Trade Marks - Industrial Cleaning Equipment (Southampton) Ltd. v Intelligent Cleaning Equipment Holdings Co. Ltd. and another
This was an appeal by Intelligent Cleaning Equipment Holdings Co Ltd. ("Intelligent") and Killis Ltd. ("Killis") against the order of Her Honour Judge Melissa Clarke of 23 March 2023 granting Industrial Cleaning Equipment (Southampton) Ltd. ("Industrial") relief against Intelligent and Killis from trade mark infringement and dismissing their counterclaim for the reasons set out in her judgment in Industrial Cleaning Equipment (Southampton) Ltd v Intelligent Cleaning Equipment Holdings Co Ltd [2023] EWHC 411 (IPEC) (27 Feb 2023). The appeal came on before Lady Justice King and Lord Justices Arnold and Nugee on 13 and 14 Nov 2023. By their judgment of 6 Dec 2023, they unanimously dismissed the appeal (Industrial Cleaning Equipment (Southampton) Ltd v Intelligent Cleaning Equipment Holdings Co Ltd and another [2023] EWCA Civ 1451 (6 Dec 2023)). Importantly, they decided not to follow the decision of the Court of Justice of the European Union ("CJEU") in Case C-482/09 Budejovický Budvar NP v Anheuser-Busch Inc [2012] RPC 11, [2011] EUECJ C-482/09, [2012] ETMR 2, [2012] Bus LR 298, [2011] EUECJ C-482/9 which had been part of the UK's retained EU case law.
The Parties
Lord Justice Arnold characterized these proceedings in para [1] of his judgment as "a trade mark dispute between rival users of the acronym ICE." The claimant, Industrial, was incorporated in 1992 to carry on a business that had been founded in 1967. It provides retail, rental and maintenance services for commercial and consumer cleaning equipment in the UK. It does so using the name Industrial Cleaning Equipment, the acronym ICE (i.e. in upper case) and logos comprising the acronym "ice" (i.e. in lower case). The logo that has been used by that company since 2007 appears below:
Intelligent is the holding company of a group of companies known as the ICE Group. The group's IP rights are held by Intelligent. The group designs cleaning equipment and manufactures it in China and has done so since 2011. Those goods have been distributed in the UK under the following mark since 2013:
Killis (the fourth defendant) has been the ICE Group's distributor in the UK since 2019.
The Dispute
Industrial is the registered proprietor of the following marks:
By a letter dated 2 July 2019 solicitors acting for Industrial accused the third defendant, T J Killis & Sons Ltd. ("TJK") of trade mark infringement and passing off. Trade mark attorneys acting for Intelligent and TJK denied the allegations and referred to Intelligent's own trade marks. Industrial launched invalidation proceedings in the European Union Intellectual Property Office ("EUIPO") but later abandoned them. There were settlement negotiations between the parties but they came to nothing;
Industrial issued its claim form on 24 May 2021 but did not serve it until 21 Sept 2021. It sued Intelligent, Killis, TJK and ICE UK Robotics Ltd. ("Robotics") alleging that those companies had infringed its marks under s.10 (2) and (3) of the Trade Marks Act 1994 by the following acts:
Industrial issued its claim form on 24 May 2021 but did not serve it until 21 Sept 2021. It sued Intelligent, Killis, TJK and ICE UK Robotics Ltd. ("Robotics") alleging that those companies had infringed its marks under s.10 (2) and (3) of the Trade Marks Act 1994 by the following acts:
- offering for sale, selling, offering for rent, renting and/or importing commercial cleaning equipment, in particular floor cleaning machines, under, by reference to and/or branded with the following signs;
- ICE
-
- Importing commercial cleaning equipment, in particular floor cleaning machines, under, by reference to, and/or branded with
- ICE
-
- Intending imminently to carry out the above acts under and/or by reference to the above signs and/or following sign on a quia time basis:
Intelligent denied that it had done any of the alleged acts in the UK. Robotics denied that it had ever traded. Killis admitted that it had done the acts complained of but denied that Industrial's trade mark registrations were valid. The defendants relied on s.11 (1) and s.11 (1A) and statutory acquiescence under s.48 (1) of the Trade Marks Act 1994. They denied that there had been any likelihood of confusion for the purposes of s.10 (2) of the Act in the circumstances of the case. Similarly, they denied that their use of the signs complained of took unfair advantage of, or was detrimental to, the distinctive character or repute of the claimant's marks and/or that it was without due cause for the purposes of s.10 (3). Finally, they denied misrepresentation or any likelihood of misrepresentation regarding the passing off claim.
Intelligent had registered the signs in the following table as international trade marks. They were accepted by the EUIPO as EU trade marks. As I explained in How Brexit has changed IP Law on17 Jan 2021 in IP After Brexit, international trade marks designating the EU were converted into UK marks on 31 Dec 2020 when the implementation period provided by art 126 of the Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community expired.
Industrial sought to invalidate trade marks numbered 801256685 and 801260671 under s.47 (2) (b) and s.5 (4) (a) of the Trade Marks Act 1994. It also tried to invalidate marks numbered 918241028 and 918241024 under s.47 (1) and s.3 (6), s.47 (2) (a) and s. 5 (2) and/or s.5 (3), and/or s. 47 (2) (b) and s. 5 (4) (a) the Act.
The defendants counterclaimed for the invalidation of Industrial's trade marks numbered 3133002 and 3460809 under s.47 (2) and s.5 (2) relying on Intelligent's marks numbered 801256685, 801260671 and 918241028. They sought the invalidation of Industrial's 3460809 mark under s.47 (2) on the ground that it had been registered in bad faith. They complained that Industrial had infringed its ICE word mark under s.10 (1) or (2) by selling, offering for sale and threatening to sell and offer for sale floor cleaning machines and similar equipment marked with the initials ICE. Intelligent denied that Industrial's registrations were valid and alleged that Industrial had registered 3460809 in bad faith.
The Issues at Trial
At a case management conference, His Honour Judge Hacon identified the issues to be tried. Judge Melissa Clarke set them out in a schedule to her judgment. She addressed them in the following order in para [121]:
"i) C’s invalidity claims in relation to D1’s 2015 Trade Marks (encompassing passing off for the purposes of s 5 (4) (a));ii) the Defendants’ statutory acquiescence defence;
iii) the Defendants’ invalidity claims in relation to C’s Trade Marks;
iv) C’s invalidity claims in relation to D1’s 2020 Trade Marks;
v) infringement;
vi) passing-off."
Judge Melissa Clarke's Judgment
Her Honour's starting point was that Intelligent and Killis would infringe Industrial's trade mark number 3133002 if the registration was valid subject only to s.11 (1) and s.48 of the 1994 Act and art 61 of the European Parliament and Council Regulation 2017/1001/EU of 14 June 2017 on the European Union trade mark (codification) S.48 (1) of the Act provides:
"Where the proprietor 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 United Kingdom, being aware of that use, there shall cease to be any entitlement on the basis of that earlier trade mark or other right—
"Where the proprietor 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 United Kingdom, being aware of that use, there shall cease to be any entitlement on the basis of that earlier trade mark or other right—
(a) to apply for a declaration that the registration of the later trade mark is invalid, or
(b) to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used,
unless the registration of the later trade mark was applied for in bad faith."
(b) to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used,
unless the registration of the later trade mark was applied for in bad faith."
Art 61 (1) and (2) of the directive are as follows:
"(1) Where the proprietor of an EU trade mark has acquiesced, for a period of five successive years, in the use of a later EU trade mark in the Union while being aware of such use, he shall no longer be entitled on the basis of the earlier trade mark to apply for a declaration that the later trade mark is invalid in respect of the goods or services for which the later trade mark has been used, unless registration of the later EU trade mark was applied for in bad faith.
(2) Where the proprietor of an earlier national trade mark as referred to in Article 8(2) or of another earlier sign referred to in Article 8(4) has acquiesced, for a period of five successive years, in the use of a later EU trade mark in the Member State in which the earlier trade mark or the other earlier sign is protected while being aware of such use, he shall no longer be entitled on the basis of the earlier trade mark or of the other earlier sign to apply for a declaration that the later trade mark is invalid in respect of the goods or services for which the later trade mark has been used, unless registration of the later EU trade mark was applied for in bad faith."The judge reasoned that Intelligent's trade marks would be invalid as their use could be restrained by an action for passing off unless Intelligent could rely on s.48 (1) of the Act.
Applying Budejovický Budvar, the judge held that the 5-year period starts to run only from the date on which the earlier trade mark proprietor has knowledge both of the use of the later trade mark and of its registration. She found that Industrial first became aware of Intelligent's registrations when it received a letter from Intelligent's attorneys on 26 July 2019. As the claim had been launched well within 5 years of that date, the acquiescence defence failed.
Her Honour did not consider it necessary to make a finding of passing off. As she put it in para [231] of her judgment:
"This judgment is too long already. Given the determinations that I have made so far, I do not find it necessary to go on to determine such of the passing-off case as remains."
The judge summarized her decision on the issues that had been identified by Judge Hacon in para [232] of her judgment:
i) Ingustrial's claim for invalidity of Intelligent's marks numbered 801256685 and 80126067 succeeded.
ii) its claim for invalidity of Intelligent's marks numbered 918241028 and 918241024 also succeeded;
i) Ingustrial's claim for invalidity of Intelligent's marks numbered 801256685 and 80126067 succeeded.
ii) its claim for invalidity of Intelligent's marks numbered 918241028 and 918241024 also succeeded;
iii) its claim for infringement of its marks numbered 3133002 and 3460809 by Killis succeeded.
iv) its claim for infringement of those marks by TL Killis & Sons Ltd. was dismissed.
v) Intelligent was liable for infringement of 3133002 and 3460809 as a joint tortfeasor with Killis, but not as a primary tortfeasor.
vi) Intelligent's counterclaim for the invalidity of those marks was dismissed.
vii) its counterclaim for infringement of 801260671 was dismissed.
v) Intelligent was liable for infringement of 3133002 and 3460809 as a joint tortfeasor with Killis, but not as a primary tortfeasor.
vi) Intelligent's counterclaim for the invalidity of those marks was dismissed.
vii) its counterclaim for infringement of 801260671 was dismissed.
The Appeal
Intelligence and Killis appealed on the following grounds.
First, they contended that it was not necessary for the proprietor of an earlier trade mark to be aware of the registration of a later trade mark in order for time to run. It was sufficient that the later trade mark was in fact registered and that the proprietor of the earlier trade mark was aware of the use of the later trade mark. That contention required the Court of Appeal to depart from the judgment of the Court of Justice of the European Union I("CJEU") in Budvar and the appellants invited the Court of Appeal to do so.
By a respondent's notice, Industrial raised an appeal on the date upon which the acquiescence period ceased. It argued that it had brought that period to an end by its letter before claim of 2 July 2019. It also asked the Court to make a decision on its claim for passing off.
Lord Justice Arnold delivered the leading judgment. Lord Justice Nugee added a short judgment on whether the Court should depart from the CJEU's decision in Budejovický Budvar. Lady Justice King agreed with both Lords Justices.
Issue 1: Must the Proprietor of the Earlier Trade Mark be aware of the Registration of the Later Trade Mark in Order for Time to Run?
As 801256685 and 801260671 had been registered as EU trade marks Lord Justice Arnold considered
arts 53, 106 and 107 of Council Regulation 40/94/EC of 20 December 1993 on the Community trade mark. He noted that those articles were replaced by arts 54, 110 (1) and 111 of Council Regulation 207/2009/EC of 26 February 2009 on the Community trade mark (codified version) in identical terms. References to "Community trade marks" in those articles were replaced by references to "EU trade marks" pursuant to European Parliament and Council Regulation 2015/2424 of 15 December 2015. Those amended articles were in turn replaced by arts 61, 137 (1) and 138 of Regulation 2017/1001 which are in identical terms to arts 54, 110 (1) and 111 as amended.
In the absence of any equivalent recital in the above regulations, his lordship referred to para 11 of the recitals to the First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks:
"Whereas it is important, for reasons of legal certainty and without inequitably prejudicing the interests of a proprietor of an earlier trade mark, to provide that the latter may no longer request a declaration of invalidity nor may he oppose the use of a trade mark subsequent to his own of which he has knowingly tolerated the use for a substantial length of time, unless the application for the subsequent trade mark was made in bad faith;"
"Whereas it is important, for reasons of legal certainty and without inequitably prejudicing the interests of a proprietor of an earlier trade mark, to provide that the latter may no longer request a declaration of invalidity nor may he oppose the use of a trade mark subsequent to his own of which he has knowingly tolerated the use for a substantial length of time, unless the application for the subsequent trade mark was made in bad faith;"
He also cited art 9 of that directive:
"Limitation in consequence of acquiescence
1. Where, in a Member State, the proprietor of an earlier trade mark as referred to in Article 4(2) has acquiesced, for a period of five successive years, in the use of a later trade mark registered in that Member State while being aware of such use, he shall no longer be entitled on the basis of the earlier trade mark either to apply for a declaration that the later trade mark is invalid or to oppose the use of the later trade mark in respect of the goods or services for which the later trade mark has been used, unless registration of the later trade mark was applied for in bad faith.
2. Any Member State may provide that paragraph 1 shall apply mutatis mutandis to the proprietor of an earlier trade mark referred to in Article 4(4)(a) or another earlier right referred to in Article 4(4)(b) or (c).
3. In the cases referred to in paragraphs 1 and 2, the proprietor of a later registered trade mark shall not be entitled to oppose the use of the earlier right, even though that right may no longer be invoked against the later trade mark."
"Limitation in consequence of acquiescence
1. Where, in a Member State, the proprietor of an earlier trade mark as referred to in Article 4(2) has acquiesced, for a period of five successive years, in the use of a later trade mark registered in that Member State while being aware of such use, he shall no longer be entitled on the basis of the earlier trade mark either to apply for a declaration that the later trade mark is invalid or to oppose the use of the later trade mark in respect of the goods or services for which the later trade mark has been used, unless registration of the later trade mark was applied for in bad faith.
2. Any Member State may provide that paragraph 1 shall apply mutatis mutandis to the proprietor of an earlier trade mark referred to in Article 4(4)(a) or another earlier right referred to in Article 4(4)(b) or (c).
3. In the cases referred to in paragraphs 1 and 2, the proprietor of a later registered trade mark shall not be entitled to oppose the use of the earlier right, even though that right may no longer be invoked against the later trade mark."
He noted that Article 9 of Directive 89/104 was replaced by art 9 of European Parliament and Council Directive 2008/95/EC of 22 October 2008 to approximate the laws of the Member States relating to trade marks (codified version) in identical terms. Para 12 of the recitals to that directive was almost identical to para 11 of the recitals to Directive 89/104.
"It is important, for reasons of legal certainty to provide that, without prejudice to his interests as a proprietor of an earlier trade mark, the latter may no longer request a declaration of invalidity or oppose the use of a trade mark subsequent to his own trade mark, of which he has knowingly tolerated the use for a substantial length of time, unless the application for the subsequent trade mark was made in bad faith;"
The new articles were art 9 and art 18, Art 9 provided:
"Preclusion of a declaration of invalidity due to acquiescence
1. Where, in a Member State, the proprietor of an earlier trade mark as referred to in Article 5(2) or Article 5(3)(a) has acquiesced, for a period of five successive years, in the use of a later trade mark registered in that Member State while being aware of such use, that proprietor shall no longer be entitled on the basis of the earlier trade mark to apply for a declaration that the later trade mark is invalid in respect of the goods or services for which the later trade mark has been used, unless registration of the later trade mark was applied for in bad faith.
2. Member States may provide that paragraph 1 of this Article is to apply to the proprietor of any other earlier right referred to in Article 5(4)(a) or (b).
3. In the cases referred to in paragraphs 1 and 2, the proprietor of a later registered trade mark shall not be entitled to oppose the use of the earlier right, even though that right may no longer be invoked against the later trade mark,"
Art 18 introduced the following defence:
"Preclusion of a declaration of invalidity due to acquiescence
1. Where, in a Member State, the proprietor of an earlier trade mark as referred to in Article 5(2) or Article 5(3)(a) has acquiesced, for a period of five successive years, in the use of a later trade mark registered in that Member State while being aware of such use, that proprietor shall no longer be entitled on the basis of the earlier trade mark to apply for a declaration that the later trade mark is invalid in respect of the goods or services for which the later trade mark has been used, unless registration of the later trade mark was applied for in bad faith.
2. Member States may provide that paragraph 1 of this Article is to apply to the proprietor of any other earlier right referred to in Article 5(4)(a) or (b).
3. In the cases referred to in paragraphs 1 and 2, the proprietor of a later registered trade mark shall not be entitled to oppose the use of the earlier right, even though that right may no longer be invoked against the later trade mark,"
Art 18 introduced the following defence:
"Intervening right of the proprietor of a later registered trade mark as defence in infringement proceedings
1. In infringement proceedings, the proprietor of a trade mark shall not be entitled to prohibit the use of a later registered mark where that later trade mark would not be declared invalid pursuant to Article 8, Article 9 (1) or (2) or Article 46 (3).
2. In infringement proceedings, the proprietor of a trade mark shall not be entitled to prohibit the use of a later registered EU trade mark where that later trade mark would not be declared invalid pursuant to Article 53 (1), (3) or (4), 54 (1) or (2) or 57 (2) of Regulation (EC) No 207/2009.
3. Where the proprietor of a trade mark is not entitled to prohibit the use of a later registered trade mark pursuant to paragraph 1 or 2, the proprietor of that later registered trade mark shall not be entitled to prohibit the use of the earlier trade mark in infringement proceedings, even though that earlier right may no longer be invoked against the later trade mark."
S.48 of the Trade Marks Act 1988 has implemented the above provisions of those directives.
Lord Justice Arnold noted that the Court of Appeal had referred the following questions on the interpretation of art 9 of Directive 89/104 to the CJEU in Budejovický Budvar np v Anheuser-Busch Inc (2010) 33(1) IPD 33003, [2009] EWCA Civ 1022, [2010] RPC 7:
"(1) What is meant by 'acquiesced' in Article 9(1) of Directive 89/104 and in particular:
(a) is 'acquiesced' a Community law concept or is it open to the national court to apply national rules as to acquiescence (including delay or long-established honest concurrent use)?
(b) if 'acquiesced' is a Community law concept can the proprietor of a trade mark be held to have acquiesced in a long and well-established honest use of an identical mark by another when he has long known of that use but has been unable to prevent it?
(c) in any case, is it necessary that the proprietor of a trade mark should have his trade mark registered before he can begin to 'acquiesce' in the use by another of (i) an identical or (ii) a confusingly similar mark?
(2) When does the period of 'five successive years' commence and in particular, can it commence (and if so can it expire) before the proprietor of the earlier trade mark obtains actual registration of his mark; and if so what conditions are necessary to set time running?"
"(1) What is meant by 'acquiesced' in Article 9(1) of Directive 89/104 and in particular:
(a) is 'acquiesced' a Community law concept or is it open to the national court to apply national rules as to acquiescence (including delay or long-established honest concurrent use)?
(b) if 'acquiesced' is a Community law concept can the proprietor of a trade mark be held to have acquiesced in a long and well-established honest use of an identical mark by another when he has long known of that use but has been unable to prevent it?
(c) in any case, is it necessary that the proprietor of a trade mark should have his trade mark registered before he can begin to 'acquiesce' in the use by another of (i) an identical or (ii) a confusingly similar mark?
(2) When does the period of 'five successive years' commence and in particular, can it commence (and if so can it expire) before the proprietor of the earlier trade mark obtains actual registration of his mark; and if so what conditions are necessary to set time running?"
The CJEU considered those questions between paras [53] and [58] of its judgment:
"[53] It is apparent from the wording of Article 9 (1) of Directive 89/104 that four conditions must be satisfied before the period of limitation in consequence of acquiescence starts running if there is use of a later trade mark which is identical with the earlier trade mark or confusingly similar.
[54] First, since Article 9(1) refers to a 'later registered trade mark', registration of that mark in the Member State concerned constitutes a necessary condition. The period of limitation in consequence of acquiescence cannot therefore start to run from the date of mere use of a later trade mark, even if the proprietor of that mark subsequently has it registered.
…
[56] Second, the application for registration of the later trade mark must have been made by its proprietor in good faith.
[57] Third, the proprietor of the later trade mark must use his trade mark in the Member State where it is registered.
[58] Fourth, the proprietor of the earlier trade mark must be aware of the registration of the later trade mark and of the use of that trade mark after its registration."
It responded to the Court of Appeal's questions in the second paragraph of its ruling:
"The prerequisites for the running of that period of limitation, which it is for the national court to determine, are, first, registration of the later trade mark in the Member State concerned, second, the application for registration of that mark being made in good faith, third, use of the later trade mark by its proprietor in the Member State where it has been registered and, fourth, knowledge by the proprietor of the earlier trade mark that the later trade mark has been registered and used after its registration."
"[53] It is apparent from the wording of Article 9 (1) of Directive 89/104 that four conditions must be satisfied before the period of limitation in consequence of acquiescence starts running if there is use of a later trade mark which is identical with the earlier trade mark or confusingly similar.
[54] First, since Article 9(1) refers to a 'later registered trade mark', registration of that mark in the Member State concerned constitutes a necessary condition. The period of limitation in consequence of acquiescence cannot therefore start to run from the date of mere use of a later trade mark, even if the proprietor of that mark subsequently has it registered.
…
[56] Second, the application for registration of the later trade mark must have been made by its proprietor in good faith.
[57] Third, the proprietor of the later trade mark must use his trade mark in the Member State where it is registered.
[58] Fourth, the proprietor of the earlier trade mark must be aware of the registration of the later trade mark and of the use of that trade mark after its registration."
It responded to the Court of Appeal's questions in the second paragraph of its ruling:
"The prerequisites for the running of that period of limitation, which it is for the national court to determine, are, first, registration of the later trade mark in the Member State concerned, second, the application for registration of that mark being made in good faith, third, use of the later trade mark by its proprietor in the Member State where it has been registered and, fourth, knowledge by the proprietor of the earlier trade mark that the later trade mark has been registered and used after its registration."
The CJEU's decision in Budejovický Budvar was inconsistent with the decision of the Second Board of Appeal of the EUIPO (then known as the "Office for Harmonization in the Internal Market" or "OHIM") in Case R 1299/2007-2 Cristanini v Ghibli SpA ("Ghibli") (unreported, 21 Oct 2008). The Board followed its previous decision in Ghibli in Case R 502/2008-2 I Marchi Italiani Srl v Osra SA (unreported, 9 Jan 2009). Para 4.5.2 of Part D (Cancellation) Section 2 (Substantive Provisions) of the EUIPO's Guidelines for the Examination of European Trade Marks states:
"The proprietor of the contested mark cannot be required to prove, in addition to the invalidity applicant's awareness of the use of the contested EUTM, that the invalidity applicant was also aware of its registration, for at least 5 years, as an EUTM. The reference in Article 61(1) and (2) EUTMR to acquiescence in the use of a later 'EUTM' merely refers to the requirement that the later sign must have been registered as an EUTM for at least 5 years. This is an objective requirement, which is independent of the invalidity applicant's knowledge (21/10/2008, R 1299/2007-2, Ghibli (fig.), § 41-47)."
Had the United Kingdom remained in the EU the conflict could have been resolved by a reference for a preliminary ruling under art 267 of the Treaty on the Implementation of the European Union. That course is no longer open to the English courts. The Court of Appeal had to decide that matter for itself. That involved answering two questions. First, what is the correct interpretation of the legislation? Secondly, if the correct interpretation of the legislation is that contended for by the Intelligent and Killis, should the Court of Appeal depart from the decision of the CJEU in Budejovický Budvar?
As to the first question, his lordship said at para [70]:
"In my judgment the more natural reading of the operative words in the Directives and Regulations is that the proprietor of the earlier trade mark must be aware of the use of the later trade mark, but not the registration of the later trade mark."
He found support for that view in Ghibli and certain passages of his judgment in Combe International LLC v Dr August Wolff GmbH & Co KG [2022] WLR(D) 477, [2022] EWCA Civ 1562, [2023] Bus LR 532. He concluded at [79] that the legislation should be interpreted as meaning that the five-year period starts to run once the proprietor of the earlier trade mark becomes aware of the use of the later trade mark, and the later trade mark is in fact registered, whether or not the proprietor of the earlier trade mark is aware of the registration of the later trade mark.
As to the second question, Lord Justice Arnold noted that s.6 (5A) of the European Union (Withdrawal) Act 2018 (as amended by the European Union (Withdrawal) Act 2020 and reg 3 (b) of The European Union (Withdrawal) Act 2018 (Relevant Court) (Retained EU Case Law) Regulations 2020 (SI 2020 No 1525)) enabled the Court of Appeal to depart from judgments of the CJEU but only on the terms that the Supreme Court has power to depart from one of its own precedents or of one of the House of Lords in accordance with the Practice Statement (Judicial Precedent) [1966] 1 WLR 1234. This was a power to be exercised sparingly and with great caution. His lordship was persuaded to depart from Budejovický Budvar for the following reasons. First, neither the Court nor the Advocate-General had explained why it was necessary for the owner of the earlier mark to be aware not only of the use of the later mark but also of its registration, He described it as a bald conclusion which had been reached without any argument or discussion of the Board of Appeal's decision in Ghibli. Secondly, Budejovický Budvar was something of an outlier both in relation to the Board of Appeal's decisions and the General Court's decision in I Marchi Italiani.
Lord Justice Nugee did not find it easy to resolve the issue. He noted that the power to depart from the decisions of the CJEU was to be exercised cautiously. Although the conclusion of the CJEU and the Advocate-General in Budejovický Budvar had been described as "bald" his lordship thought it was possible to discern their reasoning. However, the conflicting lines of authority indicated that the issue was not settled at the European level. After considering the wider context, the objectives of the legislation and practical considerations Lord Justice Nugee decided that the better view was that the proprietor of the earlier right need only be aware of the use of the later mark and not of the fact of its registration. In those circumstances, he was persuaded that this was a case where the Court of Appeal could and should exercise its new freedom to depart from retained EU case law.
Lady Justice King concurred.
Lord Justice Arnold said that the Madrid Protocol establishes a system that enables trade mark proprietors in one Contracting Party to secure protection in other Contracting Parties. He referred to art 2. art 3 (4), art 3 ter, art 4 (1) (a) and art 5 (1), (2) and (5) of the Protocol. He added that the EU had been a Contracting Party to the Madrid Protocol since 2004. He noted that the EUIPO applies the 18-month time allowed under art 5 (2) (b) of the Protocol and it exercises the power to refuse protection as a result of opposition conferred by art 5 (2) (c). He cited arts 151, 152 and 160 of Regulation 2015/2424 and mentioned art 154 which deals with the examination of international registrations designating the EC on absolute grounds and refusal of protection where such a ground applies, and art 156 that deals with oppositions to international registrations designating the EC and refusal of protection in that context.
Intelligent and Killis argued that the registration date for the purposes of art 61 and s.48 is the date upon which a sign is registered with the International Bureau which would have been 18 June 2015 in the case of trade marks 801256685 and 801260671. Those dates would have been more than 5 years before the issue of the claim form. Lord Justice Arnold disagreed. Registration with the International Bureau was not the same as registration with the EUIPO. It was possible for the EUIPO to reject an international registration on both absolute and relative grounds, His lordship held that registration for the purpose of art 61 and s.48 was the dates on which the registrations were accepted by the EU Intellectual Property Office. In the case of 801256685 that would have been either 24 or 25 May 2016. In the case of 801260671, it would have been either 14 or 15 June 2016. In both cases that was less than 5 years before the issue of the claim form on 24 May 2021. As the learned Lord Justice observed at [106]: "Even if the relevant date in the case of 685 was 24 May 2016, the claim form was issued on 24 May 2021. That was the last day of the five year period and therefore just in time to stop a full five years' acquiescence accruing...."
It followed that although the appellants had succeeded on ground 1 they did not succeed on ground 2 which meant that their appeal had to be dismissed.
Industrial argued that it had taken sufficient action to stop time running before the expiry of the 5-year period by sending a letter before claim on 2 July 2019. His lordship disagreed. He said at [109]:
"Merely sending a warning letter is not enough, but if the warning letter is followed within a reasonable period by administrative or court action, then the warning letter will stop time running: see Heitec at [46]-[57] and Combe at [43]-[47]. In my judgment the claim form was not issued within a reasonable period from either 2 (or 26) July 2019 or 18 December 2020."
"Merely sending a warning letter is not enough, but if the warning letter is followed within a reasonable period by administrative or court action, then the warning letter will stop time running: see Heitec at [46]-[57] and Combe at [43]-[47]. In my judgment the claim form was not issued within a reasonable period from either 2 (or 26) July 2019 or 18 December 2020."
Lord Justice Arnold held that Industrial required the permission of the Court to appeal against Judge Melissa Clarke's refusal to consider its claim for passing off. He was prepared to grant such permission though he was of the view that if the defendants' case of statutory acquiescence was made out, it would bar the claimant's claim for passing off as well as its claim for infringement of the claimant's trade marks. The claimant sought the determination of its claim for passing off only if the appeal had succeeded, His lordship said that if that claim had to be determined he would have remitted it to the trial judge.
Comment
Although this case will be remembered primarily for the circumstances in which the Court of Appeal may depart from retained EU case law it addresses other important issues. These include the point at which an international registration becomes an EU trade mark, how and when the acquisition period can be ended and whether statutory acquiescence can bar a claim for passing off as well as trade mark infringfement To understand this case, it is important to read both judgments. Judge Melissa Clarke disposed of several difficult issues. Her judgment would have been worth reading even if there had been no appeal. Anyone wishing to discuss this article may call me on 020 7404 5252 during office hours or send me a message through my contact form.
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