No restitutio in integrum due to lack of vigilance during renewal process

European Union
In Rodd & Gunn Australia Ltd v Office for Harmonization in the Internal Market (OHIM) (Case T-187/08, April 20 2010), the First Chamber of the General Court has upheld a decision of the Board of Appeal of OHIM finding that the representative of the proprietor of a Community trademark (CTM) had not exercised all the due care required by the circumstances. 

The case concerned a figurative CTM consisting of the representation of a dog for goods in Classes 16, 18 and 25 of the Nice Classification. The mark was owned by New Zealand company Rodd & Gunn Australia Ltd, which changed its company name during the proceedings. The mark was registered by OHIM on July 10 1998.

On November 19 2004 the New Zealand representatives of the trademark owner, Baldwins, informed the UK law firm Page White and Farrer (PW & F) – the owner's representatives before OHIM - that responsibility for the renewal of the owner's marks had been transferred to Computer Patent Annuities Ltd (CPA).

On January 16 2006 and March 27 2006 OHIM notified PW & F that the request for the renewal of the dog device mark and payment of the respective fees should be made at the latest by February 28 2007. On April 3 2006 Baldwins informed CPA of the need to renew the mark. On January 2 2007, following an internal check, a CPA employee told his superiors that he would attend to payment of the renewal fee that same day. However, this was not done. Consequently, on March 19 2007 OHIM notified PW & F of the cancellation of the mark.

On May 21 2007 PW & F filed a request for the renewal of the mark and an application for restitutio in integrum pursuant to Article 78 of the Community Trademark Regulation (40/94) (now Article 81 of the Community Trademark Regulation (207/2009)). The Trademarks and Register Department of OHIM rejected the application for restitutio in integrum and confirmed the cancellation of the mark, considering that PW & F had not exercised all the due care required by the circumstances. The owner of the mark appealed.

The Fourth Board of Appeal dismissed the appeal, arguing as follows:
  • The analysis concerning the due care required by the circumstances should be carried out in the light of the conduct of the professional representative. In that respect, PW & F had not exercised all the due care required by the circumstances, as it had not undertaken any activity or exercised any control regarding the renewal of the mark.
  • Assuming that the analysis of the due care required by the circumstances should be related to the conduct of the proprietor of the mark, the latter had acted carelessly by relieving its professional representative of the task of monitoring the legal status of the mark and delegating the renewal of the mark to a third party (ie, CPA).
  • Assuming that the analysis of the due care required by the circumstances should be carried out having regard to the conduct of CPA, the error which led to the failure to observe the time limit was not isolated or inexplicable, but concerned a serious internal problem.
On appeal, the General Court found that the Board of Appeal had not erred in rejecting the application for restitutio in integrum.

First, the court held that there were doubts as to whether the action was admissible (ie, whether the right party had initiated the proceedings before OHIM). However, it found that it was not necessary to rule on this issue as the action was dismissed as unfounded. Moreover, there was no need to decide whether a non-professional representative can renew a CTM and, therefore, whether the owner of the mark had exercised all due care required by the circumstances in that respect. When administrative tasks such as the renewal of a mark are delegated, the person chosen is subject to the same requirement to exercise due care as the trademark owner. In any event, the court found that CPA had not exercised all the due care required by the circumstances:
  • The failure to renew the mark did not result from exceptional circumstances, but from a more general lack of vigilance on the part of CPA. The failure to renew the mark was discovered by CPA only eight months after the instruction by Baldwins and following an internal check by CPA. Moreover, despite the indication by the CPA employee responsible for renewing the mark that he would attend to payment of the renewal fee, he did not do so. Furthermore, CPA’s control procedures did not detect the fact that no payment had been made.
  • The control procedures put in place by CPA had already encountered difficulties in complying with time limits in connection with some CTMs. Therefore, CPA’s failure to renew the mark within the time limit was not an isolated problem.
  • CPA’s difficulties linked to the internal reorganization of its offices were not such as to constitute exceptional circumstances permitting restitutio in integrum.
  • CPA might have encountered difficulties with OHIM’s online payment system. Nevertheless, nothing indicated that those difficulties had specifically affected the renewal of the mark in question, or that those difficulties had persisted over several months and were continuous. In any event, CPA had other means of paying the renewal fee.
The decision, although unsurprising, is convincing. Unfortunately, the court did not answer the highly interesting question of whether delegating the renewal of trademarks to non-professional representatives, such as CPA, constitutes a failure to exercise due care on the part of the trademark owner. On a practical level, the case shows that even renowned companies face problems when it comes to the renewal of trademarks.

Florian Schwab, Boehmert & Boehmert, Munich

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