Crafts Group LLC v M/S InDeutsch International & Anor

A court hearing proceedings instituted before the end of the EU withdrawal transition period may retain jurisdiction under Chapter X of the Trade Mark Regulation, including the mandatory stay mechanism in article 132(1), notwithstanding the exclusion of that article from Schedule 2A to the Trade Marks Act 1994.

Where EUIPO cancellation proceedings may determine, or materially affect, corresponding UK trade-mark issues, the court may stay the related UK claims under its case-management discretion. The governing consideration is the balance of justice, including delay, prejudice, wasted costs, commercial certainty and the extent to which the foreign decision will resolve issues in the English proceedings.

Crafts brought claims alleging unjustified threats of infringement concerning EU and UK trade marks owned by KnitPro. KnitPro counterclaimed for infringement and passing off, while Crafts sought declarations of invalidity and revocation of certain marks.

KnitPro applied for a mandatory stay of the EU Chevron Mark claims under article 132(1) of the Trade Mark Regulation. It also sought discretionary stays of the remaining claims under section 49(3) of the Senior Courts Act 1981 and CPR 3.1(2)(f), pending EUIPO cancellation proceedings concerning the EU Chevron Mark.

The central issues were whether article 132(1) continued to apply under article 67(1)(b) of the Withdrawal Agreement, and whether justice required the remaining proceedings to be stayed.

1. Mandatory stay. Article 67(1)(b) of the Withdrawal Agreement preserved the jurisdictional provisions in Chapter X of the Trade Mark Regulation for proceedings instituted before the end of the transition period. That included article 132(1), which was not excluded by the Withdrawal Agreement.

2. Although paragraph 20 of Schedule 2A to the Trade Marks Act 1994 excluded article 132, the provisions could be reconciled. Article 67(1)(b) continued article 132 as retained EU law, while paragraph 20 simply did not do so. The direct effect of the Withdrawal Agreement could not be limited by ministerial regulations under section 8B of the European Union (Withdrawal) Act 2018.

3. The court remained an EU trade mark court for pending proceedings. The reasoning in Easygroup Ltd v Beauty Perfectionists Ltd [2021] EWHC 3385 (Ch) was applicable. The court rejected any analogy with relation back under section 35 of the Limitation Act 1980; Simon v Taché [2022] EWHC 1674 (Comm) concerned a different issue under the Brussels Recast regime.

4. Article 132(1) required a stay of the counterclaim, threats claims, revocation claims and invalidity claims relating to the EU Chevron Mark. No special grounds justified continuing those claims.

5. The remaining stay applications were governed by the broad discretion under section 49(3) of the Senior Courts Act 1981 and CPR 3.1(2)(f). Applying the guidance discussed in IPCom GmbH & Co KG v HTC Europe Co Ltd [2013] EWCA Civ 1496, the court assessed the balance of justice. The likely EUIPO and appellate outcome could determine, or substantially narrow, the UK Chevron issues. A stay avoided duplicated and potentially wasted trials. Crafts’ losses were compensable and no irreparable prejudice was established.

6. The same balance favoured a stay of the UK Chevron, Symfonie and passing-off claims. All proceedings were therefore stayed pending final resolution of the EUIPO cancellation application concerning the EU Chevron Mark.