Trademark cancellation and opposition: EUIPOs SQAP audit improves the quality of its decisions

Annulation et opposition de marque : l'audit SQAP de l'EUIPO améliore la qualité de ses décisionsOn the 1st, 14th, and 15th of March, the third audit of the European Union Intellectual Property Office (EUIPO), known as the “SQAP audit,” took place concerning trademark cancellations. More recently, on the 14th and 15th of June, the SQAP audit on trademark opposition procedures was held. This serves as an opportunity to review this initiative from the European Union Office for Intellectual Property (EUIPO).


Trademark cancellation: a step towards better rights protection

Forfeiture is an action inherent in trademark law. Forfeiture can be obtained on several grounds, such as lack of serious use, becoming a generic term, or the deceptive nature of the trademark.

The trademark is subject to an obligation of use and exploitation. Naturally, it can subsequently be canceled if it is not subject to this serious use for an uninterrupted period of five years. This ground for forfeiture can be established both five years after registration and during the lifespan of the trademark.

A trademark that becomes the common name in trade for the product or service for which it is registered can be canceled. To avoid this, the holder must fight against any deviant use of their trademark. To do this, they must be able to initiate legal action. Examples of names that have become common are Sopalin, Thermos, Caddy, Perfecto, etc.

Deceptiveness is another reason that can lead to the cancellation of the trademark. This is the case for a trademark that is likely to mislead the consumer about the quality, origin, or nature of the designated product or service. Forfeiture is established upon the request of a third party following deceptive use of the said trademark.

Since April 1, 2020, a new action has been opened to economic actors: the nullity procedure against trademarks. The goal is to enhance and simplify the protection of rights, and this action is subject to no limitation period. A successful action makes it possible to render unexploited trademarks available immediately or to bring down a monopoly on a potentially invalid trademark or one contrary to public order. For its implementation, the action can be based on two distinct causes: relative grounds and absolute grounds.

Absolute grounds can be invoked by anyone who believes that at the time of filing, the applicant was acting in bad faith, that the trademark lacked distinctive character, was contrary to public order, was likely to mislead the public about the nature, quality, or origin of the designated products and services, or even if the trademark is composed of the necessary designation of a product or service.

Only the owner of an earlier right, such as a trade name, trademark, or unregistered right, may use relative grounds. The holder must prove a risk of confusion between the signs.


Trademark opposition: an option for prior rights holders

Whether it is before the INPI (National Institute of Industrial Property), the EUIPO, or even the WIPO (World Intellectual Property Organisation), opposition reiterates the relative grounds for refusing a trademark. A third party’s second trademark application may be subject to opposition from the owner of an earlier trademark. The existence of earlier rights is considered as a relative ground for refusing registration of a European Union trademark. These grounds for refusal are not systematically verified by the Offices. As a result, trademark oppositions are becoming increasingly popular.

The European procedure has served as a model for the French procedure. As a result, it is possible to oppose a European Union trademark and European Union designations in an international trademark. The publication of the trademark in the European Union Trademark Register initiates a three-month period during which it is possible to file an opposition with the opposition division. At the end of this period, the applicant for the subsequent trademark is notified, and a so-called cooling-off period (a period for reflection and amicable resolution of the dispute) is initiated.

The applicant for the trademark opposition action must be able to prove several elements.

On the one hand, they must demonstrate the use of their trademark, specifically indications concerning the location, duration, importance, and nature of the earlier trademark’s use for the products and services for which it is registered and upon which the opposition is based.

They must also be able to prove the identity or similarity of the designated signs, products, or services. The goal of these is to highlight a risk of confusion or association between the two trademarks in the public’s mind.


State of the SQAP audit programme of the EUIPO

The review of all the conditions and requirements of the various procedures carried out within the EUIPO requires a considerable amount of attention for the concerned examiners and specialized lawyers. European initiatives are constantly moving towards harmonization of the mechanisms used, the necessary costs, and the simplification of the procedures practiced. Despite the fact that the Office is keen to improve the transparency of the law at  a community level, there is still a significant gap between the expectations of economic actors and the actual quality of the decisions rendered.

It was thus in 2017 that the European Office launched its project related to stakeholder quality assurance panels, also known as “Stakeholder Quality Assurance Panels” (SQAP). The aim was to bridge the gap between the users’ perception of the decisions made by the EUIPO and their quality, and the Office’s own perception of its decisions. To do this, it decided to invite associations to carry out external audits of its decisions.

These audits can include the review of internal processes, the accuracy of decisions, and compliance with applicable regulations and policies. During an SQAP audit, there could be an evaluation of how decisions are made, an analysis of documentation, interviews with staff, and recommendations for improving the quality of the service.

User panels represent user associations. During the 2023 audits, the following are represented: APRAM (Association of Practitioners of Trademark and Design Law), INTA (International Trademark Association), AIPPI (International Association for the Protection of Intellectual Property), ANIPA (Association of National Institutes of Intellectual Property Consultants), ASIPI (Inter-American Association of Industrial Property), ECTA (European Communities Trade Mark Association), BUSINESSEUROPE, FICPI (International Federation of Intellectual Property Counselors), GRUR (German Association for the Protection of Industrial Property and Copyright), the ICC (International Chamber of Commerce), and MARQUES. The panels verify decisions based on the quality criteria applied by the Office.

The audit unfolds in several stages. During the audit, each auditor first undertakes the individual inspection of the decisions assigned to them. After this, they submit their observations to the committee. As the committee members begin a debate, Office specialists are present to clarify any uncertainty concerning the Office’s procedures. At the end of these exchanges, an audit report containing all the conclusions is drafted and approved by the committee. Following the audit, the Office’s specialists scrutinize the conclusions in order to identify opportunities for improvement and to determine the actions to be taken. The auditors, as well as user groups, are kept informed of the improvements made thanks to SQAP on a regular basis.


Sample Size and Evaluation Criteria

The SQAP audit on cancellation decisions is based on a representative sample of cases selected at random from the EUIPO’s recent decisions. The sample size is large enough to ensure the reliability of the results and reflect the diversity of situations encountered in cancellation procedures. The evaluation criterias are based on the EUIPO’s quality standards, which aim to ensure consistent application of the rules and legal principles.


Audit Results

The results of the SQAP audit on cancellation decisions are classified into three main categories: “excellence,” “compliance,” and “actions needed.”

“Excellence” decisions are those that demonstrate a high level of quality and consistency in the application of legal criteria. These decisions are considered to be examples of good practice and serve as a reference for improving future decisions.

“Compliance” decisions meet the quality standards established by the EUIPO. They are considered satisfactory but may require certain improvements to reach the level of excellence.

“Actions needed” decisions are those that have more significant legal compliance gaps or errors. These decisions are subject to a more detailed analysis to identify the causes of the problems and implement appropriate corrective measures.

The results of the SQAP audit on cancellation and opposition decisions allow for feedback from the represented associations. Consequently, they enable the implementation of corrective actions or the adaptation of EUIPO’s decision-making mode since they allow it to discern the strengths and weaknesses of its processes by identifying the deficiencies within them. Corrective actions are taken to address the problems identified, and best practices are shared with intellectual property agents and users to improve the overall quality of cancellation decisions.EUIPO’s 2023 SQAP Audit

By improving decision-making mechanisms and establishing quality criteria, the establishment and development of this type of audit suggests the possibility of soon witnessing even more satisfying and high-quality decisions.