After Brexit: UK BASMATI mark vs. EU trade mark

Does an EU figurative mark including the word ‘basmati’ infringe the rights of the unregistered earlier UK word mark BASMATI? Not the only interesting question before the CFI, but also: has Brexit rendered this litigation irrelevant?

UK Basmati trademark versus the EU figurative mark “Abresham Super Basmati Selaa Grade One World’s Best Rice” – this was the basic dispute heard before the European Court (Court of First Instance, CFI). However, this was not the only interesting issue, but rather the impact of Brexit on pending proceedings relating to EU trade marks.

BASMATI ‘action for passing off’: The facts

In June 2017, Mr Hamid Ahmad Chakari (Vienna) applied for registration of the figurative sign ‘Abresham Super Basmati Selaa Grade One World’s Best Rice’ as a European Union figurative mark – for food containing rice and rice flour of Nice Classes 30 and 31. In October 2017, the applicant, Indo European Foods Ltd, filed an opposition against this European Union figurative mark. It claimed extended passing off, relying on its own earlier word mark BASMATI, which is a not registered mark in the UK and is used for rice.

The EUIPO Board of Appeal dismissed the appeal as unfounded in April 2020 on the basis that the applicant had failed to establish that the term ‘basmati’ allowed it to prohibit the use of the trade mark applied for in the UK on the grounds of action for passing off under the common law. In this context, please also read the following article: UK trade mark after Brexit: “SORRYBRO” decision of EUIPO.

This case, which was decided before the CFI in October 2021, is particularly interesting, not only because of the extended passing off, but above all because Brexit took place between the filing of the opposition and the decision of the Board of Appeal until the CFI’s judgment in 2021.

So the first question was: has Brexit rendered this Basmati litigation irrelevant?

Impact of Brexit on pending proceedings in relation to EU trade marks

The CFI expressly denied this. The Withdrawal Agreement, which governs the modalities of the United Kingdom’s withdrawal from the European Union, had provided for a transitional period from 1 February to 31 December 2020, during which EU law continued to apply in the United Kingdom. However, the decision of the Board of Appeal (the contested decision) had been issued on 2 April 2020, i.e. during the transitional period.

And until the end of that period, the earlier mark BASMATI continued to be under protection as it would have been if the UK had not withdrawn from the European Union, the CFI ruled. Otherwise, this would amount for the court to take into account circumstances which arose after the adoption of the contested decision and did not affect its merits. Moreover, Indo European Foods still had an interest in the proceedings, the court added, and this must continue until the final decision.

Bringing an action for passing off

The Board of Appeal was right to hold, the CFI said, that the mere risk that the goods in question might be of a lower quality than basmati rice did not entitle the applicant to prohibit the use of the mark applied for. That is because the legislation on trade mark infringement is not aimed at a promise of quality of the goods.

However, the Board of Appeal’s finding that the applicant had not pleaded, let alone proved, that the mark applied for was used in the UK and that such use concerned goods not made from genuine basmati rice was not relevant in this case, the CFI held.

Use of the mark applied for is not one of the requirements for bringing an action for passing off, the court ruled. It was apparent from the decision of the Court of Appeal (England & Wales) (Civil Division), Maier v ASOS Plc [2015] F.S.R. 20, paragraphs 71 to 85, that a notional and fair use of the trade mark applied for must be presumed. Moreover, use of the mark applied for is not a requirement set out in Article 8(4) of EU Regulation No 207/2009, the CFI added.

Consequently, the applicant had rightly argued, the CFI ruled, that the likelihood of misleading presentation arose from fictitious fair use of the mark applied for in relation to the general description of the rice products in question. The requirement of a likelihood of misleading presentation is met if the relevant public may be misled into believing that the goods in question consist of or contain basmati rice when that is not the case. Even where the goods are of different types, there may be misleading presentation. The applicant was therefore correct in arguing that the public, when purchasing a product which, like the mark in dispute, is labelled with the element ‘basmati’, would expect that the product actually contained basmati rice.

The Board of Appeal had misapplied the legal criteria for the so-called “extended form of passing off”, the Court explained. This is because the Board of Appeal had excluded the risk of deception and detriment to the goodwill associated with the term ‘basmati’ – but this was erroneous, the CFI ruled. Indeed, if the EUIPO is called upon to take into account the national law of the Member State in which the earlier sign is protected, it must, of its own motion, inform itself of the national law of the Member State concerned if this is necessary for the assessment of the conditions of the facts, the CFI said.

The CFI therefore annulled the decision of the Board of Appeal (T-342/20).

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