Home / Acquiescence – when does time start running?
8th December 2023
Trainee Solicitor, Tom Griffin looks into the case of Industrial Cleaning Equipment (Southampton) Ltd v Intelligent Cleaning Equipment Holdings Co Ltd & Anor.
On 6 December 2023, the Court of Appeal decided in Industrial Cleaning Equipment (Southampton) Ltd v Intelligent Cleaning Equipment Holdings Co Ltd & Anor when the five-year period in the acquiescence provisions starts to run.
Section 48 Trade Marks Act 1994 provides that 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 UK, being aware of that use, there shall cease to be any entitlement on the basis of that earlier trade mark or other right to:
unless the registration of the later trade mark was applied for in bad faith.
Before being heard in the Court of Appeal, this case was decided in the Intellectual Property Enterprise Court. The case concerned trade mark infringement and, as a defence, the Defendants unsuccessfully argued that the Claimant had acquiesced in their use of a registered trade mark. It was held that the five-year period for determining acquiescence had not expired.
The Defendants appealed on two grounds, both of which concerned the date on which the five-year period starts to run for the purposes of statutory acquiescence, and needed to succeed on both for the appeal to be allowed. The grounds raised the following two issues.
The Court of Justice of the European Union (the “CJEU”) in the case of Budvar in 2011 clarified that the proprietor must be aware of both the registration and use of the later mark in order for time to run. This decision was binding on the UK courts.
The Court of Appeal held that, consistent with recent case law of the Board of Appeal of the EU Intellectual Property Office (the “EUIPO”) and of the General Court, the correct legislative interpretation is that the five-year period starts to run once the proprietor of the earlier trade mark becomes aware of the use of the later mark, and the later trade mark is in fact registered, whether or not the proprietor of the earlier trade mark is aware of the registration of the later trade mark.
Budvar is retained EU case law and whilst the Court of Appeal has the power to depart from judgments of the CJEU, the power is to be exercised with great caution. However, the Court of Appeal concluded that Budvar should be departed from in relation to the issue of when time starts to run. This was for several reasons, namely that Budvar is an isolated judgment which simply stated a bald conclusion without any analysis of the issue and, furthermore, there is a real possibility that the CJEU would endorse the approach of EUIPO and the General Court and depart from its previous decision.
The Court of Appeal held that the registration date was either the date of acceptance by the EUIPO or the second republication date. It was not necessary to decide which date was correct as it made no difference on the facts of the case.
Whilst the Defendants succeeded on the first ground of appeal, they did not succeed on the second ground as the claim form was issued on the last day of the five-year period and, therefore, just in time to stop a full five years’ acquiescence accruing. The appeal was hence dismissed and, whilst not necessary, the Court of Appeal considered two further issues.
It was held that the mere sending of a warning letter is not sufficient to stop time running, however, if the letter is followed within a reasonable period by administrative or court action, then the warning letter will stop time running.
It was decided that if the Defendant’s case of statutory acquiescence was made out, it would bar the Claimant’s claim for passing off as well as its claim for trade mark infringement.
The power to depart from judgments of the CJEU which form part of the retained EU case law is to be exercised sparingly and with caution. It is not sufficient in and of itself that there is an alternative reading available – in this case, one can read the provision as requiring knowledge of only use or both use and registration and it is arguable which is the more natural – however, on this issue, there is also a divergence between the CJEU in Budvar and the approach adopted by the EUIPO and the General Court. It is clear that the issue is not settled at European level and, furthermore, the objectives of the legislation and practical considerations suggests that the better view is that the proprietor of the earlier right need not be aware of its registration. Had the legislative intention been to require knowledge of both use and registration, it would have been easy to draft the provision in such a manner.
If you any queries relating to trade mark subsistence, infringement or revocation, please contact a member of our intellectual property department on 0161 832 3434.