Repeat invalidation actions are barred, court rules

United Kingdom

In Hormel Foods Corporation v Antilles Landscape Investments NV ([2005] EWHC 13 (Ch), January 24 2004) the High Court of England and Wales has for the first time barred an attempt to invalidate a trademark through the operation of cause of action estoppel.

Hormel Foods Corporation, a US company that sold canned luncheon meat under the word mark SPAM, sought a declaration that the figurative SPAMBUSTER trademark registered by Antilles Landscape Investments NV (ALI) in relation to computer programs was invalid. After Hormel's initial application was refused by the Trademarks Registry, Hormel made further applications to the High Court for (i) a declaration that SPAMBUSTER was, at the time of its registration, either non-distinctive or descriptive under Sections 3(1)(b) and (c) of the Trademarks Act 1994, and/or (ii) revocation of SPAMBUSTER under Section 46(1)(c) of the act on the grounds that it was non-distinctive, generic or descriptive. ALI counterclaimed for a declaration that Hormel's SPAM trademark registration was itself invalid, contending that the mark was a term used in trade under Section 3(1)(d) of the act. ALI also applied for revocation, arguing that SPAM - if it ever was distinctive - had ceased to be so. Finally, ALI objected that the proceedings brought by Hormel before the High Court were oppressive and vexatious.

Dismissing the applications of both parties, Richard Arnold QC (sitting as a deputy judge), held that Hormel was barred from attacking the validity of ALI's mark a second time. He explained that a party that attacks the validity of a patent or registered design is obliged to put its full case in support of that attack at trial. If unsuccessful, that party is barred by "cause of action" estoppel from attacking the validity of that right in subsequent proceedings, whether the attack is launched on the same or different grounds. In principle, there was no reason why the same principle of cause of action estoppel should not apply equally in trademark law. Hormel's claims were an abuse of process and, since they failed in the registry proceedings, it was oppressive for Hormel to raise them now.

ALI's counterclaim fared no better. On the evidence, the court ruled, Hormel's SPAM mark had not become a generic term for canned meat. After a careful examination of dictionary entries, Arnold found that (i) the word mark SPAM possessed distinctive character at the time the application to register was made, and (ii) its distinctive character had remained unimpaired since that date.

Jeremy Phillips, Slaughter and May, London

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