Statutory Acquiescence: Court of Appeal’s decision in ICE Southampton v Intelligent Cleaning

In the legal profession, cases act as landmarks that refine our grasp and enactment of law. Each verdict settles individual disputes and also enriches the tapestry of legal precedent. Among such key cases, the recent decision by the Court of Appeal in the clash between Industrial Cleaning Equipment (Southampton) Limited and Intelligent Cleaning Equipment Holdings Co Ltd stands out. This case, rooted in the principle of statutory acquiescence under Section 48 of the Trade Marks Act 1994, has ignited widespread discussion in the IP community. While speculation is rife regarding a significant departure from EU law by the UK courts, deeper examination reveals the decision is not as revolutionary as it might first appear.

At the core of this case is the defence of statutory acquiescence, which protects against trade mark infringement claims when a newer registered trade mark infringes upon an older one but is used without contest for five years. Crucially, this defence hinges on the original trade mark owner’s awareness of the use of the mark and their subsequent inaction. The recent contention focused on whether awareness of the newer trade mark’s registration is also required for this defence to be viable.


Dissecting the Dispute

The critical question presented in this case was whether an earlier trade mark owner needs to have knowledge of both the use and the registration of a later trade mark in order to trigger the statutory period for acquiescence. This issue arose from ICE Southampton’s belated discovery of ICE Group’s formal trade mark registration in 2019, despite knowing of its use since 2014.

The Court of Appeal held that for the defence of statutory acquiescence to apply, the later mark must be registered, and the earlier trade mark owner must be aware of the use of the mark, but there is no requirement for the earlier trade mark owner to be aware of the registration of the later mark. In reaching this conclusion, the Court of Appeal emphasises the importance of proactive engagement and vigilance by trade mark owners in enforcing and managing their rights.

Perhaps more interesting, although it has been raised less frequently in the legal commentary surrounding this case, is the Court’s clarification that statutory acquiescence can pose a defence to a claim of passing off. This clarification is the first time we have been given any certain statement by the Court regarding the applicability of the defence to claims of passing off and will be a welcome clarification to later trade mark holders who no longer need to be concerned about a claim of passing off succeeding where a claim of registered trade mark infringement can be defeated on the basis the earlier rights holder acquiesced for five years or more.


European Jurisprudence

This ruling is being hailed as a significant departure from EU law because it contrasts with the decision of the Court of Justice of the EU in Budějovický Budvar v Anheuser-Busch (C 482/09), which emphasised the importance of awareness of a trade mark’s registration for the acquiescence period to commence. However, departing from this principle is not as significant as it first appears. Whilst Budvar is perhaps the most well-known case on acquiescence, it is itself an outlier in the field of European jurisprudence regarding the law of acquiescence. The Court of Appeal decision aligns closely with other EU case law which has itself departed from Budvar, such as Marchi Italiani (Case T-133/09), which do not consider the awareness of registration as indispensable for the defence of acquiescence to apply.

A key aspect of the Court’s reasoning, illuminated in paragraph 75 of the judgment, addresses the potential for misuse of the registration awareness requirement:

“requiring knowledge of the registration of the later trade mark would give the proprietor of the earlier trade mark a perverse incentive not to consult the register in order to delay time running.”

This observation underscores the Court’s intention to discourage wilful ignorance and promote diligent trade mark management, highlighting a pragmatic approach to the application of statutory acquiescence.


Groundbreaking or Evolutionary?

The legal community’s intense interest in the Court of Appeal’s decision is understandable, but reflects the decision’s perceived novelty rather than a fundamental shift from established legal norms. The ruling highlights the need for trade mark owners to remain vigilant and proactively engage with both the market and the trade mark register. It advocates for a pragmatic approach to trade mark protection, promoting a balanced strategy that is in harmony with the broader objectives of trade mark law.


If you have any queries regarding this topic, or would like assistance creating or implementing an IP strategy, please contact Sarah Neil of our team.

Category: Latest Insights | Author: Sarah Neil | Published: | Read more