INTA Weighs in on EU Case Clarifying Cancellation Proceedings

Published: August 4, 2021

The International Amicus Committee recently submitted a brief in a European Union case that looks at non-attack clauses in cancellation proceedings. In its brief, filed on June 28, the Association takes the view that such clauses serve a purpose and do not harm proceedings.

The German Bundesgerichtshof (Federal Supreme Court) referred the case to the Court of Justice of European Union (CJEU), seeking guidance on how to deal with private non-challenge agreements in administrative or court proceedings. CJEU-Case C-62/21 Leinfelder Uhren GmbH & Co KG v. E. Leinfelder GmbH and others.

In this case, the plaintiff took over a watch factory from the defendant. The asset deal included the registered trademark LEINFELDER. The purchase agreement provided a non-attack clause in a somewhat standard language as follows: “The Seller undertakes neither to attack the partial trademark itself nor to support third parties in attacking the partial trademark.”

The seller violated this obligation by instructing a lawyer to file a petition for cancellation because of non-use, and the purchaser in response sought judicial help before the German civil courts.

The courts of the first and second instance in their particular jurisdiction of European trademark courts turned down the application for enforcement of the non-attack clause. They felt bound by the Carrera judgment of the General Court of the EU (GC) (ruling of Nov. 16, 2017, T-419/16). Here, the GC held that the character of cancellation proceedings in general prohibits any review of a judicial interest, a procedural requirement for the entry into court proceedings that exists to prohibit the access to the public. Cancellation proceedings do not have this requirement.

Since the ruling was issued on “private” non-attack agreements, the GC also rejected the impact of such agreements by reference to the “legal interest” requirement. “Because we cannot review the legal interest for the access to cancellation proceedings, we also cannot take note of it in the opposite to stop access to those proceedings because of private agreements,” it stated. Thus, it also rejected any impact on non-attack obligations.

The Bundesgerichtshof froze proceedings and asked the CJEU (1) if the open character of cancellation proceedings under Article 56 (1) (a) CTMR and Article 63 (1) (a) EUTMR (which are open to everyone) causes invalidity of private non-attack clauses, and (2) if an order issued by a national court enforcing such a prohibition has to be disregarded by the EU Intellectual Property Office (EUIPO) or EU courts.

In its brief, INTA answered both questions in the negative. First taking a deeper look into the purpose of cancellation proceedings in general, the Association noted that all grounds for cancellation serve as self-purifying measures, keeping the register clean from “paper marks,” (registered marks not in use in the EU) which for various reasons should no longer benefit from the monopoly rights conferred by a registration. The brief concluded that the essential purpose of cancellation proceedings would not suffer from exceptions in bilateral agreements as the impact of such a barrier was immaterial against the background of open access to “the world.”

INTA also emphasized that non-attack clauses are customary and should enjoy protection under the laws dealing with trademarks as an object of property. It pointed out that license or purchase agreements would suffer from uncertainty without such clauses. This argument may be supported by the fact that trademark-related agreements enjoy protection under the EU Charter of Fundamental Rights.

Finally, INTA pointed out that violating a non-attack obligation constitutes an act of bad faith. Acts of bad faith have an impact on proceedings before the EUIPO and the EU courts. Trademark owners may remedy such acts by raising a defense in registration proceedings. The defense should likewise be enacted in cancellation proceedings.

So far in the current committee term, between January 2020 and July 2021, the International Amicus Committee has filed 16 amicus briefs. This includes a record nine briefs in the European Union.

Although every effort has been made to verify the accuracy of this article, readers are urged to check independently on matters of specific concern or interest.

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