Court of Justice pulls the plug on DANELECTRO
This article was included in the spring 2011 issue of snIPpets - the intellectual property newsletter.
In a case that will send shivers down the spine of brand owners, the Court of Justice of the European Union has confirmed that Evets Corp has lost two of its Community Trade Marks irrevocably - including a registration for the iconic, 50-year-old, electric guitar brand DANELECTRO.
The case arose out of a failure to renew the two registrations on time and a subsequent failed application for restitutio in integrum: the legal mechanism whereby a procedural error, such as a missed deadline, can in exceptional circumstances be recovered.
There were three parties involved in the story: Evets, who were the owner of the marks; A A Thornton & Co, who were their legal representatives before the OHIM; and Computer Patent Annuities Limited, or CPA, a business that essentially provided a backoffice administrative service in relation to trade mark renewals.
Responsibility for managing renewal of the marks had been delegated by A A Thornton & Co to CPA whose role it was to contact the brand owner directly and secure instructions to renew each mark. Due to a typographical error in a third party database, it emerged that some of CPA's renewal reminders to Evets had been sent to an incorrect address as a result of which no instructions were received and the marks were erroneously allowed to lapse.
The OHIM had sent out renewal reminders to A A Thornton & Co, as Evet’'s representative before the OHIM, according to its usual procedure, followed by notifications that the mark was due to expire unless late renewal was requested and finally notifications that the marks had expired. However, A A Thornton & Co had understood the renewal to be under care of CPA: only when the final notices of expiry arrived, on 21 and 23 November 2006, did it became clear that something had gone wrong.
A A Thornton & Co contacted their client, Evets, and established the train of events. It was decided to resort to the little used restitutio in integrum procedure and an application for restitutio was filed on 26 January 2007. The restitutio procedure allows proprietors to salvage a missed deadline where it can be shown that the error arose due to circumstances outside of the control of the proprietor or their representative and notwithstanding the highest standards of care and diligence. The periods for filing a restitutio application are strict: it must be filed within one year of the original missed deadline and within two months of the point at which the reason for non-compliance giving rise to the error, in this case a simple lack of knowledge, was removed.
Unfortunately for Evets, the application for restitutio in this case did not even receive a substantive consideration. The OHIM, and later the General Court and Court of Justice, held that it had been filed out of time. Evets argued that the relevant time to consider was the time at which it, as the registered proprietor, had become aware of the failed renewals. However, the Court rejected this approach and held that since a communication by the OHIM to a legal representative is considered to have the same effect as a notification to the proprietor itself, the relevant two month period must be considered to run from the dates, on 21 and 23 November 2006, when A A Thornton & Co was informed by OHIM of the final expiry of the marks. Since the application was not filed until 26 January 2007 it was out of time and could not be accepted.
This case holds important lessons for brand owners and is a salutary reminder of the severe consequences which can follow in the wake of a minor administrative error. Also, it reminds us that when an error has occurred and a deadline has 'fallen between two stools', then action must be taken with the most extreme urgency if there is to be any chance at all of recovering the situation. Field Fisher Waterhouse LLP does not make use of any third party renewals administrator and all renewals are handled by a dedicated team within the Trade Mark & Brand Protection Group; however, reviewing the procedures set out by CPA and A A Thornton & Co in this matter it is worth noting that both businesses had procedures in place which appear robust and might, arguably, have even allowed a successful restitutio application had action only been taken slightly more urgently and the application filed a few days earlier.