29 July 2020
Brands update - August 2020 – 7 of 7 Insights
Our brief round-up of this month's interesting brands-related developments and cases.
Licensors of IP rights may no longer be able to terminate licences on the grounds that the licensee is insolvent. The new Corporate Insolvency and Governance Act, which came into force on 26 June 2020, provides that suppliers cannot terminate contracts for the supply of goods and services on the grounds that the person supplied has entered into a formal insolvency process (except with consent). Bare IP licences seem to be caught, the government having said that it "intends that contractual licences, such as for use of software or patents, will be covered by the … provisions, acknowledging the importance of these to certain businesses and sectors."
The new provisions apply to existing and future contracts and are drafted so that they apply to any contract (whether governed by English law or not), as long as the recipient of the "supplies" – the licensee, in the case of an IP licence – is in an English insolvency process.
Licensors are advised to review their standard termination provisions and consider whether termination rights should extend to events prior to the commencement of a formal insolvency process (such as when an insolvency process is proposed, or where there is a cash flow or balance sheet insolvency). Licensors should also be alert to indications that licensees are experiencing financial difficulties.
For further information, see here.
The UKIPO has announced temporary changes to its trade mark and registered design fees in light of COVID-19. Fees for extensions of time and applications for reinstatement and restoration will be zero. The surcharge for late payment of a renewal fee will be zero for designs and £1 for trade marks. The changes will apply from 30 July 2020 to 31 March 2021. The announcement also contains updated information on renewal deadlines, post and registration. For further information, see here; for our detailed guide setting out how the IPOs in over 70 jurisdictions worldwide are responding to COVID-19, see here.
This case concerned the inherent power of the EUIPO to consider issues that are not raised by the parties to the proceedings. The issue here was whether arguments about the allegedly low inherent distinctive character of the earlier mark, PRIMA, were admissible before the General Court even though they had not been raised by the parties before the EUIPO Board of Appeal.
The CJEU held that the General Court had erred in finding that the inherent distinctiveness of the earlier mark could not be considered. In opposition proceedings, the assessment of the earlier mark's inherent distinctive character constitutes an issue of law which is necessary to ensure the correct application of the EUTM Regulation. The EUIPO alone can detect and assess the existence of inherent distinctive character, since that assessment does not require the parties to provide facts, arguments or evidence. As a result, the General Court was wrong to hold that this issue was inadmissible. The judgment should be set aside, and the case referred back to the General Court.
This case highlights that the EUIPO can and should consider issues not raised by the parties where necessary to correctly apply the EUTM Regulation. Any finding (or lack of finding) on issues such as inherent distinctiveness can therefore form the basis of an appeal.
This case is a useful reminder of when the reputation and distinctive character of an earlier mark is relevant under a claim of likelihood of confusion. The appellant had applied to register a figurative mark containing the letters CCB, which had been opposed on the basis of an earlier EUTM registration for CB in stylised form. The General Court had upheld the opposition on the basis of a likelihood of confusion.
The CJEU annulled the General Court's decision. When assessing the dominant element of the earlier mark, the EUIPO and General Court had taken into account the reputation and distinctive character of the mark. This was incorrect. Reputation and distinctiveness are only relevant when assessing likelihood of confusion, not similarity of marks. There was no likelihood of confusion in the present case.
The High Court has upheld an opposition decision that a figurative trade mark containing the word NOSECCO for non-alcoholic wines and non-alcoholic sparkling wines should be refused registration on the basis of the Protected Designation of origin (PDO) for Prosecco.
The Hearing Officer had held that the Prosecco PDO would be evoked by the NOSECCO mark within the meaning of Article 103(2)(b) of Regulation 1308/2013, which protects PDOs against any "misuse, imitation or evocation". Registration of the NOSECCO mark was therefore prohibited, it being contrary to EU law (section 3(4) of the Trade Marks Act 1994 (TMA)). She further held that registration of the NOSECCO mark was prohibited under section 3(3)(b) of the TMA, as there was a serious risk that the public would be deceived into thinking that the NOSECCO mark was somehow connected to the Prosecco PDO when it was not.
Interestingly, the Hearing Officer rejected the opposition in relation to the bad faith and passing off grounds, noting that "even if evocation of Prosecco was the stated intention, sailing close to the wind does not, of itself, indicate opportunism or bad faith". The High Court held that the Hearing Officer was entitled to come to the views she did.
by Mark Owen
by Julia King