Brands Update

R 1246/2021-5 (comparing to other Banksy decisions)

There have been numerous decisions concerning trade marks consisting of Banksy's artworks. Many registrations (and applications) have been successfully attacked on the basis that Banksy lacked a genuine intention to use the marks in trade. 

The EU Board of Appeal (BoA) has now overturned one of those decisions, holding that it is not bad faith to apply for a trade mark if you’ve:

• been critical of the copyright protection system, and
• allowed non-commercial use of copyright in the work. Neither of these show a lack of genuine intention to use the artwork as a trade mark. 

The BoA also held that it is irrelevant whether copyright subsists in the artwork. That alone does not prevent the artwork from functioning as a badge of origin. It is important to remember that each intellectual property right is separate and distinct from each other, and more than one right can subsist in the same item.

It appears that the EU trade mark institutions do not appreciate Banksy's attempt to circumvent revealing his identity whilst protecting his artworks. For example, Banksy can apply for trade mark protection using the alias of a company, but to rely on copyright (which is non-registrable) Banksy would be required to reveal his identity as author of the artworks. 

A number of Banksy trade marks have been invalidated or applications refused for bad faith for fairly dubious reasons. We therefore welcome a decision which properly applies the legal test for bad faith.

Background

Italian winery Cantina Sociale Tollo SPA (Cantina Tollo) registered a trade mark for Aldiano in 2017, covering "alcoholic beverages (excluding beers)" in class 33. Aldi Einkauf SE & Co OHG (Aldi) later filed an application to invalidate this registration relying on its earlier EU and international registrations for Aldi; two of which covered "retail services" in class 35 broadly and another covering identical goods in class 33.

As a counter, Cantina Tollo requested proof of use of the earlier rights Aldi relied on.

The first instance decision of the EUIPO Cancellation Division upheld Aldi's cancellation action, having decided that the evidence filed had established genuine use of "retailing of foodstuffs including alcoholic and non- alcoholic beverages" in class 35.

Cantina Tollo appealed the decision to the Board of Appeal, which upheld it and annulled the Cancellation Division's decision. In the Board's view the evidence filed by Aldi did not show the extent or nature of use of its marks for 'beers' in class 32 and 'wine' in class 33. Furthermore, the Board decided that the evidence was not sufficient to show genuine use for the broadly worded specification, ie "retailing in all product areas" and "running supermarkets and discount retail outlets" which did not specify the types of goods offered. The board considered that it was for this 'very broad specification' that genuine use had to be proven and that this 'was impossible' as the number or type of products was indeterminate. Even though the Board noted that the relevant registration covering class 35 had been registered before the Praktiker (Case C-418/02) decision which requires applicants to specify the goods offered under retail services, it noted that Aldi had not taken any opportunities to further specify the goods, for example at renewal.

Aldi appealed to the General Court on the basis that the Board's decision erred in law by finding that there was no genuine use for "retail services" in class 35 (EU Registration No. 3360955), "wines" in class 33 (EU Registration No. 2019867) and "beers" in class 32 (EU Registration No. 2019867) despite Aldi's evidence.

General Court Decision (Case T-249/21)

The General Court overturned the decision. The Court took note of the fact that one of Aldi's earlier marks was registered before the Praktiker decision, so it is not subject to the requirements set out in that decision. As such, the Board had erred in requiring Aldi to prove genuine use for all of its broad pre-Praktiker 'retail services' specification.

The Court also reiterated that assessing genuine use is not about "assessing the commercial success of the undertaking or monitoring its economic strategy" but rather whether the commercial exploitation of the mark is real (not token, but maintains or creates market share), so at several points the Board had erred in its assessment of the value of the evidence Aldi filed.

Comment 

While the decision eventually went in favour of Aldi, it would be prudent for registrants with pre-Praktiker class 35 specifications to take available opportunities to amend these to get them in line with current requirements in order to avoid having to take a 'scenic route' to a favourable decision.

A procedural quirk highlighted by the COVID pandemic may lead to a small but important change in practice for owners of UK designations of International trade marks. Though applications for a UK trade mark require a UK address for service, this requirement has not previously been extended to international marks and often such marks will name only the WIPO representative plus the proprietor. A recent case highlights the risks if there is no UK representative, and may mean that such marks will need to name a UK representative from now on. 

In brief, in Marco Polo (O/681/22), a notice (a) that an invalidity action had been filed against the UK designation of an International mark and (b) requiring the appointment of a U.K. representative was sent by post by the UKIPO to the mark's registered proprietor in Australia. As this took place during the pandemic, the proprietor's offices were closed and the post was apparently not monitored, so the notice was not seen before its deadline and the mark ultimately was declared invalid. Geoffrey Hobbs KC, sitting as an appointed person, allowed the proprietor's appeal to set aside the invalidity as the proceedings had not been sent to a valid address for service. He held that the UKIPO could not serve invalidity proceedings outside the UK jurisdiction, it could only write to the proprietor requiring a UK address for service to be given.

This decision means there is a potential dead end in the UKIPO's procedure: how does it serve proceedings on the proprietor of a mark for which there is no UK representative? Inevitably therefore, revised procedures will now be adopted by the UKIPO to avoid this dead end, but there is no easy answer. Requiring a local representative will be administratively burdensome for the UKIPO and will make the UK comparatively rare in requiring this, but this may well be the option required. We will continue to provide updates on how this issue is resolved.

An updated IPEC Guide was released this October 2022.

The update was primarily to reflect the new costs caps and scale of costs which came into force on 1 October 2022.

The overall costs caps have been increased from £50,000 to £60,000 for the determination of liability and £25,000 to £30,000 for any inquiry as to damages or account of profits.

The IPEC scale of costs (being the maximum amount recoverable at each stage of the proceedings) have also been increased for certain stages, such as the Statements of case, CMC, witness statements and trial. However, the total for all stages still far outweighs the overall costs caps to which a claim is limited.

The rules concerning the IPEC scale costs have also been relocated from CPR 45 (Fixed Costs) to CPR 46.

The new caps and scale of costs only applies to cases started after the new rules came into force, ie 1 October 2022. 

The updated guide also includes a new paragraph 4.6(j) which allows for an application to be made for an expedited trial ie the trial will be heard sooner than the usual 12-18 months and will effectively "jump the queue of other litigants". An expedited trial will not be made unless there is a "good reason for expedition" and precisely what constitutes a good reason is unclear.

The High Court has recently issued a decision relating to the alleged conflict between the Trade Mark (Relative Grounds) Order 2007 (the TMO) and Article 1 of the First Protocol of ECHR 1953 (the ECHR). Prior to the TMO it was possible for any party to apply to invalidate a UK trade mark registration on the grounds that an earlier trade mark registration existed, regardless whether or not they were the owner of that earlier right. In line with EU harmonisation, the TMO remove this possibility so that invalidity actions could only be brought by the owners of earlier rights. 

In a recent UK trade mark opposition case brought to by the owners of the trade mark INREACH against a later application for ENREACH, the owners of ENREACH attempted to argue that the existence of an even earlier registration for REACH . As part of their argument, the owners of ENREACH challenged the TMO on the grounds that their inability to invalidate the earlier registration (INREACH) based on the even earlier registration (REACH) would risk their "peaceful enjoyment" of their possessions, being articles and materials bearing the trade mark, the goodwill and the trade mark registration for ENREACH. To do so would hypothetically risk them facing trade mark infringement and opposition proceedings and delivery up of some of their possessions. They weren't seeking to invalidate INREACH based on REACH, but were seeking to have REACH deemed contrary to Article 1 of ECHR.

The judge stated that the purpose of invalidity proceedings is to protect the interests of the owners of the earlier mark and that no one else has a legitimate interest to rely on the earlier mark. Otherwise the earlier registration would become the property of the whole world. Furthermore, the ECHR only applies to an actual victim of an unlawful act. It cannot apply to a future or hypothetical situation. The introduction of the TMO did not increase the risk to the owners of ENREACH, however the invalidation of the TMO might reduce the risk. Nevertheless, the risk arose because the owner of ENREACH chose a trade mark which may breach the earlier rights in INREACH, not because of the introduction of the TMO. As such the existence of REACH was not contrary to the ECHR.

IP owners importing goods into Kenya are required to record their IP rights with the Kenyan Anti-Counterfeit Agency (ACA) by 1 January 2023. It will be an offence to import into Kenya goods whose IP rights have not been recorded with the ACA. 

The ACA has clarified that it is not necessary to record every registered IP right associated with the goods in question. It can be limited to the most conspicuous/prominent IP right which can easily be identified by a customs official during inspection. The obvious example is a house brand (trade mark). Recordal applications based on international or foreign registrations will meet the requirements. 

This is a live and important issue. If you don't register your rights (at least for your main house mark) with the Kenyan anti-counterfeiting authority, there is a real risk that your genuine goods will get stopped at the border and cause problems for your supply chains. Further information is available here (note the 1 July 2022 deadline in this report has been extended to 1 January 2023).