http://ipkitten.blogspot.com/2024/04/euipo-grand-board-referral-on-eutm.html
In what is the first referral from the Executive Director of the EU’s Intellectual Property Office (EUIPO), the EUIPO’s enlarged Board of Appeal (the Grand Board) has been requested to clarify whether a EU Trade Mark (EUTM) application, which is withdrawn during the appeal period following a refusal decision from the EUIPO, can proceed to conversion to a national application.
Background
Article 157(4)(l) of the EU Trade Mark Regulation (EUTMR) provides that one of the functions of the Executive Director is to refer questions on points of law to the Grand Board in order to ensure the uniform application of the EUTMR.
The Grand Board has been asked to weigh in on the process of so-called ‘conversion’, namely the process by which an EUTM application or registration can be converted into national applications in EU Member States, should issues arise in specific Member States which block the EUTM from being registered across the whole of the EU.
The conversion process is intended to counter some of the downsides of an EUTM’s unitary character, by allowing the national applications to preserve the priority date from the initial EUTM application.
The Referral
The questions referred by the Executive Director specifically relate to the interpretation of Article 139(2)(b) EUTMR, which set out the requirements for conversion of a EUTM application to take place, and prohibits the conversion in Member States where: “in accordance with the decision of the Office or of the national court, grounds for refusal of registration or grounds for revocation or invalidity apply to the EU trade mark application or EU trade mark.”
The EUIPO’s historic practice, as set out in Section 2(4) of Part E of its Trade Mark Guidelines (the Guidelines), has been for such conversion applications (i.e. where the EUIPO has found grounds for refusal in specific Member States) to be rejected, even where the relevant EUTM application was withdrawn during the appeal period, such that the EUIPO’s decision did not become ‘final’.
However, in a recent decision by the Fourth Board of Appeal (the Fourth Board) in the ‘Nightwatch’ case (Case R 1241/2020-4), the Fourth Board decided that the EUIPO must allow conversion where there is withdrawal of an EUTM application before a refusal decision becomes final. The Executive Director notes in his referral that this decision has caused a “stir in the IP world” and prompted questions as to why the matter was not sent to the Grand Board, and/or whether the Guidelines will be updated accordingly.
The Executive Director consequently considered it appropriate, in the interest of legal certainty and consistency, to obtain the reasoned opinion of the Grand Board on the matter, particularly in light of the facts that the EUIPO’s long-standing practice had been largely based on the Grand Board’s 2006 decision in Optima (Case R 331/2006-G). The Grand Board had decided in that case that although it was possible to withdraw an EUTM application during the appeal period, the refusal decision should “remain in the files”, and may have “possible effects” on the applied-for mark.
They key question therefore is whether the expression “the decision of the Office” in Article 139(2)(b) EUTMR includes decisions where no appeal is brought under Article 66 EUTMR and the EUTM is withdrawn during the appeal period – the Executive Director’s own view is that it does.
The corollary question concern whether the position is different where an appeal is filed before the application is withdrawn – in which case Article 139(2)(b) EUTMR is not triggered and the conversion process can proceed. According to the Executive Director, this makes sense procedurally because the refusal grounds are not left uncontested – even if the application is withdrawn before the appeal is decided upon.
Just a Kat basking in the glow of trade mark law…
Comment
It is clear that it is in the interest of successful opponents of EUTM applications, who are likely to have invested significant resources in their oppositions, to ensure that the refusal grounds identified by the EUIPO are not circumvented through the conversion process, meaning that the resulting national applications need to be re-opposed afresh in each Member State.
That said, it seems a little strange from a policy perspective that the mere filing of an appeal, which is largely a procedural step, should permit applicants to then withdraw their applications (before the appeal is decided) and proceed to conversion, without having to wait for the outcome of the appeal in respect of the the refusal grounds identified. The guidance of the Grand Board will certainly be welcome on this.
It is noted that, since the referral has been published in the April edition of the EUIPO’s Official Journal, interested parties now have a two-month window within which they can present observations to the Grand Court on the matter pursuant to Article 37(6) of the Commission Delegated Regulation 2018/625.
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