Case No. IP-2021-000046

prior to that date then the relevant date is the time of the first actual or threatened act of passing off: i.e. the date of commencement of the conduct complained of (which in this case is the date on which the ICE Group began to offer the relevant goods to the public in the United Kingdom) and where the conduct has changed materially between that date and the later date when the application was made, the court must reassess whether the position would have been any different at that later date. Acquiescence30.The defendants in this case run an acquiescence defence under section 48 TMA which provides:(1)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, there shall cease to be any entitlement on the basis of that earlier trade mark or other right – a.to apply for a declaration that the registration of the later trade mark is invalid, orb.to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used, unless the registration of the later trade mark was applied for in bad faith. (2)Where subsection (1) applies, the proprietor of the later trade mark is not entitled to oppose the use of the earlier trade mark or, as the case may be, the explanation of the earlier right, notwithstanding that the earlier trade mark or right may no longer be invoked against his later trade mark.31.At the time of trial there were several disputes between the parties about the proper interpretation of these statutory provisions. Following the handing down by the Court of Appeal on 30 November 2022 of its judgment in Combe International LLC and Anor v Dr August Wolff GMBH & Co KG and Ors [2022] EWCA Civ 1562 while this judgment was being prepared, the disputes have reduced in number but not disappeared. I permitted the parties to file additional written submissions addressing the effect of the Court of Appeal’s decision on this case. To the extent that Mr St. Ville, Kings Counsel took that as an opportunity to make new submissions on matters of fact which had not been raised at trial, in paragraphs 22 to 25 of his post-trial written submissions, I do not take those into account. Mr St. Ville also filed further written submissions responding to Ms Messenger’s written submissions on Combe. I did not permit or invite him to do so, and I have also put those to one side.32.As the Combe judgment explains, Section 48(1) successively implemented into English law, at a time when the UK was a Member State of the European Union, Article 9(1) of First Council Directive 89/104/EEC of 21 December 1988, Article 9(1) of European Parliament and Council Directive 2009/95/EC of 22 October 2008 and Articles 9(1) and 18(1) of European Parliament and Council Directive 2015/2436 /EU of 16 December 2015. Accordingly, CJEU jurisprudence up to the exit of the UK from the EU is retained law and remains relevant to my consideration of s48 TMA. Anything after that date may be persuasive but is not binding.33.There are two CJEU decisions of particular relevance relied on by both parties in this case and which were also addressed by the Court of Appeal in Combe: Budejovicky Budvar np v Anheuser-Busch Inc [2011] ECR I-08701 (which predates the exit of the UK from the EU) and Heitec AG v Heitch Promotion GmbH (C-466/20) [2022] ETMR 36 (which post-dates it, so is merely persuasive).34.The CJEU in Budvar held that “acquiescence” within the meaning of Article 9(1) of the Directive 89/104 should be given an autonomous and uniform interpretation, and that the concept of acquiescence “implies that the person who acquiesces remains inactive when faced with a situation which he would be in a position to oppose” (at [44]). It held that there were four prerequisites for the running of the period of limitation prescribed in Article 9(1): i)registration of the later trade mark in the Member State concerned; ii)the application for registration of that mark being made in good faith;iii)use of the later mark by its proprietor in the Member State where it has been registered; and iv)knowledge by the proprietor of the earlier trade mark that the later trade mark has been registered and used after its registration (my emphasis).35.The Court in Budvar also held that the effect of “any administrative or court action initiated by the proprietor” within the prescribed period of five years is “to interrupt the period of limitation in consequence of acquiescence” (at [49]).36.In Heitec, the court was concerned with whether a period of acquiescence can be ended by, inter alia, the sending of a letter before action. It held as follows: [54] Where, as in the present case, the bringing of that action was preceded by the sending of a warning letter, with which the proprietor of the later mark did not comply, that warning letter may interrupt the period of limitation in consequence of acquiescence provided that, following the unsatisfactory response to that warning letter, the proprietor of the earlier mark or other earlier right continues to express its opposition to the use of the later mark and takes the measures available to it to enforce its rights. [55] In contrast, if the proprietor of the earlier mark or other earlier right, having expressed its opposition to the use of the later mark by a warning letter, did not, after noting the refusal of the addressee of that letter to comply with it or to enter into negotiations, pursue its efforts within a reasonable period in order to remedy that situation, where appropriate by bringing an administrative or court action, it must be inferred that proprietor failed to take the measures available to it to put an end to the alleged infringement of its rights. 37.In Combe, Johnson J at first instance held that the bringing of a cancellation action of the later mark by the proprietor of the earlier mark was sufficient to stop time running as, inter alia, it was not a passive act. Even if he was wrong about that, he held, he was satisfied that the correspondence between the parties’ German attorneys was a sufficiently overt objection to use of the later trade mark to stop the period of acquiescence. 38.The Court of Appeal did not agree. Arnold LJ (with whom Newey LJ and Simler LJ agreed) considered Budvar and Heitec (which it acknowledged did not bind it). Arnold LJ noted at [39] of Combe, without criticism or adverse comment, the four prerequisites for the running of a period of limitation from Budvar which I set out above. Arnold LJ also considered other binding authorities pre-dating the UK leaving the EU: Case C-145/05 Levi Strauss & Co v Casucci SpA [2006] ECR I-3703 and Case C-561/11 Federation Cynologique Internationale v Federacion Canina Internacional de Perros de Pura Raza [EU:C:2013:91] before reaching the following conclusions:i)The “administrative or court action” envisaged by the Court of Justice is one brought by the proprietor to oppose the use of the later mark and to remedy the alleged infringement of its rights (per [50] of Heitec, emphasis added by Arnold J at [45]. See also [54]);ii)The bringing by the proprietor of the earlier trade mark of a cancellation action in respect of the later trade mark is not sufficient to preclude acquiescence by the proprietor of the earlier trade mark in the use of the later trade mark (at [57]);iii)Merely sending a warning letter is not enough, but if the warning letter is followed within a reasonable period by administrative or court action or other action capable of leading to “a legally binding solution” (per Heitec) (such as invoking an arbitration clause, perhaps) then the sending of the warning letter will stop time running (at [47]);iv)Acquiescence in the registration of a later trade mark which is not being used does not give rise to a defence under section 48(1) (at [59]).39.In addressing the finding at first instance that the bringing of a cancellation action of the later mark by the proprietor of the earlier mark was sufficient to stop time running as it was not a passive act, Arnold LJ explained why he disagreed at [69], saying “That is true so far as it goes, but what the CJEU was referring to in Budvar at [44] was a failure “to take measures open to him to remedy a situation of which he was aware”, namely the use of the later trade mark. As I have explained, that can only be remedied by an infringement action, not by a cancellation action. The same message is conveyed by the Court of Justice’s reference to the proprietor being inactive “when faced with a situation which he would be in a position to oppose” [per [49] of Heitec]. Arnold LJ described this as the difference between objecting to registration and objecting to use, and found as a matter of law that there was “a sharp distinction” between the two (at [73]).When does the 5 year period in section 48(1) start to run?40.This is the first dispute of law between the parties.41.Mr St. Ville’s primary post trial submission is that the Court of Appeal in Combe held that the relevant date from which to consider the question of acquiescence was the date of deemed registration, relying on [7], [13] and [103] of Arnold LJ’s judgment. 42.I do not agree that it made that finding. [7] simply states that the later UK trade mark in that case, as a clone of the defendant’s EU trade mark which came into existence automatically on 31 December 2020 as a consequence of Brexit, was deemed to have been registered as of the filing date of the defendant’s EU trade mark. [13] merely gives the history of the defendant’s application for and registration of its EU trade mark. Neither paragraph tells me anything about when time runs for the purposes of acquiescence. That is, no doubt, because this was not in issue on appeal in Combe. In Combe, the defendant did not trade in goods bearing the later mark into the UK until December 2013, which was after both the filing date (and deemed date of registration) and registration date of the relevant mark. However, it does not appear to have been disputed, and Johnson J found at [174] of the first instance judgment, that the period only begins to run when the four conditions set out in Budvar have been satisfied. His finding on this point was not an issue on appeal. The parties made slightly different submissions as to on what date “all the elements necessary for the section 48 period” were in place (at [177]) but the claimant accepted it had knowledge both of the existence of the later mark and of its use in the UK from January 2014 (at [178] of the judgment at first instance). 43.[103] of the judgment of Arnold LJ in Combe is not about acquiescence at all, but about a section 11(1) TMA defence. It notes that at first instance the defendant had only argued a section 11(1) defence as that section had been amended by the Trade Marks Regulations 2018 (SI 2018/825) with effect from 14 January 2019, and they sought also to argue it as originally enacted in relation to acts committed prior to 14 January 2019. In [105] Arnold LJ goes on to set out an acquiescence argument run by the claimant, arising from the defendant’s submission that it had a defence under the originally enacted section 11(1) TMA, namely “… that it followed that Combe [the claimant] were not in a position to oppose use of the Wolff UKTM prior to 14 January 2019, and therefore their claim for infringement of the Combe Trade Marks could not be barred by acquiescence applying the reasoning in Budvar…”, but he did not determine the point as he held it was not necessary to do so, given his conclusion that the defendant’s section 48(1) defence had failed. 44.The Defendants’ secondary post-trial submission is that paragraphs [57] – [67] of Combe support the Defendants’ position on construction of s48(1) TMA that it is not a pre-requisite for a period of acquiescence to begin to run that the proprietor of the earlier mark has knowledge of the registration of the later comparable mark (as opposed to there being, as a matter of fact, registration of the later comparable mark). Of course, this would have to follow from the Defendants’ primary submission that the date for acquiescence to start is the filing date as the deemed date of registration of the later mark, since, as Ms Messenger notes, the Defendant could have no knowledge of registration of the later comparable mark on the deemed date of registration, which is by definition earlier than the date the decision to register it was made and published. The Defendants’ primary submission only works, therefore, if there is a severing of the connection between the knowledge of the earlier owner of the use of the later mark, and his knowledge of the registration of the later mark. Accordingly, Mr St. Ville draws a distinction between the earlier mark owner’s knowledge of the use of the later mark, and its knowledge of the registration, relying on [65]- [67] of Combe. 45.Although the question of when acquiescence began was not in issue as I have stated, the Court of Appeal in Combe:i)noted that in Budvar the Court of Justice held that the concept of acquiescence implied “a person who remains inactive when faced with a situation which he would be in a position to oppose”; ii)cited all four conditions from Budvar without adverse comment, including the fourth condition that there must be knowledge by the proprietor of the earlier trade mark that the later trade mark has been registered and used after its registration; iii)applied those criteria in the matters that it did have to determine, including in the manner in which I will go on to explain, and so in my judgment approved them; and iv)made clear that Budvar remained binding law. 46.As Arnold LJ explains in Combe at [59]-[62], the defence is founded upon acquiescence in use of the later, registered, trade mark, not acquiescence in registration. That the acquiescence must be in respect of the use of the later, registered, trade mark, can be discerned from the two consequences he identifies as arising from that acquiescence in section 48(1)(a) and (b) TMA, and discusses at [60] and [61]. Those are that the proprietor of the earlier trade mark ceases to be entitled: (i) to apply for a declaration that the registration of the later trade mark is invalid; and (ii) to oppose the use of the later trade mark; unless the later mark was applied for in bad faith. Of course, the proprietor of the earlier trade mark does not begin to be entitled to apply for a declaration that the registration of the later trade mark is invalid until after the date of registration of the later trade mark, and is not in a position to do so until he is aware that the later trade mark has been registered. 47.Accordingly, I am satisfied that, as the Court of Justice stated in Budvar and as the Court of Appeal appears to have approved in Combe, time starts to run for the purposes of section 48(1) TMA once: (i) the later mark has been registered; (ii) the proprietor of the earlier trade mark knows that the later trade mark has been entered onto the register; and (iii) the proprietor of the earlier trade mark knows that the later registered trade mark has been used. 48.However, the wording of the statutory provision itself requires “acquiescence… in the use of a registered trade mark in the United Kingdom, being aware of that use” so I am satisfied that even without the assistance of Budvar and the helpful guidance of Arnold LJ in Combe it would be perverse to construe it in the manner that Mr St. Ville asks me to construe it, so that it can encompass ‘acquiescence in the use of a mark which is then, or later but within the statutory period, registered in the United Kingdom’. The natural meaning of the words is exactly what it says, that the earlier owner must acquiesce in the use of the registered trade mark, being aware of that use, for the statutory period before the defence can succeed. That requires: (i) use of a registered trade mark after registration; and (ii) the earlier owner to know both of the registration of the trade mark and the use of it after registration. That is the conclusion that Budvar comes to, and Combe does not undermine, and indeed supports in my judgement, as I have set out.49.Mr St. Ville for the Defendant submits that paras [65]-[67] of Combe do undermine Budvar because they are inconsistent with the fourth pre-requisite in Budvar, and are consistent with the Defendants’ arguments advanced at trial. 50.Again, I do not agree. In these paragraphs, Arnold LJ goes on to discuss, secondarily, “the broader purpose of the legislation as explained by the CJEU” and highlights three aspects, which he says are inter-related: (i) the intention of striking “a balance between the interest of the proprietor of a trade mark to safeguard its essential function, on the one hand, and the interests of other economic operators in having signs capable of denoting their goods and services on the other” ([65]); (ii) to “limit protection to those cases where the proprietor [of the earlier mark] shows itself to be sufficiently vigilant by opposing use of the signs by other operators likely to infringe its mark” ([66]); and (iii) the need for legal certainty, to prevent rights being enforced if the rights holder does not take action for five years, to forestall stale claims but also to incentivise the earlier trade mark to prevent long use of a conflicting sign which may affect the average consumer’s perception of the earlier trade mark, which has potential consequences not only for the proprietors of the respective trade marks, but also the consuming public. In doing so, he is explaining and expanding the reasoning at [47]-[50] of Heitec (and distinguishing it to some extent, see the discussion about ‘continuous’ use from [76] of Combe which is not relevant for the purposes of this case). This discussion and that in Heitec are both, in my view, made in the context of the later trade mark being a registered trade mark. See the references in Heitec at [48] and [50] to the later mark being applied for in good faith, and Arnold LJ in Combe discussing an action for a declaration of invalidity being insufficient to oppose the use of the later trade mark at [62] and elsewhere, arguments to which he expresses [65]-[67] to be secondary.Do invalidity proceedings bring acquiescence in the use of a mark to an end?51.The second dispute of law between the parties has, it seems, been resolved by the Court of Appeal in Combe. This was a key plank of C’s submissions in closing, but C now accepts that: (i) invalidity proceedings in and of themselves are insufficient to bring a period of acquiescence to an end, as Arnold LJ explains at [57] – [72] and as summarised above; and (ii) the Court of Appeal held that the principles from Heitec (also as summarised above) should be applied to cases before the UK Courts.