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KINDER Surprised: No Res Judicata in OHIM Disputes

When you're in a hole, stop digging is often good advice. Stepping back from a losing case can make sense, not least if it allows a party to come back later with better funding and a stronger, winning strategy. Where failure to appeal leads to an unhelpful decision becoming binding in later proceedings, though, a party can find itself trapped in a dilemma.

Such was the situation in which Ferrero SpA found itself recently in Ferrero SpA v OHIM (Case T-140/08). Before the General Court, the makers of KINDER SURPRISE and other well-known KINDER-branded chocolate confectionery forced a re-examination of the rules on res judicata in CTM opposition and invalidity proceedings. The resulting clarification is extremely useful to brand owners when revisiting strategy in CTM opposition and invalidation cases.

Reviewing the Situation...

It all began with an opposition by Ferrero SpA to a CTM application for a TIMI KINDERJOGHURT Logo of Tirol Milch for yoghurt products in Class 29. Ferrero filed a streamlined case, relying only on an earlier Italian registration for KINDER for Class 30 goods including chocolate and confectionery.

Ferrero lost at first instance and before the Fourth Board of Appeal. Apparently re-thinking its strategy, it opted not to appeal further to the General Court, but rather allowed the decision to become final. The Tirol Milch CTM was then registered. Ferrero then applied for a declaration of invalidity, relying not only on its earlier Italian registration, but also on a claim to a "family" of 35 other earlier KINDER marks in Italy, France, Spain and elsewhere.

Before OHIM's Opposition Division, the new strategy worked and the CTM was declared invalid. The Second Board of Appeal reversed, however, finding that OHIM was bound by its decision in the earlier opposition proceeding because the outcome had enabled Tirol Milch legitimately to acquire rights in a CTM. The Board held that although the principle of res judicata did not specifically apply, nonetheless OHIM was bound by the earlier substantive findings and conclusions in the opposition because the later invalidity proceedings were brought involving the same parties, the same subject matter and the same grounds.

On a further appeal, however, the General Court reversed again. It approved the Board's finding that res judicata was inapplicable to CTM opposition and invalidity decisions, in part because they were administrative rather than judicial in nature. It also accepted the Board's view that prior opposition decisions could not be completely ignored in later invalidity proceedings involving the same parties, subject matter and grounds, provided that the findings or issues are "not affected by new facts, new evidence or new grounds."

Nonetheless, it disapproved the Board's finding that there was a principle of legitimate expectations involved in the granting of a CTM. The General Court ruled that because the principle of res judicata does not apply, even a final decision in opposition proceedings does not confer any legitimate expectation that a CTM will not later be struck down in invalidity proceedings. If that were the case, then a subsequent invalidity action between the same parties would have no practical effect, despite the CTMR not prohibiting such challenges.

This finding essentially rescued Ferrero's revised attack strategy, although in practice it was of little use to them, as they lost the appeal in any event on the grounds that the marks were not similar.


Although the Italian confectioner's limited success was somewhat less than sweet, it will nonetheless satisfy the cravings of others for legal certainty on the status of OHIM opposition decisions when subsequent invalidity proceedings are brought.

The decision makes clear that failure in a CTM opposition does not block a challenger from re-asserting its case as an invalidation. It brings OHIM into line with the practice in the UK, where a challenger is not estopped from re-running a failed opposition as a new invalidity proceeding (SPECIAL EFFECTS, [2007] RPC 15). In SPECIAL EFFECTS, the Court of Appeal regarded the availability of invalidity proceedings as evidence that a mere decision to register could not give rise to a final decision entitling a registrant to certainty that the right could not be removed. This is consonant with the General Court's finding in Ferrero that there is no legitimate expectation that a registered CTM cannot be successfully challenged, including by a previously unsuccessful opponent.

It is important to note that this principle does not necessarily apply to the re-running of invalidity proceedings, though. Under Article 53 (4) CTMR, an unsuccessful applicant for invalidity on relative grounds cannot re-apply for invalidity later on the basis of another right that he could have raised the first time but did not. Such conduct in the UK may also run a case aground as a cause of action estoppel or an abuse of process. So, while a botched opposition might perhaps be put right, a failed invalidation is final.

The ruling in Ferrero will benefit opponents who need to re-think their strategy following a disappointing opposition outcome, and shows that it is not necessary to throw good money after bad in appeal proceedings with poor prospects, simply to keep the issues alive. Better instead to keep one's powder dry for a stronger and tighter invalidation case, if the facts support it.

It remains to be seen whether knowing that opposition decisions are not the last word results in more subsequent invalidation claims. It will be a less helpful outcome if parties take it as encouragement to pursue oppositions only languidly and to reserve the real fight, if one is needed, for invalidation. The fact that CTMs once registered can be enforced will hopefully be enough to concentrate parties' minds in an opposition, and in the cases that really count opposition is likely to remain a major battleground.