The moose, loose in the non-use hoose

Emerging from the busyness of hearing preparation, this Kat has now found a moment to tell you about a clever little loophole just closed by OHIM (the Office for Harmonisation in the Internal Market) which previously made it possible to defeat (in part at least) an attempt to revoke a Community trade mark (CTM) despite it never having been used.

For those who don't get the tenuous
reference in the title, scroll down

Under European trade mark law, you either use it or you lose it – once a mark has been registered for five years, it becomes liable to revocation if it has not been put to genuine use in the Community (see Article 51 of the Community Trade Mark Regulation).

However, in certain circumstances it is possible to “convert” a CTM into a series of national trade marks, in fact up to 26 of them – one for each Member State of the European Union (well, there are 28 states, but Belgium, the Netherlands and Luxembourg are covered by a Benelux mark). Your CTM ceases to be and you – once you jump through the right hoops in each local jurisdiction (see Section 8 of this OHIM document) – end up with a number of separate national registrations. The converted national registrations retain the same filing and priority dates as the CTM but, as they are only registered once the conversion process is complete, will be given new registration dates.

As a result, while a proprietor of a CTM who finds itself up against an earlier right holder in perhaps one Member State may lose its CTM, it can retain the same level of protection on a national level in the other Member States, or at least those of interest to it.

So far as registrations are concerned, conversion is available where the proprietor has chosen to surrender its CTM or has not renewed it. It is also available where the CTM has been declared invalid by OHIM or a Community trade mark court or revoked other than for non-use. Conversion is also available in the case of a CTM application where the application has been refused or withdrawn or is deemed to be withdrawn, or where the CTM ceases to have effect. See here.        

If you don't recognise this scene,
I guess you weren't around in the early 90s... 

Conversion is not available where a mark has been revoked for non-use. However, under the old practice, if your mark came under attack for non-use, you could simply surrender it and then convert. It was possible to do this while the non-use revocation action was pending, or even after losing at first instance provided that an appeal had been filed. The result would be a series of national applications, which once registered would be given a new registration date. The upshot is that despite your CTM being revoked, you end up with a series of new national marks which cannot be challenged for another five years.

Take this example. Teller-Morrow Automotive registers a CTM for JAX in respect of motorcycles in 2002. It makes no use of the mark for 12 years. Business rival Charming Heights, Inc. applies to revoke the mark for non-use. Knowing its mark is at risk, Teller-Morrow Automotive surrenders the CTM, converts in fourteen Members States and obtains new national registrations with 2014 registration dates. These JAX marks are now invulnerable to non-use attack until at least 2019.

OHIM’s got wind of this and isn’t impressed. Its new practice is as follows. Once non-use cancellation proceedings are underway, any attempt to surrender the CTM by the proprietor will be put on hold. The applicant for cancellation will then be asked if it wants to continue its action notwithstanding the surrender. If it does not, the surrender will go ahead and the proprietor can convert as before. If the applicant does wish to proceed, the cancellation proceedings will run to their conclusion. Only then will the surrender be allowed to go ahead, and only in respect of those goods and services which survive the non-use attack.

I'm half way through Season 5. It's brutal.

In my example above, Teller-Morrow Automotive’s surrender would be suspended. If Charming Heights, Inc. wanted to maintain its action, it would (given the complete non-use) end up revoking the CTM and there would be nothing left for Teller-Morrow Automotive to convert.

To any proprietors with CTMs vulnerable to non-use attack – if you are thinking about converting in light of a possible cancellation attack, don’t wait until your rival commences it. You’ll be too late.

Juice loose aboot this hoose here.

With apologies for the lack of mooses (meese?) in this post.