IP-2020-000138 - [2023] EWHC 1455 (IPEC)

There remain Crafts’ threats claims which relate to the UK Chevron Mark and the EU and UK Symfonie Marks, KnitPro’s counterclaim for infringement of the UK Chevron Mark and the EU and UK Symfonie Marks, KnitPro’s counterclaim for passing off and Crafts’ additional claim for a declaration of invalidity of the Chevron UK Mark and for revocation of that Mark.

KnitPro seeks a stay of those claims too pursuant to s.49(3) of the Senior Courts Act 1981 and CPR 3.1.(2)(f).

Article 54 of the Withdrawal Agreement provides, in relevant part:

“Continued protection in the United Kingdom of registered or granted rights

1.

The holder of any of the following intellectual property rights which have been registered or granted before the end of the transition period shall, without any re-examination, become the holder of a comparable registered and enforceable intellectual property right in the United Kingdom under the law of the United Kingdom:

(a)

the holder of a European Union trade mark registered in accordance with Regulation (EU) 2017/1001 of the European Parliament and of the Council ( 33) shall become the holder of a trade mark in the United Kingdom, consisting of the same sign, for the same goods or services;

…

3.

Notwithstanding paragraph 1, if an intellectual property right referred to in that paragraph is declared invalid or revoked, or, in the case of a Community plant variety right, is declared null and void or is cancelled, in the Union as the result of an administrative or judicial procedure which was ongoing on the last day of the transition period, the corresponding right in the United Kingdom shall also be declared invalid or revoked, or declared null and void, or be cancelled. The date of effect of the declaration or revocation or cancellation in the United Kingdom shall be the same as in the Union.

By way of derogation from the first subparagraph, the United Kingdom shall not be obliged to declare invalid or to revoke the corresponding right in the United Kingdom where the grounds for the invalidity or revocation of the European Union trade mark or registered Community design do not apply in the United Kingdom.”

Consistently with this, paragraph 21A of schedule 2A introduced into the Trade Marks Act 1994 provides:

“21A.— Existing EUTM: effect of invalidity or revocation

(1)

This paragraph applies where, on IP completion day, an existing EUTM is the subject of proceedings under Article 58 (Grounds for revocation), 59 (Absolute grounds for invalidity) or 60 (Relative grounds for invalidity) which have been instituted but not finally determined before IP completion day (‘cancellation proceedings’).

(2)

Subject to sub-paragraph (4), where—

(a)

the existing EUTM is revoked or declared invalid (whether wholly or partially) pursuant to a decision in the cancellation proceedings which is finally determined, and

(b)

the registrar has—

(i)

received notice of the situation referred to in paragraph (a) (‘a cancellation notice’), or

(ii)

otherwise become aware of the situation referred to in paragraph (a),

the registration of the comparable trade mark (EU) which derives from the existing EUTM must be revoked or declared invalid to the same extent as the existing EUTM.

…

(4)

The registration of a comparable trade mark (EU) must not be revoked or declared invalid under sub-paragraph (2) where the grounds on which the existing EUTM was revoked or declared invalid (whether wholly or partially) would not apply or would not have been satisfied in relation to the comparable trade mark (EU)—

(a)

if the comparable trade mark (EU) had existed as at the date the cancellation proceedings were instituted, and

(b)

an application for the revocation or a declaration of invalidity of the comparable trade mark (EU) based on those grounds had been made on that date under section 46 or 47 (as the case may be).

(5)

Where a comparable trade mark (EU) is revoked or declared invalid to any extent pursuant to this paragraph—

(a)

the rights of the proprietor are deemed to have ceased to that extent as from the date on which the rights of the proprietor of the existing EUTM are deemed to have ceased under the EUTM Regulation;

(b)

subject to any claim for compensation for damage caused by negligence or lack of good faith on the part of the proprietor or a claim for restitution based upon the unjust enrichment of the proprietor, the revocation or invalidity of the comparable trade mark (EU) does not affect—

(i)

a decision arising from infringement proceedings which has been finally determined and which has been enforced prior to the date on which the entry in the register of the comparable trade mark (EU) has been removed or amended pursuant to sub-paragraph (3) (‘the decision date’);

(ii)

any contract entered into prior to the decision date to the extent that it has been performed prior to the decision date, subject to the right of a party to the contract to claim the repayment of any consideration paid under the contract where, having regard to the circumstances, it is fair and equitable for such repayment to be made.

…

(7)

For the purposes of this paragraph—

(a)

proceedings are instituted if an application or counterclaim for revocation or for a declaration of invalidity—

(i)

has been filed (and not subsequently withdrawn) with the European Union Intellectual Property Office or a court designated for the purposes of Article 123, and

(ii)

meets the requirements for being accorded a filing date under the European Union Trade Mark Regulation and Commission Delegated Regulation (EU) 2018/625 of 5th March 2018;

(b)

a decision is finally determined when—

(i)

it has been determined, and

(ii)

there is no further possibility of the determination being varied or set aside (disregarding any power to grant permission to appeal out of time).”

The cancellation proceedings before the EUIPO are under art.7(1)(a) and (b). It was common ground that neither the second paragraph of art.54(3) of the Withdrawal Agreement nor paragraph 21A(4) of Schedule 2A applies. If the EU Chevron Mark is declared invalid by the EUIPO, the UK Chevron Mark will also be declared invalid.

The reverse is not necessarily the case: if the decisions of the EUIPO and appeals from them were to result in the EU Chevron Mark being found validly registered, neither the Withdrawal Agreement nor Schedule 2A of the Trade Marks Act 1994 require English courts to follow suit. KnitPro submitted that it would be an abuse of process for Crafts to seek a declaration of invalidity of the UK Chevron Mark in those circumstances. It seems to me that, without deciding whether it would be an abuse, it is safe for me to assume that this court is unlikely to reach a different view on the validity of the registration of the UK Chevron Mark to that reached by EU tribunals. The material facts in this case relating to the provisions of the Trade Marks Act 1994 equivalent to art.7(1)(a) and (b) would not differ materially from those facts considered by the EU tribunals. It was part of Crafts’ case on delay that the EU proceedings are likely to be decided finally by the CJEU and its judgment would be persuasive. The judgment from the General Court, before remission to the EUIPO Grand Board of Appeal, suggests that the challenge to validity under art.7(1)(a) of the Trade Mark Regulation may play a central part in the final result. To my knowledge, there is little case law on that provision. A judgment of the CJEU which turns on an analysis of this part of trade mark law is likely to be particularly persuasive.

My attention was drawn to the discussion of the Court of Appeal in IPCom GmbH & Co KG v HTC Europe Co Ltd [2013] EWCA Civ 1496 in which the court considered an application for the stay of an English patent action pending the outcome of opposition proceedings in the European Patent Office.

An analogy can be drawn with the present application insofar as it relates to the Chevron issues, i.e. the issues of infringement, validity, revocation for non-use and threats in respect of the EU and UK Chevron Marks. The analogy is not exact because in the case of patent proceedings, the outcome in the EPO may or may not be decisive of the issues before the English court. If there is a finding in the EPO that the patent in suit is valid, it resolves nothing. There is therefore a risk – the degree of risk will generally be difficult to assess – that a stay pending the outcome of the EPO proceedings will delay the claimant’s right to relief to no purpose. By contrast, in the present case if the EU Chevron Mark is found to be valid by the European Tribunals, the validity of the registration of the EU Chevron Mark and very likely the UK Chevron Mark would no longer be issues before this court. If the EU Chevron Mark is found to be invalid, so will be the UK Chevron mark; infringement and revocation for non-use fall away. Of the Chevron issues, only the question of whether there was a threat on the facts would remain.

In IPCom Floyd LJ noted that the earlier guidance in Glaxo Group Ltd v Genentech Inc [2008] EWCA Civ 23 had been overtaken by the judgment of the Supreme Court in Virgin Atlantic Airways Ltd v Zodiac Seats UK Ltd [2013] UKSC 46:

“[68] In the light of the observations in Virgin and the arguments in this appeal I would recast the Glaxo guidance as follows:

1.

The discretion, which is very wide indeed, should be exercised to achieve the balance of justice between the parties having regard to all the relevant circumstances of the particular case.

2.

The discretion is of the Patents Court, not of the Court of Appeal. The Court of Appeal would not be justified in interfering with a first instance decision that accords with legal principle and has been reached by taking into account all the relevant, and only the relevant, circumstances.

3.

Although neither the EPC nor the 1977 Act contains express provisions relating to automatic or discretionary stay of proceedings in national courts, they provide the context and condition the exercise of the discretion.

4.

It should thus be remembered that the possibility of concurrent proceedings contesting the validity of a patent granted by the EPO is inherent in the system established by the EPC. It should also be remembered that national courts exercise exclusive jurisdiction on infringement issues.

5.

If there are no other factors, a stay of the national proceedings is the default option. There is no purpose in pursuing two sets of proceedings simply because the Convention allows for it.

6.

It is for the party resisting the grant of the stay to show why it should not be granted. Ultimately it is a question of where the balance of justice lies.

7.

One important factor affecting the exercise of the discretion is the extent to which refusal of a stay will irrevocably deprive a party of any part of the benefit which the concurrent jurisdiction of the EPO and the national court is intended to confer. Thus, if allowing the national court to proceed might allow the patentee to obtain monetary compensation which is not repayable if the patent is subsequently revoked, this would be a weighty factor in favour of a grant of a stay. It may, however, be possible to mitigate the effect of this factor by the offer of suitable undertakings to repay.

8.

The Patents Court judge is entitled to refuse a stay of the national proceedings where the evidence is that some commercial certainty would be achieved at a considerably earlier date in the case of the UK proceedings than in the EPO. It is true that it will not be possible to attain certainty everywhere until the EPO proceedings are finally resolved, but some certainty, sooner rather than later, and somewhere, such as in the UK, rather than nowhere, is, in general, preferable to continuing uncertainty everywhere.

9.

It is permissible to take account of the fact that resolution of the national proceedings, whilst not finally resolving everything, may, by deciding some important issues, promote settlement.

10.

An important factor affecting the discretion will be the length of time that it will take for the respective proceedings in the national court and in the EPO to reach a conclusion. This is not an independent factor, but needs to be considered in conjunction with the prejudice which any party will suffer from the delay, and lack of certainty, and what the national proceedings can achieve in terms of certainty.

11.

The public interest in dispelling the uncertainty surrounding the validity of monopoly rights conferred by the grant of a patent is also a factor to be considered.

12.

In weighing the balance it is material to take into account the risk of wasted costs, but this factor will normally be outweighed by commercial factors concerned with early resolution.

13.

The hearing of an application for a stay is not to become a mini-trial of the various factors affecting its grant or refusal. The parties’ assertions need to be examined critically, but at a relatively high level of generality.”

With regard to Floyd LJ’s point 5, Crafts’ estimate, on the assumption that validity of the EU Chevron Mark is finally resolved by the CJEU, is that a finding will be made in 5 years’ time. That is probably a maximum, but I will assume that it is correct. If there were no stay of the present proceedings, the issues relating to the UK Chevron Mark, and the EU Chevron Mark if this court has jurisdiction, would be decided in about 9-10 months, subject to appeal. Five years must be added to that if there were a stay of the issues relating to the UK Chevron Mark.