Auteur
Louise Popple

Louise Popple

Senior professional support lawyer

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Auteur
Louise Popple

Louise Popple

Senior professional support lawyer

Read More

24 juin 2022

Brands Update - June 2022 – 2 de 4 Publications

Acquiring an earlier right to thwart an infringement action: UK Court of Appeal Court ruling

  • In-depth analysis

What has happened?

  • Where an allegation of trade mark infringement is made against a person, a common tactic is for that person to try to acquire an even earlier trade mark registration than the one(s) asserted against it. Acquiring an even earlier registration potentially provides not only a defence to the infringement claim but also a possible basis for a counter-claim for infringement against the other party. This case concerned such a tactic.  
  • The Defendants to a trade mark infringement claim set up a shelf company through which they acquired a trade mark registration that pre-dated the registrations being asserted against them. The Defendants did not initially disclose the existence of the registration they had acquired, or rely on it in the infringement proceeding, as the mark had not been used for a continuous period of five years. If the Defendants had disclosed the registration, the Claimant might have applied to revoke it for non-use. 
  • Once the Defendants had put the registration acquired into use for three months, they attempted to introduce it into the proceeding. They sought to amend their defence based on the fact that they were using an earlier registered trade mark under s.11(1B) Trade Marks Act 1994 and to introduce a counter-claim for infringement and for invalidity of the Claimant's registrations. 
  • The High Court allowed the Defendant to amend its defence and introduce a counter-claim for infringement (but not for invalidity). The Claimant appealed to the Court of Appeal, who held that the High Court was wrong to allow the amendment to the defence and the introduction of the counterclaim. The application to amend was timed to deprive the Claimant of the benefit of the three-month period in section 46(3) of the Trade Marks Act 1994 for applying for revocation of a registration for non-use (in this case, the registration acquired).
  • While it is common for potential defendants to trade mark infringement claims to seek to acquire an even earlier right, this case illustrates that it is often not straightforward to do so. Once a court action is underway, there is a duty on the parties to put their cards on the table. The Court of Appeal found that this duty is paramount.

Want to know more?

In ABP Technology Ltd v Voyetra Turtle Beach Inc, the Court of Appeal has held that the High Court was wrong to allow a late amendment to a defence and the introduction of a counterclaim. The application to amend was timed to deprive the Claimant of the benefit of the three-month period in section 46(3) of the Trade Marks Act 1994 for applying for revocation of a mark for non-use (with any use in the three months before a claim being disregarded). 

The issue arose in the context of a trade mark infringement claim. After the action had commenced, a shell company acting for the Defendant purchased an unused UK registration owned by a third party. That registration was identical to and pre-dated the trade marks on which the Claimant based its claim. The mark was then licensed to the Defendant who subsequently put it to use. The Defendant's connection to the mark was not raised in its initial defence and was kept secret from the Claimant. 

After more than three months of use, the Defendant sought to amend its defence based on the fact that it was using an earlier registered trade mark under s.11(1B). It also counter-claimed for infringement and for invalidity of the Claimant's registrations. 

Over-turning a previous ruling of the High Court, the Court of Appeal (Birss LJ) held that the amendment should not be allowed. 

  • The Defendant had failed to explain the timing of the request to amend. That ought to have been fatal to its application. 
  • Litigation should be conducted "with cards on the table – face up". The CPR allows amendments to statements of case for the benefit of all parties, but is subject to the overriding objective of enabling the court to deal with cases justly. 
  • The Defendant's amendments could and should have been made earlier while the Claimant still had the opportunity to apply for revocation of the Defendant's registration on the basis of non-use within the 3-month period in section 46(3). The timing had deprived the Claimant of that ability and thereby caused irremediable prejudice. 

In theory, the Claimant could have found the Defendant's registration itself and applied to revoke it. However, in Walton v Verweij Arnold J held that a party did not have a duty to search the register prior to marketing their goods and then to apply to revoke any unused marks it found there. Although the context was different, in Birss LJ's judgment the same point applied here. He did not see why it could be said to be a point against the Claimant in this case that they did not search the register and identify a mark in a third party's hands and apply to revoke it for non-use, if they believed it was not being used. They were under no duty to do that. 

In coming to this view, the Court of Appeal put the requirements of the CPR ahead of the strict interpretation of the Trade Marks Act 1994 (which does not prohibit the acquisition of an earlier right and its use in the way attempted by the Defendant).

It is worth noting another aspect of this case, which arose in the context of the earlier summary judgment ruling by the High Court. It held that genuine use can only be satisfied where – at the time of such use – the user was the registered proprietor of the mark or was using it with the registered proprietor's consent. That couldn't be altered by the agreement of the parties or some sort of retrospective legal fiction (cf. the discussion in BIC UK Ltd v Burgess [2019] EWCA 806 at [53]-[55]). The statutory words in s.47 of the Trade Marks Act 1994 are concerned with ascertainable real world events and those events cannot be rewritten or expunged by reason of the subsequent change of ownership of a trade mark.

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