Basmati rice’s EU trade mark application raises questions about Brexit and oppositions on the basis of UK law

A few weeks back, this Kat wrote an article about a case which relied on the UK law of passing off in a UK trade mark infringement claim. This time, we have a look at a case which relied on UK passing off to oppose an EU trade mark application under Article 8(4) EUTMR. With the case revolving around Basmati rice, and a bit of Brexit to sweeten the deal, let’s see what happened.

Background

On 14 June 2017, Mr Chakari filed an application for registration of an EU trade mark for the pictured figurative sign - featuring the words ‘Abresham Super Basmati Selaa Grade One World’s Best Rice’ for the following goods in classes 30 and 31:

• Class 30: ‘Flour of rice; rice-based snack food; rice cakes; rice pulp for culinary purposes; extruded food products made of rice’;
• Class 31: ‘Rice meal for forage’.

The figurative mark in question

On 13 October 2017, Indo European Foods Ltd (the applicant) filed an opposition based on the earlier non-registered word mark in the UK, ‘BASMATI’, used to refer to rice. The opposition relied on Article 8(4) EUTMR, stating that it was entitled under the applicable law in the UK to prevent the use of the mark applied for by means of ‘extended’ passing off (a concept that shall be elaborated on below). The opposition was rejected before the Opposition Division on 5 April 2019 and rejected by the Fourth Board of Appeal (BoA) on 2 April 2020 before appearing before the General Court (GC).

A question of Brexit

Prior to addressing the plea relied upon by the applicant, the GC considered the admissibility of the claim. In proceedings, the EUIPO submitted that, the expiry of the transition period under the UK Withdrawal Agreement would deprive the opposition procedure and the present action of their purpose, to the effect that such references to Member States and their laws in the EUTMR would no longer refer to the UK and its laws anymore. It was also argued that the ‘passing off’ right relied on would no longer constitute an ‘earlier right’ within the meaning of Article 8(4) EUTMR.

In light of this, the GC noted that the UK Withdrawal Agreement provided for a transition period from 1 February to 31 December 2020, during which EU law was still applicable to and in the UK. Despite several arguments raised by the EUIPO, the GC was content to conclude that, since both the application and the decision of the previous BoA came before the end of the transition period, withdrawal of the UK from the EU would not render the action devoid of purpose.

The fact that the applicant no longer had interest in bringing proceedings would not also affect the delivery of the legal decision, with the GC further maintaining that the BoA should not place itself at the time of its new decision for the purposes of assessing the facts of the case.

Article 8(4) EUTMR

Turning to the single plea in law submitted by the applicant under Article 8(4) EUTMR, the GC noted that, of the necessary conditions to be fulfilled, the use of the sign in the course of trade and the sign being of more than mere local significance was to be considered in light of EU law. The other conditions - namely, that the rights to the sign were acquired prior to the date of application for registration of the EU trade mark, and that the sign confers upon its proprietor the right to prohibit the use of a subsequent mark - were to be considered in light of the criteria set out by the law of the Member State governing that sign, so UK law.

The relevant UK provision (section 5(4) of the Trade Mark Act 1994) provides that a trade mark shall not be registered where its use can be prevented by virtue of any law (in particular, the law of passing off) that protects a non-registered trade mark or other sign used in the course of trade. The applicant relied upon the ‘extended’ form of passing off (referred to in Chocosuisse Union des fabricants suisses de chocolat & Ors v Cadbury Ltd. [1999] EWCA Civ 856), which enables several traders to have rights over a sign which has acquired a reputation on the market (and whereby - as per the UK law of passing off - such notional use by another has constituted a misrepresentation, and damage was caused).

The BoA had previously found that, whilst there was reputation giving rise to goodwill, a likelihood of misrepresentation could not be established on the basis of the contested goods and use of the mark applied for could not cause direct loss to the applicant as it was not likely to cause a direct loss of sales.

Credit: me :)

Looking first at the misrepresentation condition, the GC was noted that there was case law setting out that, where goodwill in a name had been established for some goods and services and was later used for other goods or services, proving the existence of a likelihood of misrepresentation would be more difficult where those goods and services were different. However, in light of the Taittinger decision (Taittinger SA v ALLBEV LTD [1993] F.S.R. 641, which had arisen in the context of ‘extended’ passing off) and the ‘Basmati Bus’ decision, misrepresentation could arise even in the case of goods of a different nature, as a non-negligible part of the relevant public might believe that the goods referred to by the BoA (namely flour of rice, rice based snack food, rice pulp or rice meal for forage), when labelled as ‘Abresham Super Basmati Selaa Grade One World’s Best Rice’, would be in some way associated with Basmati rice (i.e., as opposed to other types of rice).

The GC also considered that actual use of the mark was not a condition for UK passing off, nor a condition laid down by Article 8(4) EUTMR, and that the extended form of passing off could not be likened to the bad faith absolute ground for refusal.

Finally, turning to the ‘damages’ condition of passing off, the GC noted that, irrespective of the likelihood of a direct loss of sales for the applicant, damage would arise from the loss of distinctiveness of that sign or the ‘very singularity and exclusiveness’ of genuine Basmati rice. Since no argument had been submitted to explain how use of the mark could affect the distinctiveness of the word ‘Basmati’, and namely, how distinctiveness would not be eroded (referring to the Taittinger decision again), damage was likely to occur.

As such, the applicant’s plea was upheld and the Board of Appeal’s decision was annulled.

Comment

Brexit rears its head again, providing another talking point for conversation and raising the age-old question of when it will all be over.

Well, the decision does raise an interesting question - when will it be over? The GC made references to case law both in favour and against taking into account the time at which the EUIPO gives its decision on the opposition - in essence, querying whether the fact that an earlier sign (with an earlier right) could lose such status at a later date (e.g. following the possible withdrawal of a Member State in which the mark enjoys protection) would affect the outcome of the case (see by analogy T-598/18 Grupo Brownie decision, para 19).

The GC stated that there was no need to decide that based on the dates involved in the present case. Also because the purpose of the GC is to review the legality of the Board of Appeals’ decisions, such clarification was not necessary for the case at hand. But, what about where a case was to arise where an earlier (UK) right existed at the time of filing the EU trade mark application, but where the decision of the EUIPO came after the end of the transition period?

Of course this may only affect a small number of cases, and whilst the UK has set out how EUTMs pre-Brexit and post-Brexit will be treated in the UK, it will be interesting to see what the result would be in the event that such a case did arise.