Court of Appeal confirms filing a trade mark cancellation action does not ‘stop the clock’ on acquiescence

In our “Pharma trade marks: 2022 case law round up” (written towards the end of November 2022) we discussed the decision of the High Court in Combe International LLC & Anor v Dr August Wolff GmbH & Co KG Arzneimittel & Anor [2021] EWHC 3347 (Ch). We now have an update on that case, as the Court of Appeal of England and Wales has issued its appeal decision.

The Defendants, including Dr August Wolff, appealed to the Court of Appeal. Whilst the appeal was ultimately dismissed on all grounds, the Court of Appeal in Combe International LLC & Anor v Dr August Wolff GmbH & Co KG Arzneimittel & Anor [2022] EWCA Civ 1562 made a number of important clarifications as to when a defence of acquiescence can apply.

Background

The Claimants are proprietor and licensee of UK trade mark registrations for the mark VAGISIL, which has been used in the UK for feminine intimate healthcare products since 1984.

Dr Wolff started using the trade mark VAGISAN in the UK in 2013 in respect of vaginal healthcare products. In late January 2014, the Claimants discovered that VAGISAN Moist Cream was being offered for sale in some small pharmacies in the UK. 

 

 

 

For a long period in 2015 and 2016, the Claimants believed that Dr Wolff was not active in the UK market. However, during 2016, Dr Wolff decided to take steps to grow its UK business and ran a major advertising campaign.

On 2 December 2017, Combe filed a cancellation action against Dr Wolff’s EUTM registration for VAGISAN. At the time, the EUTM registration also provided protection in the UK. The cancellation action was ultimately successful at first instance and on appeal. The EUIPO’s Fourth Board of Appeal issued its decision in September 2020.

In January 2019 and February 2020, Dr Wolff expanded its product line in the UK. The Claimants issued a claim form in the UK on 3 October 2019, sent the Defendants a letter before claim on 16 January 2020, and served the claim form on 31 January 2020.

In September 2020, the Defendants began to rebrand their UK range of products under the sign “DR WOLFF’S VAGISAN”. Before the High Court, they sought a declaration that this rebranding does not infringe the VAGISIL mark. 

High court decision

In his judgement of 10 December 2021, Adam Johnson J held that both marks VAGISAN and DR WOLFF’S VAGISAN infringed the VAGISIL trade mark. 

He acknowledged that descriptive prefixes can be used as a signpost for consumers to tell them what the relevant product is used for. He also accepted the proposition that VAGI is suggestive of the idea of the vagina. However, he rejected the Defendants’ argument that the VAGISIL marks had only a low level of distinctiveness in the UK. He commented “I find it inescapable that the average consumer in 2013 would have regarded the entire word VAGISIL as an identifier of trade origin, and would not have discounted the embedded elements VAGI or VAGIS as serving only a signposting function”. 

As a result, he concluded there was (and is) a risk of confusion between VAGISIL and VAGISAN. This was further supported by the “striking” volume of evidence of actual confusion presented by the Claimants.

The Defendants tried to argue that the Claimants acquiesced to their use of VAGISAN for a period of over 5 years; they first became aware of use of VAGISAN around January 2014 but did not issue their claim form until October 2019. The Defendants argued that, whilst the Claimants had applied to invalidate the EUTM registration in December 2017, they had knowingly tolerated the use of the mark. Adam Johnson J was not persuaded by this argument, stating that “as a straightforward matter of language, it seems to me clear that if the owner of an earlier mark seeks to invalidate the registration of a later mark, he cannot be said to be acquiescing in the use of a registered trade mark, because he is saying that there has been no valid registration”. 

A defence of honest concurrent use was also dismissed quickly, on the grounds that there had not been continuous co-existence for a sufficiently long period so as to engage the defence and, in any event, the use by the Defendants was not honest. They were aware of the Claimants’ objection to use, and of the accumulating evidence of actual confusion, but still persisted in advertising their products for sale. 

Appeal to Court of Appeal

The most interesting issue considered on appeal was whether the Defendants could rely on acquiescence as a defence. Ultimately, the Court of Appeal found they could not. However, in reaching this decision they disagreed with the reasoning of Adam Johnson J on a number of points.

The legislation states that acquiescence gives rise to a defence where "the proprietor of an earlier trade mark… has acquiesced for a continuous period of five years in the use of a registered trade mark in the United Kingdom, being aware of that use"  (emphasis added).

In considering this language, Arnold LJ said that a cancellation action against a trade mark registration has no impact at all on the use of the trade mark; action to oppose use of the later trade mark requires a claim for infringement. Therefore, the bringing of a cancellation action is not sufficient to preclude acquiescence by the proprietor of the earlier trade mark in the use of the later trade mark. 

Applying this reasoning to the present case, Arnold LJ noted that, although Combe commenced the cancellation action against Dr Wolff’s EUTM registration on 2 December 2017, that had no effect at all on Dr Wolff's continued use of the mark, and they didn’t commence the infringement proceedings until 2 October 2019. Therefore, in principle, acquiescence could apply.

The next consideration was whether the Claimants could be said to have acquiesced “for a continuous period of five years” given Dr Wolff’s use was inconsistent during that time. In that regard, Arnold LJ said there must be continued, but not necessarily continuous, use of the later trade mark throughout the five year period. What amounts to continued use will be a fact-sensitive question which depends on the nature of the goods or services and on the characteristics of the average consumer of those goods or services. For example, fewer instances of use may suffice for expensive or seasonal goods.

Arnold LJ found that the Defendants were continuously infringing throughout the relevant period by using their mark on their website and, whilst sales were at a relatively low level, their use was still sufficient to give rise to a potential defence of acquiescence.

However, ultimately, the Defendants still failed to demonstrate that the Claimants acquiesced to their use because it was reasonable to conclude that the Claimants weren’t aware of the continued use.

“Acquiescence or toleration requires continued awareness of the use. That does not mean that the proprietor can say that it has ceased to be aware of the use merely because of the passage of time, or that it can turn a blind eye to the question of whether the use is continuing. But if the proprietor genuinely and reasonably believes that the use has ceased for a significant period of time, then I do not consider that the proprietor can be said to be acquiescing in or tolerating the use during that period.”  (emphasis added)

In this instance, Arnold LJ held that the Claimants were not aware of the use of VAGISAN for a long period during 2015 and 2016, despite keeping a watch for such use, and it was reasonable for them to assume that Dr Wolff had withdrawn from the UK market. For this reason, they could not be said to have acquiesced to use for a continuous period of five years.

Comment

This decision highlights the importance of trade mark owners promptly bringing trade mark infringement proceedings when they become aware of infringements. Sending a cease and desist letter and/or bringing a trade mark cancellation action before the trade mark office will not ‘stop the clock’ on acquiescence to use of the trade mark. 

However, it also demonstrates that, where the trade mark owner genuinely believes that infringing use has ceased, and has taken reasonable steps to monitor the situation, they should not be found to have acquiesced if they do not take action until they next become aware of infringing use some years later.