General Court issues FAIR & LOVELY decision in Unilever's favour

European Union

In Unilever v European Union Intellectual Property Office (EUIPO) (T-811/14), which related to opposition proceedings that started back in 2005, the General Court has annulled a decision of the Fourth Board of Appeal of the EUIPO. The decision is a clear demonstration of the complexities - and delays - which can result from the overlapping and potentially competing trademark rights in EU member states and supranational EU trademark rights.

On September 24 2004 Unilever filed a EU trademark (EUTM) application to register the sign FAIR & LOVELY (stylised) in Class 3. The application was opposed by Technopharma Ltd on the basis of its pending, but earlier, EUTM application for NEW YORK FAIR & LOVELY, also in Class 3. The opposition was suspended in May 2006, because Technopharma’s application was itself opposed by Unilever, on the basis of earlier national rights it owned in Italy and the Benelux. Technopharma’s EUTM was rejected in February 2010, though the decision noted that Unilever had failed to provide proof of use in the Benelux. Following an unsuccessful appeal, Technopharma applied to convert its rejected EUTM into national applications in Germany, Spain, France and the United Kingdom, as well as the Benelux.

Opposition proceedings against Unilever’s EUTM recommenced in June 2011, but were then suspended again, pending the outcome of the various conversion requests, since those marks would be the “new” bases of opposition. Technopharma’s Benelux mark progressed to registration, and the opposition proceedings began again in September 2011. Unilever requested a further suspension in January 2012, on the basis that it had opposed Technopharma’s UK (converted) application. That request was denied by the EUIPO, because the UK mark was not the sole basis of opposition.

In April 2013 the opposition was upheld, on the basis of a likelihood of confusion. In the interests of procedural economy, the decision was based only on Technopharma’s converted Spanish mark.

Unilever appealed the opposition decision and its pleadings sought either cancellation of the decision, or a suspension of the proceedings, pending the outcome of the cancellation actions filed by Unilever against all of Technopharma’s converted rights. All those actions were filed subsequent to the opposition decision. The Board of Appeal dismissed the appeal on October 6 2014, finding that Technopharma could reasonably rely on its earlier national rights.

Unilever appealed to the General Court, asking for the decision to be dismissed or, alternatively, suspended, pending the outcome of the cancellation actions.

The key part of the court's decision relates to the decision of the Board of Appeal not to suspend the appeal proceedings, while Unilever’s cancellation actions were live. The EUIPO argued that Unilever had not shown evidence of use of its own Benelux mark and so could not reliably indicate the outcome of the cancellation action against Technopharma. Technopharma argued that a decision to suspend after so many years, and so late in proceedings, would be unfair and disproportionate. The Board of Appeal, when exercising its discretion, must weigh up the interests of all the parties concerned.

While the General Court accepted Technopharma’s point, its decision turned on the fact that the board had claimed that Unilever had not filed sufficient information regarding the Benelux cancellation action. This was inaccurate and meant the board had not noted the bad-faith basis for the action, which rendered proof of use irrelevant. This, in turn, meant the board was not in a position to weigh up fully and properly the various interests involved. 

The decision was thus annulled.

This case is an example of the level of complexity, and scope for counter-attack and multiple proceedings, which arises from the parallel trademark systems in the EU member states. It illustrates the need for practitioners to have their wits about them and be alive to all the options available, and especially the need for a clear and thorough knowledge of procedural requirements. It also demonstrates to brand owners the fact that they may need to be ready for the long haul, if the parties cannot reach a settlement.

Chris Morris, Burges Salmon LLP, Bristol


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