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Trade mark ruling 'first’ showing UK divergence from EU law post-Brexit

A recent Court of Appeal ruling on trade mark infringement is the first clear example of a UK court consciously deciding to depart from a judgment of the Court of Justice of the EU (CJEU)after Brexit, an expert has said.

Gill Dennis, an expert in intellectual property (IP) law at Pinsent Masons, said that in light of the decision, it is important for trade mark owners to proactively monitor the market for infringements of their marks.

The judgment (37 pages/ 419 KB) concerns the scope of the statutory acquiescence defence to trade mark infringement – found in section 48 of the 1994 Trade Marks Act. This defence prevents the owner of an earlier registered trade mark, or other earlier right, from challenging the validity or infringing use of a later registered trade mark after five years’ acquiescence to its use. The question before the Court of Appeal was when the five-year period starts to run.

Prior to this case, the leading authority, a Court of Justice of the EU case, held that the time starts to run when the later mark is registered, and the owner of the earlier mark has knowledge of both use and registration of the later mark. The position in EU law was, despite the case decided by the CJEU, not 100% settled. In any event, the Court of Appeal’s decision departs from the CJEU, with Lord Justice Arnold stating in his leading judgment that the five-year period begins to run once the later trade mark is registered and the owner of the earlier trade mark becomes aware of its use. The latest ruling does not include a requirement that the owner of the earlier mark is also aware of the registration of the later mark.

In practice, the judgment means that if the owner of the earlier trade mark becomes aware of the use of the later mark on 2 July 2019, but becomes aware of the registration not before 19 June 2020, the five-year period still begins to run from the earlier date, i.e. 2 July 2019, assuming that the mark was in fact registered at that date, meaning the acquiescence period ends on 2 July 2024. If the owner of the earlier trade mark has not challenged the validity of the later mark, or issued infringement proceedings by that date, then they lose the right to do so. Dennis said: “The Court of Appeal’s decision makes the acquiescence defence more readily available to defendants and penalises trade mark owners who are insufficiently vigilant about conflicting marks. In practical terms, owners of earlier marks must watch out for uses on the market of conflicting later marks by competitors and, importantly, also monitor the trade mark register for related registrations."

Dennis said that there is potential risk that the owner of the earlier mark may unintentionally acquiesce to use, losing the ability to enforce their trade mark rights. However, engaging a proactive trade mark monitoring solution could mitigate that risk, she said.

Within the decision, Lord Justice Arnold noted that the Court of Appeal’s power to depart from existing EU law should only be exercised with “great caution”. David Thorneloe, retained EU law expert at Pinsent Masons, commented: “This appears to be the first example of a UK court consciously choosing to depart from EU case law after Brexit. I do not think the judgment represents a reversal in of the general judicial preference for continuity, but it does emphasise our courts’ willingness to make exceptions where they feel the case law needs to develop in a different direction.”.

The case was decided before the reforms in the 2023 Retained EU Law (Revocation and Reform) Act took effect on 1 January 2024, and Thorneloe believes that judicial departures from EU case law will occur “a little more frequently”, as the reforms begin to bite.

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