the trademark in classes 30 and 31, to cover rice and rice-based snacks.
Indo European Foods, a British company that describes itself as an Indian food product specialist, filed a notice of opposition, relying on its unregistered word mark in the UK for ‘Basmati’. The mark is used in relation to rice.
Indo European Foods argued that the applied-for mark would not be permitted to be registered in the UK, because its use would constitute passing off.
The principle behind the tort of passing off is that “a man is not to sell his own goods under the pretence that they are the goods of another man” (Perry v Truefitt 1842).
Although the UK has now left the EU, Chakari applied to register his trademark before the UK left and this matter came before the EUIPO before the conclusion of the transition period—meaning that the trademark continued to have the same protection in the EU as if the UK had not withdrawn.
In 2019, the EUIPO’s opposition division rejected the opposition having determined that the evidence of use submitted by Indo European Foods was insufficient. Indo European Foods appealed against the decision.
In 2020, the Fourth Board of Appeal dismissed the appeal as unfounded. The board held that Indo European Foods had not shown that its own trademark for ‘Basmati’ would allow the company to prevent registration of the applied-for mark in the UK, due to the rules on passing off.
Goodwill in UK
The board agreed that the word ‘Basmati’ denotes a clearly defined class of goods; that the name has a reputation giving rise to goodwill among a large section of the UK public; and that Indo European Foods is one of many traders entitled to rely on that goodwill.
However, Indo European Foods had failed to show that the use of the applied-for mark could result in a misrepresentation of ‘Basmati’, according to the board. It also found that use of the applied-for mark could not cause a direct loss of sales to Indo European Foods, because the applied-for mark was to cover foods other than rice whereas Indo European Foods only sells rice under the existing mark.
Indo European Foods appealed to the EU General Court. The food company claimed that the EUIPO had misunderstood the law on passing off.
The General Court said that regardless of whether there is a likelihood of a direct loss of sales, damage can arise from a loss of distinctiveness of a trademark. For example, this could be a loss of distinctiveness of the “singularity and exclusiveness” of genuine basmati rice.
Even if the goodwill attached to basmati rice relates only to basmati rice itself, some of the relevant public might believe that related goods (such as the ones to be covered by the applied-for mark) are in some way associated with basmati rice.
Therefore, the existence of a likelihood of misrepresentation may be established in respect of goods that are similar, the court said. It noted that the goods to be covered by the applied-for mark are all made from rice, meaning they are highly similar to basmati rice.
The General Court annulled the EUIPO board’s decision to dismiss Indo European Foods’ appeal and ordered the EUIPO to pay the costs incurred by Indo European Foods for the purposes of the proceedings, both before the Fourth Board of Appeal and before the General Court.
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