(Night)watch out for clarification on conversion

• The Grand Board of Appeal issued its first reasoned opinion under the EUTMR referral mechanism.
• The 'Nightwatch' approach to conversion was confirmed; an applicant may convert its EU trade mark application to national applications during the two-month appeal period following a refusal by the EUIPO.
• During that period, an EUIPO decision is not classed as 'final'. 

In R0497/2024-G, the Grand Board of Appeal of the EUIPO issued its first reasoned opinion under the referral mechanism provided by Article 157(4)(l) EU Trade Mark Regulation (EU 2017/1001) ("EUTMR").  That article provides that one function of the EUIPO's Executive Director is, "in order to ensure uniform application of the Regulation, referring, where appropriate, to the enlarged Board of Appeal (‘the Grand Board’) questions on a point of law, in particular if the Boards of Appeal have issued diverging decisions on the point".

 Background

Under Article 139 EUTMR,  an applicant for an EU trade mark ("EUTM") may request the application be converted into national applications(s), insofar as the EUTM application has been refused, withdrawn, or ceased to have effect. However, the EUTM application cannot be converted in Member States where, "in accordance with the decision of the Office or of the national court, grounds for refusal of registration or grounds for revocation or invalidity apply to the EU trade mark application or EU trade mark."   

It was long thought that a refusal by the EUIPO was a "decision of the Office" that would bar conversion, should no appeal be filed. However, in Nightwatch (R1241/2020-4), the Fourth Board of Appeal held that conversion can occur where an applicant has withdrawn an EUTM application within the two-month appeal period following the EUIPO's refusal – as the decision had not yet become 'final'.

Seeking clarification, the EUIPO's Executive Director referred to the Grand Board of Appeal questions as to the scope and meaning of 'decision' as it related to the conversion process.

Opinion of the Grand Board of Appeal

The Grand Board of Appeal confirmed the approach of the Fourth Board of Appeal in Nightwatch. It stated that a refusal decision does not become 'final' until after either the expiry of the two-month appeal period, or the dismissal of an appeal, if filed. Considering an applicant may withdraw its EUTM application at 'any time' (Article 49(1)) and that withdrawal terminates proceedings, rendering them 'devoid of purpose', it necessarily follows that a refusal does not become effective until the expiry of the appeal period, and so an applicant may convert its application up until that point. Consequently, what the Grand Board of Appeal considered an 'inoperative refusal decision' could not bar the conversion process.

It also stated that just because the EUIPO's decisions (e.g. refusals) are public documents does not mean that they have residual legal effect. The finality of a refusal is not contingent on the public administration of legal documents, nor the EUIPO's legal duty to publish said documents.

Comment

This is the first time the Executive Director of the EUIPO has used the referral mechanism in Article 157(4)(l) EUTMR, which has seemingly been a procedural success. Numerous interested parties, including INTA, Marques and the Benelux IP office, submitted observations. The opinion is clear and well reasoned, and arguably enables the "uniform application of the Regulation" which it was intended to do. 

Furthermore the opinion makes clear that applicants no longer need to file an appeal to convert their EUTM if faced with an EUIPO refusal – saving on costs and time – although they must apply for conversion within the appeal period.

With thanks to trainee solicitor Ali Zaghloul for co-authoring this article.