Royalton Overseas Ltd v. Office for Harmonisation in the Internal Market (OHIM) (Case T-556/12, November 25, 2014)
In opposition appeal proceedings before the Office for Harmonisation in the Internal Market (“OHIM”)’s Boards of Appeal, it is common for the applicant to request a suspension pending the resolution of a cancellation action against an opposer’s registration. Whether to grant or refuse the suspension is within the discretion of the particular Board of Appeal deciding the case.
In Royalton Overseas Ltd v. Office for Harmonisation in the Internal Market, the General Court considered a decision by the First Board of Appeal (the “Board”) in which the Board refused to grant such a suspension. The case involved an opposition by S.C. Romarose Invest Srl (“Romarose”) against Royalton Overseas Ltd (“Royalton”)’s CTM application for the mark KAISERHOFF (Stylized)
based on Romarose’s earlier Romanian registration for the word mark KAISERHOFF. In October 2011, OHIM’s Opposition Division upheld the opposition with respect to some of the goods and services covered by Royalton’s application. Two months later, Royalton filed a notice of appeal and, in additional observations submitted to OHIM in March 2012, requested a suspension of the appeal pending a decision in Royalton’s cancellation action against Romarose’s Romanian registration.
The Board refused to suspend the appeal on two grounds: (1) Royalton failed to provide a copy of the Romanian cancellation action, and (2) the cancellation action was filed after the Board appeal and statement of grounds had been filed. The Board also stated that it had serious doubts about Royalton’s intentions in requesting a suspension, as Royalton had filed two other cancellation actions in Romania against Romarose’s registration before, and those actions had already concluded (the first one because Romarose did not pay the requisite fee, and the second one because Romarose withdrew it) by the time the appeal was filed. After refusing the suspension request, the Board confirmed the findings of the Opposition Division. Royalton appealed to the General Court.
The Board has broad discretion in ruling on requests for suspension, but its decisions in such cases can be reviewed and annulled by the General Court if the Board exhibited a “manifest error of assessment” or “misuse of powers.” Oppositions will not necessarily be suspended if a cancellation action is filed against the opposer’s mark; the decision on whether to suspend requires a weighing of the interests involved.
In Royalton’s appeal, the General Court found that the Board was incorrect in stating that no copy of the cancellation action was filed, as the document (along with its English translation) had indeed been filed with the statement of grounds. Thus, the Board fell short of its obligations under the Community Trademark Regulations to carefully examine all relevant factual and legal aspects of the case.
The General Court also noted that Royalton’s latest cancellation action against Romarose’s registration had in fact been brought while the subject opposition proceedings were pending; however, in any event, this by itself would not be sufficient reason to refuse a suspension request.
Turning to the Board’s suspicions regarding Royalton’s earlier cancellation actions, the General Court observed that the earlier actions failed on procedural grounds, so Royalton’s filing of a fresh cancellation action did not necessarily mean that Royalton was merely seeking to delay the opposition. The court found the Board’s doubts unsupported by any objective evidence, and concluded that the Board failed to account for all aspects of Royalton’s position. Having failed to properly weigh the various interests involved, the Board’s refusal to suspend was found to be in error. The General Court annulled the Board’s decision and did not rule on the merits, as requests for suspension must be decided prior to an assessment of likelihood of confusion or other substantive issues.
Unlike the Opposition and Cancellation Divisions of OHIM, the Boards of Appeal are not bound by strict practices when it comes to extensions and suspensions, and different Boards can take different approaches to the same procedural issue. This is the first time that a Board decision on a procedural matter has been held to exceed the Board’s discretion.