ECJ confirms deadline to substantiate status before OHIM’s boards of appeal

European Union
In Office for Harmonisation in the Internal Market (OHIM) v Nike International Ltd (Case C-53/11P, January 19 2012), the Court of Justice of the European Union (ECJ) has confirmed the time limits for an appellant before OHIM’s boards of appeal to remedy any deficiencies in the appeal pursuant to Rule 49 of Commission Regulation 2868/95/EC implementing the Community Trademark Regulation (40/94).
 
The appeal to the ECJ stemmed from Community trademark (CTM) opposition proceedings brought by Nike International Ltd against Aurelio Muñoz Molina in respect of a CTM application for the word sign R10 on the basis of non-registered trademark rights owned by Nike in an identical mark.
 
On June 20 2007 Nike had allegedly acquired by way of assignment the rights to an earlier R10 mark from DL Sports & Marketing Ltda, who had originally filed the opposition but subsequently failed to prove the existence and validity of the earlier mark by the deadline given by OHIM’s Opposition Division (August 9 2007). On October 31 2007 Nike’s lawyers notified OHIM that Nike was the new owners of the R10 mark and had been instructed to pursue the opposition.

On February 19 2008 OHIM rejected the opposition on the grounds that the initial proprietor, DL Sports, had failed to substantiate its rights in the prescribed timeframe. Nike appealed the decision, but OHIM’s First Board of Appeal rejected Nike’s appeal as inadmissible because Nike had also failed to prove its ownership of the earlier mark within the four-month time limit under Article 59 of Regulation 40/94 (now Article 60 of the Community Trademark Regulation (207/2009)). This was because the assignment from the initial proprietor produced by Nike dealt with a transfer of CTMs, but not specifically the R10 mark.
 
Nike successfully brought an appeal before the General Court. The court concluded that OHIM had failed to "give Nike an opportunity to produce additional evidence of the transfer" of the R10 mark, as it should have done on the basis of what the court considered to be the procedural rules applicable in the circumstances.  
 
The ECJ disagreed with the General Court and reversed its decision.
 
In a nutshell, the General Court’s reasoning ran as follows:
  • There is a lacuna in the Implementing Regulation in relation to the procedure before OHIM’s boards of appeal for proving the ownership of earlier national rights relied on in opposition proceedings;
  • Such lacuna can be filled by requiring the boards of appeal to apply the guidelines used by OHIM’s Opposition Division, which were said to be applicable mutatis mutandis to appeal proceedings pursuant to Rule 50 of the Implementing Regulation; and
  • Following the guidelines, the Board of Appeal should have satisfied itself that Nike was the owner of the R10 mark by giving it additional time to produce further evidence.
Conversely, the ECJ held that there is no such lacuna in the Implementing Regulation, because Rule 49 of the regulation sets out the time limits for the assessment of the admissibility of an OHIM appeal. These include the following:
  • Where the appeal does not comply with the provisions expressly mentioned in Rule 49(1) (including Article 58 (now 59) of the Community Trademark Regulation on locus standi), the boards of appeal shall reject the appeal as inadmissible, unless the appellant remedies each deficiency before the deadline set out in Article 59 (now 60) of the Community Trademark Regulation (ie, within four months after the date of the notification of the decision being appealed); and
  • Where the appeal does not comply with "other provisions" of the Community Trademark Regulation, the boards of appeal are required to inform the appellant and request them to "remedy the deficiencies noted within such period as [they] may specify".
Nike had four months from the date of notification of the decision of the Opposition Division to produce evidence that it was a party to the opposition, but failed to do so. Therefore, OHIM was right to have found Nike’s appeal inadmissible.
 
This case confirms the importance of due diligence in the context of an acquisition of IP assets whether via a self-standing transaction or as part of a larger deal. In particular, it highlights the need to ensure that:
  • non-registered rights are identified and expressly included in the transfer agreement; and
  • all existing disputes and proceedings, and related deadlines are identified and brought to the client’s attention.
Cam Gatta, D Young & Co LLP, London

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