The post-Brexit trade mark order: (ir)relevance of use and acquired distinctiveness in the UK for EU trade marks

Post-Brexit, evidence of use and acquired distinctiveness of a trade mark may be one of the areas within trade mark law that cause headaches for practitioners. The position of the EUIPO, when it comes to acquired distinctiveness through use in the UK for the purposes of an invalidation action against a registered EU trade mark (EUTM), is that the distinctiveness acquired through use in the UK is not relevant for EU trade mark applications filed after the end of the transition period (December 31st, 2020).

However, the now said has not always been entirely clear, since case law (Decathlon v EUIPO (T‑349/19) EU:T:2020:488), states that the date to be taken into account when assessing the acquired distinctiveness of an earlier mark is the filing date of the contested trade mark application.

In a recent judgment (T-222/21) from October this year, the General Court concluded that, for evidence of acquired distinctiveness of an earlier mark acquired through use in the United Kingdom to be relevant for the application for a declaration of invalidity, that use must still be capable of being relied on at the date when the EUIPO rules on the application for a declaration of invalidity. In the present case, the date of the contested decision – 18 February 2021 – post-dated the expiry of the transition period. As a result, proof use of the earlier mark in the UK should be disregarded.

Background

In 2018, Mr Massimo Carlo Alberto Rossi, Mr Salvatore Vacante, and Shoppi Ltd (the interveners) successfully registered the following figurative mark as an EUTM:

Registration was obtained for goods and services in Classes 9 (application software, e-commerce software, mobile apps), 35 (advertising analysis), and 38 (photo uploading services, digital transmission of data, message services) of the Nice Classification.

In 2019, Shopify Inc. (the applicant) sought to invalidate the intervener’s EUTM, pursuant to Articles 60(1)(a) and 8(1)(b) of Regulation 2017/1001 (EUTMR) based on its earlier EUTM “SHOPIFY” covering goods and services in Classes 9 (computer software for e-commerce, electronic publications for e-commerce), 35 (provision of websites and mobile platforms featuring information in the fields of shopping, retailing, electronic commerce, and order fulfilment), 36 (providing electronic processing of credit card transactions and electronic payments online for the retail industry) and 42 (online services that allow users to create online stores to sell their goods and services).

In 2020, the Cancellation Division sided with Shopify. The applicant thus appealed to the EUIPO Second Board of Appeal (the Board), which annulled the Cancellation Division’s decision in its entirety and dismissed the application for a declaration of invalidity. In essence, it considered that there was no likelihood of confusion between the marks at issue and that the evidence submitted by the applicant in order to demonstrate the acquired distinctiveness of the earlier mark through use was not sufficient for that purpose.

The General Court’s judgment

The applicant relied on a single plea in law, namely infringement of Articles 60(1)(a) and 8(1)(b) EUTMR.

The present analysis only concerns the applicant’s claim regarding the acquired distinctiveness of the earlier mark. In this regard, the applicant submitted that, although the time for assessing acquireddistinctiveness acquired through use is the date of filing of the application for registration of the contested mark – 8 May 2017 – the United Kingdom was still a member of the European Union at that time and the evidence relating to that territory should therefore be taken into account.

The General Court considered that Article 127 of the Withdrawal Agreement stipulates, a contrario, that EU trade mark legislation no longer applies to the United Kingdom and within its territory, unless and to the extent that such continued application is expressly provided for by the withdrawal agreement. Furthermore, in the context of cancellation proceedings, the proprietor of an industrial property right, particularly an earlier mark, must establish that they may prohibit the use of the EU trade mark at issue, not only on the filing or priority date of that mark but also on the date on which EUIPO decides on the application for a declaration of invalidity (Style & Taste v EUIPO (T‑169/19) EU:T:2021:318).

It therefore follows that, for the evidence of acquired distinctiveness of the earlier mark acquired through use in the United Kingdom to be relevant for the application for a declaration of invalidity of the contested mark, that use must still be capable of being relied on at the date on which EUIPO rules on the application for a declaration of invalidity.

The General Court also stressed that, in the light of the fundamental principle of territoriality of intellectual property rights, set out in Article 1(2) EUTMR, after the expiry of the transitional period, no conflict can arise in the United Kingdom between the contested mark and the earlier mark, which are no longer protected in that territory. At the date of the contested decision, the public of the United Kingdom was no longer part of the relevant public of the European Union.

Finally, while it is true that the date to be taken into account for assessing the acquired distinctiveness of the earlier mark is the filing date of the contested trade mark application (Decathlon v EUIPO (T‑349/19) EU:T:2020:488), the fact remains that the requirement of permanence or persistence of the prior right at the date on which EUIPO rules on the application for a declaration of invalidity is a matter of enforceability, previous to such a substantive assessment.

Comment

The case sheds guidance in an area of trade mark law that might have been relatively unproblematic prior to Brexit, but that has caused uncertainties amongst practitioners afterwards. Importantly, while the date to be considered for assessing acquired distinctiveness of the earlier mark is the filing date of the contested trade mark application, that is not always the case. Instead, the General Court has now clarified that that use must be capable of being relied on at the date on which EUIPO rules on the application for a declaration of invalidity.