SFC’s AQUAFLOW: Defence of Acquiescence

Board of Appeal

SFC appealed and submitted evidence which it claimed proved that Aqua had acquiesced in the use of the AQUA FLOW CTM, including documents showing sales of goods to Aqua in France which bore the identical French registration AQUA FLOW. The Board of Appeal exercised its discretion not to accept the evidence because the evidence submitted by SFC did not fully explain the commercial situation and relationship between the parties and therefore, would not assist its decision. SFC appealed further.

General Court

The court summarised the four conditions that must be satisfied before the five year limitation period of acquiescence begins to run, namely:

1. The later trade mark must be registered;
2. The application for registration of the later mark must have been made in good faith;
3. The later trade mark must be used in the member state where the earlier mark is protected;
4. The proprietor of the earlier mark must be aware of the use of the later trade mark after its registration.

The court held that the five year limitation period runs from the time that the proprietor of the earlier mark is made aware of the use of the later mark after its registration, and not the date on which the application for the later mark is filed. Accordingly, SFC’s claim that the period of acquiescence began five years after it filed the AQUA FLOW CTM was rejected. In examining the evidence of acquiescence filed by SFC, the court held that whilst the Board of Appeal has discretion to allow evidence into the proceedings for the first time, there is no unconditional right to have such evidence accepted. In exercising its discretion, the Board of Appeal can consider whether the evidence is likely to be relevant to its decision, the stage of the proceedings when the evidence is submitted for the first time and whether the circumstances surrounding the case argue against the evidence being accepted.

In the present case, SFC only filed its evidence on appeal. The evidence did show that documents bearing the AQUA FLOW trade mark had been sent to Aqua during the relevant period. However, the Board of Appeal was entitled to exercise its discretion in not accepting the evidence because:

• the facts of the evidence had been known to SFC at the time of the first instance decision, but had not been submitted; and
• the evidence itself gave rise to new questions which meant that it would have been difficult for the Board of Appeal to interpret the evidence correctly.

Therefore, it was held that it would have been impossible for the Board of Appeal to say at face value that the evidence was relevant to determining the question of acquiescence and to the outcome of the invalidity action. The court further held that SFC had not sufficiently shown acquiescence in any case. The fact that its CTM registration for AQUA FLOW had been registered for more than five years was irrelevant because this did not show that Aqua was aware of the use of the AQUA FLOW CTM registration. Furthermore, the fact that Aqua had purchased goods from SFC, which bore the French national AQUA FLOW trade mark, did not mean that Aqua was aware of the existence of SFC’s CTM registration for the same and had acquiesced in the use of that registration. Therefore, the appeal was rejected.

Comment

The case demonstrates the difficulties in relying on a defence of acquiescence. If trade mark owners intend to rely on this claim, they must make sure that their evidence is filed at the earliest opportunity, and clearly shows that the other party are aware of the use of the particular trade mark in question. In this case, the fact that the parties had traded in goods under an identical French national registration was used to successfully argue that Aqua did not know of the CTM registration for the same mark and therefore could not have acquiesced in the use of the later CTM registration. Therefore, a trade mark owner wishing to rely on a CTM registration must ensure that the other party knows about the existence of the CTM registration and the use thereof, in order to successfully argue there has been acquiescence.