Opposing CTMs Based on Unregistered Signs

When it comes to enforcement, an earlier registered trade mark is a compelling ground for opposing the use or registration of a later mark. However, unregistered rights, too, can form a strong basis for action in certain circumstances. Proving such rights and the required criteria is typically more challenging, but recent decisions suggest that before OHIM at least, unregistered right holders may be enjoying a slightly easier ride.

 

Article 8 (4) CTMR

Under Article 8 (4) of the CTM Regulation, owners of “a non-registered trade mark or of another sign used in the course of trade of more than mere local significance” can oppose or invalidate a CTM:

“where and to the extent that, pursuant to the Community legislation or the law of the member state governing that sign:

(a) rights to that sign were acquired prior to the date of application for registration of the Community Trade Mark, or the date of the priority claimed for the application for registration of the Community Trade Mark;

(b) that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.” Company names, trade names, shop names, unregistered trade marks and the like are all capable of assertion under this provision. However, opponents relying on Article 8 (4) must prove three elements: first, that the unregistered sign in question is of more than mere local significance; second, that rights in it pre-date the opposed application; and third, that the unregistered sign confers the right to prohibit use of the opposed mark under national law.

Whilst the second element is often a straightforward matter of evidence, the first and third can be more challenging.

 

More Than Mere Local Significance

The meaning of “more than mere local significance” was examined by the English High Court in Compass Publishing BV v. Compass Logistics BV (see Make Your Mark, Autumn 2004), but has yet to be examined by the ECJ. OHIM’s Boards of Appeal appear comfortable with it denoting use on a national or international scale, backed up by qualitative and quantitative evidence of the size of the business and its trading activities. When the question of “how local is too local?” eventually reaches the ECJ, however, more considered guidance will be welcomed.

For now, however, success before OHIM under Article 8 (4) will require proof of the existence of the earlier right on a scale that is more than merely local, prior to the filing date of the opposed CTM. This can be achieved through a wide range of material, including company or trade name registration documents; dated brochures, invoices, correspondence and advertisements referring to the unregistered sign; and statements from customers and the trade confirming the use and reputation of the unregistered sign prior to the opposed mark’s filing date.

In the recent case Gremco S.A. v Gremco GmbH (Case R 792/2005-1), the First Board of Appeal was persuaded that a registered French company name was an earlier sign “of more than mere local significance” by a copy of a French company registration document, company website print-outs, copies of product leaflets and brochures, copies of dated orders and invoices, an ISO 9000 certificate, copies of dated customer correspondence, and evidence that the opponent’s capital had been raised before the opposed mark was filed, which indicated “enhanced commercial activities.”

Failure to prove that an earlier unregistered sign is of more than mere local significance will defeat the opposition. Although the vanquished opponent may still be able to prevent the use of the opposed CTM in his locale under Article 107 CTMR, he will not be able to block or invalidate the CTM.

 

Right to Prohibit Use Under National Law

Proving a right to prohibit use under national law is not necessarily as straightforward as it seems.

Filing copies of leading cases on passing off or unfair competition, or copies of relevant legislation, may suffice for some countries. However, the legal position in others is far from clear. In Gremco and another recent case, MSP Singapore Company LLC v Zeltia SA (Case R 585/2005-2, Second Board of Appeal), the opponents struggled to prove that their earlier unregistered rights afforded a basis for successfully opposing use of the later CTM under their national laws. Their eventual success was owed in part to OHIM’s own research and analysis of the national legal positions.

The right relied upon in Gremco was a French registered company name. The opponent filed a copy of Article L. 711-4 of the Code de la Propriété Intellectuelle, but the evidence indicated that while under French law an earlier company name could be relied upon to cancel a French trade mark registration in a court, it could not be relied upon in opposition proceedings. OHIM resolved the anomaly through its own research of French legal texts, concluding that the availability of cancellation proceedings was linked to an ability to rely on the company name in an action for unfair competition, and thus entailed a right to prevent the use of the later mark.

Likewise, in MSP Singapore, the opponent relied on a Spanish unregistered trade name, but its evidence showed that under Spanish law an unregistered trade name could not be relied upon either in opposition proceedings. In this case, OHIM trawled through a wide range of legal sources uncited by the opponent, including the Paris Convention and TRIPs, to conclude that an unregistered Spanish trade name could indeed be relied upon to injunct the use of a later mark in an action for unfair competition.

What seemed simple matters of fact turned out to be difficult questions of national law, on which the opponents arguably only prevailed because OHIM took further legal research upon itself. The importance of researching and analyzing the national law relied upon could not be clearer.

 

Burden of Proof

OHIM’s interventionist approach in Gremco and MSP Singapore reflects an interesting trend under Article 8 (4).

The basic rule under Article 74 (1) CTMR is that in matters relating to relative grounds for refusal, OHIM is generally restricted to considering the facts, evidence and arguments submitted by the parties. Hence, it is important to ensure that each element of an Article 8 (4) case (or any other) is fully pleaded, reasoned and supported.

Gremco and MSP Singapore, however, show that OHIM’s approach is changing. In Article 8 (4) cases, OHIM increasingly appears to regard national law as an essential question of law for it to resolve, rather than a question of fact for the parties to prove. Consequently, where opponents fail to do enough to prove and explain the relevant national law, OHIM may itself take the research and analysis further to ensure that the opposition under Article 8 (4) is properly decided.

In both the cited cases, for example, OHIM went well beyond the materials filed in evidence by the opponents on the national law in France and Spain, and in MSP Singapore it expressly observed that it “must, of its own motion and by whatever means considered appropriate, obtain information about the national law of the Member State concerned, where such information is necessary to assess the applicability of the ground for refusal of registration in question” ( MSP Singapore, para 33; see also Court of First Instance, Case T-318/03, Atomic Austria GmbH v OHIM).

 

Comment

OHIM’s greater proactiveness in researching matters of national law under Article 8 (4) is a boon to opponents, as the outcome of these cases shows.

Nevertheless, opponents relying on earlier unregistered signs should not be lured into complacency. Leaving the research to OHIM and assuming that the desired outcome will be achieved would be a reckless approach. It is common-sense advocacy to assist the tribunal by providing it with everything it needs to find in one’s favour. Failure to take this seriously can lead to unfortunate results.

Costs are obviously involved in preparing fully reasoned and fully supported cases, but some of those costs are incurred in any event in the pre-opposition merits assessment. National law should be researched and considered before a decision is taken to file, or substantiate, an opposition based on Article 8 (4).

Nevertheless, there will always be cases where OHIM does not get the full story from the parties, not least because sometimes the law itself is difficult to unravel. In the interests of justice, OHIM’s willingness to fill in the gaps by researching the relevant national provisions is commendable. On the other hand, it is hard to see how it will be able to do this expertly for all 27 member states whilst still dealing with oppositions efficiently.

Hence, while parties may be grateful that OHIM will share the burden on tricky questions of national law where needed, it might be reasonable to assume that OHIM will first help those who help themselves.