Board of Appeal adopts strict interpretation of 'legitimate interests' condition

Iceland

The Board of Appeal has issued a decision regarding the 'legitimate interests' condition in actions for cancellation (based on non-use).

At issue in this case was whether the conditions for an administrative cancellation under Articles 25, 28 and 30 of the Trademarks Act were fulfilled. According to Article 30(a), "anyone with legitimate interests at stake" may request that the Patent Office invalidate a registration. One of the reasons for a cancellation claim relates to the user requirements, as outlined in Article 25.

In the present case, a cancellation claim was filed before the Patent Office based on non-use. The owner of the registration filed no response. Therefore, any interpretation of the conditions relating to the user requirements based on facts such as the extent of use and volume of sales was not a part of the decision.

The Patent Office however rejected the cancellation claim on the basis that the legitimate interests condition had not been met.

The decision was appealed, and the Board of Appeal confirmed the Patent Office's decision.

First, the Board of Appeal referred to Article 25, which states that, if the owner of a registered trademark does not use the trademark in Iceland for the goods or services for which it is registered within five years of the registration date, or if such use has not occurred for five consecutive years, the registration can be cancelled by a decision of the Patent Office, unless valid reasons justify the non-use of the trademark.

The Board of Appeal then noted that, according to the decision of the Patent Office, the legitimate interests of the appellant were based on the argument that the registered trademark KLACID was similar to the trademark COLAZID. The appellant thus reasoned that its legitimate interests in the case were based on the existence of a risk of confusion between the marks.

The Board of Appeal noted that the trademark owner had not presented any defence or valid reasons that explained why its mark had not been used under Article 25 of the act.

However, it argued that Article 30(a) calls for sufficient reasoning to be provided regarding the existence of legitimate interests. In spite of the fact that the concept of 'legitimate interests' should likely not be interpreted strictly, the Board of Appeal did not consider that the appellant had supported its claim sufficiently by means of reasoning as provided in this article, and had not demonstrated such interests by providing relevant documents. There were no documents available to the board that showed that it had been found that the marks were confusingly similar, which could support the assertion that the appellant had legitimate interests. Even if the appellant based its claim on an alleged risk of confusion, there was no support for this in its reasoning pursuant to Article 14, Paragraph 1, No 6 of the act. The evaluation of whether a risk of confusion existed was not part of the decision of the Board of Appeal in this case. The Board of Appeal thus confirmed the conclusion of the Patent Office.

The decision indicates that the Board of Appeal considers that an actual risk of confusion within the meaning of the Trademarks Act must be sufficiently demonstrated by a claimant. The exact requirement in this respect was not defined, but the conclusion of the Board of Appeal was that such risk had not been sufficiently demonstrated in this particular case.

This case raises further questions that must be addressed in future decisions. For example, in light of the rather strict interpretation of the concept of 'legitimate interests', it is worth considering the fact that, according to the Trademarks Act, the Patent Office must examine new applications based on relative grounds (ex officio). The Patent Office had accepted both marks at issue for registration (after an examination of prior marks) without presenting an objection/refusal on the basis of confusing similarity with prior rights. This means, in principle, that a decision has already been made on behalf of the Patent Office regarding the co-existence of the marks in the Trademark Register. The Board of Appeal's decision may have been different if Iceland had abolished the ex officio examination of relative rights.

Valborg Kjartansdóttir, Sigurjónsson & Thor, Reykjavík

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