Common sense prevails in trade mark specification interpretation

Legal interpretation is of particular interest to this Kat, so she was intrigued to hear about this case which turned on the correct interpretation of a trade mark specification; the literal vs the "common sense approach". Here's what happened.

Background to the case

Kat Alliance
Image: Andy Miccone
In January 2011, AxiCorp applied for registration through WIPO designating the European Union for the word mark AXICORP ALLIANCE in Classes 3, 5, 10 and 35. The applicant, Alliance Pharmaceuticals, opposed the registration based on its earlier marks; EU word mark ALLIANCE (registered August 2006 in Class 5),  an EU figurative mark (registered December 2003 in Class 5) and an unregistered word mark ALLIANCE, used in the course of trade for ‘pharmaceutical preparations and substances’ in the UK.

In May 2017, the Opposition Division rejected the opposition in its entirety on the grounds of lack of evidence of genuine use of the earlier EU trade marks and the unregistered mark in the course of trade. The applicant appealed and by decision of 7 February 2018, the Fifth Board of Appeal of EUIPO partially annulled the Opposition Division’s decision and remitted the case to the Opposition Division. This is the contested decision in the present case.

The Applicants Case: Infringement of Regulation 2017/1001 or an infringement of a rule of law relating to its application

The applicant sought partial annulment of the contested decision in so far as the Board of Appeal had dismissed the appeal as regards the grounds for opposition set out in Article 8(1)(b) and (5) of Regulation 2017/1001. In support of the action, the applicant relied on a single plea in law, alleging that the Board of Appeal construed the specification of the earlier EU trade marks incorrectly, and so concluded that the evidence of use submitted did not show genuine use of those marks in connection with the goods included in that specification. In particular, the applicant disputed the Opposition Division’s narrow construction of the specification, which was confirmed by the Board of Appeal, that ‘chemical preparations for pharmaceutical purposes’ were excluded from ‘pharmaceutical preparations’.

Too narrow?
Image: VirtKitty
The applicant submitted that the narrow construction of the specification was contrary to the EUIPO’s examination guidelines on how exclusions are to be worded in specifications, arguing that if the intention is to exclude types of goods, the conjunction to use is the disjunctive conjunction ‘or’ and not the coordinating conjunction ‘and’. As such, the words ‘but not including infants’ and invalids’ food and chemical preparations for pharmaceutical purposes’ was meant to be construed as excluding only the first category of goods - foods for infants and invalids - and as including the second category of goods - chemical preparations for pharmaceutical purposes. Moreover, the applicant submitted that the narrow construction of the specification adopted was incorrect as it resulted in a specification that makes no commercial sense, contrary to the normal canons of construction of legal texts.

The EUIPO's arguments for a narrow literal approach so that trade mark owners are obliged to draft with clarity and precision

The EUIPO disputed the applicant’s arguments, submitting that an example of the drafting of an exclusion taken from the EUIPO’s examination guidelines cannot provide the basis for a rule determining the conjunction which should be used when drafting an exclusion in a specification. It maintained that it is the responsibility of the applicant to draft clearly and precisely the specification of the goods and services in respect of which protection is sought. Further, the EUIPO argued, the way in which the specification was interpreted was neither unreasonable nor contrary to grammatical rules, even though other interpretations could not be excluded. Thirdly, the EUIPO stated that the extent of the protection sought must be capable of being determined on the basis of the register alone. Therefore, where the designation of goods or services lacks clarity and precision, the scope of the mark must be interpreted narrowly because the proprietor of the mark should not gain from the infringement of its obligation to draw up the list of goods and services with clarity and precision.

The Courts Decision

The Court pointed out that, the interpretation of the specification given by the Board of Appeal, that ‘chemical preparations for pharmaceutical purposes’ were excluded, was possible from the wording of the specification. However, that interpretation did not duly take into consideration other factors that were essential for the purpose of understanding the scope of that specification; the actual intention of the proprietor of the marks concerned and the need to give an appropriate scope to that wording, one that precludes a reading leading to an absurd result for the proprietor. The actual intention of the applicant for registration of an EU trade mark is not irrelevant. Indeed, the Court of Justice has observed that a situation in which the extent of the protection conferred by a trade mark depends on the approach to interpretation adopted by the competent authority and not on the actual intention of the applicant runs the risk of undermining legal certainty both for the applicant and for third party economic operators (Chartered Institute of Patent Attorneys, C 307/10, EU:C:2012:361).

In the present case, the Court found that if the approach adopted by the Board of Appeal were correct and the registrations of the earlier EU trade marks covered pharmaceutical products except for those ‘using pharmaceutical chemical preparations’, thereby covering only ‘natural’ preparations or preparations ‘of herbal origin’ which do not contain chemical substances or synthetic components, those registrations would cover only goods which were not contemplated by the applicant and which were not expressly referred to in the specification of those marks. Such a situation is incompatible with the requirements of predictability and legal certainty.

Further, the Court stated that although it is true that the literal interpretation of the specification of a mark is preferred, that principle is of little use where two literal interpretations are equally possible. In such a situation, it is the interpretation which, among a number of possible interpretations of EU legal instruments, is the one which does not lead to an absurd result that must be preferred. The interpretation of EU law provisions is based first and foremost on the text, since that approach reflects the core principles of predictability and legal certainty. However, if the text is ambiguous or the literal meaning would lead to a nonsensical result, the meaning may be reappraised after being placed in context and interpreted in light of the provision of EU law as a whole, bearing in mind the objectives and its state of evolution at the time.

Don't be absurd!
Image: Lisa Zins
Thus, the Court found that in the context of Article 47(2) of Regulation 2017/1001 and assessing the evidence of genuine use of a mark, if two possible literal interpretations of the specification of that mark exist, but one of them would lead to an absurd result as regards the extent of the protection of the mark, the Board of Appeal must resolve the difficulty by opting for the most plausible and predictable interpretation of that specification. The Court held that it would be absurd to adopt an interpretation of the specification which would have the effect of excluding all of the applicant’s goods, leaving only goods in respect of which it has not sought trade mark protection.

As such, in the present case, the Board of Appeal had equated ‘chemical preparations for pharmaceutical purposes’ with final pharmaceutical chemical or synthetic preparations and therefore all the evidence of use of the earlier EU trade marks were rejected, despite the applicant’s main business activity was the marketing of pharmaceutical preparations and those marks were registered in respect of ‘pharmaceutical preparations’. The Court agreed with the applicant that it would be absurd to assume that it intended to seek registration of an EU trade mark in respect of a category of goods which it then restricted by a broadly equivalent category of goods.

Common sense prevails in trade mark specification interpretation Common sense prevails in trade mark specification interpretation Reviewed by Hayleigh Bosher on Monday, November 25, 2019 Rating: 5

No comments:

All comments must be moderated by a member of the IPKat team before they appear on the blog. Comments will not be allowed if the contravene the IPKat policy that readers' comments should not be obscene or defamatory; they should not consist of ad hominem attacks on members of the blog team or other comment-posters and they should make a constructive contribution to the discussion of the post on which they purport to comment.

It is also the IPKat policy that comments should not be made completely anonymously, and users should use a consistent name or pseudonym (which should not itself be defamatory or obscene, or that of another real person), either in the "identity" field, or at the beginning of the comment. Current practice is to, however, allow a limited number of comments that contravene this policy, provided that the comment has a high degree of relevance and the comment chain does not become too difficult to follow.

Learn more here: http://ipkitten.blogspot.com/p/want-to-complain.html

Powered by Blogger.