Author
Roland Mallinson

Roland Mallinson

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Author
Roland Mallinson

Roland Mallinson

Partner

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13 July 2020

Brands update - July 2020 – 2 of 9 Insights

UK brand owners prejudiced at EUIPO by combination of COVID-19 and Brexit

  • IN-DEPTH ANALYSIS

As if COVID-19 has not wrought enough misery and inconvenience on people and businesses generally, it has specifically prejudiced owners of UK trade mark and passing off rights. 

UK-only earlier rights in pending cases

Since at least January 2018 (see the EUIPO Brexit FAQ), the EUIPO has made it clear that, post-Brexit, its opposition and cancellation decisions would ignore UK-only earlier trade marks. So a EUIPO opposition filed now in which the opponent relies only on an earlier UK right will be rejected if the decision is rendered after 31 December 2020 (assuming no extension to the transition period). 

We (and the European trade mark owners' association MARQUES) have previously questioned whether the EUIPO's stated approach on this is necessarily correct in law. The EUIPO has omitted reference to its intentions in this respect in its latest Brexit update issued on 18 June 2020. It may be that the validity of the EUIPO's approach will only finally be resolved by the CJEU. 

In support of its position, the EUIPO cited a CJEU ruling from 2013 (C-268/12 P – ZYDUS). That was an opposition based on a registration that had lapsed after the Board of Appeal decision but before the General Court or CJEU decisions. The question is whether the "purpose of the proceedings" and the "interest in bringing proceedings" continues to exist until the final decision.

The EUIPO's position is that the owner of UK-only rights will have, by the time of its post-Brexit decision, ceased to have that interest in the EU and that, as such, that there is no continued purpose to its proceedings. 

Assuming it is adopted, this approach will impact virtually all oppositions relying on UK-only rights that were started in 2020. This is because decisions are, on average, being made approximately 12 months after the proceedings started. That means they would not be decided until sometime in 2021. 

Impact of COVID-19

Because of COVID-19, this approach will now also affect many more such cases, including some that may have been started as far back as August/September last year. This is the consequence of the EUIPO putting all actions on hold between 9 March and 18 May 2020 in response to the pandemic. 

When those cases started last summer, those opponents that were banking on a Withdrawal Agreement being reached would also have expected a first instance decision from the EUIPO long before the end of any transitional period. The EUTM applicant or registrant may then have assumed they would lose the opposition. Now, however, it seems they can assume they will win. Their reversal in fortune will simply be because the decision will have been pushed back until after 31 December 2020 due to COVID-19.

This seems like harsh justice for UK businesses that are already struggling to deal with a challenging enough business environment. MARQUES will be raising this with the EUIPO.

No stay pending Brexit

One consolation for opponents relying on UK-only earlier rights is that an explicit attempt by an EUTM applicant to stay an opposition purely to await the outcome of Brexit uncertainties was refused by the General Court.

In CORNEREYE (Case T-688/18) the UK opponent's earlier EUTM for BACKEYE had an enhanced reputation in the UK. If the stay had been granted, the opponent's case would have been confined to claiming a likelihood of confusion in one or more of the EU27 countries where BACKEYE had little or no reputation.

The stay request was refused in January 2019 but there is no publicly available reasoning for that refusal (it is not explained in the General Court's decision of 5 March 2020). That refusal allowed the enhanced UK reputation claim to proceed. However, despite that, the opposition was rejected.

In a further irony, the opposition had originally been filed on 14 June 2016. That was less than a fortnight before the Brexit referendum. The case is now forever connected with Brexit, if only in a small way.

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