CFI considers consent to registration of FIRST DEFENCE by agent

In a case involving a mark for pepper spray, the European Court of First Instance (CFI) has considered the requirements for establishing the presence of consent by a mark owner to an agent that registered the mark in its own name.

Examples of authorized commercial agents using and then attempting to assume the local trademark rights of a foreign principal are not all that uncommon. Article 8(3) of the Community Trademark Regulation is intended to assist trademark owners in overcoming this problem by granting a right of opposition unless the agent can demonstrate the owner's consent or some other justification.

In September 1997 Defense Technology GmbH (Def-Tec) filed an application to register a combined device/word Community trademark for FIRST DEFENCE AEROSOL PEPPER PROJECTOR (the FIRST DEFENCE mark). Def-Tec had been the European agent of Defense Technology Corporation of America (DTCA), based in Jacksonville, United States. DTCA's president had on June 1 1996 provided Def-Tec with a declaration stating that DTCA "expressly waives all of the rights" to the FIRST DEFENCE mark in Europe. Before Def-Tec made its Community trademark application DTCA was taken over by a Wyoming-based corporation. This latter company opposed Def-Tec's Community trademark application for the FIRST DEFENCE mark on the basis of Article 8(3).

The Opposition Division of the Office for Harmonization in the Internal Market upheld the opposition, noting that Def-Tec did not provide any evidence of the consent given by the Wyoming company. The Board of Appeal confirmed the Opposition Division's decision, holding that the declaration of June 1 1996 did not contain "clear, specific or unconditional consent" and inferred that a lack of financial consideration for the consent affected its validity. Accordingly, the Board of Appeal did not go on to consider the effect of the change in ownership of DTCA on the validity of the earlier consent.

The CFI took a different view on subsequent appeal by Def-Tec. Firstly, it found that the consent given by DTCA was "clear, specific and unconditional" on the date it was given and the fact that the parties were engaged in real and genuine commercial relations explained the lack of consideration. Secondly, the fact that DTCA's president omitted to inform the acquiring Wyoming corporation of the declaration of June 1 1996 did not affect the validity of that consent. Whether the consent was still valid at the date of Def-Tec's trademark application and survived the transfer of ownership of the FIRST DEFENCE mark was a matter for decision under the law of the commercial agreement between the parties. Finally, the CFI found that the Board of Appeal should have determined whether the Wyoming corporation was bound by that consent, or whether Def-Tec had some other justification. Accordingly, the CFI annulled the decision of the Board of Appeal.

It is a salutary tale for the Wyoming corporation, which no doubt never assumed on acquiring DTCA that one of that company's commercial agents would have the power to assume and register its trademark rights in Europe.

Alistair Payne, Matheson Ormsby Prentice, Dublin