Legal Updates

Intellectual Property Law – Trade Mark Application and Opposition – OHIM – Invalidity Claim, Passing off

In the case of Kitfix Swallow Group Ltd v Great Gizmos Ltd [2007], the claimant brought proceedings against defendant for trade mark infringement and passing off. The claimant in this case was a company which was the registered proprietor of a registered Community Trade Mark. The registration was for the word mark “Sequin Art” in respect of artistic materials, namely craft and hobby kits for making pictures. The claimant also argued that it was entitled to the good will attached to manufacturing and selling craft and hobby kits under the name “Sequin Art”. 

The defendant company in this case was the English distributor of craft kits for making pictures out of different coloured sequins, and also bearing the name “Sequin Art”. The manufacturer of the kit was 4M Industrial Development Ltd (“4M”). 4M was a Hong Kong company.

The claimant brought a claim against the defendant seeking relief for trade mark infringement and passing off. In response, the defendant brought a counterclaim for a declaration of invalidity.

A number of months later, 4M commenced proceedings at the Office for Harmonisation in the Internal Market (Trade Mark and Designs) (OHIM) in accordance with Article 7 of Council Regulation (EC) 40/94 (on the Community trade mark) (“the Regulation”). 4M sought a declaration for the mark to be declared invalid. OHIM initially stayed the proceedings, applying Article 100 of the Regulation but resumed after a short stay.

The defendant subsequently applied for a stay of the trade mark infringement proceedings, arguing the following:

• The mark was highly questionable;
• Once the trade marks issues were disposed of there would be little left by way of the passing off claim. This meant that the disposal of the trade mark matter by OHIM would therefore dispose of the real issue in the action;
• OHIM proceedings would be much cheaper than the costs in the English jurisdiction; and
• The provisions of Article 100(2) of the Regulation allowed a pause in the circumstances of the case.

The application was dismissed.

The court felt that Article 100(1) of the Regulation did not expressly deal with the factors to be applied where OHIM had decided that there were special grounds for continuing its hearing or if an application was made to the national court. However, the court also felt that it was plain that there could be no presumption in favour of a stay in the English proceedings in favour of OHIM in either of those situations.

What the court had to do in such circumstances was to arrive at a decision that was fair, bearing in mind all the relevant factors. The relevant factors included the legitimate interest that the claimant would usually have to pursue its proceedings in its chosen jurisdiction.

This meant that in the circumstances of this case, balancing the factors relied on by the defendant and the other factors, the grant of a stay was not deemed appropriate.

The other factors included the fact that the claimant had started its proceedings in the jurisdiction of the English courts, as it had been entitled to do, and ought to be allowed to have the benefit of the timing of that jurisdiction where it was available to it.

The overall prospect of appeals from the decision of OHIM was greater, and the prospect of delay arising out such appeals was very much greater than the prospect arising out of English proceedings. This was due to the fact that permission to appeal might not be given in the English proceedings.

There was also a question mark over the viability of OHIM’s proceedings in relation to its decision to stay the proceedings. The passing-off claim remained live, and even though the trade mark proceedings might have been resolved in a way which made that passing off claim unnecessary or unviable, it remained a separate claim which the claimant was legitimately entitled to maintain.

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© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.