Advocate General issues opinion on extinction of prior rights and Brexit

General Court position upheld by Advocate General on prior rights that cease to exist during an action | ‘Many more’ attempts to revoke priors by defendants in opposition cases to be expected if opinion adopted, says lawyer | Szpunar says EUIPO appeal should be dismissed.

The EU Advocate General (AG) has weighed in on how Brexit should affect prior rights that are relied upon during opposition proceedings to EU trademarks.

The conclusions of AG Maciej Szpunar were delivered on Thursday, November 23, through an opinion issued on the case of European Intellectual Property Office (EUIPO) v Indo European Foods.

The intervention comes after the matter has received differing approaches under EU trademark law.

He said the case was an opportunity for the CJEU to clarify the issue of “the extinction, during the proceedings, of the right on which an opposition to the registration of an EU trademark was based”, on account of the UK’s withdrawal from the EU.

Szpunar agreed with the General Court that prior UK passing off rights could be taken into account in opposition proceedings if they were in effect before the end of the Brexit transition period, proposing that the EUIPO’s appeal be dismissed.

Food distributor opposes rice mark

The case at issue concerned the opposition, filed by Indo European Foods, to an EU trademark registered in 2017 for ‘Abresham Super Basmati Selaa Grade One World’s Best Rice’. The food distributor’s opposition was based on an earlier non-registered word mark in the UK, and Indo European Foods argued it was entitled to prevent use of the mark under the applicable UK law by means of the ‘extended’ form of the action for passing off.

Ultimately, the EUIPO found that Indo European Foods had failed to prove that the ‘extended’ form of the action for passing off would allow it to prohibit the use of the mark applied for in the UK.

The dispute was escalated to the General Court, which overturned the decision of the EUIPO. The General Court disagreed with the EUIPO’s contention that the Indo European’s opposition proceedings were “devoid of purpose” when the Brexit transition period ended.

The prior right was still in existence when the EUIPO’s Board of Appeal issued its decision, the General Court said, and the Board should have placed itself “for the purposes of assessing the facts, not at the time of the new decision, but at the stage at which the action found itself before the decision at issue”.

The EUIPO appealed the decision and asked for the CJEU to order Indo European Foods to pay the costs of the proceedings.

EUPIO stance rejected

Regarding the action becoming “devoid of purpose”, the Advocate General said that “it was for the General Court to examine whether the extinction—after the end of the transition period and in the course of the proceedings before the General Court—of the earlier right on which the notice of opposition at issue in the decision at issue was based was capable of affecting the dispute relating to the rejection of the notice, with the result that that dispute should be found to have never existed”.

He also disagreed with the EUIPO’s claim that Indo European foods did not have a viable “continuing interest” in bringing proceedings, in part because the company could face paying compensation if the opposed mark was registered.

The ECJ ruling on the matter is expected in three to six months, wrote Louise Popple of Taylor Wessing in an article published last week.

Commenting on the wider implications of the opinion, Popple said: “If a prior right must be in existence during an action or any appeal then we can expect many more attempts to try to revoke prior rights (eg for non-use) by defendants to opposition and invalidity actions.

“This effectively introduces an additional proof of use requirement for the owners of prior rights when enforcing their rights.”

The AG’s opinion is not binding on the CJEU and only considers what happens if a prior right relied on in an action ceases to exist after the Board of Appeal decision in that action has been issued, said Popple. It “says nothing” about what the position would be if the prior right ceases to exist before that time, she added.

Popple noted that two other appeals— Nowhere Co. and Shopify—raising similar issues are also pending before the CJEU and opinions and decisions in these cases should also follow within the next year.

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