In a recent judgment in Industrial Cleaning Equipment (Southampton) Limited v Intelligent Cleaning Equipment Holdings Co Ltd and Killis Limited [2023] EWCA Civ 1451, the Court of Appeal decided it could and would depart from retained EU case law in dismissing an appeal concerning the date from which the period for “statutory acquiescence” begins to run for the purposes of determining if invalidity and infringement claims are barred in a trade mark dispute. 

The marks

The Claimant had brought invalidity, infringement and passing-off claims against the Defendants, in relation to two International (UK) Trade Marks, one being the word mark ICE and the other being the logo mark (below right). The Claimants claimed these marks infringed their own mark, the logo shown below left.

A blue square with white text

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A blue and white logo

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Claimant’s mark Defendant’s mark

The Claimant’s logo had been used since 2007, but the Claimant only applied to register it as a UKTM on 23 October 2015, proceeding to registration on 22 January 2016.

The Defendants’ logo, alongside the word mark ICE, was initially registered at the WIPO on 18 June 2015, based on an earlier registration in the US. The word mark was received by the EUIPO on 23 July 2015, accepted on 24 May 2016 and published 25 May 2016. The logo mark went through the same process, with the relevant dates being 13 August 2015, 14 and 15 June 2016. As a consequence of Brexit, these were replaced by comparable International (UK) registrations, with the same filing date recorded, in addition to the “date of entry into the register” being 25 May and 15 June 2016, respectively. Bear all these dates in mind… they are important later!

The first instance decision

In a lengthy judgment, detailing the history of both sides’ business and knowledge of each other over the years, and engaging closely with the case law, the Judge at first instance found in favour of the Claimants, holding that the defence of statutory acquiescence, pursuant to section 48 of the Trade Marks Act 1994 (the “Act”), failed. 

HHJ Clarke had accepted that the Claimant only became aware of the registration of the Defendants’ marks on 26 July 2019, but they had been aware of their use since 2014. Because the Claim Form had been issued and served well before the expiry of the five-year period for statutory acquiescence (issued on 24 May 2021 and served on 21 September 2021), the Judge therefore rejected the Defendants’ defence of statutory acquiescence, holding that the acquiescence period starts to run only when the proprietor of the earlier trade mark has knowledge of both the use of the later trade mark and its registration. Consequentially their defence under section 11(1) of the Act also failed.

In rejecting the statutory acquiescence defence, the first instance Judge was required to apply the retained EU case of Case C-482/09 Budejovický Budvar np v Anheuser-Busch Inc [2011] ECR I-08701 (“Budvar”) but said she would have interpreted the Act in that way in any event. As the Claimant first became aware the Defendants’ marks were registered on receipt of a letter in July 2019, HHJ Clarke held that the claim form had been issued and served well before the expiry of the five-year period required for acquiescence. She also rejected the counterclaim for declaration of invalidity of Claimant’s mark, holding that the Claimant’s trade mark had been infringed and the Defendants’ trade marks were invalid on the grounds that use of trade marks was liable to be restrained for passing off (sections 5(4)(a) and 47(2)(b) of the Act).

The Defendants appealed on two grounds:

  1. It was not necessary for the proprietor of the earlier trade mark to be aware of the later trade mark’s registration in order for time to begin to run for statutory acquiescence, but that it is sufficient that the later trade mark is registered and the proprietor of the earlier trade mark is aware of the use of the later trade mark. This would require the Court to depart from Budvar.
  2. The later trade mark is an international trade mark protected in the EU, so the registration date from which time starts to run should be the international registration date, and not the date of protection in the EU i.e. in this case, from 18 June 2015, not 24-25 May 2016 or 14-15 June 2016.

The decision of the Court of Appeal

Issue 1: Does the proprietor of the earlier trade mark need to be aware of the registration of the later trade mark in order for time to run?

Lord Justice Arnold, leading the Court of Appeal’s Judgment, reviewed the EU legislation for trade marks (as amended over time) regarding the framework for statutory acquiescence, i.e. in essence, and to heavily précis the legislation, the preclusion from a proprietor of an earlier trade mark from seeking a declaration of invalidity or opposing the use of a trade mark if they have knowingly tolerated its use for a continuous period of five years (unless the registration of the later mark was applied for in bad faith). The statutory framework itself is not entirely clear as to when this period of five years starts to run. While the UK remained in the EU, it had implemented various provisions, by way of section 48 of the Act.

A seminal EU case dealing with this was the Budvar case, a referral from the UK Court of Appeal. concerning a dispute over concurrent BUDWEISER trade marks for beer. The ECJ determined in that case that the period for acquiescence begins to run when four requirements are met:

  1. The registration of the later mark in the Member State concerned;
  2. The application of the later mark being made in good faith;
  3. The use of the later trade mark by its proprietor in the Member State where it has been registered; and
  4. Knowledge by the proprietor of the earlier trade mark that the later trade mark has been registered and used after its registration.

Arnold LJ noted that in Budvar there was no issue as to the knowledge element of condition 4, as each party in that case was aware of the use and registration of the respective trade marks at all relevant times. Arnold LJ also considered other relevant EU case law that appeared to conflict with, or vary, condition 4, which suggested that the proprietor of the earlier mark need only be aware of the use of the later mark after it has been registered, rather than being aware of both the use of the mark and its registration. 

Arnold LJ considered the meaning, spirit and underlying policy objectives of the EU legislation, taking the view that the natural reading of the provision was that “that the proprietor of the earlier trade mark must be aware of the use of the later trade mark, but not the registration of the later trade mark”. He considered whether the Court should depart from Budvar, given that the case forms part of the “retained EU case law” within section 6(7) of the European Union (Withdrawal) Act 2018. The Judge recognised that the Court of Appeal and the Supreme Court have the power to depart from such precedents but this power should be used sparingly and rarely, much like the Supreme Court should seldom depart from its own precedents.

Arnold LJ concluded UK law should depart from Budvar and found that the five-year period starts to run when the proprietor of the earlier trade mark becomes aware of the use of the later trade mark and the later mark is in fact registered, whether or not the proprietor of the earlier trade mark is aware of the later mark’s registration. He concluded that Budvar was an isolated judgment with real possibility that it would itself be departed from by the CJEU if opportunity arose and that it was “unpersuasive because neither the Advocate General’s Opinion nor the Court’s judgment contained any analysis of the issue, but simply stated a bald conclusion”. It is important for courts to be able to apply legislation that best serves its objectives, and statutory acquiescence is a key tool which underpins the defence at section 11(1) of the Act. 

Issue 2: What is the “registration date” in the case of an international trade mark protected in the EU?

Arnold LJ again considered the relevant EU legislation applicable to the issue. There were some complexities to be dealt with, taking into account the fact that the Defendants’ mark was an international mark designating the EU (rather than a “straightforward” application to the EUIPO). Therefore, there were potentially various dates which could be deemed “the registration date”. On the analysis, it was concluded that it must either be the date of acceptance by the EUIPO or the date of second republication. This was not actually decided as it became irrelevant on the facts, considering it meant either 24 or 25 May 2016 in the case of the word mark and either 14 or 15 June 2016 for the logo. As the Claim Form was issued on 24 May 2021, it was (just) in time for the defence of statutory acquiescence to fail.

Why is this decision significant? 

What this case shows is that the Court of Appeal looks ready and willing to depart from retained EU case law where it considers it has the ability and discretion to do so. There look to be a lot of factors which the Court will take into account and we expect that these will be weighted differently on a case by case basis. This contrasts with the position taken so far in copyright law, where the Court of Appeal has explicitly chosen not to depart from Court of Justice law (see for example Tunein Inc v Warner Music UK Ltd & Anor [2021] EWCA Civ 441 and THJ Systems Ltd v Sheridan [2023] EWCA Civ 1354). Those considering relying on EU case law should also be mindful of the Retained EU Law (Revocation and Reform) Act 2023, which came into force at the end of 2023 – see more information on this here.

In more specific trade marks news, this case shows the importance of promptness at all stages of the life cycle of a mark; don’t leave anything to the last minute, whether that be registration or bringing a claim. It’s likely to be useful, and indeed was encouraged by Lord Justice Arnold, to watch the register (or for proprietors to instruct a trade mark attorney to do so on their behalf).