Case for caution

3rd May 2022

​​​​​​​Post‑Brexit complexity means continuing to tread carefully, suggests Tania Clark

Key points      

  • UK courts have preserved the right to issue a pan‑EU injunction in EU trade mark infringement proceedings pending on 31st December 2020
  • Guidance issued by the UK IPO to assist in the interpretation of Brexit laws was deemed as “simply wrong”
  • In this case, the IPEC addressed inconsistencies in Brexit statute and guidance notes and clarified whether UK courts have preserved the right to issue a pan‑EU injunction in EU trade mark (EUTM) infringement proceedings that were pending on 31st December 2020.

The Claimant, EasyGroup Ltd, brought trade mark infringement proceedings against Beauty Perfectionists Ltd, Beauty International Austria Ltd and Julie Ann Khamo in March 2020 on the ground that their use of “easyCOSMETICS” in connection with online sales of beauty products infringed Easygroup’s EUTM registration.

The proceedings were pending on 31st December 2020 and in July 2021 the Defendants subsequently sought to strike out those parts of the claim that sought an injunction and other remedies outside of the UK.

They argued that the IPEC no longer had jurisdiction to grant a pan‑EU injunction or other remedies in respect of alleged infringement of EUTM registrations.

The case was heard by Sir Julian Flaux, Chancellor of the High Court.

The pre‑Brexit position

Of course, it is not in doubt whether the IPEC had jurisdiction to grant pan‑EU injunctions before 31st December 2020. A brief recap of the relevant laws that granted that power is as follows.

Chapter 10 of Regulation (EU) 2017/1001 (the EU Regulation) is titled “Jurisdiction and Procedure in Legal Actions Relating to EU Trade Marks” and includes the following provisions:

  • Article 123 provides that Member States can designate national courts which shall act as an “EU Trade Mark Court” and perform the functions assigned to them by the EU Regulation;
  • Article 124 provides that EU Trade Mark Courts will have exclusive jurisdiction for all infringement actions relating to EUTM registrations; and
  • Article 130 provides that EU Trade Mark Courts can issue an order to prohibit a defendant from proceeding with the infringing acts.

The High Court, along with county courts, was designated as an EU Trade Mark Court by Regulation 12 of the Community Trade Mark Regulations 2006 (which was later amended by the European Union Trade Mark Regulations 2016).

Brexit laws

The Trade Marks (Amendment etc.) (EU Exit) Regulations 2019 (the 2019 Regulations) provided for amendments to the Trade Marks Act 1994 (TMA). Schedule 1 of the 2019 Regulations stipulated that Schedule 2A would be inserted into the TMA, which included a provision for a UK clone of EUTM registrations that were granted on 31st December 2020 to be automatically created.

Paragraph 20 of Schedule 2A sets out the laws relating to EUTM proceedings that were pending before an EU Trade Mark Court on 31st December 2020 and includes the following subparagraphs:

  • 20(2) – subject to subparagraphs (3) and (4), Chapter 10 of the EU Regulation (with some exceptions to specific articles which required reciprocity with EUIPO) continues to apply to the pending proceedings as if the UK were still a Member State; and
  • 20(3) – where the proceedings involve an infringement claim of an EU registration, without prejudice to any other relief by way of damages, accounts or otherwise available to the proprietor of the existing EUTM, the EU Trade Mark Court may grant an injunction against the use of the UK clone.

The UK IPO issued an Explanatory Memorandum to the 2019 Regulations as an aid of construction. Paragraph 7.15 is titled “Jurisdictional Arrangements” and reads as follows:

“UK courts can act as EU Courts in trade mark infringement actions relating to EUTMs. At exit there will be EUTM cases ongoing before these Courts.

"The SI ensures that these cases continue to be heard, as if the UK were still a Member State with effect from exit day, but also confirms that actions and remedies taken or granted by the Court are applicable to the comparable UK right only [emphasis added].”

The Defendants’ arguments

The Defendants argued that because the 2019 Regulations were created in February 2019 when a “no deal” Brexit was a real possibility, paragraph 20 of Schedule 2A must be construed as allowing EU Trade Mark Courts to grant an injunction against the UK clone only, and not the corresponding EU registration.

The rationale behind this line of argument was that it would have been extraordinary had the EU Trade Mark Courts been able to grant a pan‑EU injunction in the event that the UK left the EU without a deal.

Further, they submitted that the wording of paragraph 7.15 of the Explanatory Memorandum to the 2019 Regulations was unambiguous and clearly stated that any injunction that may be issued can only relate to the UK clone.

They claimed support from the fact that the Intellectual Property (Amendment etc.) (EU Exit) Regulations 2020, which made amendments to the 2019 Regulations, made no substantive amendments to paragraph 20 of Schedule 2A and that the UK IPO had not at the time made any amendments to the guidance it provided in the Explanatory Memorandum to the 2019 Regulations.

The decision

Sir Julian acknowledged that paragraph 20 of Schedule 2A of the 2019 Regulations was not clearly drafted. However, he held that paragraph 20(3) does not limit the jurisdiction which is retained in pending proceedings under paragraph 20(2).

In particular, he noted that the words “without prejudice to any other relief by way of damages, accounts or otherwise available to the proprietor of the existing EUTM” clearly illustrate that the new power granted in relation to the newly created UK clone does not affect or limit the existing remedies that are available to the proprietor of an EU registration.

As the existing remedies include a pan‑EU injunction, he found that the IPEC retained jurisdiction to grant pan‑EU injunctions and consequently dismissed the Defendants’ application to strike out parts of the claim.

Had paragraph 20(3) been intended to limit the jurisdiction of the EU Trade Mark Courts that was preserved by paragraph 20(2), Sir Julian stated that clearer words would have been used and, at the very least, the text would have stated that the court “may only grant” an injunction against the use of the UK clone.

Referring to the Defendants’ reliance on the Explanatory Memorandum to the 2019 Regulations, Sir Julian held that “it is simply wrong and should be disregarded” as it fails to take account of the important legislative changes that followed after it had been drafted.

Implications

This case illustrates the complexity of the interwoven Brexit statutes and, for now, clarifies an area of uncertainty. However, the Defendants were granted permission to appeal.

At the time of writing, the Explanatory Memorandum still contains the incorrect guidance. Parties should therefore treat this and any other constructive aid provided by the UK IPO with caution.

Tania Clark is a Chartered Trade Mark Attorney at Withers & Rogers

Anne Long, Chartered Trade Mark Attorney and Associate at Withers & Rogers, co‑authored.­­

 

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