Watch Those Renewals: Impact of Expiry of Rights on OHIM Oppositions

Brand owners might reasonably suppose that an earlier conflicting registration as of the filing date of a CTM is a strong enough basis to oppose. The Court of First Instance, however, does not share this view.

In MIP METRO Group Intellectual Property GmbH & Co. KG v. OHIM (Case T-191/04), the CFI recently affirmed that OHIM may require an opponent to prove not only that its earlier registrations were live when the opposed CTM was filed, but also that they were renewed where expiry dates fell within the pendency of the opposition. Failure to comply can cause an otherwise well-founded opposition to run aground.

 

Tesco’s Opposition

In Metro, the British supermarket chain Tesco Stores Ltd. had opposed a CTM application for a stylized METRO logo of a German rival chain, based on a 1990 U.K. registration for the word mark METRO. The opposition was filed in January 2000. Tesco’s earlier national right was due to expire in July 2000.

OHIM’s Opposition Division invited Tesco to provide evidence of the renewal of its national registration together with its additional facts, evidence and arguments in the opposition. Tesco did not produce evidence of renewal within the time limit. The Opposition Division therefore rejected the opposition. The Board of Appeal reversed the decision on appeal, and MIP METRO Group (“Metro”) appealed to the CFI.

Metro argued that the Board of Appeal had been wrong to hold that OHIM could not require proof of the renewal of an earlier registration during the pendency of the opposition, when the earlier registration fell due for renewal during the procedure. In Metro’s submission, the effect of such a rule would be the upholding of oppositions based on expired rights.

Tesco contended that Articles 42 (1), 42 (3) and 8 (2) of the CTM Regulation, which provide for opposition based on earlier registrations, are expressed in the present tense and therefore refer to the situation as of the filing date of the CTM. Requiring proof of the existence of earlier registrations at some later date would be contrary to the express wording of the Regulation. Had such further proof been required, Tesco argued, the law could have been expected to state this expressly since detailed provisions on opposition had been laid down.

 

Supermarket Sweep

The CFI found for Metro.

In its view, the underlying logic behind the opposition system is the protection of earlier conflicting rights. Those rights were to be protected to the extent that registration and use of the later mark was likely to encroach on the essential function of the earlier right. The essential function of a trade mark was to guarantee the origin of the marked goods to the consumer or end user.

Where an earlier registered trade mark had lapsed, the CFI reasoned, the mark could no longer fulfil its essential origin-indicating function. In such circumstances, there was no public interest in conferring the full benefit of protection to the earlier mark in opposition proceedings. The CFI therefore considered it proper for OHIM to take into account changes in circumstances relating to earlier registered rights that occur between the filing of the opposition and the decision on the merits. It was therefore within OHIM’s scope of authority to require opponents to file evidence of renewal of earlier registered marks due to expire during the pendency of the opposition.

The CFI rejected Tesco’s protest that such a ruling would create legal uncertainty and an obligation to file supporting documents continuously throughout an opposition. On the contrary, the CFI considered that OHIM’s guidelines required opponents to provide evidence of renewal only upon OHIM’s express request. This was enough in its view to avoid the creation of uncertain and indefinite legal obligations.

 

Comment

This decision has an important impact on opposition practice.

Previously it had been thought that the key date in CTM oppositions was the CTM filing date. If an earlier registered right existed on that date, later changes were irrelevant. Once the earlier right had been substantiated as of the CTM filing date, an opponent could effectively dust off his hands, walk away and wait for OHIM’s decision.

It is now clear that matters are not this simple, and indeed there had long been a feeling that OHIM’s intuitive views on this point were less clear-cut. OHIM’s practice of requesting proof of renewal in oppositions is not entirely new, and in most cases opponents faced with such demands will simply have shrugged and complied. What is new is the CFI’s confirmation of the legitimacy of the practice, based not on the wording of the law, but rather on the underlying purpose behind the CTM opposition provisions.

Curiously, OHIM itself supported Metro and argued for the overturning of the Board of Appeal’s decision. This is perhaps no surprise given that the practice condemned by the Board had been written into OHIM’s own internal practice guidelines. As observed by the CFI, those guidelines permit OHIM to require opponents to file evidence of renewal even where an applicant has not raised the issue. However, the guidelines are explicit that such evidence must be requested by OHIM. There is no apparent obligation for opponents to file it of their own accord.

This last point seems strange, however. If it is improper to uphold an opposition based on a registration that expires during the opposition’s pendency, would the result be overturned automatically on appeal? If evidence of renewal is required where OHIM notices the impending expiry date, why should such evidence not also be required where OHIM fails to notice? If oppositions should not be decided on the basis of rights expiring during the course of proceedings, then arguably the burden of proving continued existence of rights should fall automatically on the parties, without any need for prompting from OHIM. The fact that neither OHIM nor the CFI has gone so far gives rise to a lingering doubt as to how committed either is to the notion that earlier rights need to be in existence on the decision date, as well as the filing date, in CTM oppositions. Metro’s success may not be the end of the story.

Meanwhile, opponents who want to play it safe will keep a rolling review of oppositions to ensure that where rights are due for renewal during the course of the proceedings, they are in a position to file evidence of renewal either upon OHIM’s request or of their own accord. The uncertainty overhanging this area arguably makes the voluntary filing of the additional, renewal documents advisable; they can do no harm, they may in fact do good, and the costs involved are minimal.

The principle, moreover, cuts both ways. Opposed applicants will want to keep an eye on opponents’ rights. While the expiry of such rights during an opposition may be rare, it is not unknown, and appropriate evidence of non-renewal may help defeat an opposition that would otherwise have prevailed.