The never ending story of Brexit – Chapter: EUIPO v Indo European Foods – Act II: The CJEU’s decision

The Court of Justice of the EU (‘CJEU’) recently published its long-awaited decision in EUIPO v Indo European Foods (case C-801/21 P) concerning the consequences of Brexit for an action before the General Court against a decision of the Board of Appeal (‘BoA’) of the European Union Intellectual Property Office (‘EUIPO’) rendered before Brexit took full effect.

Background

It is important to know that, 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’).

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. For the EUIPO 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 have to apply the law as it was at its first decision (case T‑342/20; IPKat here). The General 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. In his Opinion on the case, Advocate General Maciej Szpunar proposed to dismiss the EUIPO’s appeal (IPKat here).

The Court of Justice’s decision

The CJEU dismissed the appeal.

The judges agreed with the EUIPO insofar as the purpose of an action before the General Court and the applicant’s interest in bringing proceedings must continue until the decision is rendered.

Purpose of the action

By referring to its previous case law, the Court held that, unless the BoA’s decision has been formally withdrawn, the dispute retained a purpose. The judges did not explain what that purpose is but it can be assumed that it is to annul or alter the BoA’s decision.

Considering that the BoA’s decision had not been withdrawn and that the end of the transition period had not retroactively eliminated the decision (sic!; the CJEU does not speak of retroactively eliminating the earlier right), the General Court was justified to hold that the action had a purpose.

Interest in the proceedings

The judges found that the General Court is entitled to raise of its own motion and at any stage in the proceedings the objection that a party has no interest in maintaining its action.

An interest in the proceedings presupposes that the action is liable, if successful, to procure an advantage for the applicant. This must be assessed in view of all the consequences that may follow from a possible finding of unlawfulness of the BoA’s decision and the nature of the damage allegedly suffered by Indo.

The CJEU considered that:

(1) The purpose of the action still existed;

(2) Indo relied on an infringement of Art. 8(4) EUTMR by the BoA rejecting its opposition; and

(3) The BoA’s decision was detrimental to Indo’s economic interest (without specifying what this interest would be).

The judges considered this to be sufficient for finding that Indo still had an interest in the proceedings.

The arguments put forth by the EUIPO regarding the specific nature of opposition proceedings, the essential function of a trade mark, the principle of territoriality and the unitary character of an EU trade mark were considered to be irrelevant. The interest in the proceedings must not be assessed solely in the light of the legal interests protected by the EUTMR and does not depend solely on whether there can still be a risk of a conflict.

The Court also rejected the EUIPO’s argument that, if Indo’s opposition were successful, the opposed mark could be converted into national applications in all (remaining) EU Member States. The judges referred to their previous reasoning and found the EUIPO’s argument to have no bearing on Indo’s interest in bringing proceedings.

Sufficient reasoning

The CJEU dismissed the EUIPO’s plea alleging insufficient reasoning of the General Court’s finding that Indo had an interest in the proceedings.

The judges held that the General Court’s reasoning was implicit and deemed it sufficient to enable the parties to understand the grounds of the judgment and to provide the Court with sufficient information to exercise its powers of review.

Violation of Art. 72(6) EUTMR

The General Court found in the judgment under appeal that the BoA, after the annulment of the BoA’s decision by the General Court, would have to adopt a new decision “by reference to the situation at the time that [the appeal before the BoA] was brought, since the action is again pending at the same stage as it was before the contested decision” (case T‑342/20 at para. 27).

The EUIPO considered this to infringe Art. 72(6) EUTMR, which requires the BoA to take the necessary measures to comply with a judgment. According to settled case law, this provision also prevents the EU courts from issuing orders to the BoA.

The CJEU dismissed the EUIPO’s argument with a rather formal response. It found that para. 27 of the General Court's judgment only dealt with the EUIPO’s argument before the General Court that Indo had lost its interest in the proceedings and did not impose an obligation on the BoA.

Comment

1. The CJEU’s decision does not come as a surprise. According to its consistent case law, the General Court may annul or alter a decision of the BoA only if, at the date on which the BoA adopted its decision, it was vitiated by one of the grounds for annulment or alteration mentioned in Art. 72(2) EUTMR, namely lack of competence, infringement of an essential procedural requirement, infringement of the TFEU, infringement of the EUTMR or of any rule of law relating to their application or misuse of power. The General Court may not, however, annul or alter a decision of the BoA on grounds which come into existence subsequent to its adoption (e.g. case C‑482/15 P at para. 27). Based on this case law, the CJEU found, for instance, that the revocation of the earlier right after the BoA’s decision may not be taken into account by the General Court (case C‑482/15 P at paras. 28 et seqq.). The CJEU’s decision discussed above is a consistent continuation of this case law.

2. Against this background, it is interesting to see that the CJEU admitted the EUIPO’s appeal despite the above-mentioned case law. The judges seemed to have had an interest in defending their case law against the EUIPO’s arguments.

3. This is not the end of the Brexit story. The CJEU’s judgment only concerned the question whether an appeal before the General Court becomes inadmissible/devoid of purpose if the earlier right ceases to have effect after the BoA decided on the opposition proceedings.

The interesting question is: How will the BoA decide the case after the remittance? This begs two questions:

(i) What is the relevant point in time for finding that an opposition is well-founded? Only the application date of the contested trade mark? Or also the date of the decision of the Opposition Division or the BoA? This question is going to be answered in EUIPO v Nowhere (case C-337/22 P) for opposition proceedings and in Shopify v EUIPO (case C-751/22 P) in invalidity proceedings.

(ii) If also the decision date is decisive, is it:

(a) The date of the BoA’s first decision (which, in the case above, was prior to the end of the transition period; this seems to be the position of the General Court in the contested decision); or

(b) The second (i.e. new) decision after the case is remitted back to the BoA following the annulment of the BoA’s first decision (which would be after the end of the transition period)?

Stay tuned for further chapters in the ‘book of Brexit'.