Community Trade Marks: Great Gizmos - to stay or not to stay

Regular readers (if there are any left) will have noted that this blog has been very quiet for months on end. There are a couple of reasons for that. One that I can't tell you about just yet but those who know me or indeed those who know Manchester can guess. And one that I can tell you which is that I was foolish enough to be flattered by Gower Publishing to write 65,000 to 75,000 words on enforcing intellectual property rights in everyday language for small business which has proved to be one of the most frustrating and difficult projects of my life. I have just learned that the manuscript has been accepted for publication so yippee. I have to worry about corrections, proofs, authors' blurb and all that sort of guff but at least I can return to regular blogging on a slightly less infrequent basis.

Well what better case with which to cast off than Mr Justice Mann's decision in Kitfix Swallow Group Ltd v Great Gizmos Ltd [2007] EWHC 2668 (Ch) (22 Nov 2007). This was an application by the defendant to an action for the infringement of a Community trade mark for a stay of those proceedings pending an application to OHIM for a declaration that the claimant's mark is invalid. Art 100 (1) of the CTM Regulation requires national courts to stay proceedings where validity is an issue where an application for revocation or invalidity has already been launched in Alicante unless there are special grounds for continuing the hearing. Conversely, art 100 (2) requires OHIM to stay its proceedings absent special grounds for continuing the hearing where validity is in issue in a national court. In this case, the application to OHIM has been made after the infringement proceedings been launched in England so in normal circumstances the English claim would be the ones to go ahead. But art 100 (2) also confers a discretion on national courts to stay their proceedings at the request of a party after hearing the other parties to the dispute. According to the judge, this was the first time that discretion had ever been considered.

There were some very good reasons for granting the application. The judge listed 10 not least of which was that the OHIM proceedings would cost about £5,000 but the claim in London a whopping £200,000 per side. The defendant was a small company doing very little business in the mark which was arguably completely descriptive and it was unreasonable to put it to such enormous risk and expense. A no brainer one would have thought.

Not so. His lordship decided against a stay for the following reasons:
(1) The English proceedings would come to trial 3 months sooner than the resolution of the OHIM proceedings and appeals in England would certainly be resolved more quickly than appeals from OHIM.
(2) There was a question mark over the OHIM proceedings. The Cancellation Division had stayed its proceedings once and then reversed its stance. In a postscript to the judgment it was reported that it had flip-flopped again.
(3) "This is not a case in which the claimant has deliberately sought out an advantage in attacking a minnow and allowing the shark to swim free" (per Mann J).
(4) There was still a passing off claim in England which did not appear to amount to much was still extant.
(5) The applicant for invalidity had waited months before launching its own proceedings.

With the very greatest respect to Mr Justice Mann (and I do sincerely have an enormous respect for him because he did a lot to bring a vibrant chancery bar to the North) I am afraid I am not persuaded. As for delay, 3 months is neither nowt nor summat in an Autumn 2008 trial window. And if there is a Community law point that would bring the OHIM case to the ECJ there might equally be a reference under art 234 of the Treaty of Rome. The attitude of OHIM was irrelevant because art 100 (2) of the CTM regulation allows the OHIM proceedings to revive if the national court stays its proceedings. As the minnow and shark point, "yeah, right!". The judge observed at least twice in his judgment that the passing off claim did not add much to the trade mark claim. And since the applicant in the invalidity proceedings and the defendant in the infringement proceedings were different legal entities and there was not much the defendant could have done to expedite the OHIM application it is hard to see why another company's delay should be thrown at the defendant.

A very different approach is taken where there are proceedings before the European Patent Office (see Glaxo Group Ltd v Genentech Inc [2007] EWHC 1416 (Pat) (15 June 2007) and since a Community trade mark is a single EC-wide right independent of national law whereas a European patent is a national patent granted under authority conferred by a national government my simplistic Northern mind inclines even more towards a stay in circumstances such as these. It will be interesting to see whether other national courts and indeed other English judges follow this decision. Finally, before officious bystander wades in, I know that the "national court" is in fact a Community trade mark court. However, I don't think it is wrong to use that expression of a court that combines in the same case national and Community jurisdiction.


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