Trade Marks
Posted on 1/12/2022

Does use of a trade mark within the UK constitute valid use within the EU to evidence enhanced distinctiveness of an EU trade mark?

The judgement of the Shopify vs Shoppi case has important implications for UK trade mark owners.

The date of 31 December 2020 marked the end of the Brexit transition period and the official end date of the United Kingdom’s (UK) membership in the European Union (EU). However, the withdrawal agreement between the UK and EU did not regulate on whether use of a trade mark in the UK prior to this date would be regarded as valid use in the EU when considering whether a mark has acquired enhanced distinctiveness within the EU once the UK left.

In a recent case, between e-commerce company Shopify and UK competitors Shoppi, the General Court clarified their stance on the matter stating that evidence to prove enhanced distinctiveness of a trade mark may only be considered relevant if at the time of the EUIPO’s decision, the trade mark rights were enforceable in the EU.

Shopify vs Shoppi (Shopify v EUIPO – Rossi and Others (Shoppi) Case T-222/21 Judgement on 12/10/2022)

Shopify had challenged an earlier decision by the EUIPO which held that there was no likelihood of confusion between the word marks SHOPIFY and SHOPPI. The decision also stated that there was a lack of evidence to support the SHOPIFY mark having acquired enhanced distinctiveness within the EU.

Shopify appealed by arguing that the use of the SHOPIFY trade mark in the UK should be valid evidence to support its claim of enhanced distinctiveness within the EU, particularly because Shoppi had made their application on 08 May 2017, when the UK was still a member of the EU.

However, the contested decision was issued on 18 February 2021, almost two months after the end of the transition period of 31 December 2020 when the UK officially left the EU. Therefore, the court, passing judgement on 12 October 2022, upheld its earlier decision stating that “evidence of reputation or enhanced distinctiveness relating to the United Kingdom could no longer sustain or contribute to the protection of an EU trademark as from 1 January 2021, even if that evidence predated 1 January 2021.”

The General Court explained that: “It is apparent from the case law of the Court that, in the context of cancellation proceedings, the proprietor of an industrial property right, particularly an earlier mark, must establish that he or she may prohibit the use of the EU trademark at issue, not only on the filing or priority date of that mark but also on the date on which EUIPO decides on the application for a declaration of invalidity.” The court also clarified that the same reasoning would apply in the context of opposition proceedings.  They further added that “at the date of the contested decision, the public of the United Kingdom was no longer part of the relevant public of the European Union.”

The judgment concluded that: “the fact remains that the requirement of permanence or persistence of the prior right at the date on which EUIPO rules on the application for a declaration of invalidity is a matter of enforceability, previous to such a substantive assessment.”

Effects of the outcome

It has always been generally accepted that use of a trade mark in the UK prior to 01 January 2021 would constitute valid use within the EU when considering whether a mark has enhanced distinctiveness in relation to invalidity and opposition proceedings and that use after this date would no longer be considered relevant. However, the recent judgement of the General Court establishes that there must still be valid use within the EU up to the date on which the EUIPO reaches a decision even if proceedings began prior to 01 January 2021. Although the decision made by the General Court applies to the concept of enhanced distinctiveness, the reasoning could be extrapolated to apply when deciding on genuine use and the validity of EU marks.

Therefore, it is important that trade mark owners understand the implications of this judgement and review the use of their trade marks to ensure that their use of EU trade marks complies with the requirements under EU law.

The UKIPO’s stance on EU use

It is important to note that the UKIPO takes a different approach to that of the EUIPO. At the end of the transition period, registered EU trade marks automatically gave rise to equivalent UK registrations. Although these UK clones of EU registrations were created as of 01 January 2021, unlike the EUIPO, the UKIPO does consider that evidence of use within the EU prior to 01 January 2021 may support the validity of EU equivalent UK registrations created as of 01 January 2021. Therefore, trade mark owners may provide evidence of prior use of their marks within the EU in support of the validity of UK trade mark registrations which were created as a result of Brexit, with the caveat being that the use of the mark must be within five years of the filing date of the opposed application and/or the commencement of proceedings (if invalidation is at issue), so that the relevant five year period would need to commence prior to 01 January 2021 for evidence of use of the mark in the EU to be considered.

If you have any questions about your UK or EU trade mark registrations, please get in touch to speak to one of our attorneys.

Wilson Gunn