Crafts Group LLC v M/S Indeutsch International
| Jurisdiction | England & Wales |
| Judge | Hacon |
| Judgment Date | 16 June 2023 |
| Neutral Citation | [2023] EWHC 1455 (IPEC) |
| Court | Intellectual Property Enterprise Court |
| Docket Number | Case No: IP-2020-000138 |
[2023] EWHC 1455 (IPEC)
HIS HONOUR JUDGE Hacon
Case No: IP-2020-000138
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
INTELLECTUAL PROPERTY ENTERPRISE COURT
Royal Courts of Justice, Rolls Building
Fetter Lane, London, EC4A 1NL
Michael Edenborough KC (instructed by White & Black Limited) for the Claimant
Guy Hollingworth (instructed by Wiggin LLP) for the Defendants
Hearing date: 22 May 2023
Approved Judgment
This judgment was handed down remotely at 10.30am on 16 June 2023 by circulation to the parties or their representatives by e-mail and by release to the National Archives.
Introduction
This an application by the defendants (“KnitPro”) for a stay of this claim pending the resolution of an application to cancel one of KnitPro's trade marks in the European Union Intellectual Property Office (“EUIPO”). KnitPro relies on art.132(1) of Regulation (EU) 2017/1001 (“the Trade Mark Regulation”) and on CPR 3.1(2)(f).
Michael Edenborough KC appeared for the claimant (“Crafts”), Guy Hollingworth for KnitPro.
Background
Both KnitPro defendants are partnership firms formed under Indian law. They are part of a group headed by the Indian company Indeutsch Industries Private Limited. From August 2007 the Indeutsch group supplied to Crafts' predecessor, Crafts Americana, wooden knitting needles and crochet hooks which bore a decorative chevron pattern in two styles.
In late 2009 Crafts applied for a trade mark in the form of one of the chevron patterns in the United States Patent and Trade Mark Office.
To protect its position outside the United States, in February 2010 KnitPro (specifically the first defendant, but I need not distinguish the defendants) filed two applications in the EUIPO for trade marks. Both were registered on 10 August 2010 in class 26 for knitting needles and crochet hooks. The first, “the EU Chevron Mark” takes a chevron form, as does the second (“the EU Symfonie Mark”), more figuratively. Following Brexit the second defendant obtained comparable UK trade marks, the “UK Chevron Mark” and the “UK Symfonie Mark”.
On 26 May 2010 the parties signed what was referred to as the “Trade Dress Rights Agreement”, by which they sought to delimit geographically their respective uses of two types of chevron signs used on their products.
The relationship broke down. Crafts began to sell knitting needles and crochet hooks in competition with those made by KnitPro. On 9 January 2013 Crafts applied to the EUIPO seeking cancellation of KnitPro's EU Chevron Mark under art.7(1)(a) and (b) of the Trade Mark Regulation.
In 2015 KnitPro became aware that Crafts was selling knitting needles and crochet hooks through Amazon in the United Kingdom and in Germany, both types of product bearing a sign which KnitPro believed constituted an infringement of its EU Chevron Mark. In the UK they were branded Crafts' “Caspian” products. In June 2015 KnitPro instigated a takedown request to Amazon. Amazon removed the listing of the Caspian products from Amazon.co.uk on 14 July 2015.
On 23 July 2015, trade mark attorneys acting for Crafts wrote to KnitPro's solicitors alleging that KnitPro had made unjustified threats of infringement of the EU Chevron Mark by reason of its communications with Amazon. On 29 July 2015, KnitPro's solicitors replied, denying the claim.
On 30 November 2015 Amazon removed another line of Crafts' needles, the “Sunstruck” needles, following KnitPro's complaint that they infringed the EU Chevron Mark.
Meanwhile Crafts took no further steps in respect of its allegation of threats and did not do so for over five years. The next that KnitPro heard about this allegation was when solicitors newly instructed by Crafts wrote to KnitPro's solicitors on 12 November 2020 alleging that KnitPro's communications with Amazon UK had constituted unjustified threats of infringement of the EU Chevron and Symfonie Marks contrary to s.21 of the Trade Marks Act 1994. A claim form was issued in this court by Crafts on 11 December 2020.
On 8 January 2021 the claim form was amended to add allegations of unjustified threats in relation to the UK Chevron and UK Symfonie Marks and later re-amended to correct the addresses of KnitPro.
I made an Order dated 20 May 2021 giving Crafts permission to serve the re-amended claim form in India. KnitPro were served on 3 August 2021. On 9 September 2021 KnitPro applied to set aside service. KnitPro also sought in the alternative a stay pursuant to art.132(1) of the Trade Mark Regulation.
In a judgment dated 23 December 2021, Ian Karet, sitting as an Enterprise Judge, refused either to set aside service or to grant the stay (“the Karet Judgment”). Permission was sought to appeal the order on service, which was refused by Snowden LJ on 29 September 2022.
On 27 October 2022 KnitPro served a Defence and Counterclaim. KnitPro allege that the EU Chevron and Symfonie Marks and the two comparable UK Marks have been infringed by Crafts. They further allege that Crafts has passed off its goods for those of KnitPro.
On 8 December 2022 Crafts served a Reply and Defence to Counterclaim, together with an Additional Claim. Crafts pleads that the Trade Dress Rights Agreement provides a defence to the allegation of infringement of all the Chevron and Symfonie Marks. In the Additional Claim Crafts alleges that the EU Chevron and UK Chevron marks were invalidly registered pursuant to, respectively, art.7(1)(a), (b) and (c) of the Trade Mark Regulation and s.3(1)(a), (b) and (c) of the Trade Marks Act 1994, and further that they stand to be revoked on grounds of non-use.
Part of Crafts' case is that this Court does not have jurisdiction in relation to the EU Chevron and Symfonie Marks because it is no longer an EU trade mark court within the meaning of the Trade Mark Regulation. I discuss this below.
KnitPro's principal argument for a stay is based on its contention that art.132(1) of the Trade Mark Regulation applies. KnitPro submits that this court is obliged to stay the proceedings insofar as they relate to the EU Chevron Mark.
Article 132(1) of the Trade Mark Regulation
Art.132(1) falls within Chapter X of the Trade Mark Regulation. It provides:
“ 1. An EU trade mark court hearing an action referred to in Article 124 other than an action for a declaration of non-infringement shall, unless there are special grounds for continuing the hearing, of its own motion after hearing the parties or at the request of one of the parties and after hearing the other parties, stay the proceedings where the validity of the EU trade mark is already in issue before another EU trade mark court on account of a counterclaim or where an application for revocation or for a declaration of invalidity has already been filed at the Office.”
Art.123 of the Trade Mark Regulation requires Member States to designate national courts which have the functions of EU trade mark courts under the Regulation. Art.124, referred to in art.132(1), provides:
“ The EU trade mark courts shall have exclusive jurisdiction:
(a) for all infringement actions and – if they are permitted under national law – actions in respect of threatened infringement relating to EU trade marks;
(b) for actions for declaration of non-infringement, if they are permitted under national law;
(c) for all actions brought as a result of acts referred to in Article 11(2);
(d) for counterclaims for revocation or for a declaration of invalidity of the EU trade mark pursuant to Article 128.”
The UK Community Trade Mark Courts Regulations 2006 (SI 2006/1027) (“the 2006 Regulations”) as amended designate the High Court and the County Courts at the seven regional Business and Property Court centres as EU trade mark courts in accordance with art.123.
I pause here to mention the reason given in the Karet Judgment for refusing a stay of the threats action. It was held that a UK threats action is not listed in art.124 of the Trade Mark Regulation and consequently art.132(1) could not be engaged and there could be no stay. It followed that there was no need to consider the issues on post-Brexit transitional provisions which have been raised in the present hearing.
Withdrawal of the UK from the EU
In anticipation of the UK leaving the EU, among the provisions introduced were the Trade Marks (Amendment etc.) (EU Exit) Regulations 2019 (“the 2019 Regulations”), made on 13 February 2019. They were to come into force on exit day. Exit day was due to fall on 31 October 2019, later amended to be 31 January 2020.
The 2019 Regulations added Schedule 2A to the Trade Marks Act 1994 (“the 1994 Act”). Paragraph 1 provided for the introduction of “comparable trade marks (EU)” to UK trade mark law on exit day. Paragraph 20(1) and (2) stated:
“ 20. (1) This paragraph applies where on exit day an existing EUTM is the subject of proceedings which are pending (‘pending proceedings’) before a court in the United Kingdom designated for the purposes of Article 123 (‘EU trade mark court’).
(2) Subject to sub-paragraphs (3) and (4), the provisions contained or referred to in Chapter 10 of the European Union Trade Mark Regulation (with the exception of Articles 128(2), (4), (6) and (7) and 132) continue to apply to the pending proceedings as if the United Kingdom were still a Member State with effect from exit day.”
Thus, where there were pending proceedings before a UK designated EU trade mark court on exit day, the articles of the Trade Mark Regulation falling under Chapter X of the Trade Mark Regulation would continue to apply to those proceedings. There were exceptions, among them art.132.
The 2019 Regulations were made at the time when...
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