New OHIM practice in revocation and cancellation proceedings
The Office for Harmonisation in the Internal Market (OHIM) has recently revised half of its guidelines. The new guidelines are effective as of February 1 2014.
While the guidelines are not law, they are the primary tool used not only by OHIM examiners in their work, but also by professional representatives before OHIM. The revisions to the remaining half are to be issued this summer on completion of the drafting and consultation process; from now on, revisions will be made yearly, with a view to updating the guidelines on an ongoing basis.
While many of the changes are chiefly 'cosmetic' (improved wording and text structure), in certain cases the resulting changes are of major importance.
The change discussed here relates to the surrender of Community trademarks (CTMs) where an action for revocation or cancellation is pending before OHIM. This is dealt with in Part D, Section 1 of the Guidelines on Cancellation (pages 15 to 17). In practice, OHIM has already been applying the change for a number of months, but its inclusion in the guidelines affords greater certainty as to OHIM's position in such cases.
A strategy that was formerly permitted enabled CTM owners to circumvent the effects of an application for revocation or invalidity against their marks simply by surrendering the mark before OHIM had issued a decision, and then converting the CTM into national registrations or applications. This forced the invalidity/revocation applicant to 'pursue' the CTM owner in all or some of those national jurisdictions, which was both time and cost consuming. It was often not affordable or worthwhile for a party attacking a CTM to spend the wherewithal and time needed to continue contesting the national trademarks derived from a converted CTM. Furthermore, in cases of revocation on grounds of non-use, CTM owners gained a further five years in which to use their marks.
Under its new practice, OHIM suspends the registration of the surrender and informs the invalidity/revocation applicant of its intention to close the invalidity/revocation proceedings, inviting the applicant to submit observations. If the applicant does not respond, OHIM sends a second letter, closing the invalidity/revocation proceedings and drawing the applicant's attention to the possible loss of rights.
The reason is that the effects of surrendering a CTM registration are not the same as those of a decision on the substance in invalidity/revocation proceedings. The surrender of a CTM has effect only from the date on which the surrender is registered with OHIM, whereas a decision to cancel a CTM produces its effects earlier - either the date of registration of the CTM (in invalidity proceedings) or the date on which the application for cancellation was filed (in revocation proceedings for non-use). Thus, notwithstanding a request to surrender a contested CTM, the applicant may claim to have a legitimate interest in the continuation of the cancellation proceedings in order to obtain a decision on the substance (see Ferrero SpA v OHIM (TiMi Kinderjoghurt) (Case C-552/09 P, March 24 2011), Paragraph 39, and the Magenta decision in OHIM appeal proceedings (R 463/2009-4, October 22 2010), Paragraphs 25 to 27).
This new practice is, without question, more logical and fairer than the former practice, in which the surrender strategy could be used to avoid the consequences of a decision revoking or invalidating a CTM. However, it is now imperative for the regulations governing CTMs to be amended to provide for this new practice under the law, since nowhere do the regulations stipulate that a CTM owner must continue invalidity/revocation proceedings until a decision on the substance has been taken by OHIM, unless the applicant consents otherwise. This loophole is so significant that it should not be regulated merely by OHIM practice, as reflected in a document that does not have the force of law.
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