The matter at hand

The Canadian company Alcohol Countermeasure Systems (‘ACS’) was the proprietor of an EU word mark for ALCOLOCK for goods and services in Classes 9, 37 and 52. The English company Lion Laboratories issued an invalidity action against the mark before the EUIPO, based on an identical earlier UK word mark, for goods in Class 9. The invalidity action was upheld by the EUIPO and the General Court.

In the appeal before the ECJ, ACS inter alia raised an argument based on the article 50 TEUTreaty on European Union notification of the UK government, i.e. the announced ‘Brexit’. ACS argued that as a result of the Brexit, Lion Laboratories would no longer be able to rely on the earlier UK mark to invalidate the EU Trade Mark. ACS argued that allowing such an invalidation would create an undesired an disproportionate interference to unitary trade mark protection, considering that the UK would no longer be part of the EU unitary trade mark system. ACS argued that the General Court should have stayed the proceedings until the completion of the Brexit, and should subsequently dismiss the EUIPO’s decision on the ground of it not being possible to invalidate an EU Trade Mark on the basis of a UK mark.

The UK intervened in the proceedings before the ECJ and contended that the ‘Brexit argument’ was inadmissible and, in any event, unfounded.

The judgment of the ECJ

With reference to earlier case law, the ECJ first sums up the grounds on which the General Court may annul or alter a decision of the EUIPO: lack of competence, infringement of an essential procedural requirement, infringement of EU treaties or regulations or any rule of law relating to their application or misuse of power. The ECJ notes that the General Court may merely annul or alter a decision if on the date on which that decision was adopted, one of these grounds applied, not if any of such grounds only came into existence after the date on which that decision was adopted (paragraph 116).

Applied to the case at hand, the ECJ finds that it would be contrary to those principles if “the General Court was required to stay the proceedings pending before it in order, where appropriate, to annul the decision at issue following the withdrawal of the United Kingdom from the European Union on the ground which, moreover was purely hypothetical at that stage, that that withdrawal would retroactively affect the outcome of invalidity proceedings based on an earlier trade mark of that Member State” (paragraph 117).

Furthermore, the ECJ rules, that “the mere communication by a Member State of its intention to leave the European Union in accordance with article 50 TFEUTreaty on the Functioning of the European Union does not have the effect of suspending the application of EU law in that Member State, and, consequently, EU law continues in full force and effect in that Member State until the time of its actual withdrawal from the European Union” (paragraph 118).

The ECJ consequently concludes that the ‘Brexit argument’ must be rejected.