Whether or not to suspend appeal proceedings must be decided before examining the existence of a likelihood of confusion, the CJEU ruled on the suspension of proceedings; parallel procedures must be taken into account. The case concerns the older well-known figurative marks of Mastercard and the question of likelihood of confusion with numerous younger figurative marks in the currency sector.
Suspension of proceedings
In an extensive trademark dispute and appeal proceedings concerning the older well-known figurative marks of Mastercard and numerous younger figurative marks in the currency and banking sector, the European Court (CJEU) has ruled in favour of a stay of proceedings and also in respect of parallel proceedings.
The CJEU ruled that the examination of whether an appeal procedure should be suspended must be carried out before the examination of the existence of a likelihood of confusion. Despite wide discretion to suspend the proceedings, the Board of Appeal had to take parallel proceedings into account.
The applicant Cinkciarz essentially claimed that the Board of Appeal should have suspended the appeal proceedings, since it took into account relevant parallel proceedings and recommended that the Opposition Division suspend the proceedings. In the trade mark dispute concerning the earlier well-known figurative marks of Mastercard (USA) and numerous more recent figurative marks in the currency and currency sector of Cinkciarz (Poland), several parallel proceedings for invalidity or likelihood of confusion of the marks were brought.
In all the contested decisions, the Board of Appeal decided to compare the signs in question on the basis of the Mastercard EU trade mark, which represents two black and white circles – but which has been the subject of applications for a declaration of invalidity in two parallel proceedings. In only one case did the Board of Appeal decide to base its analysis on the EU trade mark, which represented two red and orange circles. By the way, all the decisions found that the signs compared were visually only slightly similar.
Then, after annulling the decisions of the Opposition Division, the Board of Appeal referred the cases back to it to examine the highly distinctive character of the earlier marks. However, in doing so, it recommended that the Opposition Division suspend the proceedings. The opposition proceedings should be suspended until a final, legally binding decision on the validity of the earlier rights is taken. With regard to the figurative mark €$, the applicant argued that the parallel proceedings concerning the refusal to register the purely figurative mark €$ for lack of distinctiveness should also be awaited or taken into account.
The applicant Cinkciarz added that the Board of Appeal had not given reasons for its final decision not to stay the proceedings, although it considered that such a stay of proceedings was justified – as can be seen from the recommendation to the Opposition Division.
EUIPO argued that the Board of Appeal had confined itself to making only recommendations for the suspension of the opposition proceedings. Furthermore, the failure to suspend the proceedings before the Board of Appeal did not adversely affect the interests of the trade mark applicant, according to EUIPO.
It was also questionable whether the case-law on Article 71(1) of Delegate Regulation No 2018/625 relieved the Board of Appeal of the obligation to suspend the proceedings, even if suspension were appropriate.
Wide discretion for the Board of Appeal
The CJEU confirmed that the wording of Article 71(1) of Delegated Regulation 2018/625 gives the Board of Appeal a wide discretion in deciding whether or not to stay the current proceedings. The existence of parallel proceedings, the outcome of which may have an impact on the appeal proceedings, does not lead to an automatic suspension of the appeal proceedings, the CJEU stated. However, judicial review of the case is still required to ensure that there is no manifest error of assessment or misuse of powers.
It should be noted that the Board of Appeal, when weighing up the interests prima facie, has to assess inter alia the likelihood that the potentially relevant parallel proceedings will lead to a decision which would have an impact on the appeal proceedings. However, where there is uncertainty as to the outcome of parallel proceedings, initiating opposition proceedings without awaiting the outcome of the parallel proceedings is not, in principle, advantageous to the proprietor of the earlier mark.
In this respect, the CJEU stated that the Board of Appeal committed an error of assessment when it based its conclusion regarding the balance of interests on an incorrect legal assessment of the facts or on imprecise facts or when it did not take into account all relevant aspects of the parties’ situation.
Suspension of proceedings must first be examined
Accordingly, the examination as to whether the appeal proceedings should be stayed must be carried out first, before the examination as to the existence of a likelihood of confusion. Consequently, if the Board of Appeal considers it appropriate to stay the proceedings, it has no option but to stay the proceedings and cannot therefore examine the appeal, even partially.
Moreover, an opposition against an earlier mark relied on in support of an opposition loses its validity in the course of the proceedings, with the result that that opposition becomes devoid of purpose.
The CJEU therefore upheld the action and annulled 12 of the decisions in dispute of the Board of Appeal.
These are, in particular, Cases R 1062/2018-2, R 1059/2018-2, R 1058/2018-2, R 1057/2018-2, R 1056/2018-2, R 1060/2018-2, R 1055/2018-2, R 1054/2018-2, R 1053/2018-2, R 986/2018-2, R 1063/2018-2 and R 1064/2018-2. Cases T-84/19 and T-88/19 to T-98/19 are also joined for the purposes of the judgment, the CJEU ruled.
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Judgement of CJEU ‘Mastercard and suspension of proceedings’, EU:T:2020:231
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