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If you are thinking of opposing a CTM, that 5-year grace period for avoiding proof of use may not be as long as you think. Or is it? OHIM’s Boards of Appeal have found both ways on that point, and the result is a serious muddle.

The controversy centres on a key element of CTM opposition practice, the ability of an applicant to require an opponent to prove use of earlier pleaded registered marks. Cases can be won or lost on this, and knowing when the provision can be invoked is critical to deciding what rights to plead in a case, and in planning a defence.

Until recently, the position seemed clear. Under Article 42 (2) CTMR, opponents could be put to proof of use of any earlier pleaded right which had "been registered for not less than five years" as of the publication date of the opposed CTM. If an earlier registration was younger than that, it was immune from proof of use.

Some applicants, however, have been arguing that "five years" need not always be taken literally. The point arises in particular where opponents have relied on re-filings of older rights, which were made in order to extend the 5-year grace period for use but have the further effect of also eluding the proof of use requirements in proceedings.

In October the issue landed before OHIM’s Second Board of Appeal in NAVIGO (HHD Global Corporation v Syndicat des Transports d’Ile-de-France, Case R 2181/2010-2). The applicant argued that recent French re-filings relied on by the opponent had been made in bad faith, citing in particular OHIM’s Cancellation Guidelines, which regarded repeated CTM re-filings made in order to avoid revocation for non-use as being evidence of bad faith. The applicant argued that national re-filings should be regarded in the same way and contended that proof of use should therefore be required even though the re-filings had not yet been registered for 5 years when the CTM had been published.

The Second Board saw the holes in the applicant’s logic and firmly held that whether or not the re-filings had been made in bad faith was an issue for a national forum. Article 42 (2) was clear: the registrations relied on were too young for proof of use to be required in the opposition. Less than a month later, the same ball landed in the Fourth Board’s court, this time involving a re-filing in Spain (Anja Holzapfel v José Domingo López-Palacios González, Case R 1785/2008-4). In a creative move, this Board held that OHIM could regard a pleaded re-filing as essentially one and the same right as the older registrations it sought to "extend". When this was done, it ruled, Article 42 (2) could then be taken to apply even where a re-filing relied upon was itself less than 5 years old. The opposition therefore failed since the Spanish opponent was unable to prove use.

The Fourth Board in Holzapfel was motivated by a desire to stop brand owners and speculators from re-filing repeatedly for unused marks and then wielding them against others. However, the Board’s approach is hard to follow and is not supported by the clear wording of Article 42 (2). The NAVIGO approach is better reasoned and the Second Board there rightly resisted the temptation to distort the wording of the law to right a perceived wrong.

Many in fact dispute the view that identical re-filings made to extend a non-use grace period are in bad faith. There are often good commercial reasons for a re-filing and such strategies can be a sensible part of portfolio maintenance practices where inter alia commercial obstacles have prevented a launch from taking place when originally planned. Courts and national offices should be wary of regarding re-filings per se as evidence of bad faith. Bad faith should involve more than seeking the best protection for a company’s undisputed IP.

These are issues best resolved on a case by case basis, but they were rightly seen in NAVIGO as irrelevant to requests for proof of use in oppositions. OHIM’s inconsistency in NAVIGO and Holzapfel has nevertheless muddied the waters for those involved in such proceedings since it has undermined the brightline rule on whether an earlier registration is subject to proof of use. Brand owners deserve clarity, soon.