A 'Special' Trade Mark - and its effects
In a judgment which could have major repercussions for trade mark owners, the Vice Chancellor of the High Court has held that persons may be prevented from litigating issues before the English Courts in trade mark disputes which have been, or should have been, dealt with in previous trade mark opposition proceedings before the UK Trade Mark Registry.
Until this judgement it had been accepted practice that a trade mark owner could oppose an application for a UK registered trade mark and, even if their opposition was unsuccessful, could still apply to the High Court to invalidate the mark, once the mark had been registered. This practice could now end.
The Facts
L'Oréal opposed an application to register the trade mark SPECIAL EFFECTS, filed by Special Effects Limited. The opposition process ran its course and the Hearing Officer found in favour of the applicant. The mark SPECIAL EFFECTS was therefore registered.
Special Effects Limited then sued L'Oréal, claiming that L'Oréal had infringed the mark SPECIAL EFFECTS by using the brand name SPECIAL FX. L'Oréal contended that the mark was invalid and should be removed from the UK Trade Marks Register.
The Vice Chancellor held that L'Oréal was precluded from challenging the validity of the SPECIAL EFFECTS registration. He held that L'Oréal had unsuccessfully attacked the validity of the SPECIAL EFFECTS mark during the opposition proceedings before the UK Trade Marks Registry and were barred from again challenging the registration before the Court. L'Oréal could not re-litigate points or issues which were either raised in the opposition proceedings, or which might or should have been. The public interest was in finality and litigants should not be faced with the same claim twice.
The Consequences
In practice, the effect of the decision is that trade mark owners may now only have one "bite at the cherry" when it comes to trying to prevent a third party from registering a trade mark which, in their view, conflicts with their own earlier trade mark.
Previously, an opponent was able to file an opposition against the registration of a trade mark before the UK Trade Mark Registry. The opponent would submit its arguments as to why the mark should not be registered. The UK Trade Mark Registry would consider these submissions and reach a verdict. If, despite the opposition, the applicant's mark was registered, the opponent would still be able to issue legal proceedings before the Court, challenging the validity of the mark and using the same arguments employed, unsuccessfully, during the opposition process.
If the L'Oréal decision is upheld by the Court of Appeal, an opponent may have to decide whether to oppose the registration of the mark during the application process or to commence invalidity proceedings before the Court once the mark is registered.
In some circumstances, it may be prudent for a would-be opponent to allow an offending application to proceed to registration, before attacking it before the Court.
A successful litigant before the Court is able to recover a far greater percentage of their costs as compared with those recoverable pursuant to the UK Trade Mark Registry's opposition procedure. Also, opposition proceedings brought before the UK Trade Mark Registry rarely involve disclosure of relevant documents between the parties, nor the cross-examination of each party's witnesses and experts. Sometimes it may be better for an opponent to litigate before the Courts, in order to take advantage of these case management procedures.
Conclusion
If the L'Oréal decision is upheld, potential opponents will need to think carefully before commencing opposition proceedings before the UK Trade Mark Registry.
In general, to date, opponents have not spent as much time, effort and money pursuing opposition proceedings before the Registry as they have done when conducting litigation before the Courts (i.e. where the successful party can recover higher costs awards). This approach may need to be reconsidered, for fear that an opponent may now have only one opportunity to challenge a rival's trade mark. Greater resources may need to be committed when pursuing opposition proceedings than has historically been the case.
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