Risks of outsourcing trademark management highlighted

European Union
In Evets Corp v Office for Harmonization in the Internal Market (OHIM) (Joined Cases T-20/08 and T-21/08, September 23 2009), the Court of First Instance (CFI) has held that the failure of an outsourced third party to action renewal notices and the subsequent cancellation of the trademarks could not be cured by an application for reinstatement based on the date on which the trademark owner became aware of the loss of rights. 

In this case, the registrations for the trademarks QWICK TUNE and DANELECTRO were removed from the Register of Community Trademarks because they had not been renewed by the trademark owner’s appointed third-party service provider. Having an incorrect address for its client, the service provider had not informed the latter of the renewals, and no renewal applications had been made. 

OHIM initially informed the registered proprietor’s designated trademark agent of the expiry of these registrations and of the possibility of reinstatement within six months. Following the expiry of this period, OHIM followed up with a further notice to the trademark agent advising of a final two-month period during which the trademark owner could seek reinstatement. However, the trademark agent applied for restitutio in integrum (reinstatement) under Article 78 of the Community Trademark Regulation (40/94) only several days after the expiry of this period. It argued that the two-month period should run from the date on which it informed its client, which was several days after its receipt of OHIM’s final notice.

The Trademarks and Register Department of OHIM considered that the application for reinstatement had been filed in due time and was admissible. However, it refused the application on the basis that the registered proprietor had not taken all due care. Although aware of the renewal deadlines, the trademark agent had failed to check with the owner, the third-party agent or OHIM whether the renewals were in progress.

The Fourth Board of Appeal of OHIM dismissed the appeal, but adopted a different reasoning. The Board of Appeal based its ruling solely on the admissibility of the application for reinstatement. The application was deemed to have been lodged outside the requisite two-month period, which, according to the board, ran from the date on which the trademark agent was first notified of the cancellation of the marks - and not, as argued by trademark owner, on the date on which it first became aware of its loss.

The CFI confirmed the decision of the board and rejected the trademark owner’s arguments on the basis that a communication to the duly authorized trademark agent is effectively a communication to the registered owner. Accordingly, the owner could not argue that the final two-month period for reinstatement started to run only on the date on which it was informed of the loss of its rights. The decision demonstrates that, sometimes, the risks of outsourcing trademark management outweigh the rewards. 
 
Alistair Payne, Matheson Ormsby Prentice, Dublin

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