Special Effects Ltd v L'Oréal SA L'Oréal (UK) Ltd

Decisions of the Registrar in trade mark opposition proceedings may give rise to cause of action estoppel and issue estoppel in later infringement proceedings. The relevant question is the substance of the issues under sections 3 and 5 of the Trade Marks Act 1994, not the procedural timing of registration. An unsuccessful opponent is barred from relitigating grounds which were raised or could have been raised. The bar may bind a company which was not formally a party where there is sufficient identity of interest to constitute privity. Estoppel also prevents relitigation of earlier use relied upon for a defence or passing-off claim. A claim for revocation based on the expiry of the five-year non-use period is premature before that period has elapsed.

The claimant owned the registered mark SPECIAL EFFECTS. L’Oréal SA had unsuccessfully opposed registration before the Registrar, relying on absolute and relative grounds under the Trade Marks Act 1994. The registration was later assigned to the claimant.

The claimant brought infringement proceedings against L’Oréal SA and L’Oréal (UK) Ltd. The defendants sought to challenge validity, rely on earlier use of SPECIAL FX, advance a passing-off counterclaim, and seek revocation for non-use. Preliminary issues concerned estoppel, privity, the scope of section 11(3), the five-year revocation period and an Article 6 ECHR defence.

1. Estoppel from opposition proceedings. The Registrar was a court of competent jurisdiction and the decision in opposition proceedings was final, subject to appeal, for estoppel purposes. The difference between opposition before registration and invalidity proceedings after registration was immaterial because both concerned objections under sections 3 and 5 of the Trade Marks Act 1994. The decision was unlike the European Patent Office opposition decision in Buehler AG v Chronos Richardson because the Registrar’s jurisdiction was not divided from that of the national courts.
2. Cause of action estoppel prevented the defendants from relying on all grounds founded on sections 3 or 5, including grounds which could have been raised but were not. Issue estoppel separately prevented relitigation of issues actually decided, including the absence of established prior use of SPECIAL FX. The fuller evidence later available, the parties’ correspondence, the alleged change of position and Article 6 ECHR did not amount to special circumstances defeating the estoppels.
3. The principles in Arnold v NatWest Bank plc, Johnson v Gore-Wood and Hormel Foods Corpn v Antilles Landscape Investments NV were applied. The court followed the reasoning in Hormel that the principles applicable to validity challenges in patent and registered-design cases could apply to trade marks.
4. L’Oréal (UK) Ltd was a privy of L’Oréal SA. There was sufficient identity of interest because both companies were concerned with the same rival marks, belonged to the same group, and the second defendant could have been joined in the opposition. Both defendants were therefore bound.
5. The defendants were estopped from alleging use of SPECIAL FX before 30 June 2000 for section 11(3) or passing-off purposes. The question whether such use existed had been expressly determined in the opposition proceedings.
6. The question whether the United Kingdom or England and Wales could constitute a particular locality under section 11(3) was not decided because it did not arise on the facts.
7. The proposed revocation claim under section 46(1)(a) was premature. The court could not predict whether genuine use or proper reasons for non-use would exist when the five-year period expired. Paragraph 14 of the defence and counterclaim was struck out.

The defendants’ Article 6 ECHR contention added nothing once the estoppels had been established. The parties were directed to agree an order, with costs reserved for further argument.