Can a trademark holder prevent its agent from registering a similar trademark for itself? CJEU judgment in the Magic Minerals Case

In November, the Court of Justice of the European Union (“CJEU”) issued a judgment ruling on the appeal in cassation filed by the EUIPO in the “MAGIC MINERALS” case. The judgment examines the trademark law requirements that must be met to uphold opposition to a trademark application by an agent or representative.

Background

The parties in dispute are the British company JOHN MILLS (the “Applicant”) and the American company Jerome Alexander Consulting Corporation (the “Opponent”).

The parties had entered into a distribution agreement under which the Applicant marketed the Opponent’s products in Europe. According to the judgment, the agreement contained exclusivity and non-compete clauses, as well as provisions evidencing that they had an established commercial relationship (“an actual, ongoing and non-transient business relationship and loyalty”).

The Applicant later filed the “MINERAL MAGIC” trademark application, in Nice Classification class 3 (“cosmetics”).

The Opponent objected based on its priority industrial property rights: the US “MAGIC MATERIALS BY JEROME ALEXANDER” trademark and the unregistered US “MAGIC MINERALS” trademark protecting “face powder featuring mineral enhancements.”

It based its opposition on Article 8.3 of the repealed Regulation (EC) 207/2009, of February 26, 2009, on the Community trademark (current Article 8.3 of Regulation (EU) 2017/1001):

“Upon opposition by the proprietor of the trade mark, a trade mark shall not be registered where an agent or representative of the proprietor of the trade mark applies for registration thereof in his own name without the proprietor’s consent, unless the agent or representative justifies his action.”

First instance and appeal (EUIPO)

Although the EUIPO’s Opposition Division dismissed the opposition, the Office’s Board of Appeal denied the trademark registration, considering that the requirements set out in that Article were met.

Broadly speaking, it based its argument on the fact that: (i) the Opponent held a previous trademark; (ii) the Applicant is or was the Opponent’s representative; (iii) the application was filed in the Applicant’s name and without the Opponent’s consent; and (iv) the application referred to similar signs and goods. The dispute pertains to point (iv).

Proceedings before the General Court (“GCEU”).

The Applicant appealed the Board of Appeal’s decision, requesting its cancellation based on infringement of Article 8.3, considering that the Board was mistaken when it ruled that: (a) the Applicant was an agent or representative of the proprietor of the previous trademark; (b) Article 8.3 applied even though the signs at issue were not identical but merely similar; and (c) Article 8.3 applied despite the fact that the disputed goods were not identical but merely similar.

The GCEU upheld the Applicant’s claims, ruling that Article 8.3 exclusively refers to a situation in which the previous trademark and the trademark requested by the agent or representative are identical, thus annulling the Board of Appeal’s resolution.

Appeal in cassation before the CJEU

The EUIPO filed an appeal in cassation before the CJEU against the General Court’s decision.

In its judgment, the CJEU took as a basis the fact that the provisions of EU Law must be interpreted taking into account their literal wording, the context in which they are issued and the objectives and purpose pursued by the specific rule. From this viewpoint, it believes that:

• Article 8.3 does not expressly establish whether it applies to similar or identical trademarks.
• The fact that this is not expressly established does not automatically mean that Article 8.3 only applies to cases in which the trademarks at issue are identical.
• In regulating Article 8.3, the EU legislator substantially reproduced Article 6septies, section 1, of the Paris Convention. The CJEU adds that, its “authentic” version (in French) confirms that this precept can apply when the previous trademark is similar.
• The GCEU’s strict interpretation would mean the trademark proprietor would not have the option of opposing the registration of a similar trademark by its agent or representative based on Article 8.3.

On the contrary, its agent or representative — after completing its registration — would be authorized to oppose the subsequent registration application of the initial trademark by that proprietor based on this trademark’s similarity to the trademark registered by that proprietor’s agent or representative.

The CJEU establishes that the purpose of the rule confirms that this precept should be interpreted broadly, as it seeks “to prevent the misuse of the earlier mark by the agent or representative of the proprietor of that mark, as those persons may exploit the knowledge and experience acquired during their business relationship with that proprietor and may therefore improperly benefit from the effort and investment which the proprietor himself has made.”

Consequently, the CJEU concludes that the GCEU committed an error of law by limiting the application of this provision, canceling the appealed judgment. The court then resolved on the grounds for appeal raised by the trademark applicant before the CJEU, dismissing each of them:

• The submission that the EUIPO’s Board of Appeal erred in considering that the applicant was an agent or representative of the proprietor of the previous trademark.
  
  The CJEU calls for a broad interpretation of these terms, to cover all forms of relationship based on a contractual agreement under which one of the parties represents the interests of the other.
  
  For these purposes, it establishes that “it is sufficient (…) for there to be some agreement or commercial cooperation between the parties of a kind that gives rise to a fiduciary relationship by imposing on the applicant (…) a general duty of trust and loyalty as regards the interests of the proprietor of the earlier mark.”
• The submission that the EUIPO Board of Appeal erred in considering that Article 8.3 applied even though the signs at issue were not identical but merely similar.
  
  As stated, this provision applies in both cases. Therefore, this ground for appeal was also dismissed.
• The submission that the EUIPO Board of Appeal erred in considering that Article 8.3 applied even though the goods were not identical.
  
  Given that the essential function of a trademark is to indicate its commercial origin, the application of that precept cannot be excluded because the goods or services under the application and those designated in the previous trademark are not identical but merely similar.

Authors: Nora Oyarzabal y Raúl Pérez.