Crafts Group LLC v M/S Indeutsch International & Anor

A stay pending EUIPO or EU-court validity proceedings is governed by the balance of justice. The court should consider delay, prejudice, commercial certainty, prospects of settlement, duplication, wasted costs and whether the external decision will be decisive. A foreign decision may be persuasive without determining the validity of a corresponding UK trade mark, particularly where the grounds or factual assessments differ. Where most issues can be resolved promptly and any later trial would involve little duplication, a limited stay may be preferable to a complete stay. An appellate court may re-exercise the case-management discretion where later developments materially change the case.

Crafts appealed orders of the Intellectual Property Enterprise Court staying all claims pending EUIPO cancellation proceedings concerning the EU Chevron Mark. The judge held that article 132(1) of Regulation 2017/1001 required a stay of claims concerning that mark and ordered a case-management stay of the remaining claims: [2023] EWHC 1455 (IPEC) and [2023] EWHC 1914 (IPEC).

During the appeal, KnitPro withdrew its EU trade mark infringement counterclaims and conceded that article 132(1) no longer applied. The central issue became whether the complete stay should remain, or whether only Crafts’ claim for invalidity of the UK Chevron Mark should be stayed.

1. The appeal was allowed. Subsequent developments had fundamentally changed the case on which the judge had exercised his discretion. The Court of Appeal therefore re-exercised the discretion itself, being as well placed as the judge and able to save time and costs. Remittal was particularly inappropriate in IPEC, where proportionality was paramount.
2. The withdrawal of the EU trade mark infringement counterclaims and KnitPro’s concession meant that article 132(1) of Regulation 2017/1001 no longer provided a basis for a mandatory stay. It was unnecessary to determine the alternative jurisdictional arguments.
3. The Court adopted the approach in IPCom GmbH & Co KG v HTC Europe Co Ltd [2013] EWCA Civ 1496. The discretion to stay parallel proceedings is broad and must be exercised by weighing the balance of justice in all relevant circumstances. Relevant considerations include the duration of each process, prejudice caused by delay, the certainty available from an earlier domestic decision, prospects of settlement, the risk of wasted costs and whether the external decision will be decisive.
4. The EU tribunals’ eventual decision on the EU Chevron Mark would be persuasive but would not guarantee the same outcome for the UK Chevron Mark. The statutory grounds differed in some respects, including the untested ground under section 3(1)(c) of the Trade Marks Act 1994. The application of the principles concerning representation, distinctiveness and acquired distinctiveness could also produce different results.
5. Many issues, including threats, infringement, the contractual defence, the section 11(2)(b) defence, revocation for non-use and passing off, were unaffected by the EU mark’s validity. They could be determined within 9–10 months, whereas final EU validity might take five years. Their resolution could determine or settle the dispute. If the EU mark were invalid, no second trial would be needed; if valid, a second trial would involve little duplication.
6. The balance of justice therefore favoured a limited stay. The judge’s order staying all claims was set aside and replaced by an order staying only Crafts’ claim for a declaration that the UK Chevron Mark was invalid, pending final resolution of the validity of the EU Chevron Mark.

• Court of Appeal (Civil Division): appeal allowed; the complete stay was set aside and a limited stay of the UK Chevron Mark invalidity claim was substituted.
• High Court of Justice, Intellectual Property Enterprise Court: His Honour Judge Hacon ordered a stay of all claims pending resolution of the EUIPO proceedings in [2023] EWHC 1455 (IPEC), with additional reasons in [2023] EWHC 1914 (IPEC).