Ricing to the occasion: The Advocate General supports the EU General Court decision that Brexit does not leave “Basmati” bereft

Executive summary

These proceedings relate to an opposition to an application for EU trade mark containing the word “Basmati” in which Mills & Reeve were instructed on behalf of The Agricultural and Processed Food Products Export Development Authority (APEDA), an India Government body established to represent the interests of, amongst others, Basmati rice growers, producers and exporters.

This is an important case for APEDA in protecting the geographical indication “Basmati” and relates to an important issue concerning the status of appeals against pre-Brexit EU Intellectual Property Office  (EUIPO) decisions in matters based on UK-only rights, which were ongoing at the end of the Brexit transition period.

Background

“Basmati” is a name traditionally applied to a unique variety of aromatic rice grown and produced in a particular region below the foothills of the Himalayas. Around the world, the name “Basmati” is exclusively associated with this particular type of rice. In the UK, the “Basmati” name has acquired goodwill and distinguishes that class of rice from other rice. That goodwill is collectively owned by those who trade in genuine Basmati rice in the UK.

Earlier proceedings

An individual applied to register an EU trade mark which included the words “Abresham Super Basmati Selaa Grade One World's Best Rice” for various rice-based products that were not limited to genuine Basmati rice.

APEDA wished to oppose the application. However, as APEDA is not a trader in Basmati rice, on 13 October 2017 the application was opposed by Indo European Foods Ltd (IEF), a UK trader in Basmati rice, on the basis of the extended form of passing off, a legal action available in the UK.

The trade mark opposition was rejected by the EUIPO on 5 April 2019, and again (on appeal by IEF) by the Fourth Board of Appeal of the EUIPO (Board of Appeal) on 2 April 2020, on the basis that IEF had failed to prove the necessary elements of misrepresentation and damage. IEF appealed this decision to the EU General Court on 2 June 2020.

With effect from the expiry of the Brexit transition period on 31 December 2020, EU trade mark law ceased to have effect in the UK and UK-trade mark rights could no longer form the basis of an opposition to EU trade mark applications.

In the light of this, the EUIPO argued that the appeal to the General Court should be dismissed on, amongst others, grounds that the opposition and appeal were devoid of purpose and, that because the opposition could no longer procure any advantage to it, IEF no longer had any interest in appealing to the General Court.

On 6 October 2021, the General Court upheld IEF’s appeal (which it held to be admissible). It held that the opposition and appeal could not become devoid of purpose as a result of expiry of the Brexit transition period (which occurred after the Board of Appeal decision) and that IEF’s interest in bringing proceedings still subsisted.

The relevant date for determining the purpose of the opposition and IEF’s continued interest was the date of the Board of Appeal’s decision on 2 April 2020, not any subsequent date. The General Court also held that the extended form of passing off was a basis for opposing an EU trade mark application and that the use of the opposed mark would give rise to a misrepresentation and damage. While it did not uphold the opposition (it was for the Board of Appeal to reconsider its decision on the merits), the General Court commented favourably on IEF’s substantive case.

The EUIPO appealed the General Court’s decision to the Court of Justice of the European Union (CJEU) on the basis that IEF had ceased to have a continuing interest in bringing proceedings. The Federal Republic of Germany was granted leave to intervene in support of the EUIPO.

Andrew Norris KC, instructed by Mills & Reeve, appeared on behalf of IEF in the proceedings before the General Court and the CJEU.

Advocate General opinion

As a precursor to CJEU decisions, the Advocate General (AG), an advisor to the judges of the CJEU, assists the CJEU by writing an impartial and independent opinion on a case that the judges consider before giving judgment. Although an AG's opinion is not binding, it is influential and is usually followed by the court.

On 23 November 2023, the AG, Mr Maciej Szpunar handed down his opinion. In a thorough opinion dealing with complex legal issues, the AG comprehensively rejected the EUIPO’s appeal and approved the General Court’s decision. The AG’s opinion can briefly be summarised as follows:

The purpose of the action

The General Court did not examine the issue of IEF’s continuing interest in bringing proceedings or the legality of the decision at issue, but that of the action becoming devoid of purpose.

The purpose of an action and the interest in bringing proceedings of the person bringing such an action are two separate issues, although these two elements are often linked.

The CJEU had previously held that the purpose of an action has ceased to exist when, during the proceedings, an event occurs having the effect that the relevant EUIPO decision should be found to have never existed (such as the invalidation of the trade mark on which the action is based).  

The AG stated that in this case the action before the General Court concerns a Board of Appeal decision handed down at a time when the right on which IEF’s notice of opposition was based was still a valid ground for opposition. The extinction of the applicability under EU law of that earlier right due to the withdrawal of the UK from the EU, when it occurs after the Board of Appeal decision, cannot have any effect on the proceedings before EUIPO, since it cannot be considered to eliminate the earlier right such that it is deemed to have never existed. EU law remains applicable to the UK until the end of the Brexit transition period, and trade mark rights based on UK national law only ceased to have effect in the EU from the end of the transition.

The AG stated that the General Court was right to hold that IEF’s action before it retained its purpose.

The continued interest in bringing proceedings

The AG stated that it was irrelevant, as argued by the EUIPO, to determine whether the registration of the EU trade mark application at issue, despite the end of the transition period, is still capable of adversely affecting the legal interests of IEF. In summary, this was because the event on which the EUIPO based its argument that IEF had ceased to have a continued interest (namely the effective withdrawal of the United Kingdom from the EU), occurred after the Board of Appeal decision.

In any event, dismissing the EUIPO’s arguments, the AG found that IEF did have a continued interest in bringing proceedings before the General Court. The EU Trade Mark Regulation provides that reasonable compensation may be claimed in respect of acts occurring after the date of publication of an EU trade mark application, where those acts would, after registration of the trade mark, have infringed the trade mark. The opposed application was published on 6 September 2017, over 3 years before the expiry of the Brexit transition period. In summary, IEF would be exposed to a claim for compensation by the applicant arising from its use of “Basmati” during the period between publication of the application and the expiry of the transition period.

The effects on the proceedings before the EUIPO

The General Court decision did not have the effect of imposing on the EUIPO an obligation to disregard the legal effects of the end of the transition period.

The AG stated that this decision cannot anticipate the outcome of the EUIPO’s re-examination of the notice of opposition. Even if the withdrawal of the UK from the EU could have the effect of leading the Board of Appeal to dismiss the notice of opposition (which the AG opinion suggests it would not have the grounds to do), it is for the Board of Appeal, and not for the General Court, to reach that conclusion.

Summary

Richard Plaistowe, principal associate at Mills & Reeve, said: “We are delighted to have represented Indo European Foods, and the wider interests of Basmati rice growers, exporters and traders, in these proceedings before the CJEU. The Advocate-General’s opinion is a key step in providing much-needed clarification for parties involved in appeals against EUIPO decisions relating to UK-only rights which were the subject of appeals ongoing after Brexit.”