High Court Casts Doubt on OHIM Specification Practice

The English High Court recently highlighted the widening gulf between OHIM and national offices on the interpretation of class headings. The decision in Daimler AG v Sany Group Company Ltd. [2009] EWHC 1003 (Ch) was on an application for summary judgment and did not explore the issue in depth. It is, however, clear that a resolution must come soon on whether OHIM can legitimately grant protection for all goods or services in a class based on a claim for the class heading.

What does it all mean?

The Court's remarks came in an infringement action brought by Daimler based on UK and CTM registrations for its well-known three-pronged emblem in Classes 7 and 12.

The defendant, Sany, was also using a three-pronged emblem in respect of commercial vehicles including trucks and truck chassis. Daimler claimed that the marks were similar and that Sany's goods were identical or similar to those for which Daimler's earlier marks were protected. Sany retaliated with a claim for partial non-use revocation of Daimler's marks.

Central to the case was the correct interpretation of Daimler's specifications, which either consisted of class headings or contained general terms from them. It was essential in both the claim and counterclaim to establish what the specifications actually covered. If interpreted by reference to OHIM's practice, the class heading specifications would cover all goods in the class, whether or not mentioned in the class heading. If the UK-IPO practice was followed, however, only the specific items mentioned in the class heading would be covered.

On this issue, the judge noted that OHIM's practice and that of the UK-IPO were fundamentally incompatible. The disparity was well-illustrated by class headings that omitted reference, even in a general way, to goods known to fall in a certain class. Where, for example, an applicant claimed the Class 15 heading, "musical instruments," the specification would be deemed by OHIM to cover "stands for musical instruments," despite those goods not being mentioned. In the UK, it manifestly would not.

The judge remarked, "These divergent approaches...have given rise to debate and concern. I do not think that there is room for them to co-exist within the framework established for the co-ordinated protection of trade marks in the Member States and at the Community level." Nonetheless, as this was purely an application for summary judgment, it sufficed for the judge to note that there was a real issue as to how the specifications should be interpreted, which contributed to making the case inappropriate for a decision without trial.

Comment

The infringement issues in this case are not uninteresting, but it is really the practical question of how to interpret specifications that takes centre stage.

Debate on this issue has been welling up amid growing concern that OHIM's independent path may be leading to the grant of many CTMs that do not confer the breadth of protection the registrants have been led to expect. It has long been suspected that OHIM's approach was designed for the administrative convenience of the Office in translating and examining applications. How the courts would dispose of the issue must have seemed a very distant prospect when the original Presidential Communication announcing the change was published in 2003.

CTMs granted under OHIM's practice are now coming before the national courts, however, and the courts may have the unenviable task of disabusing registrants of the belief that their CTMs cover all goods in a class. What is most likely, however, is that the issue will end up before the ECJ, who will have to examine whether OHIM ever had the power to deem a class heading to cover goods or services not mentioned in it, and whether CTMs granted under that practice have that effect.

Class headings in national registrations should be interpreted by reference to the same principles, and the ECJ will ultimately have to decide who is right: the UK-IPO and a number of national offices, or OHIM.

OHIM is understood to recognise the risk that its practice could be struck down, but is reluctant to introduce changes given the doubt this would cast on the coverage conferred by the vast number of CTMs already issued under the practice. Until the ECJ gets its teeth into the issue, therefore, nothing is likely to change.

For now, applicants before OHIM are still best advised to file for class headings in case the practice is upheld, but to be sure to add express references to specific goods and services of interest. This should ensure that relevant coverage is maintained if the practice is eventually scuppered by the ECJ.

If it is not, then applicants covering their bases in this way should have CTMs with good broad coverage-useful to have when business activities expand.