It's not over till the Pink Lady sues: crunch time for apple appeal and application

When it comes to IP litigation in Europe, courts are becoming increasingly user-friendly. As national courts in different jurisdictions vie with one another to attract forum-shoppers, and as computerisation of files and pre-trial case management bring down both the cost and the time spent litigating, the courts are definitely on the up-and-up. But what of proceedings before rights-granting offices?  Proceedings before the European Patent Office are often slow, complex and unpredictable in both procedural and substantive terms. The Office for Harmonisation in the Internal Market (OHIM) has sometimes been held up as a better example of how rights can be granted and administered, though the comparison is an unfair one because the subject matter of patent applications is so much less easy to grasp. Bearing this in mind, Case T 378/13 Apple and Pear Australia Ltd and Star Fruits Diffusion v OHIM, Carolus C. BVBA is a 25 March decision of the Fourth Chamber of the General Court of the European Union which should be carefully studied by businesses and traders who live in a real world in which brands are litigated in courts but administered by bureaucrats.

In short, back in October 2009 Carolus applied to register as a Community trade mark (CTM) the word sign ‘English pink’ for ‘agricultural, horticultural and forestry products (neither prepared nor processed) and grains not included in other classes; live animals; fresh fruits and vegetables; seeds, natural plants and flowers; foodstuffs for animals, malt’ (Class 31). In April 2010 two businesses -- Apple and Pear and Star Fruits Diffusion ('the opponents') -- challenged this mark's registration for all the goods for which registration was sought. The opponents relied on three earlier CTMs for goods in Class 31: (i) the word mark PINK LADY, registered for ‘agricultural, horticultural products, including fruit, grains, plants and trees, in particular apples and apple trees’; (ii) a figurative mark, depicted on the left and designating inter alia ‘fresh fruit; apples, fruit trees; apple trees’; (iii)  a figurative mark (below, right) registered for ‘agricultural, horticultural products, including fruit, grains, plants and trees, in particular apples and apple trees’.

Said the opponents, on account of the similarity of  'English pink' to their  marks and the identical nature of the parties' respective goods, there was a likelihood of confusion of the relevant consumers under Article 8(1)(b) of Regulation 207/2009 on the Community trade mark; additionally, given the reputation of the earlier trade marks, the use by Carolus of the term ‘English pink’ would, without due cause, take advantage of the repute of their earlier marks under Article 8(5) of the same Regulation.

The Opposition Division rejected the opposition, so the opponents appealed to the OHIM Board of Appeal. Meanwhile, before the Board of Appeal could consider its decision,  the opponents successfully sued Carolus, relying on their earlier Community marks and a further Benelux mark. The court, the Tribunal de commerce de Bruxelles, in its capacity as a Community trade mark court, annulled the Benelux mark ENGLISH PINK and ordered Carolus to stop using that mark throughout the European Union. The opponents sent OHIM a copy of that judgment and, in August 2012, informed OHIM that Carolus had accepted that judgment, which had accordingly become final.

Having wiped ENGLISH PINK of the face of Europe, the opponents must have thought that a triumphant appeal result at OHIM was a formality. In May 2013 the Fourth Board of Appeal of OHIM dismissed their appeal. Examining the opposition as being based on the earlier word mark, the Board held that, since the marks were not visually, conceptually or phonetically similar, there was no likelihood of confusion. In any event, the Board said, the opponents had failed to establish the reputation of their earlier word mark and had not shown that the public associated PINK LADY with them rather than with apples of that variety as produced by any other grower. In reaching its decision the Board only referred to the evidence before the Opposition Division: everything else was too late.

Unsurprisingly the opponents applied to the General Court for annulment of the decision of the Board of Appeal or for it to be altered. This application was based on the failure of the Board of Appeal to take account of the judgment of the Tribunal de commerce de Bruxelles and on the application of the principle of res judicata.

The General Court agreed that the decision of the Fourth Board of Appeal should be annulled, but not that it could be altered. It the view of that court:

* The Board of Appeal had been duly notified several months before the adoption of its decision that a new fact —the judgment of the Tribunal de commerce de Bruxelles — had arisen. However, nowhere in its decision did the Board even refer to the existence of that judgment, much less give reasons for its appraisal of it.

* OHIM's argument that "the Board of Appeal in all likelihood did take account of the judgment" but "did not consider itself to be bound by it as it arose from an action for trade mark infringement" was a belated attempt to state reasons for the Board's decision, which was inadmissible before the General Court.

* As a general rule and unless otherwise specified, the submission of facts and evidence by the parties remains possible even after the expiry of the time-limits to which such submission is subject under Regulation 207/2009 and OHIM is in no way prohibited from taking account of facts and evidence which are submitted or produced late.

* It was clear that the judgment of the Tribunal de commerce was a relevant factual element for resolving the case at hand. The Board of Appeal could not fail to recognise that there were essential common points between the factual aspects at issue in the infringement proceedings initiated and the opposition proceedings brought to contest the registration of the mark sought. The parties to both sets of proceedings were identical and the earlier word mark relied on in support of the infringement proceedings before the Tribunal de commerce was the same as that relied on in support of the opposition proceedings before OHIM. Moreover, this judgment was delivered by a Community trade mark court which was established as part of the autonomous system that is the European Union's trade mark regime. Failure to take it into account meant that the Board of Appeal did not assess all the relevant factual aspects of the case before it with the required diligence. That lack of diligence was such as to lead to annulment of the Board of Appeal’s decision, with the result that the complaint alleging infringement of the principle of sound administration must be upheld.

* The decision of a national court sitting as a Community trade mark court in an action for infringement of a Community trade mark carries no such weight of res judicata for the departments of OHIM in opposition proceedings concerning the registration of a CTM, even if it is identical to the national mark which is the subject of the action for infringement. The existence of a decision such as that of the Tribunal de commerce here even if it had become final, would thus not in itself be sufficient to enable the General Court to ascertain which decision the Board of Appeal was required to take.

* The legality of decisions of the Boards of Appeal must be evaluated solely on the basis of Regulation 207/2009, as interpreted by the Courts of the European Union, and not on the basis of earlier judicial decisions, including national judicial decisions. It followed that a refusal to register must be assessed solely on the basis of the relevant Union legislation; earlier decisions by national courts could, in any event, cast doubt on the lawfulness of the decision at issue.

* Regulation 207/2009 does not contain any provision by which OHIM is bound by a decision by a Community trade mark court delivered in an action for infringement when it exercises its exclusive jurisdiction over registration of CTMs and when, in so doing, it examines oppositions lodged against applications to register CTMs.

* res judicata does not preclude the departments of OHIM or the European Union Courts from examining the possible existence of a likelihood of confusion in the context of opposition proceedings concerning the registration of a new CTM, even though it is identical to a national mark which has been held by a Community trade mark court to undermine an earlier CTM. Since OHIM is the only body empowered by EU law to examine registration applications and to authorise or refuse registration of a CTM, the lawfulness of Board of Appeal decisions must be assessed solely on the basis of the CTM Regulation.

* Carolus's ENGLISH PINK Benelux mark and the CTM it applied for were two legally distinct marks. The judgment of the Tribunal de commerce had the effect of protecting the opponents' earlier word mark only against the effects of the Benelux mark. Since the subject-matter and causes of action in the Benelux and OHIM proceedings were not identical, res judicata could not apply anyway.

* Since the Board of Appeal failed to take account of the judgment of the Tribunal de commerce and to assess the potential impact of that judgment on the outcome of the present dispute, the General Court was not in a position to determine, on the basis of the matters of fact and law as established, which decision the Board of Appeal was required to take and could not therefore exercise its power of alteration. Consequently, the request for alteration of the contested decision must be rejected.

This Kat sees the point, which the General Court substantially laboured: infringement proceedings are not oppositions and national marks are not CTMs.  However, he does not feel that the efficiency of the single market is greatly enhanced by a system that takes such a long and winding way to travel such a short distance.  He finds it surprising that the Tribunal de commerce's ruling, once communicated to OHIM, was not just automatically channelled into into relevant case file but that it was stapled to it by such physical or electronic means that no-one could avoid seeing it and taking it into account.

This Kat would also like to believe that, if a final and unchallenged ruling of a Belgian Community trade mark court has ordered Carolus not to use its ENGLISH PINK mark anywhere in the European Union on the ground that it was likely to cause confusion among purchasers of apples who might think it was something to do with PINK LADY, it should not be difficult for any OHIM instance to conclude that it should not be granted.

Merpel is anxious that there may be a miscarriage of justice in the making here. One of the goods for which Carolus sought registration of ENGLISH PINK was "live animals".  Being only a fictional animal herself, she is nonetheless concerned that none of the goods for which the opponents had registered their earlier CTMs are remotely similar to "live animals" for which, in her humble opinion, registration for live animals should be allowed -- though not for animals that are both pink and English.
It's not over till the Pink Lady sues: crunch time for apple appeal and application It's not over till the Pink Lady sues: crunch time for apple appeal and application Reviewed by Jeremy on Monday, March 30, 2015 Rating: 5

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