Court of Appeal Rules on Stay of Proceedings in Post-Brexit EU Trade Mark Dispute

Citation: [2024] EWCA Civ 87
Judgment on

Introduction

In the case of Crafts Group LLC v M/S Indeutsch International & Anor [2024] EWCA Civ 87, the Court of Appeal (Civil Division) was tasked with evaluating the appropriateness of a stay of proceedings in a case involving claims of trade mark infringement, unjustified threats, and invalidity of a trade mark registration. This article navigates the various legal principles examined by the court in reaching its decision and extracts the key topics discussed.

Key Facts

The legal dispute arose from a prior commercial relationship between Crafts Group LLC (“Crafts”) and M/S Indeutsch International (“KnitPro”), during which KnitPro made takedown requests to Amazon, alleging that Crafts’ products infringed their EU trade marks. Crafts sought relief for unjustified threats of infringement proceedings concerning both EU and UK trade marks, while KnitPro counterclaimed with allegations of infringement of the same marks.

A pivotal aspect of the case hinged on the legal aftermath of the UK’s withdrawal from the EU and the corresponding jurisdictional implications for cases involving EU trade marks that were pending at the time. The initial decision by His Honour Judge Hacon granted a stay of all claims pending the final resolution of the invalidity proceedings before the European Union Intellectual Property Office (“EUIPO”) concerning the EU Chevron Mark. The claimant, Crafts, appealed this decision.

Several key legal principles were at the center of the Court of Appeal’s deliberation:

  1. Application of EU Law Post-Brexit: The court scrutinized the legal implications of the Withdrawal Agreement, the subsequent UK legislation, and the relevance of EU trade mark law as it pertained to proceedings that were initiated before the UK’s official departure from the EU.

  2. Jurisdiction of EU Trade Mark Courts: The court had to determine whether the Intellectual Property Enterprise Court (“IPEC”) retained jurisdiction to hear cases related to EU trade marks that were initiated before the end of the implementation period post-Brexit.

  3. Stay of Proceedings under Article 132(1): The definitive application of Article 132(1) of European Parliament and Council Regulation 2017/1001, which suggests a stay in proceedings when the validity of an EU trade mark is being contested at the EUIPO, was called into question.

  4. Case Management and Discretion: The court exercised its discretion regarding a stay based on case management under CPR rule 3.1(2)(f), considering factors such as preventing unnecessary duplication of proceedings, allowing for the resolution of some disputes, and assessing potential harm and delay caused to the parties.

  5. Analogy with Patent Cases: Guidance from previous patent cases, particularly IPCom v HTC, was utilized in determining the approach to stays when parallel proceedings are taking place in national courts and at the EUIPO.

Outcomes

The Court of Appeal allowed the appeal, changing the stay of all claims to a partial stay. It was held that:

  • The IPEC had no jurisdiction under Article 132(1) to order a stay concerning the EU Chevron Mark following Brexit.
  • The discretion exercised by the judge on case management grounds was flawed due to an initial error in the application of Article 132(1).
  • The court must not impose unnecessary delay where some issues can be resolved independently of an EU decision, potentially promoting settlement or reducing future legal contention.
  • The proceedings involving the UK Chevron Mark’s declaration of invalidity should be stayed, but other matters, including unjustified threats and infringement of UK trade marks, should not be stayed.

Conclusion

The Crafts Group LLC v M/S Indeutsch International case establishes the significance of careful application of post-Brexit legal provisions concerning transitory EU trade mark cases. The court emphasized the need to balance expeditious justice with the avoidance of redundant litigation, aligning its decision with the broader principle of achieving commercial certainty. By tailoring its decision to the context of the IPEC and the proportionality principles inherent in its remit, the Court of Appeal also underscored the heightened importance of jurisdictional clarity and efficient case management in the dynamic landscape of intellectual property law.

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