Overcooked, but with a slight bite – CJEU considers relevance of pre-Brexit UK rights in BASMATI EU trade mark opposition

Are UK trade mark rights still relevant for EU trade mark oppositions that were started before – but are appealed after – the end of the Brexit transition period? And, more importantly, should UK rights holders still have the right to block EU trade mark applications that would no longer overlap with their earlier UK rights?

The CJEU has sunk its teeth into these sticky issues in the case of Indo European Foods Ltd v EUIPO. The case concerned an opposition against an EU trade mark bearing the mark BASMATI, relying on “extended passing off” under UK common law. It demonstrates the difficulty of assessing the relevance of prior rights that apply only in the UK, in cases which were started before Brexit but for which the appeals process has dragged on long after the end of the transition period.

The facts

In June 2017, Mr. Hamid Ahmad Chakari (the Applicant) had applied to register a figurative mark including the text "Abresham Super Basmati Selaa Grade One World’s Best Rice" as an EU trade mark.

^{Image source: curia.europa.eu}

In October 2017, Indo European Foods Ltd (the Opponent), a UK-based company, opposed the application based on the term "BASMATI" being protected under UK law.

The law and the impact of Brexit

Article 8(4) of EU Trade Mark Regulation 2017/1001 (Article 8(4)) provides that a trade mark must not be registered if it conflicts with an earlier mark which has been used in the course of trade prior to the filing date in an EU Member State, and which has more than mere local significance. The Regulation also requires an applicant under trade mark proceedings to have a ‘continuing interest’ in bringing those proceedings.

Despite the UK’s exit from the European Union on 31 January 2020, the EU Withdrawal Agreement provided that earlier UK national trade mark rights could still be used as the basis for EU trade mark oppositions until the end of the transition period on 31 December 2020.

The Opponent argued that the non-registered trade mark "BASMATI" qualified as an “earlier mark” for the purposes of Article 8(4) as it was protected under the UK common law tort of “passing off”. Specifically, the Opponent said it was entitled to prevent the Applicant’s registration of its mark on the grounds of so-called “extended passing off”.

‘Extended’ form of passing off

Traditional 'passing off' typically involves protecting the goodwill of individual businesses and their goods or services. 'Extended passing off,' however, protects collective goodwill associated with a group of traders or a specific product type, against misrepresentation by others. Examples of protected terms include ‘Champagne’ and ‘Scotch whisky’. Essentially, while 'passing off' focuses on individual business identity, 'extended passing off' safeguards collective reputations and product origins. It gives rights similar to protected designations or origin or geographical indications, but on an unregistered basis.

"BASMATI" is a term widely associated with a specific type of aromatic rice that enjoys a strong reputation for quality. The Opponent’s case was that Applicant’s use and registration of ‘BASMATI’ would amount to a misrepresentation about the quality of their products, therefore damaging the collective economic interests of UK traders legitimately using the term.

On 5 April 2019, the EUIPO Opposition Division rejected the opposition, ruling that there was insufficient evidence under Article 8(4) to prove that the earlier mark “BASMATI” had been used in trade with “more than local significance” before the filing date. On appeal to the Fourth Board Appeal, the decision was upheld, as the Board did not accept that the Opponent was entitled to prohibit the use of the Applicant’s mark in the UK on “extended passing off” grounds.

On 2 June 2020, the Opponent appealed its case up to the General Court (GC).

“Devoid of purpose” – had Brexit made the case pointless?

The GC annulled the Board of Appeal’s decision, agreeing with the Opponent that the non-registered mark "BASMATI" was protected in the UK under the law of extended passing off. Prior UK rights remained relevant throughout the Brexit transition period, which was still ongoing when the Board of Appeal issued its ruling.

The EUIPO counter-argued that the case had become effectively pointless, as the Opponent no longer had any interest in the proceedings. It noted that the Opponent’s rights would have fallen away by the time the case was remitted to the Board of Appeal for reconsideration. Therefore, it said, the Board of Appeal would be forced to reach a different decision if its original ruling was annulled, as the transition period would (by then) have ended.

The CG disagreed, and confirmed that the case had to be assessed at the point in time when the contested mark was filed (in this case, in 2017). In any case, the original decision under appeal had also been made during the transition period, when the Opponent’s rights remained relevant. The Board of Appeal could not start its analysis afresh based on the new status quo, nor base its ruling on the fact that the earlier right would ‘soon’ fall away.

However, the GC declined to rule on the opposition itself but simply annulled the Board of Appeal’s previous ruling. The EUIPO appealed the annulment to the Court of Justice (CJEU) arguing that the GC had made an error of law by finding that the Opponent still retained an interest in pursuing the opposition, despite the end of the transition period. It asked the CJEU to set aside the GC’s decision and declare that the case was now devoid of purpose and the opposition should fail.

CJEU’s findings

The CJEU confirmed that an action for annulment of an opposition decision had to be capable of procuring an advantage to the party bringing it. However, on the present facts, the GC had made no error of law. The Opponent’s earlier right still existed at the time of the decision, and the end of the transition period did not retrospectively make the GC’s ruling incorrect as a matter of law. Moreover, the Board of Appeal’s ruling subject to the annulment had not been withdrawn or retroactively eliminated, so the Opponent retained an interest in challenging it.

The EUIPO separately argued that, despite the opposition being technically allowed, the GC had not properly considered whether the Opponent in fact had any residual interest in pursuing it. It said that the Applicant’s mark would not actually harm the Opponent, since the Applicant’s mark would not (post-Brexit) be protected in the UK anyway. Therefore, the opposition was contrary to the territorial nature and essential purpose of trade mark rights.

The CJEU acknowledged the EUIPO’s arguments, but maintained that the GC did properly consider the Opponent’s continuing interests. The refusal of the opposition was capable of adversely affecting the Opponent’s economic interests at the time the ruling was made, and the Opponent was entitled to challenge it. Accordingly, the CJEU dismissed the EUIPO’s appeal and upheld the GC’s decision to annul the Board of Appeal’s decision to dismiss the opposition.

A bitter aftertaste?

The CJEU applied the ‘letter’ of the Withdrawal Agreement and rejected the EUIPO’s pleas for a purposive, ‘common sense’ approach which would have thrown out the Opponent’s case on the basis that it no longer served any real purpose. The fact was, the Opponent’s case had been considered at each stage of appeal on the basis of the legal rights that continued to exist at the relevant time. Those rights were not extinguished after-the-event, even though circumstances had changed.

EU brand owners may, understandably, feel aggrieved that a UK-only right was able to block the registration of a trade mark in the remaining 27 Member States, long after the UK’s exit from the EU. As time goes on, such cases will become more rare. In the meantime, UK brand owners with pending oppositions or invalidity challenges based on earlier UK rights may take comfort in knowing that EU courts may still uphold those rights, despite a perceived ‘lack of ongoing interest’. Otherwise, EU rights holders might be tempted to retrospectively challenge similar decisions validly made during the transition period, on the grounds that the UK rights in question have now ceased to exist.

More generally, the case serves as a reminder that established, albeit non-registered, national trade mark rights can still offer robust protection against new, conflicting EU trade mark applications. For brand owners, it emphasizes the importance of maintaining and defending their trade mark rights, even in the face of legal and regulatory changes.