Continuity between Community trademark instances clarified

The European Court of Justice (ECJ) has reversed a decision of the Court of First Instance (CFI) which held that the Boards of Appeal of the Office for Harmonization in the Internal Market (OHIM) cannot refuse to consider new evidence that is filed within the time limit for appeal provided by Article 59 of the Community Trademark Regulation.

The decision stems from an opposition filed by Kaul GmbH, the proprietor of a Community trademark for CAPOL, against Bayer AG's application to register ARCOL as a Community trademark. Kaul claimed that there was a likelihood of confusion between the marks within the meaning of Article 8(1)(b) of the regulation. The Opposition Division found that the visual and phonetic differences between the marks were sufficient to prevent any likelihood of confusion, including any likelihood of association.

Kaul filed an appeal, claiming, among other things, that its CAPOL mark is highly distinctive since (i) it does not contain any reference to the goods, and (ii) Kaul is the market leader in the development and supply of glazing and anti-sticking agents for confectionery. Kaul also argued that it is the world's largest consumer of medium chain triglycerides oil, which is used to manufacture the goods bearing the CAPOL mark. This argument was supported by a declaration in lieu of oath by Kaul's managing director.

OHIM's Third Board of Appeal held that the affidavit of Kaul's managing director was new evidence that had not been submitted before the Opposition Division and by which Kaul was trying to establish a new legal basis - under Article 8(2)(c) on well-known marks - to the previous grounds of opposition. The board found that insofar as the inter partes stage of the procedure has been terminated by a final decision of the Opposition Division, the board cannot reopen that procedure on the basis of new facts, evidence and relief sought which the opponent could and should have submitted before the Opposition Division in a timely manner. Accordingly, the board concluded that it could not take into account Kaul's affidavit and, thus, find any likelihood of confusion.

Kaul brought an appeal before the CFI, claiming that proceedings before the Board of Appeal must be regarded as a second instance of review of the merits, in the course of which new evidence may be submitted.

The CFI upheld Kaul's argument and concluded that since new evidence was submitted within the four-month time limit provided by Article 59 of the regulation for lodging an appeal, the Board of Appeal could not refuse to take it into account without breaching its obligations relating to assessment of the likelihood of confusion (see Board should have considered distinctiveness evidence, rules CFI).

OHIM filed an appeal before the ECJ for guidance on continuity of terms. Three streams of case law on this issue have emerged from recent CFI decisions:

• the strict approach, according to which the time limits for submitting evidence are fixed and cannot be circumvented (T-388/00);
  
  
• the discretionary approach, according to which the Boards of Appeal enjoy discretion under Article 74(2) to take into account evidence produced after the expiry of a time limit (T-334/01); and
  
  
• the 'reset to zero' approach, according to which the new evidence that is filed within the four-month limit set in Article 59 cannot be refused by the Boards of Appeal (T-164/02).

Following the opinion of Advocate General Sharpston (see OHIM boards should have more discretion, says Advocate General), the ECJ upheld the discretionary approach, finding that the Boards of Appeal are allowed to take material not presented to the first instance OHIM department into consideration, but that they are not required to do so. Consequently, the ECJ found that the CFI's approach to reset proceedings to zero in the case under appeal was wrong and, thus, the CFI's judgment must be set aside. The ECJ also annulled the decision of the Board of Appeal because the latter wrongly considered itself to be lacking discretion by following the strict approach.

Mikas Miniotas, AAA Legal Services, Tallinn