The never ending story of Brexit – Chapter: EUIPO v Indo European Foods – Act I: The AG’s Opinion

As former prime minister of the UK Theresa May famously said:

Brexit means Brexit!

But does it really? Not for the trade mark offices and the courts, it seems. There are several appeals pending before the CJEU concerning the effects of Brexit on EU trade mark law. According to the ‘Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community’ (‘Withdrawal Agreement’), the UK essentially remained a part of the EU until 31 December 2020 (so called ‘transition period’). After that date, UK trade mark rights could not be invoked against EU trade marks and vice versa.

This begs many questions, e.g. what happens to opposition proceedings if the transition period ends in the course of the proceedings. The matter EUIPO v Indo European Foods (case C-801/21 P) concerns the situation where the Board of Appeal of the EUIPO (‘BoA’) rejected the opposition based on a UK right (because it was not sufficiently substantiated) prior to the end of the transition period. Advocate General (‘AG’) Maciej Szpunar recently gave his Opinion as to whether an action before the General Court against the BoA’s decision is still admissible despite the fact that the appellant cannot rely on their UK rights any longer.

Background

On 14 June 2017, an individual filed an application for the following EU trade mark covering various rice products in classes 30 and 31.

 

Indo European Foods Ltd (‘Indo’) filed an opposition on the basis of Art. 8(4) EUTMR relying on a non-registered UK trade mark ‘BASMATI’ for ‘rice’. Indo argued an extended form of passing off under UK law.

The EUIPO’s Opposition Division rejected the opposition in April 2019 and the BoA dismissed the appeal in April 2020. Both found that Indo did not sufficiently show that the requirements of Art. 8(4) EUTMR would be fulfilled. Indo appealed to the General Court in 2020.

The case was heard before the General Court in 2021, i.e. after the end of the transition period. The EUIPO argued that Indo could not rely on the asserted earlier UK trade mark anymore because of the end of the transition period. It followed that

(1) The opposition became devoid of purpose, and
(2) Indo did not have an interest in bringing proceedings.

The General Court disagreed and found that the subject matter of an appeal before it is the decision of the BoA, including the facts and law as they were at the time the decision was rendered. In the new decision, the BoA would also have to apply the law as it was at its first decision (T‑342/20; see here). The Court also found that the BoA’s assessment of the claim of passing off was flawed and annulled the BoA’s decision.

The EUIPO appealed to the CJEU, which admitted the appeal.

Advocate General Maciej Szpunar’s Opinion

AG Szpunar recommends to dismiss the EUIPO’s appeal. The EUIPO put forward three arguments:

1. Indo’s action before the General Court became devoid of purpose after the end of the transition period.

2. Indo lacked an interest in bringing the action before the General Court.

3. Even if Indo’s action was not devoid of purpose and Indo had an interest in bringing the action, the BoA would have to dismiss the appeal again because the transition period is over and Indo cannot rely on UK rights any longer. The General Court cannot compel the BoA to ignore the effects of Brexit in the BoA’s subsequent decision.

The AG dealt with each argument separately.

1. The purpose of the action before the General Court

The question whether an action is devoid of purpose is an objective condition concerning the decision whose annulment is sought. This issue is separate from the interest in bringing proceedings, which is a subjective condition, intended to establish whether the outcome of the action may procure an advantage to the appellant.

An action has a purpose if the decision requested to be annulled continues to have effect. It may become devoid of purpose where an event with ex tunc (i.e. retroactive) effect occurs. For instance, the withdrawal or replacement of the contested decision or the withdrawal of the opposition can render proceedings before the General Court devoid of purpose.

In the present case, the action before the General Court still had a purpose because it concerned the BoA’s decision, which was adopted within the transition period. The end of the transition period did not have ex tunc effect, i.e. the Withdrawal Agreement does not require UK rights to be treated as if they never existed. A change in circumstances arising after the adoption of the contested decision with ex nunc effect cannot be taken into account.

2. Indo’s interest in bringing proceedings

AG Szpunar acknowledged that the interest in bringing proceedings is an essential and fundamental prerequisite for any action brought under Article 263 TFEU. It requires that the annulment of the contested decision has legal consequences and may, therefore, procure an advantage for the appellant. This interest must exist from the filing of the action until a final decision is rendered.

At the time of filing the action with the General Court, the transition period had not expired. Therefore, Indo had an interest in the annulment of the BoA’s decision. The annulment would provide an advantage for Indo because it required the BoA to re-examine the appeal against the EUIPO’s decision.

AG Szpunar found that the expiration of the transition period does not change this finding. The EUIPO argued that it is decisive whether the opposed EU trade mark application was still capable of adversely affecting the legal interests of Indo. According to the EUIPO this question had to be answered in the negative because there is no conflict between Indo’s UK right and the contested application after the end of the transition period.

AG Szpunar found that the question posed by the EUIPO may be a substantive issue, which may be relevant in deciding whether an opposition is well-founded. It is, however, not a condition for the admissibility of an action before the General Court. The AG mentioned the example of an opposition being filed on the basis of a UK right after the end of the transition period. The opposition would have to be found inadmissible by the EUIPO and confirmed by the BoA upon appeal. However, an action against the BoA’s decision before the General Court would be admissible (but, of course, unfounded). The same must apply in the present case, where the earlier mark was a valid ground of opposition in the proceedings before the EUIPO and the BoA.

Further, the General Court may, in principle, not annul or alter a decision from the BoA on grounds, which came into existence after the adoption of the decision. This would be the case here, since the transition period ended after the adoption of the BoA’s decision.

For the sake of completeness, AG Szpunar mentioned that the opposed EU trade mark application adversely affected Indo’s interests because of Art. 11(2) EUTMR. It provides that reasonable compensation may be claimed in respect of infringing acts occurring between the publication of an EU trade mark application and its registration. The owner of the opposed EU trade mark application could request such compensation for infringing uses in the UK between the application’s publication and the end of the transition period. While the AG accepts that the risk of such a claim is hypothetical, he considers it sufficient to provide Indo with an interest in bringing an action before the General Court.

3. Effects on proceedings before the BoA

The AG was also not convinced of the EUIPO’s argument regarding the effects of the General Court’s annulment of the BoA’s decision on the further proceedings before the BoA.

The General Court cannot render its decision on the basis of facts that emerged after the adoption of the BoA’s decision. Therefore, it will be for the BoA to decide on the appeal against the EUIPO’s decision taking the General Court’s annulment decision into account.

Comment

This matter seems to be a case of ‘old wine in a new bottle’. As AG Szpunar rightly points out, it is consistent case law of the CJEU that

the General Court may annul or alter a decision of a Board of Appeal of EUIPO only ‘on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the Treaty, of [that] Regulation or of any rule of law relating to their application or misuse of power’. It follows that the General Court may annul or alter the decision at issue only if, at the date on which that decision was adopted, it was vitiated by one of those grounds for annulment or alteration. The General Court may not, however, annul or alter that decision on grounds which come into existence subsequent to its adoption. 

(Alcohol Countermeasure Systems (International) v EUIPO, case C‑340/17 P at para. 116)

The General Court may not annul the BoA’s decision because the earlier right was revoked or simply not renewed after the BoA’s decision (e.g. Westermann Lernspielverlag v EUIPO, case C-482/15 P at paras. 27 et seqq.). The CJEU never uttered any doubts that the appeals before the General Court were inadmissible because the appellant did not have an interest in bringing the proceedings or because they became devoid of purpose.

The effects of Brexit do not appear different from the revocation or non-renewal of the earlier right: It existed at the time of the BoA’s decision and ceased to have effects in the EU thereafter, may it be due to revocation, non-renewal or the end of the transition period.

It would be consistent with this line of case law if the CJEU agreed with AG Szpunar and dismissed the EUIPO’s appeal.

The more interesting question is what happens if the transition period ended before the EUIPO’s or the BoA’s decision? This is the subject of the cases EUIPO v Nowhere (C-337/22 P) concerning opposition proceedings and Shopify v EUIPO (C-751/22 P) concerning invalidity proceedings. Both cases deal with the broader question of the date when an opposition or invalidity application must be well-founded: Is it sufficient to assess the opposition/invalidity application at the filing/priority date of the contested EU trade mark application/registration or do they also have to be well-founded at the time the decision (of the EUIPO or the BoA) is rendered? These cases require further chapters in the ‘book of Brexit’.

Picture is by Ivaivaivaiva9 and used under the licensing terms of pixabay.