General Court considers issue of ownership of prior rights

Par Richard Milchior, le 9 juin 2022

Article publié dans World Trademark Review

The General Court upheld a EUIPO decision dismissing an opposition on the ground that the opponent had failed to demonstrate that it was the owner of the prior rights on which the opposition was based.

– Cilem opposed the registration of HALIX RECORDS on the basis of two earlier German marks

– The EUIPO dismissed the opposition, notably on the ground of lack of ownership of the prior marks

– The court agreed that Cilem had not demonstrated that it owned the prior marks at the time the opposition was filed

On 6 April 2022 the General Court issued its decision in Cilem Records International UG v European Union Intellectual Property Office (EUIPO) (Case T-118/21).

Background

KVZ Music filed an application for registration of the EU trademark HALIX RECORDS, which was opposed by Cilem Records on the basis of two German marks, invoking Articles 8(1) and 5 of Regulation 207/2009, as well as bad faith – nothing special so far.
However, the Opposition Division of the EUIPO requested Cilem to prove its ownership of the prior rights, subsequently extending the delay to do so until 11 February 2018. In correspondence addressed to the Opposition Division, Cilem argued that the important point was the date of registration of the prior rights, and not the identity of the owner.
Since this was insufficient for the Opposition Division, Cilem informed it that the earlier marks had been transferred in 2018 from a Mr Uslu to Cilem, as demonstrated by a fax sent to the German Patent Office (DPMA) in March 2018 requesting the modification of the information in the German Register. Cilem later submitted some documents from the DPMA to prove the registration of the transfer.
The Opposition Division rejected the opposition, notably based on the fact that it had not been proven that Cilem owned the prior marks, either at the time of the filing of the opposition or when it had been asked to prove ownership.

The Board of Appeal of the EUIPO rejected the appeal, notably on the ground of lack of ownership of the prior marks.
The case was then appealed to the General Court.

General Court decision

Cilem raised two claims before the court.

First, Cilem recognised that it did not own the marks at the time the opposition was filed, since they were owned by its CEO, Mr Uslu. However, it claimed that this was irrelevant.

The court first defined the applicable regulations on the merits, taking into consideration the filing date of the contested mark (25 January 2017). It decided that it had to apply Regulation 207/2009, and that this regulation was also applicable to the procedural issues. However, Regulation 2017/2001 as well as Regulation 2018/625 were applicable to the issue of the validity of the attacked decision before the General Court.

The General Court decided not to consider the admissibility of the appeal since the case was groundless, and started by analysing the second claim brought before it.

The second claim concerned a potential violation of Rules 19 and 20 of Regulation 2868/95 concerning the production of evidence of prior rights. Cilem argued that it had demonstrated the existence and scope of the two prior national rights invoked; however, the General Court stated that, based on Article 8 of Regulation 207/2009, combined with Rule 19 of Regulation 2868/95, it was necessary for Cilem to prove that it owned the marks used as a basis for the opposition.

The court found that it had not been proven that Cilem owned the prior marks before 11 February 2018. In addition, the transfer before the DPMA was requested on 2 March 2018 and published in April – that is, after the February deadline. This was not an element which had been introduced at a later stage in the proceedings, but a fact which had occurred later on. Therefore, demonstrating such acquisition at a later stage was not relevant to prove ownership at the time of the opposition.

To answer Cilem’s arguments, the General Court added that there is a difference between a physical person and a moral person, and that Mr Ulus was the original owner; the fact that he was domiciled at the headquarter of the company, as well as the fact that he used the mark HALIX RECORDS in the 1980s, were irrelevant.

The General Court did not take into consideration Cilem’s argument that the letter asking to prove its prior rights was not sufficiently clear.

The second claim was thus rejected.

The first claim was based on an alleged violation of Article 8(4) of Regulation 207/2009, which allows oppositions based on prior rights used in the course of trade. The court noted that Article 8(4) was not clearly mentioned in the notice of opposition, but was nevertheless discussed in the proceedings, notably with regard to Cilem’s argument that it was the object of acts of unfair competition.

The General Court answered that acts of unfair competition cannot be a basis for opposition proceedings. It then stated that an opponent is free to choose the type of evidence that it wants to submit to prove a prior right as a basis for an opposition under Article 8(4). In the present case, Cilem claimed to benefit from the protection granted by Article 5 of the German law on distinctive signs, but had provided neither the text of the law, nor any precision about its contents or the type of right that it sought to invoke. Some evidence had been provided later on to prove the use of HALIX as a designation or logo, but Cilem had not explained how this could serve as a basis for the opposition.

The action was thus dismissed in its entirety.

Comment

The case is important in that it stresses an obvious, but key requirement: one needs to own a right before filing a lawsuit or administrative suit based on such right.

This article first appeared on WTR Daily, part of World Trademark Review, in May 2022. For further information, please go to www.worldtrademarkreview.com.