A dispute over trade marks between cosmetics giant L'Oreal and
small prospective hair and cosmetic product producer Special
Effects came to the High Court last year. L'Oreal had previously
used the Registry's opposition proceedings to object to the smaller
company registering a trade mark in the UK for hair products for
'Special Effects'. A matter of days after that registration L'Oreal
had launched a range of beauty products using the Special FX name.
That opposition was unsuccessful.
Special Effects then sued L'Oreal for trade mark infringement.
In the course of that case it argued that L'Oreal could not oppose
the validity of its trade mark because that issue had already been
resolved at the Registry proceedings. Special Effects argued that
there was a cause of action estoppel, i.e. the processes of the
Registry and the court were effectively the same; and issue
estoppel, i.e. the issue under consideration was essentially the
same. It also argued that L'Oreal was guilty of abuse of process in
attempting to make the invalidity argument.
In March last year the High Court found in favour of Special
Effects, ruling that the arguments could not be re-heard because
they had already been decided at the Registry opposition
proceedings stage.
The ruling was a shock to the trade mark attorney world because
it was the first time that Registry proceedings had been given that
status by the courts. Effectively it meant that the court system
could not act as an appeal process for the Registry's own system.
Attorneys who lost an action in the Registry proceedings could not
then simply re-argue it in the courts.
L'Oreal appealed and the Court of Appeal heard the case in
November of last year. The just-issued ruling overturns the High
Court ruling and effectively re-establishes the status quo.
Arguments already heard in Registry proceedings can, in many
circumstances, be reheard in court, it said.
Both parties agreed that in some cases the rulings of the
Registry could not be challenged by a court, but L'Oreal argued
that this was not one of these cases.
The original decision was set to change the way trade mark cases
at the Registry were heard, and was likely to add to the cost and
scale of such hearings. "The point is seen as being of considerable
importance," said Lord Justice Lloyd in giving the Court of
Appeal's decision.
"If the [High Court's] decision is right, the practice in
relation to opposition proceedings will change in one or both of
two ways: either parties will not attempt to oppose or, if they do
oppose, they will seek to do so in a much more substantial way,
similar to the conduct of litigation in court."
The issue was of such importance that both the International
Trade Mark Association and the Institute of Trade Mark Attorneys
sought to intervene and filed evidence to the court.
The Court of Appeal found that the Registry's opposition
proceedings did not have the finality of a court decision.
"The decision of the Registry on opposition proceedings, or more
generally a decision to register despite opposition, is not a final
decision so as to be capable of being the basis for an issue
estoppel," ruled the court. "This is true both as regards the
grounds of invalidity and as regards the issue of prior use more
generally, as relevant to a passing off claim. The same would be
true of cause of action estoppel if, contrary to our view expressed
above, there was a cause of action at that stage."
