Brand owners need to be aware of the acquiescence provisions and act decisively against potential infringers so that they do not lose their rights to take action. This is particularly so as recent decision have made it easier for defendants to defend claims against them by arguing that the claimant has acquiesced to their conduct.
Introduction
UK and EU trade mark law provide that a trade mark owner can – in certain circumstances – lose the right to invalidate or object to the use of a later registered trade mark. This occurs if the owner of the earlier mark has knowingly acquiesced to the use of the later registered mark for five continuous years. UK law on acquiescence is currently derived from (and largely – although not completely - aligned with) EU law.
Who does acquiescence apply to?
In the UK, the provision applies to the owners of "earlier trade marks" and "other earlier rights (such as those under the law of passing off)". This is so despite the fact that UK trade mark legislation expressly says that it does not affect the law of passing off.
While it seems that the owners of earlier registered and unregistered rights can be deemed to have acquiesced, they can only do so if the later mark (ie the allegedly infringing mark) is registered. If the later mark is not registered, there can be no acquiescence. The position on this issue differs slightly across EU member states and for EUTMs.
UK legislation in detail
UK trade mark law provides that, where the owner of an earlier trade mark or other earlier right has acquiesced for a continuous period of five years in the use of a registered trade mark in the UK, being aware of that use, there shall cease to be any entitlement on the basis of that earlier trade mark or other right:
- to apply for a declaration that the registration of the later trade mark is invalid
The quid pro quo is that, where this provision applies, the owner of the later trade mark is not entitled to oppose the use of the earlier trade mark or the exploitation of the earlier right, notwithstanding that the earlier trade mark or right may no longer be invoked against the later trade mark.
When does the five-year period start?
The five-year period starts to run when the owner of the earlier mark or right is aware (or can reasonably be presumed to be aware) of the "use" of the later registered mark. This date must necessarily be on or after the date the later mark was registered.
Note that there is some uncertainty as to when the five year acquiescence period is calculated from for international marks designating the EU.
What type of awareness is required?
Awareness has generally been interpreted to mean actual knowledge (not constructive or implied knowledge). The bar is high.
Awareness as to what?
In a recent case, the Court of Appeal held that the owner of an earlier right need only be aware of the use of a later mark (which is, in fact, registered) for it to be deemed to be acquiescing; it need not be aware that the later mark is registered. This represented a departure by the UK courts from the ECJ decision in the Budvar case (which was retained EU case law) although the EUIPO and CJEU had not been consistently applying the Budvar ruling anyway.
How can the acquiescence period be stopped?
Sending a warning letter to the owner of the later registered mark alone is not sufficient to stop the acquiescence period from running. Only commencing administrative or court proceedings in respect of the use of the later registered mark is sufficient. This would be by way of an infringement and/or passing off claim.
Likewise, bringing an invalidity claim against the later registered mark does not stop the clock from running. An invalidity action would only work if the claim was successful (with no further right of appeal) before the end of the five-year acquiescence period.
What if there is a settlement?
If a warning letter is successful (eg because it results in a co-existence or settlement agreement), then the acquiescence period would stop. However, if that agreement is subsequently breached and ceases to have effect, then a new five year period would commence (assuming the owner of the earlier mark or right is aware of such use) – acquiescence has to be for five 'successive' years.
What does this mean for you?
- Recent decisions have made it easier for defendants to infringement, passing off and invalidity claims to argue no infringement/passing off/invalidity due to acquiescence.
- To mitigate this risk, brand owners should not delay in taking action for trade mark infringement and passing off where the later (allegedly infringing) right is registered. In particular, they should not allow negotiations to drag on and should carefully track the five year period.
- Action to stop the infringing use should be the focus (alongside any challenges to address the state of the trade mark register).
