Industrial Cleaning Equipment (Southampton) Limited v Intelligent Cleaning Equipment Holdings Co Ltd et al [2023] EWCA Civ 1451
https://www.bailii.org/ew/cases/EWCA/Civ/2023/1451.html
Key points
The Court of Appeal’s decision in Industrial Cleaning v Intelligent Cleaning brought to light important considerations concerning the defence of acquiescence in claims for trade mark infringement and passing off in the UK.
- A claimant who has acquiesced by failing to enforce its rights for five years will fail in trade mark infringement proceedings.
- A claimant cannot say it was unaware of a conflicting registration to extend the time period within which it can bring a claim. If a later registration is more than five years old, the claimant is deemed to be on constructive notice that it exists.
- To ‘stop the acquiescence clock’, a claimant must file court proceedings; a letter before claim is not enough.
- English courts will diverge from EU law in appropriate cases but only with considerable caution
Background
This case involved a dispute regarding the use of the marks “ICE” and various logos (together, the ICE Marks) in connection with a cleaning equipment business.
The Claimant provides retail, rental and maintenance services for commercial and consumer cleaning equipment. It owns a UK trade mark registration for the ICE logo depicted above, which was registered on 22 January 2016 and has been using the ICE Marks since at least 2007.
The Defendants make floor cleaning machines and have used their own ICE marks since June 2013. They own trade mark registrations for ICE and the logo below which were registered on 25 May 2016 and 15 June 2016. These registrations were EU designations of International Registrations. Following Brexit, the registrations were replaced by two comparable registrations in the UK.
After initially denying it did so, the Claimant eventually accepted that it had knowledge of the Defendants’ use of the ICE marks from around July 2014, when it first contacted the Defendant to discuss “strategic opportunities”. However, the Claimant denied having any knowledge of Defendants’ Registrations before 26 July 2019, and this was accepted.
In July 2019 the Claimant sent a letter before claim, alleging infringement of its trade mark registration for the ICE logo and passing off in relation to the ICE Marks. The Claimant issued proceedings for trade mark infringement and passing off on 24 May 2021. The Defendants pleaded that the Claimants had acquiesced and accordingly that they are not entitled to any remedy even if there was infringement.
The law
Section 48 of the Trade Marks Act 1994 states:(1) 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 United Kingdom, being aware of that use, there shall cease to be any entitlement on the basis of that earlier trade mark or other right—
- to apply for a declaration that the registration of the later trade mark is invalid, or
- to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used, unless the registration of the later trade mark was applied for in bad faith.[1]
The leading English decision on acquiescence is Combe International LLC v Dr August Wolff GmbH & Co KG[2].
The first instance decision[3]
The Claimant was successful in the first instance. The judge held that the defence of statutory acquiescence only applies where a claimant has knowledge of the use of the later trade mark, and knowledge of the later registrations. Since the Claimant first became aware of the Defendants’ Registrations in July 2019, the defence of statutory acquiescence did not apply and the judge held that the Defendants had infringed the Claimant’s registration, and the Defendants’ Registrations were invalid on the grounds that their use was liable to be restrained as passing off.
The appeal
The Defendants appealed on two grounds, both concerning the date on which the five-year period starts for the purposes of statutory acquiescence.
- The Defendants argued that it is sufficient that the later trade mark is registered and that the proprietor of the earlier trade mark is aware of the use of the later trade mark, but knowledge of the registration of the later trade mark is not required (sometimes known as constructive notice).
- Where the later trade mark is an international trade mark designating the EU, the five-year period when assessing acquiescence should run from the international registration date, and not from when the trade mark is protected in the EU.
The Claimant raised two additional issues by way of respondent’s notice, and these are also discussed briefly below.
The Court of Appeal’s decision
First ground of appeal
Lord Justice Arnold gave the leading judgment for the Court of Appeal and undertook a detailed analysis[4] of the decision in Budějovický Budvar v Anheuser-Busch[5] (Budvar), where the Court of Justice of the European Union held that the owner of an earlier trade mark must be aware of the use and registration of a later mark for time to start running.
The Court also considered the case law of the EUIPO and the General Court[6], where the relevant date for starting the time period runs from when the proprietor of the earlier mark has become aware of the use of the later mark, and that date can only be later than that of the registration of the later mark. Knowledge of the later registration is not required. This appears to conflict with the CJEU decision in Budvar, even though the decision is binding upon EUIPO and the General Court.
In a landmark decision, the Court departed from retained CJEU case law and, ultimately, agreed with the approach taken by the EUIPO and General Court, finding:
…the five year period starts to run once the proprietor of the earlier trade mark becomes aware of the use of the later trade 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. In order to give effect to this conclusion, however, this Court must depart from Budvar[7].
In reaching this decision, the Court considered that a requirement for the proprietor of the earlier trade mark to have knowledge of the later trade mark registration could lead to a “perverse incentive” for the proprietor to not consult the register, as this would delay the time from running[8].
Second ground of appeal
In relation to the second ground of appeal, the Court of Appeal held that the relevant date is either:
- the date the designation is accepted by the EUIPO; or
- the date when such acceptance is published by the EUIPO (the second republication date).
However, the Court did not specify which of these two dates is the correct one as this would not have any bearing on the outcome as in either circumstance the date would be less than 5 years from when the claim was issued.
Additional issues in the respondent’s notice
The Court also provided comments on two additional issues raised in the respondent’s notice:
- When did acquiescence cease: sending a warning letter is not enough in itself, and it must be followed within a reasonable period by an administrative or court action. If such circumstances, then the warning letter will stop the time from running.
- Passing off: if the defence of acquiescence applied, this would have also barred the claims for passing off.
Key takeaways
- Brand owners should be aware that the ‘infringement clock is ticking’. Delaying enforcement against infringers can be fatal, particularly where the infringing right is registered.
- A trade mark registration does not confer a right to use a mark or a defence to infringement. It is merely a right to stop another business beginning to use the same mark.
- Divergence from EU case law is extremely rare. The power to do so will only be exercised with considerable caution.
References:
[1] Section 48, Trade Marks Act 1994
[2] Combe International LLC v Dr August Wolff GmbH & Co KG [2022] EWCA Civ 1562, [2023] Bus LR 532, paragraphs 58 to 67
[3] Industrial Cleaning Equipment (Southampton) Limited v Intelligent Cleaning Equipment Holdings Co Ltd et al [2023] EWHC 411 (IPEC)
[4] Paragraphs 38 to 52
[5] Budějovický Budvar v Anheuser-Busch, Case C-482/09
[6] Paragraphs 53 to 65
[7] Paragraph 89
[8] Paragraph 75
