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Saturday, 3 October 2015

The BASMATI saga: General Court accommodates extended passing off within Community trade mark system

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Earlier this week Katfriend Nigel Urwin (Lee Bolton Monier-Williams) brought to the IPKat's attention news of a case (Tilda Riceland Private v OHMI - Siam Grains (BASMALI), T-136/14) that the General Court (GC) decided on 30 September last, and appears to have some relevant implications particularly as far as that peculiar creature of UK common law known as extended passing off is concerned.

Before going into the details of the decision, what is extended passing off?

Like the law on passing off, it is a legal construction of UK courts which Danckwerts J first acknowledged in 1960 in Bollinger SA v Costa Brava Wine [this resulted from an action aimed at preventing the defendants from calling their product 'Spanish champagne'], and has more recently excited the minds and hearts (and possibly also the hunger) of passing off enthusiasts with, for instance, the Greek Yoghurt case [here, here and here].

Unlike the classic form of passing off, its extended version has mainly to do with the fact that goodwill (one of the 3 requirements of the action, the other two being misrepresetation and damage) in a name that is distinctive of a particular class of goods is shared between a class or group of traders.

Going back to this recent GC decision, the background was as follows. 

What had happened before

In 2003 Siam Grains submitted an application to register the sign reproduced above as a Community trade mark (CTM) in Class 30 (long rice, more specifically) of the Nice Classification.

United Riceland opposed Siam's application, based on the earlier non-registered trade mark or the earlier sign BASMATI [this being a superior variety of Indian rice, characteristically light and fragrant when cooked], used in the course of trade in relation to rice.
Not quite basmati rice,
but Mildred is equally startled
United Riceland based its opposition on what is currently Article 8(4) of the Trade Mark Regulation, claiming that UK law would prevent, by means of an action for passing off, use [as well as registration, pursuant Article 5(4) of the Trade Marks Act 1994] of the mark applied for.
The OHIM Opposition Division rejected United Riceland's opposition, on grounds that the applicant had failed to prove that it had acquired the goodwill necessary to succeed in a passing off action in the UK.
In 2008 Tilda Riceland unsuccessfully appealed against the decision of the Opposition Division. Among other things the First Board of Appeal of OHIM found that the term BASMATI was not a trade mark or sign covered by proprietary rights, but simply the common designation of a variety of rice. In other words, BASMATI would be a generic term. The Board of Appeal also pointed out that the property protected by an action for passing off does not relate to the sign at issue but to the goodwill. The Board of Appeal concluded that the applicant had failed to show that it had ownership of the term BASMATI and that, accordingly, the opposition did not fulfil the condition provided for in the Trade Mark Regulation, relating to the existence of a proprietary right.
In 2012 the GC annulled the decision of the Board of Appeal, holding that the latter had failed to determine whether Tilda Riceland had acquired rights over BASMATI in accordance with UK law [Katpost here].
The case thus went back to OHIM, but the Fourth Board of Appeal also dismissed Tilda Riceland's appeal, on grounds that the applicant had failed to provide evidence that the name BASMATI had been used as a distinctive sign in the course of trade. In those circumstances, the Board of Appeal did not examine whether the applicant had acquired any rights over that sign according to UK law.
So what happened next? The decision was once again appealed before the GC, and Tilda Riceland submitted that in the UK BASMATI would be entitled to the same degree of protection as CHAMPAGNE or SWISS CHOCOLATE by means of an action for extended passing off.
extended passing off
What the GC said this time
Having recalled Article 5(4) of the Trade Marks Act 1994, the GC founds that (para 22):
"It ... follows from the decisions of the United Kingdom courts that a sign used to designate goods or services may have acquired a reputation on the market for the purposes of the law applicable to passing off, even though it is used by several traders in the course of business ... That ‘extended’ form of passing off, recognised by the United Kingdom courts, accordingly enables several traders to have rights over a sign which has acquired a reputation on the market".
Before annulling the contested decision, the Court reviewed the reasoning of the Fourth Board of Appeal, and concluded that the latter had erred in its interpretation of Article 8(4) of the Trade Mark Regulation. 
In particular the GC noted how Article 8(4) (para 29) "covers non-registered trade marks and any ‘[other] sign’ used in the course of trade. In that context, and in the absence of any indication to the contrary, the function of the use of the sign at issue may, in the light of the nature of that sign, lie not only in the identification by the relevant public of the commercial origin of the goods concerned, but also, inter alia, in the identification of their geographical origin and the special qualities inherent in them ... or of the characteristics on which their reputation is based".

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