Monday, 13 June 2011

Co-existence agreements and trade mark classification

Omega SA v Omega Engineering Incorporated [2011] EWCA Civ 645, 27 May 2011 concerns the interpretation of a co-existence agreement - the sort of thing we encounter all the time in trade marks practice, especially in these days of more-or-less spurious oppositions. Nothing spurious about this case, though: it's a dispute that has been rumbling on for a long, long time. Almost another Hundred Years War - well, not really, because it only kicked off in 1984.

At first instance ([2010] EWHC 1211 (Ch)) Arnold J upheld the agreement, siding with the US company and rejecting the opposition from the Swiss watchmaker. The Court of Appeal (Mummery LJ giving the leading judgment, with which Black LJ and Sir John Chadwick agreed) concurred with him. The agreement did not (as the Swiss argued) restrict the Americans to class 9, so that they (Omega SA) were entitled to oppose an application in class 14. The agreement, not surprisingly, was concerned with demarcating the goods on which each party could use the trade marks, not with matters of classification. The agreement did not mention class 9 or class 14, or indeed say anything about classes: the appellants were trying to persuade the court that the officious bystander would imply such a reference, but the court saw no need for reasons of commercial efficacy to imply anything into the agreement.

One important point made by both Arnold J and Mummery LJ was that it is not unknown for the Nice Agreement, which sets out the international classification of goods and services, to be changed. Goods could move from one class to another. If the appellants' approach were adopted, a change of classification would wreck the agreement. Of course, a form of words could be devised that would include mentions of the classes while avoiding this outcome, but that was not what the appellants were arguing for anyway. The case does make it abundantly clear that when drafting a co-existence agreement one must take great care to ensure that it draws the line in exactly the right place - just as with any commercial agreement, in fact ... Between the lines, the case also says quite a lot about class headings and the role of the classification system, both highly topical subjects at present. I never quite understood the purpose of the classification system: it doesn't even play a useful role in making searches easier, though I suppose it can narrow the field. Apart from that, it only gives trade mark registries an excuse to charge additional fees. It certainly doesn't provide a rigorous basis for a co-existence agreement (although it might well provide a starting point).

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