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An often important element of the strategic considerations relating to claims in the UK for infringement of a registered EU right is due to be removed on 1 January 2021.
Article 132 of the EUTMR states that EU trade mark courts shall stay an action for infringement of an EU trade mark where an application for revocation or invalidity of that mark has been filed at the EUIPO, unless there are special grounds for not imposing the stay. In the joint actions of Starbucks v BskyB and EMI v BskyB the Court of Appeal made it clear that this provision imposes a strong presumption in favour of a stay, but that there is a reasonable amount of discretion afforded to the Judge in deciding whether any special grounds exist. The equivalent provision exists in relation to Community Registered Design Rights in article 91 of the CDR.
Therefore, an earlier challenge to the validity of the right at the EUIPO can remove the immediate threat of facing infringement proceedings. This is a powerful tool when you consider that such EUIPO proceedings can carry on, with possible appeals to the Board of Appeal and the EU General Court, for a number of years, by which time the infringement may have come to an end and/or the claimant’s appetite to pursue it may have ebbed.
These provisions exist to try to avoid irreconcilable judicial decisions, but they have presented EU trade mark and Community design right owners with decisions to make at the point of asserting their rights, particularly if there are no equivalent national rights to rely on in parallel. They have also provided an opportunity to alleged infringers in certain situations.
The opportunity for the alleged infringer is to respond to a pre-action letter by filing an invalidity or revocation action at the EUIPO. This should, absent of special grounds, stay any subsequent infringement claim in the court – the “EUIPO Torpedo”.
The decision for rights holders is whether to dispense with the pre-action protocol entirely or to issue a claim form and seize the court prior to engaging with an alleged infringer. This can be done with or without letting the alleged infringer know (it can be served at any point within 4 months of issue  and will remove the possibility of the EUIPO Torpedo.
Brexit and the Torpedo
One might be forgiven for thinking that with the full impact of Brexit looming on 1 January 2021 the issue of an EUIPO Torpedo will have no relevance in the UK beyond that date. Of course, the EUTMR and CDR will no longer apply to the UK after that date and the EU rights will spawn new UK national equivalent rights. However, in the weeks remaining before 1 January 2021 there are still opportunities and decisions to make for rights holders and alleged infringers and these can continue to have an impact after that date.
Many rights holders have not applied for UK national marks in anticipation of Brexit, relying on the arrangement for a new equivalent right to come into existence at that time. Meaning any assertion of their rights before 1 January 2021 will involve invoking their EU right.
The Brexit Withdrawal Agreement has a role to play here. Article 54(3) states that if an EU trade mark or registered Community design is declared invalid or revoked in proceedings that were ongoing at 1 January 2021 the corresponding UK right shall also be declared invalid or revoked, save for where the grounds of invalidity or revocation of the EU right do not apply in the UK. Importantly, the date of any invalidity or revocation of the equivalent UK right will be the same as the date for the EU right.
Therefore, where there are pre-existing non-use revocation actions or challenges to validity at the EUIPO that rely on rights that also apply to the UK, such as absolute grounds attacks, the equivalent UK remains potentially vulnerable for years after 1 January 2021. In such circumstances would the UK courts be tempted to stay a subsequent infringement claim pending resolution of the EUIPO challenge? Factors in favour of such a stay would be the risk of irreconcilable decisions (or more particularly a finding of infringement in the UK of a right that was later invalidated or revoked), and the fact that these rights in question used to be subject to the rules in articles 132 and 91 of the EUTMR and CDR respectively.
Time will tell if the UK courts need to address these issues. There remain a few weeks before 1 January 2021 for alleged infringers to act and avail themselves of these arguments, and on the other hand, potential claimants may consider waiting until after 1 January 2021 before asserting their rights free of the fear of a post-Brexit EUIPO Torpedo.
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