Trade mark acquiescence: a matter of clockwork

A version of this article was published on World Intellectual Property Review at worldipreview.com on 20 February 2024.

In a trade mark dispute between rival users of the acronym 'ICE' (Industrial Cleaning Equipment v Intelligent Cleaning Equipment [2023] EWCA Civ 1451), the Court of Appeal ("CoA") held that statutory acquiescence starts to run from when an earlier trade mark holder becomes aware of the use of a later registered trade mark, whether or not it is aware of the later registration. This is a departure from both the first instance decision by the Intellectual Property Enterprise Court ("IPEC") and the decision of the Court of Justice of the European Union ("CJEU") in Budějovický Budvar, národní podnik v Anheuser-Busch, Inc. (Case C-482/09) ("Budvar").

What do you need for acquiescence to start to run?

Statutory acquiescence under section 48(1) Trade Marks Act 1994 ("TMA") provides a defence to trade mark infringement where "the proprietor of an earlier trade mark or other earlier right has acquiesced for a continuous period of five years in the use of a registered trade mark in the United Kingdom, being aware of that use". 

Budvar held that for acquiescence to start to run, the proprietor of an earlier mark had to have knowledge of both the use of a later registered mark and of its registration.  IPEC had been bound by that, because it was retained EU case law, falling into s6(3) European Union (Withdrawal) Act 2018.  However that Act allowed the Court of Appeal and Supreme Court to depart from CJEU judgments under certain circumstances – "where it appears right to do so" – which was "a power to be exercised with great caution".  That power was exercised here for various reasons including:

• Budvar was (according to Arnold LJ, giving the leading judgment) "unpersuasive because neither the Advocate General's Opinion nor the Court [of Justice]'s judgment contained any analysis of the issue, but simply stated a bald conclusion";
• The CJEU in Budvar had not been addressed on nor considered other relevant cases (such as Cristianini v Ghibli, Case R 1299/2007-2 and Marchi Italiani (Case T-133/09));
• Budvar is an isolated judgment and has not been followed by the CJEU itself, the General Court and the European Union Intellectual Property Office ("EUIPO");
• Departing from Budvar would not cause legal uncertainty, because it was already established that the EU institutions took varying approaches to the issue; and
• Upholding Budvar unduly restricted the proper development of the law.  Several recent cases had showed that delay in bringing trade mark disputes can cause complexity; statutory acquiescence is "a key tool for dealing [with] this problem... It is therefore important that the courts of this jurisdiction are able to apply the legislation in the manner which best serves its objectives".

The CoA recognised that until recently, it could have referred the questions in this case to the CJEU for guidance.  It could no longer do that but while it felt that attempting to predict the CJEU's decision would have been presumptuous, it believed that there was a real possibility that the CJEU would endorse the approach taken by the EUIPO and the General Court, diverging from its previous ruling.

The Defendants had argued for this departure from Budvar, but it did not help them; they had no statutory acquiescence defence to infringement as the proprietor's 5-year period for acquiescence had not yet expired.

From which date does acquiescence start to run?

The dates in this case were key.  

The Defendants had applied for two international trade marks via the Madrid Protocol route.  These were registered at WIPO on 18 June 2015, designating the EU.  The EUIPO received one application on 23 July 2015, accepted it on 24 May 2016 and published it on 25 May 2016.  It received the second application on 13 August 2015, accepted it on 14 June 2016 and published it on 15 June 2016.

On 2 July 2019 the Claimant’s solicitors sent a letter before claim alleging trade mark infringement and passing off. Responses from the Defendants followed on 26 July 2019 denying infringement and passing off, relying partly on the Defendants’ EU trade marks, at which point the Claimants became aware of the Defendants' registrations. The claim form was issued on 24 May 2021 and served on 21 September 2021. 

The CoA was clear that in the case of a UK or EU mark, acquiescence starts to run from the registration date of the defendant’s mark, not the application date (there is no cause of action before registration).  However, for an international/Madrid mark designating the EU, as here, there was debate over which date equated to the "registration date" between the various acceptance/publication/republication dates which result from the way this application route is administered. 

Ultimately, Arnold LJ held that the registration dates "were either 24 or 25 May 2016 and either 14 or 15 June 2016", and it was "not necessary to decide whether the correct date is the date of acceptance … or the second republication date … because it makes no difference on the facts of this case". Even if the relevant date was 24 May 2016, when the earliest of the Defendants' marks was registered, the claim form was issued on 24 May 2021. That was the last day of the five-year period and therefore just in time to stop a full five years' acquiescence accruing. 

In interpreting s48(1) TMA, the CoA considered the wording of the TMA and its predecessors, the relevant Directives and Regulations and general principles of interpretation.  It found that "the more natural reading of the operative words in the Directives and Regulations is 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".

The CoA explained that use and registration are two different things; "use affects the market, while registration does not". The purpose of the legislation is to sanction proprietors of earlier trade marks who are insufficiently vigilant to stop use of later trade marks. Therefore, provided the later trade mark is in fact registered, time should run from the date on which the proprietor of the earlier trade mark becomes aware of use of the later trade mark, not from some later date. Requiring knowledge of registration of the later trade mark would give the owner of the earlier trade mark a "perverse incentive" not to consult the register to delay time running, and knowledge of the mere fact of registration of the later trade mark cannot be sufficient.

Further considerations

The CoA considered two other issues:

• when did acquiescence cease?  The CoA held that simply sending a warning letter is not enough to stop acquiescence, unless a claim form or other legal action is issued shortly thereafter. Here, it had been two years between the warning letters and the issuing of the claim form, which was considered by the CoA not to be a reasonable period, and therefore the letter before claim did not operate to stop acquiescence; and
• passing off:  the CoA held that if acquiescence had applied, it would also have barred the Claimant's claims for passing off.

Comments

This case marks one of the first instances where a senior court in the UK has departed from the jurisprudence of the CJEU regarding a provision of retained or EU-derived legislation related to intellectual property.

The ruling emphasises the need for trade mark owners to monitor diligently the marketplace and registration databases and take substantive action (beyond mere letters before action) promptly when they become aware of potential infringements. 

With thanks to Andrea Carrera, Solicitor Apprentice, for co-authoring this article.