August 8, 2016

Apple and Pear Australia Ltd., Star Fruits Diffusion v Office for Harmonisation in the Internal Market (Trade Marks and Designs), Carolus C. BVBA, Judgment of the CJEU, Case C-226/15 P, 21 July 2016.

The CJEU has upheld a decision of the General Court that, in the context of opposition proceedings, the European Union Intellectual Property Office is not bound to follow the decisions of European Union trade mark courts in parallel infringement proceedings concerning the same parties and the same marks. Our previous report on the General Court’s decision is available at this link. 

Factual background

Carolus C. BVBA (“Carolus”) is a Belgian tree nursery specialising in apple trees. On 13 October 2009, Carolus applied to register the word mark ENGLISH PINK as a European Union trade mark (“EUTM”) for goods in class 31, including agricultural products and fresh fruits. An application for an identical Benelux mark was also filed by Carolus on the same date and was subsequently granted.

Apple and Pear Australia Ltd. and Star Fruits Diffusion (the “Appellants”) use PINK LADY in connection with the sale of a particular variety of apple, called Cripps Pink. On 20 April 2010, the Appellants opposed Carolus’ application to register ENGLISH PINK as an EUTM on the basis of three prior EUTMs which were registered for goods that were largely identical to the goods for which ENGLISH PINK was proposed to be registered. These EUTMs were:

1. The word PINK LADY registered on 27 February 2003; and
2. Two separate figurative marks featuring the words “Pink Lady”, which were registered on 15 December 2005 and 30 July 2008 (shown below).

Shortly thereafter, on 8 June 2010, the Appellants commenced infringement and revocation proceedings against Carolus before the Tribunal de commerce de Bruxelles (the “Brussels Commercial Court”). The Brussels Commercial Court delivered its judgment on 28 June 2012. As regards the strength of the Appellants’ marks, the court took the view that PINK LADY was not descriptive since apples are not pink and, on the basis of evidence adduced by the Appellants and common knowledge, PINK LADY had a substantial reputation. It held that there was a likelihood of confusion between ENGLISH PINK and PINK LADY and it ordered Carolus to refrain from infringing the Appellant’s EUTMs throughout the European Union. It also invalidated Carolus’ Benelux ENGLISH PINK mark.

Following this decision, the Appellants wrote to the European Union Intellectual Property Office (“EUIPO”) a number of times to draw its attention to the ruling of the Brussels Commercial Court. In a letter of 29 August 2012, the Appellants informed EUIPO that Carolus had acquiesced in the judgment and that it was therefore final.

However, in a decision dated 29 May 2013, the Fourth Board of Appeal rejected the Appellants’ opposition to the registration of ENGLISH PINK based on their prior EUTM rights in PINK LADY. Surprisingly, the Board of Appeal made no mention of the decision of the Brussels Commercial Court, despite having been made aware of it on a number of occasions.  Furthermore, its analysis on the likelihood of confusion between the two marks was very different to that of the Brussels Commercial Court. For example, the Board of Appeal observed that the “pink” element of PINK LADY was non-distinctive because apples “may oscillate into shades of pink” and it took the view that the Appellants had not adduced sufficient evidence in support of their argument that PINK LADY had a reputation.

The Appellants appealed to the General Court on the basis that the Board of Appeal should have considered the decision of the Brussels Commercial Court and delivered a ruling that was compatible with that decision.

The General Court annulled the Board of Appeal’s decision holding that the Board of Appeal should have assessed the impact of the Brussels Commercial Court’s decision in the present case and should have stated reasons for the inferences to be drawn from that decision, in view of the commonalities between the relevant infringement and opposition proceedings. However, the General Court held that the principle of res judicata did not attach to the judgment of the Brussels Commercial Court in the context of the EUIPO opposition proceedings. Council Regulation (EC) No 207/2009[1] does not require the application of res judicata in these circumstances and there were technical differences between the infringement and opposition proceedings, such as the fact that they concerned different provisions of the Regulation, namely Articles 9(1)(b) and 9(1)(c) (now 9(2)(b) and 9(2)(c)) in the case of the infringement proceedings and Articles 8(1)(b) and 8(5) of the opposition proceedings.

The Appellants appealed to the CJEU on the question of whether res judicata should have applied to the decision of the Brussels Commercial Court.

CJEU’s judgment

The CJEU initially noted that the Regulation did not address the particular circumstances of this case, namely where the parties are the same, where the mark which is infringed is identical to the mark relied on for the purpose of opposition and where the infringing sign and the sign which is opposed are identical.  Although the CJEU recognised the unitary character of an EUTM, it also noted that the EUIPO has exclusive jurisdiction over the registration of, and oppositions to, EUTM applications.

Although “res judicata” is not used or defined in the Regulation, the CJEU noted that some provisions of the Regulation have an effect which is equivalent to res judicata where parallel proceedings before the EUIPO and an EUTM Court have the same parties, the same subject matter and causes of action.

The CJEU declined to adopt the Appellant’s view that the infringement and opposition proceedings described above concerned the same subject matter. The Belgian infringement proceedings concerned annulment of the Benelux ENGLISH PINK mark and a pan-European injunction restraining the use of ENGLISH PINK. However, the opposition proceedings concerned an opposition to the registration of an EUTM for ENGLISH PINK. Res judicata did not therefore apply on a strict reading of the Regulation. The CJEU made it very clear that “the subject matter of any proceedings before EUIPO relating to registration of an EU trade mark or opposition to that registration necessarily is different to any proceedings before a national court, even where that court acts as an EU trade marks court”.

Practical Significance

The CJEU’s decision will disappoint EUTM proprietors, who may bring opposition actions in parallel to infringement proceedings before EUTM Courts. As the CJEU acknowledged, EUTMs have unitary character and the Regulation is intended to provide them with uniform protection. Furthermore, the relevant legal tests applied in opposition and infringement actions are equivalent. However, while the CJEU correctly observed that the Regulation does not stipulate the application of res judicata in circumstances such as those described above, the CJEU’s literal interpretation of the Regulation can produce awkward results that arguably conflict with the principle that EUTMs have unitary character. In particular, if a final decision has been issued by a EUTM court to the effect that a sign cannot be used throughout the European Union in relation to particular goods and services, it makes no sense for the EUIPO to permit the registration of this sign as an EUTM in respect of those goods and services.

While some trade mark opponents in this situation may derive some comfort from the fact that such a trade mark registration can presumably be revoked on the grounds of non-use after a period of five years, it seems unfair to require appellants to incur the time and costs of a revocation action in circumstances where they have already obtained a final decision on infringement before a EUTM Court. The General Court’s ruling in the earlier decision that the EUIPO must take into account the final decisions of EUTM Courts in the context of opposition proceedings, although not explicitly dealt with by the CJEU (but endorsed by the Advocate General) in this case, may in the future reduce the likelihood of inconsistent decisions.

[1] Note that the CJEU did not, in its decision, refer to the new Council Regulation (EU) 2015/2424 amending Council Regulation (EC) No 207/2009.