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When Recording Assignments, Late Can Sometimes Mean Never

The money has changed hands, the ink has dried – but the proud new owner of a registered CTM has not yet told OHIM about the transfer. Where assignees do not record a transfer, anyone else consulting the register may gain the impression that the mark still belongs to the original owner. This ostensibly administrative omission can result in serious consequences, as one assignee recently learned (David Chalk v OHIM, Case T-83/09).

Falling Through the Cracks

The case concerned a registered CTM for CRAIC in Classes 32 and 33, originally filed by Arthur Crack Ltd. in 2001. The proprietor was, however, dissolved in 2006.

Seeing that the registration stood in the name of a dissolved company, Reformed Spirits Company Holdings Ltd. approached the United Kingdom Treasury Solicitor offering to buy the right. The Treasury Solicitor accepted that on the dissolution of Arthur Crack Ltd., all its remaining property and rights held on trust for it became vested in the Crown as bona vacantia. The Treasury Solicitor was empowered to dispose of such property on behalf of the Crown and agreed to the assignment of the CTM to Reformed Spirits for the sum of £2,000. A written assignment was executed in March 2007 and notified to OHIM, who recorded it on the Register in April 2007.

A month later, David Chalk applied separately to OHIM to record an earlier transfer of the CTM to him in January 2006. Mr Chalk had been Chairman of Arthur Crack Ltd.’s Board of Directors and a shareholder in the company, and he presented a copy of an assignment document dated 21 January 2006, signed by himself on behalf of the assignor in his official capacity, and on his own behalf as assignee.

OHIM hesitated, but ultimately decided not to revoke its decision to record the assignment to Reformed Spirits. The examiner, and ultimately the Second Board of Appeal, found that the only legal basis for revoking that decision would have been an obvious procedural error attributable to OHIM. However, in this case there had been no such error: the request for recordal of the transfer had been filed in accordance with the rules and the copy of the assignment deed in favour of Reformed Spirits met the required conditions for legal transfer.

Chalking It Up to Experience

David Chalk appealed to the General Court, whose findings essentially mirrored those of the Board of Appeal.

The Court held that Reformed Spirits’ application for recordal of a transfer and supporting transfer document had complied with the rules. Consequently, OHIM’s decision to record the transfer had been correct.

There had been no reason for OHIM to question the validity or content of the documents and request, and OHIM had made no procedural error in accepting them and entering the recordal. In the Court’s view, in the absence of an obvious procedural irregularity on the Office’s part, there was no obligation on OHIM to review and revoke the earlier decision to record the transfer.

The Court noted that under Article 23 CTMR the transfer of a CTM is only effective against third parties after the transfer is recorded, except where third parties acquire rights in a mark in the knowledge that an earlier transfer has been made. There was no evidence that Reformed Spirits was aware of the alleged earlier transfer here, and Mr Chalk had failed to record the transfer in his favour before the assignment to Reformed Spirits had been made. Consequently, the Court found that Mr Chalk could not assert the transfer of the CTM against Reformed Spirits, and the CTM remained in the latter’s name.


As the parties must have been only too aware, the General Court’s decision by no means untangles the legal issues relating to ownership and control of this CTM. Both parties held what appeared to have been valid legal assignments, and if the earlier assignment was indeed valid, then, despite Mr Chalk’s failure to record the transfer, the later assignment could arguably do no more than transfer legal, but not equitable, title.

Nevertheless, the onus of proving equitable ownership would fall on Mr Chalk and OHIM, as the Court observed, is not the competent authority to determine questions relating to the ownership of CTMs. As CTMs are objects of property, the relevant authority for such issues is in fact the national courts. An issue like this has the potential to run and run. Although the facts of this case were special, it is not hard to imagine other circumstances in which late recordal can cost a CTM registrant dearly.

An assignee who delays recordal may find that a right has been sold twice, as in this case; or may find that a disorganised assignee overlooks an assignment and later enters into a licensing arrangement involving the mark with a third party. Failure to record an assignment can also lead third parties to wrong conclusions about the availability or otherwise of a new brand, which can lead to enforcement issues.

All such issues cost money to resolve, and can be avoided by the mere filing of an application to record an assignment within three months of the transfer. In this case, the earlier assignee waited over a year to record, whereas Reformed Spirits filed within a month. The early bird gets the worm, it seems, and the CTM in question still stands in the name of Reformed Spirits.