General Court finds UK evidence not admissible post-Brexit in EUIPO proceedings

A recent decision by the European Union's General Court has concluded that the requirements for challenging an EUTM must be satisfied not only at its filing date but also at the time of the European Union Intellectual Property Office (EUIPO) decision. Consequently, UK evidence is not admissible in EUIPO proceedings, even if the evidence preceded Brexit.   

This is a surprising judgment that is contrary to recent previous General Court decisions, which have held that the requirement for challenging an EUTM is the filing date of the contested mark only; therefore, prior UK trade marks could be relied on when the filing date of the later EUTM was before the end of the Brexit transition period (31 December 2020 or before). The fact that an earlier mark could lose its status as a trade mark registered in an EU member state at a time after the filing date – for example, by the UK's withdrawal from the EU – was irrelevant.

This decision, therefore, reignites the previous uncertainty surrounding the effects of Brexit. However, an appeal to the Court of Justice of the EU (CJEU) has been allowed in one of the previous cases and is pending in another. The confusion created by this latest contrasting decision emphasises the need for the CJEU to provide certainty on the matter.

Shopify's action

In May 2017, Shoppi filed an EUTM application, which registered in May 2018In March 2019, Shopify applied to invalidate Shoppi's mark on the basis of its earlier EUTM for word mark "Shopify".

The Cancellation Division initially upheld Shopify's action. However, on appeal, this decision was reversed by the Board of Appeal, which found that Shopify's earlier mark had a low degree of inherent distinctiveness and that evidence submitted to demonstrate enhanced distinctiveness of the earlier mark was not sufficient. The board relied on the EUIPO's previous communication, inferring that a mark had to be reputed or have an enhanced distinctiveness in the EU when the EUIPO's decision was taken. Therefore, related UK evidence could not be relied on when the decision was taken after 31 December 2020, even if the evidence predated the end of the Brexit transition period.

Shopify appealed the Board of Appeal's decision to the General Court.

General Court decision

The General Court agreed with the Board of Appeal's position. The court found that, for evidence of enhanced distinctiveness to be relevant, it must still be capable of being relied upon on the date when the EUIPO makes its decision. This is the case even if the evidence preceded this date.

The EUIPO's decision in Shopify's case was dated 18 February 2021. Given that this post-dated the expiry of the Brexit transition period, the General Court held that the Board of Appeal had been "obliged not to take into account" evidence of the mark's use in the UK.

The General Court stated that even though the relevant date for assessing the enhanced distinctiveness of the earlier mark was the filing date of the EUTM, there was still a requirement of "permanence or persistence of the prior right" when the EUIPO made its validity decision. This, it said, was a "matter of enforceability", which is prior to the substantive validity assessment.

The court made clear that, although the present case related to cancellation proceedings, the same approach should be taken for oppositions.

Osborne Clarke comment

Interestingly, the General Court distinguished the present case from the earlier Indo Foods (Basmati) decision, where both the filing date and the date of the contested decision were prior to the end of the Brexit transition period.

Shopify had sought to rely on the General Court's earlier contrasting Ape Tees decision, however, the General Court stated that its latest position was supported by General Court case law.

Undoubtedly, this decision conflicts with previous General Court decisions and signals a return to uncertainty over just what effect Brexit has had and whether earlier UK marks can be relied on in proceedings where the contested mark was filed before the end of the Brexit transition period. This means that brand owners should now carefully consider what marks and evidence are relied upon when challenging marks filed pre-Brexit.

Given that the Basmati appeal has been allowed and the Ape Tees appeal is pending, it looks like clarity will have to wait until the CJEU makes a decision.

Trainee Solicitor Sam Bluteau-Tait co-authored this article.