Omega Engineering Incorporated v Omega SA (Omega AG) (Omega Ltd)

This is another battle in the long-running war between the American company Omega Engineering Incorporated (which I shall refer to as “Engineering”) and the Swiss company Omega S.A. (Omega AG) (Omega Ltd) (which I shall refer to as “Swiss”) over the trade marks OMEGA and Ω. Whilst this war has not been running for as long as the hundred years’ war between Anheuser-Busch Inc and Budejovicky Budvar NP over the BUDWEISER and BUD trade marks worldwide, it has been running for a similar duration to the thirty years’ war between those litigants in this country (see Budejovicky Budvar NP v Anheuser-Busch Inc[2009] EWCA Civ 1022, [2010] RPC 7).

The present battle has two fronts. The first is an application by Engineering for summary judgment on a claim for breach of contract commenced by it in this Court. The second is an appeal by Swiss against a decision of David Landau acting for the Registrar of Trade Marks dated 12 November 2009 (BL O/352/09, “the Decision”). By the Decision the hearing officer dismissed Swiss’ opposition to Engineering’s application number 2456185C (“the Application”) to register the trade mark OMEGA (“the Trade Mark”) in respect of the following goods (“the Goods”) in Class 14:

Common to both fronts is an agreement between Engineering and Swiss dated 11 April 1984 (“the Agreement”). Engineering’s case in summary is that: (1) by clause 5 of the Agreement Swiss undertook inter alia not to object to the registration by Engineering of the Trade Mark in respect of the Goods; (2) Swiss thereby consented to registration of the Trade Mark so as to preclude it from raising an objection on relative grounds pursuant to section 5(5) of the Trade Marks Act 1994; and (3) by opposing the Application Swiss has acted, and continues to act, in breach of the Agreement. Swiss’s case in summary is that: (1) clause 5 of the Agreement on its true construction does not prevent it from objecting to the Application; (2) in the alternative, Engineering is precluded from enforcing clause 5 on the grounds of estoppel, variation or acquiescence; and (3) in any event, section 5(5) has been impliedly repealed.

For reasons that will appear, central to these disputes is a very technical, not to say arcane, area of trade mark law, namely that of classification. In order properly to understand the disputes, let alone to resolve them, it is essential to know the relevant law at the relevant dates, namely April 1984 and May 2007. To my surprise, neither counsel addressed the legal framework in their respective skeleton arguments. Perhaps they assumed that I did not need to be told. Be that as it may, I must set out the law in a little detail in order for my reasoning on the issues that arise to be comprehensible.

Trade marks may be registered for any of the vast range of goods and services which are traded. For administrative reasons, in particular so as to facilitate searching, it has long been the practice of trade mark registries throughout the world to classify those goods and services into numbered classes. Although the United Kingdom adopted a classification system in conjunction with the first Trade Marks Act in 1875, the present system has its origins in an international conference in London in 1934 when an internationally-agreed list of classes was drawn up. This was adopted in the United Kingdom as Schedule IV to the Trade Marks Rules 1938 made under section 40(1)(c) of the Trade Marks Act 1938.

In 1957 an international convention concerning the classification of goods and services, the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, was agreed. This came into force in 1961 and has subsequently been revised on three occasions. The Nice Agreement provides for the establishment and periodic revision of a Classification consisting of: (i) a numbered list of classes (each of which consists of a “class heading” which describes the goods or services in that class) together with explanatory notes; and (ii) an alphabetical list of goods and services with an indication of the class into which each of the goods or services falls: see Article 1(2). The Nice Classification is based on that drawn up at the London conference in 1934.

It should be noted that the Nice Agreement is only an agreement as to classification, not as to the effect of classification. Thus Article 2(1) provides:

The United Kingdom acceded to the Nice Agreement and adopted the Nice Classification, initially by way of amendment of Schedule IV to the 1938 Rules in 1964: see the account given in CAL-U-TEST Trade Mark [1967] FSR 39 at 43-45. As at April 1984 the Nice Agreement continued to be implemented in the United Kingdom by Schedule IV to the 1938 Rules (as subsequently amended) made under the 1938 Act.

The 1938 Act contained three provisions relating to classification. First, section 3 of the 1938 Act provided:

Secondly, section 36 provided for rules to be made empowering the Registrar to take steps necessary to implement any amended or substituted classification.

Thirdly, section 40(1) of the 1938 Act provided:

Turning to the 1938 Rules made under section 40(1)(c), rule 21 provided inter alia:

The effect of classification under the 1938 Act was stated by Kerly’s Law of Trade Marks and Trade Names (11^th edition published in 1983) at §5-05 as follows:

Amongst the authorities cited in support of this proposition, it is sufficient to refer to two. First, in Carless, Capel & Leonard v F. Pilmore-Bedford & Sons (1928) 45 RPC 205, the trade mark in suit was registered in Class 47 (of the pre-1938 classification) in respect of “oils for lighting and heating”. The claimant alleged infringement by the sale of petrol and relied upon the facts that (a) petrol fell within Class 47 and (b) the Registrar had opined that the mark would cover petrol. Tomlin J held at 217 that commercially nobody spoke of petrol as oil and that, if the mark (which included the words “petroleum oil for burning”) did cover petrol, it would be misleading. Accordingly, he held that, assuming without deciding that the mark did cover petrol, it should be limited so as to exclude petrol. This case was cited in CAL-U-TEST (supra at 45) as authority for the proposition that:

In Ofrex Ltd v Rapesco Ltd[1963] RPC 169 the claimant owned the trade mark OFREX registered in Class 39 (of the pre-1938 classification) in respect of inter alia “stationery”. The defendant sold staples for an office stapling machine under the same mark. The defendant contended that it did not infringe because “staples (metal)” were listed in Class 13 in the Registry’s Guide to Classification. The Claimant answered that by producing a letter from the Registrar saying that “stapling presses being articles of stationery and staples for use therein” were within Class 39. Pennycuick J decided the case on the ground that staples were stationery according to the ordinary meaning of the word and declined to go into the question of classification.

As was pointed out in Kerly at §5-06, the position was different where the specification of the mark expressly incorporated a reference to the class (such as where it was registered for “all goods within Class X” or for “widgets included in Class X”). In such a case, the question whether any particular goods did or did not fall within the specification was to be answered by reference to the Registrar’s practice at the date of registration: see CAL-U-TEST at 46 and GE Trade Mark [1969] RPC 418 at 458-459.

The provisions in the 1994 Act relating to classification are little different to those in the 1938 Act. First, section 34 of the 1994 Act provides:

Secondly, section 65 provides for rules to be made empowering the Registrar to take steps necessary to implement any amended or substituted classification.

Thirdly, section 78(1) provides:

As at May 2007, the rules made under section 78(1) in force were the Trade Marks Rules 2000 as amended. Rule 7 of the 2000 Rules as amended provided:

Rule 8(1) of the 2000 Rules as amended provided:

In Altecnic Ltd’s Trade Mark Application[2001] EWCA Civ 1928, [2002] RPC 34 the Court of Appeal held that a statement by an applicant for registration in his application form as to the class of the goods in respect of which registration was sought formed part of the application and was to be taken into account in interpreting the scope of the application at least during prosecution. Mummery LJ (with whom Sedley and Kennedy LJJ agreed) said at [42]:

The Nice Classification is periodically revised by a Committee of Experts appointed under the Nice Agreement. In April 1984 the 4^th edition of the Nice Classification was in force. In May 2007 the 9^th edition of the Nice Classification was in force (and it remains in force now).

The 9^th edition of the Nice Classification includes the following “General Remarks” (emphasis added):

Paragraph (b) which I have italicised above makes it clear that in some circumstances a finished product may be classified in more than one class. Importantly, paragraph (b) did not appear in the General Remarks in the 4^th edition.

In the 9^th edition of the Nice Classification the class heading of Class 9 includes: “Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling, checking (supervision), life-saving and teaching apparatus”. The explanatory note includes the statement: “Does not include, in particular … clocks and watches and other chronometric instruments (Cl. 14)”.

The class heading of Class 14 includes: “Horological and chronometric instruments”.

It is convenient next to set out the other key statutory provisions. Section 5(1) to (4) of the 1994 Act provide that a trade mark shall not be registered where it conflicts with earlier trade marks or other earlier rights owned by third parties. This is known as an objection on “relative” grounds. For present purposes the details of these provisions do not matter. Section 5(5) provides:

This provision implements Article 4(5) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (“the Directive”, now codified as Directive 2008/95/EC of 22 October 2008), which provides:

Article 8 of Council Regulation 40/94/EC of 20 December 1993 on the Community trade mark (“the Regulation”, now codified as Council Regulation 207/2009/EC of 26 February 2009), which contains provisions concerning relative grounds for refusing registration of trade marks corresponding to those contained in Article 4 of the Directive, does not include any provision corresponding to Article 4(5) of the Directive in the pre-registration context. In the post-registration context, however, Article 52(3) of the Regulation (now Article 53(3) in the codified version) provides:

Swiss was founded by Louis Brandt in 1848. It manufactures and markets wristwatches and other chronometers. It has been known by names beginning with the word Omega since 1903, after a calibre of that name designed by François Chevillat in 1894.

Engineering was founded in 1962. It manufactures and markets products for the measurement and control of temperature, humidity, pressure, strain, force, flow, level, pH and conductivity. As far as I am aware, the founders of Engineering coined the name Omega independently from Swiss. The coincidence is not too surprising given that Omega is the name of the last letter in the Greek alphabet.

Although the businesses of Swiss and Engineering are different, their respective products are not dissimilar in some respects. Given that and given the similarity of their names, there is an obvious potential for confusion if precautions are not taken. It is therefore not surprising that the parties have entered into a number of trade mark coexistence agreements, which are intended to enable the parties to coexist with each other and to minimise confusion between their respective goods. Coexistence agreements (sometimes referred to as delimitation agreements) are a common, important and under-appreciated aspect of trade mark practice. The Agreement is one such agreement. Another between the parties dating from 1994 featured in the decision of Pumfrey J (as he then was) in Omega SA v Omega Engineering Ltd [2002] EWHC 2620 (Ch).

It is convenient to quote the Agreement in full. I have added the numbering of the clauses in square brackets for ease of reference.

On 21 May 2007 Engineering filed application number 2456185 to register the Trade Mark in respect of various goods in Classes 9 and 14. The specification for the goods in Class 14 was as follows:

On 30 November 2007 the application was amended so as to delete the words “including such” and “to record heat or temperature over a period of time and/or” in the Class 14 specification, leaving just the Goods in that class. Nothing turns on this amendment, since it simply narrowed the scope of the specification of goods in Class 14.

The application was advertised on 28 December 2007. On 28 March 2008 Swiss filed a notice of opposition to some of the Class 9 goods and to the Goods in Class 14. In its notice of opposition Swiss raised a number of relative grounds of objection to the application under section 5(1) to (4) of the 1994 Act, relying upon various earlier trade marks and other rights.

In June 2008 Engineering divided the application into applications 2456185A in Classes 9 and 14 and 2456185B in Class 9. The B application related to goods in respect of which Swiss had not opposed the application, and so it proceeded to registration.

On 1 July 2008 Engineering filed a counterstatement in which it pleaded as follows:

On 21 October 2008 Swiss withdrew its opposition to application 2456185A in so far as it related to the remaining Class 9 goods. Shortly afterwards, Engineering divided the application once more into the Application in Class 14 and application 2456185D in Class 9. As there was no live opposition to the D application, it proceeded to registration.

The upshot was that Swiss’ opposition was confined to the Application in Class 14.

It was common ground between the parties before the hearing officer that the Application was precluded from registration under section 5(1) of the 1994 Act due to conflict with an earlier trade mark owned by Swiss unless the Agreement was an answer to that objection. Engineering contended that the Agreement amounted to consent to the Application pursuant to section 5(5) of the 1994 Act. Engineering did not contend that Swiss was precluded by the Agreement from bringing and pursuing the opposition, regardless of whether the Agreement amounted to consent, even though such a contention would arguably have been within the scope of its counterstatement.

Swiss did not dispute that the Agreement amounted to consent, but contended that consent was irrelevant to an objection on relative grounds, relying on the decision of the Court of First Instance (as it then was) in Case T-90/05Omega SA v Office for Harmonisation in the Internal Market [2007] ECR II-145. In the alternative, Swiss contended that on its true construction the Agreement only provided for consent to registration of the Goods in Class 9, and not in Class 14. Swiss did not contend before the hearing officer that, if the consent was relevant and the Agreement amounted to consent to registration of the Goods in Class 14, Engineering was precluded from relying upon the Agreement by estoppel, variation or acquiescence.

The hearing officer rejected both of Swiss’ contentions, holding that consent was a bar to opposition on relative grounds by virtue of section 5(5) of the 1994 Act and that the Agreement on its true construction amounted to consent to registration of the Goods in any appropriate class. He also considered of his motion whether the Goods were properly classified in Class 14, and concluded that they were. Accordingly, he dismissed the opposition.

On 10 December 2009 Swiss filed an appeal to this Court against the Decision (“the Appeal”). In its appellant’s notice Swiss advanced two grounds of appeal. The first was that consent by Swiss to the application was irrelevant, relying on Omega v OHIM. The second was that the hearing officer should have construed the Agreement as only applying to goods in Class 9.

By section 8 part C of its appellant’s notice Swiss applied to adduce additional evidence:

In his skeleton argument in support of the appeal dated 29 December 2009, counsel for Swiss addressed the two grounds of appeal set out in the appellants’ notice. He also addressed the application for permission to adduce further evidence, although at that stage the evidence had not been finalised. Counsel did not contend in his skeleton argument that, if the Agreement had been correctly construed by the hearing officer, Engineering was precluded from relying on the Agreement by estoppel, variation or acquiescence.

Swiss’ further evidence consists of a witness statement of Christiane Sauser Rupp dated 13 January 2010, a witness statement of Barry Gamache dated 13 January 2010 and a witness statement of Sofia Arenal dated 13 January 2010. As I understand it, the further evidence was filed and served on or shortly after 14 January 2010.

The further evidence falls into four categories. First, as indicated by the appellant’s notice, Swiss seeks to adduce the relevant parts of the 4^th edition of the Nice Classification. Since the Nice Classification is a matter of law, not fact, no permission is required to adduce this material.

Secondly, Swiss seeks to adduce evidence that in April 1984 the goods defined as “the excluded goods” in clause 3 of the Agreement were properly classified in Class 9. This evidence emanates from an official in the registry. By section 34(2) of the 1994 Act any issue as to classification is a matter for the Registrar whose decision is final. It is therefore debatable whether permission is required to adduce this evidence. In any event, however, Engineering does not dispute that the excluded goods were properly classified in Class 9 in April 1984 or that that fact forms part of the relevant matrix of fact when construing the Agreement.

Thirdly, Swiss seeks to rely upon the fact that as at the date of the Agreement Engineering owned certain Class 14 registrations for the disputed trade marks. It is again debatable whether permission is required to adduce this material given that it is a matter of public record. In any event, however, Engineering accepts that the existence of those registrations forms part of the relevant matrix of fact when construing the Agreement.

Fourthly, Swiss seeks to rely upon evidence as to what has happened both in the United Kingdom and elsewhere since the date of the Agreement. Engineering contends that this category of further evidence should not be admitted. I shall deal with this aspect of the matter below.

On 11 February 2010 Engineering commenced proceedings in this Court against Swiss for breach of the Agreement. In its Particulars of Claim Engineering alleges that Swiss has breached the Agreement by (i) filing its opposition to the Application, (ii) attending the hearing of the opposition and seeking refusal of the Application and (iii) appealing against the Decision. Engineering seeks (1) an injunction to restrain Swiss from prosecuting the Appeal, (2) an order that Swiss withdraw the Appeal and (3) damages for breach of contract.

On 3 March 2010 Engineering applied for summary judgment on its claim for breach of contract. Engineering’s evidence in support of the application contains no explanation as to why Engineering only brought these proceedings once Swiss had filed the Appeal. In argument before me counsel for Engineering submitted that it would have been disproportionate to bring the proceedings so long as the Application remained at the level of the Trade Mark Registry, but that it became proportionate once Swiss lodged the Appeal. I have to say that I am sceptical about that submission, but that is by the by.

Due to the pendency of the summary judgment application, Swiss has not served a Defence. In its evidence in answer to the application, however, Swiss exhibited a draft Defence and Counterclaim. In the draft Defence and Counterclaim Swiss contends that on the true construction of the Agreement it is not precluded from objecting to registration of the Goods in Class 14. It does not advance any case of estoppel, variation or acquiescence.

By the time that Engineering issued its application for summary judgment, the hearing of the Appeal had been listed for a three day window commencing on 11 May 2010. Engineering insisted that its application should be heard first since it was concerned to ensure that its claim for an injunction to restrain prosecution of the Appeal should be not be prejudiced. Accordingly, Swiss consented to the hearing of the Appeal being vacated and the summary judgment application being heard in the same window instead. When the summary judgment application came before me, however, I invited the parties to consider whether it would make sense for me to hear the Appeal at the same time. In the event both parties agreed to this.

It is convenient to begin by considering Engineering’s claim for breach of contract and its application for summary judgment. That requires me to decide whether Swiss has a real prospect of successfully defending the claim, applying the principles stated by Sir Andrew Morritt V-C in Celador Productions Ltd v Melville[2004] EWHC 2362 (Ch) at [6]-[7] and approved by the Court of Appeal in Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2006] EWCA Civ 661, [2007] FSR 3 at [4]. As indicated above, the main issue between the parties is as to the true construction of the Agreement. Counsel for Swiss did not dispute that this issue was capable of summary determination.

It is common ground that the Agreement should be construed in accordance with the principles of contractual interpretation stated by Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912-913. As Lord Hoffmann summarised it in the later cases of Bank of Credit and Commerce International SA v Ali [2001] UKHL 8, [2002] 1 AC 251 at [37] and Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1011 at [14], the correct approach is ask what a reasonable person having all the background knowledge which would have been available to the parties at the time would have understood them to be using the language of the contract to mean.

It is also common ground that in construing the Agreement evidence of what the parties said or did after the date of the Agreement is inadmissible: see James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583.

It is also common ground that by clause 5 of the Agreement Swiss agreed not to object to (and hence consented to) the use or registration in the United Kingdom by Engineering of inter alia the Trade Mark in respect of “the excluded goods”. The dispute turns on the definition of “the excluded goods” in clause 3. Engineering contends that “the excluded goods” means “Instruments and apparatus intended for a scientific or industrial application in measuring, signalling, checking, displaying or recording heat or temperature (including such having provision to record heat or temperature over a period of time and/or to display the time of day)” regardless of class. Swiss contends that “the excluded goods” means those goods in Class 9.

Counsel for Engineering’s principal submissions may be summarised as follows. First, the excluded goods are defined without reference to their class. Indeed, there is no reference to the class of the respective goods anywhere in the Agreement. The definition of the excluded goods is complete, intelligible and workable as it stands. Accordingly there is no room to read in the words “in Class 9”.

Secondly, clause 5 must be interpreted in its context in the whole Agreement. The starting point when construing the Agreement is the recital. This says that the purpose of the Agreement is “to avoid confusion between [the parties’] respective goods” in the United Kingdom. Confusion is caused by use of trade marks in trade, not by mere registration of them. Accordingly, the Agreement is primarily concerned with the use of trade marks in trade, although it also addresses issues of registration. Under the Agreement each party accepts restrictions upon its own freedom of action in return for the acceptance of restrictions by the other party. Those restrictions are intended primarily to differentiate the parties’ goods from each other in use, although they extend to differentiating their registrations. To interpret the Agreement by reference to the classification of goods for the purposes of registration, which has no relevance to use in the course of trade, would be to permit the tail to wag the dog.

Thirdly, in each of clauses 2, 4 and 5 the undertaking by the respective party not to use or not to object to use the disputed trade marks in respect of certain goods must extend to use of an unregistered trade mark or otherwise that party could evade the obligation if the disputed trade marks were not registered, which would fail to achieve the purpose of avoiding confusion. It follows that the scope of the obligations in clauses 2, 4 and 5 cannot depend on the class in which the respective goods are classified for the purposes of registration.

Fourthly, goods can and do change their classification, in particular as a result of revisions to the Nice Classification. Swiss’ interpretation does not allow for this possibility.

Counsel for Swiss’ principal submissions may be summarised as follows. The Agreement must be construed in the light of the relevant factual matrix. That includes the following matters, each of which is common ground or at least undisputed by Engineering. First, as discussed above, at the time of the Agreement goods could only be classified in one class. Secondly, under the 1938 Act a registered trade mark could only be infringed by use of the trade mark (or a confusing similar mark) in relation to the same goods as the trade mark was registered in respect of. Thirdly, at the time of the Agreement the excluded goods were properly classified in Class 9. Fourthly, all the registrations referred to in the Agreement were registrations in Class 9. Fifthly, at the time of the Agreement Swiss owned three registrations in Class 14, including number 699058 for the Trade Mark together with the Ω symbol, which was registered in respect of “all goods included in Class 14”; yet the Agreement did not require Swiss to cancel the excluded goods from those registrations. Accordingly, as a matter of interpretation of the Agreement, it is implicit that the goods referred to in the Agreement, including the excluded goods, are goods in Class 9.

In my judgment clause 5 of the Agreement is to be construed in the manner contended for by Engineering, mainly for the reasons submitted by counsel for Engineering. I would add the following points.

First, counsel for Swiss accepted during the course of argument that the undertakings in clauses 2, 4 and 5 extend to use of unregistered trade marks. As counsel for Engineering submitted, that is an important concession. If Swiss’ undertaking in clause 5 not object to use by Engineering of the disputed marks in relation to the excluded goods applies regardless of whether Engineering has registered those marks in respect of those goods in any class, it is very difficult to see why the undertaking not to object to registration should be construed as depending on the particular class in which it is sought to register the excluded goods.

Secondly, counsel for Swiss did not attempt to rely upon the reference in clause 3 of the Agreement to “a form of wording acceptable to the British Registrar of Trade Marks and stated by him to have the same meaning as the above wording”. In my judgment he was right not to do so. This part of clause 3 was necessary because clause 3 required Swiss to part-cancel an existing registration. Swiss could not do this unilaterally, but only if the Registrar accepted the proposed new wording of the specification. This part of clause 3 makes it clear, however, that what mattered as between the parties was the meaning, rather than the form, of the wording. Thus, if anything, this part of clause 3 supports Engineering’s construction rather than Swiss’ construction.

Thirdly, counsel for Swiss submitted that the hearing officer had wrongly relied on the 9^th edition of the Nice Classification in construing the Agreement, and in particular paragraph (b) of the General Remarks, when the edition in force at the time of the Agreement was the 4^th edition, which did not include that paragraph. I agree that the Agreement falls to be construed against the background of the 4^th edition of the Nice Classification and not by reference to the 9^th edition, but in my view the hearing officer did not rely on the 9^th edition for the purposes of construing the Agreement. Instead, my reading of the Decision is that the hearing officer relied on the 9^th edition for the different purpose of determining whether the Goods were properly classified in Class 14.

Furthermore, in my judgment the changes in classification law between April 1984 and May 2007 undermine rather than support Swiss’ case on the construction of the Agreement. As explained above, as at April 1984 a trade mark could only be registered in one class. Furthermore, once the Registrar had determined pursuant to section 3 of the 1938 Act which class any particular goods fell into, those goods could only be registered in that class and no other class. By May 2007, however, the law had changed. The combined effect of rules 7(2) and 8(1) of the 2000 Rules and of paragraph (b) of the General Remarks to the 9^th edition of the Nice Classification was that in some cases it was now possible to register the same goods in more than one class.

It is common ground that in April 1984 the excluded goods were proper to Class 9, and hence could only be registered in Class 9. It is also common ground that in May 2007 the Goods (which are a subset of the excluded goods) were proper to Class 9. As the hearing officer pointed out, however, the Goods are finished products and they are multipurpose composite objects. Given that the Goods include a chronometric function, under the 9^th edition of the Nice Classification the Goods are also proper to Class 14. Thus the Goods are proper to both Class 9 and Class 14, and hence can be registered in both those classes. Furthermore, by virtue of section 34(2) of the 1994 Act, the hearing officer’s determination that the Goods are proper to Class 14 as well as Class 9 is final, and so cannot be challenged in this Court.

As the hearing officer explained in paragraph 17 of the Decision, this is perfectly consistent with Altecnic:

Fourthly, Swiss’s Class 14 registrations referred to in paragraph 65 above do not assist Swiss. For the reason I have explained in paragraph 16 above, as at April 1984, the scope of those registrations was confined to goods which were proper to Class 14 as at the dates of registration of those trade marks. There is no evidence that there was any difference in the Registrar’s practice between those dates and April 1984. Since the excluded goods were proper to Class 9 in April 1984, the excluded goods did not fall within the scope of those registrations. Accordingly, the fact that the Agreement did not require Engineering to part cancel those registrations is not inconsistent with Engineering’s construction.

It is fair to say that a question now arises as to the scope of Swiss’s Class 14 registrations. This depends on whether it is still the law that the specification must, where it expressly incorporates the class, be interpreted by reference to the Registrar’s practice at the date of registration. It is neither necessary nor appropriate for me to express any view on this question.

Before leaving the issue of construction, I would make one final observation. By now a disinterested reader of this judgment may be wondering what the practical effect of this issue is. Engineering has already registered the Trade Mark in respect of the Goods in Class 9. What benefit does it gain from a registration in Class 14? Conversely, why does it matter to Swiss if Engineering can obtain a registration in Class 14 as well as in Class 9? I put this question to counsel during the hearing, but did not receive a clear answer. The impression I received at the time was that the parties were fighting on (perceived) principle. On further reflection, however, it seems to me that there may be more to it than that. It may perhaps be argued that a registration for the Goods in Class 14 has a different scope to a registration for the Goods in Class 9. This depends on whether the decision of the Court of Appeal in Altecnic applies in the infringement context as well in the registration context, and if so what its effect is. Those are difficult issues, and they potentially give rise to a further difficult issue, which is whether Altecnic was correctly decided. In that regard it may be noted that the Court of Appeal differed from Laddie J, a judge of great experience in this field, and that the Judicial Committee of the House of Lords granted Altecnic leave to appeal against the decision of the Court of Appeal, but the case subsequently settled. Again, it is neither necessary nor appropriate for me to express any view on these issues.

Swiss’ defences of estoppel, variation and acquiescence were first raised in counsel for Swiss’ skeleton argument for the summary judgment hearing dated 7 May 2010. It can be seen from the procedural history recounted above that these defences are very much afterthoughts on the part of Swiss. Engineering contends that they have no real prospect of success. I agree, for the following reasons.

Swiss contends that the evidence of Messrs Rupp and Gamache and of Ms Arenal shows in summary that: (i) Engineering has never complained about Swiss’ Class 14 registrations referred to in paragraph 65 above as being in conflict with the Agreement; and (ii) since the Agreement was signed there have been another 20 applications in various jurisdictions, including the UK and Canada (where there is a similarly worded agreement in place), in relation to which Engineering has never objected to Swiss opposing Engineering’s applications for goods in Class 14.

In my judgment, point (i) goes nowhere in any event. For the reasons explained above, there may not be any conflict between those registrations and the Agreement even now.

As to point (ii), I do not see how applications and oppositions outside the United Kingdom can possibly be relevant in any event. Not only is the Agreement confined to the United Kingdom, but also it must be construed against the background of United Kingdom trade mark law and practice. The law and practice in other countries is different. This is particularly true of Canada.

That leaves applications and oppositions in the United Kingdom. Swiss points in particular to Engineering’s application number 222666. This was an application to register the trade mark OMEGA.CO.UK filed on 20 March 2000 for goods and services in various classes, including the following goods in Class 14:

The problem for Swiss’s case on estoppel is that it can point to no representation whatsoever on the part of Engineering as to the interpretation of the Agreement. All Swiss can point to is a failure on the part of Engineering to invoke the Agreement in circumstances where it would have been entitled to invoke it if the Agreement is to be construed as Engineering now contends. Counsel for Swiss accepted that silence would not normally give rise to an estoppel in the absence of a duty to speak, and he did not contend that Engineering was under a duty to speak. He submitted, however, that it was least arguable that there was an implied representation on the part of Engineering that the Agreement was to be construed in the manner contended for by Swiss because there had been a long history of conflict between the parties such that if any point could be raised it would be. In my judgment that argument has no real prospect of success. Engineering’s failure to invoke the Agreement conveyed no representation as to its true construction. It could have been due to oversight on the part of Engineering or because Engineering thought rightly or wrongly that in the circumstances it then faced it could not rely on section 5(5) or for purely tactical reasons.

Nor can Swiss point to any reliance by it on Engineering’s supposed representation. Indeed, as counsel for Engineering pointed out, Swiss’ witnesses do not even claim that Swiss did rely upon the supposed representation.

Swiss’ case that the Agreement has been varied is even more hopeless. An agreement cannot be varied as a result of a mere failure by one party to the agreement to invoke it when entitled to do so. Swiss can point to no offer or acceptance. Nor is the supposed variation supported by consideration.

As for Swiss’ case of acquiescence, this again has no real prospect of success. A mere failure to raise a point for a period of time does not amount to acquiescence: see Farmers’ Build Ltd v Carier Bulk Materials Handling Ltd[1999] RPC 461.

As noted above, Engineering seeks both positive and negative injunctive relief against Swiss requiring it to withdraw the Appeal and not prosecute it any further. Given the parties’ agreement that I should determine the Appeal, and given that I have concluded, for the reasons explained below, that the Appeal should be dismissed, this issue is now academic. I shall nevertheless deal with it for the following reasons: (i) the issue may not be academic if the matter goes further and it is held that I am right on the construction of the Agreement, but wrong on section 5(5) of the 1994 Act; (ii) it was fully argued; (iii) it may be relevant to costs; and (iv) it is of some general interest.

It seems to me that the first question to be considered is whether this Court has jurisdiction to grant an injunction to restrain a party from pursuing pending proceedings in the same Court. Accordingly, I asked counsel to address me on that question.

In this connection I drew to counsel’s attention the following statements in Halsbury’s Laws (5^th edition), volume 11 at §494 (omitting footnotes):

Counsel for Engineering submitted that the first half of the first sentence did not represent the present state of the law. No direct authority for this proposition is cited, but a footnote does refer to the Supreme Court of Judicature Act 1873. Section 24(5) of that Act provided inter alia:

In addition, counsel for Engineering relied upon the decision of the Court of Appeal in In re Connolly Brothers Ltd[1911] 1 Ch 731 which is not cited in Halsbury. In that case a debenture holder in company carrying on business in the County Palatine of Lancaster commenced a representative action in this Court to enforce the debentures and moved for the appointment of a receiver. Before the motion came on for hearing, the owner of an equitable charge granted by the company on land acquired by it in Manchester after the issue of the debentures commenced an action to enforce his security in the Palatine Court with full knowledge of the High Court action. The debenture holder applied to this Court for an injunction to restrain the plaintiff in the Palatine Court from pursuing that action. Parker J granted the injunction, and an appeal by the plaintiff in the Palatine Court was dismissed. The Court of Appeal held that the Court had jurisdiction to grant the injunction and that the jurisdiction should be exercised since the Palatine action was vexatious.

The leading judgment was given by Cozens-Hardy MR who said at 743-744:

As Counsel for Engineering acknowledged, a curious aspect of the judgments in the Court of Appeal is that none of them refer to section 24(5) of the 1873 Act even though it was considered by Parker J in his judgment at first instance. Counsel for Engineering submitted that any doubts about the Court of Appeal’s decision on that score had been laid to rest by the subsequent repeal of the successor to that provision. Accordingly, he submitted that Connolly was authority for the proposition that the High Court has jurisdiction to grant an injunction in personam to restrain a party from prosecuting other proceedings in the same court, for example where those other proceedings have been brought in breach of contract.

Counsel for Swiss pointed out that in Connolly the Palatine action had been commenced after the High Court action, not before. This fact does not appear to have been material to the reasoning of the Court of Appeal, however. Furthermore, I find it difficult to see why the sequence of the proceedings should affect the Court’s jurisdiction to grant an injunction to restrain a party from pursuing another proceeding in this Court, although it may well be very relevant to the exercise of the Court’s discretion as to whether to grant such an injunction.

Accordingly, I conclude that this Court has jurisdiction in a proper case to grant an injunction to restrain a person from pursuing another proceeding in this Court, including an existing claim or appeal.

That being so, the next question is whether it would be a proper exercise of that jurisdiction to restrain the prosecution of the Appeal in the circumstances of this case. Counsel for Swiss submitted that it would not. On the contrary, he submitted that Engineering’s application for summary judgment was an abuse of process because its primary purpose was to frustrate a properly constituted appeal. I do not accept that submission. Swiss contracted not to object to registration of a trade mark by Engineering in certain circumstances. Swiss subsequently objected to such a registration in precisely the circumstances in which it had contracted not to do so, as I have construed the Agreement. On that basis, I did not understand counsel for Swiss to dispute that, if Engineering had brought its claim in this Court and made its application for summary judgment prior to the Decision, then Engineering would have been entitled to an injunction to restrain Swiss from pursuing the opposition. I do not see why Engineering should be debarred from claiming the same relief merely because it inexplicably delayed in commencing the claim in this Court until after the Appeal had been lodged. The position might be different if the delay had prejudiced Swiss’ position, but in my judgment it did not. This is not to say that Engineering’s delay may not be relevant in other ways, for example to questions of mitigation of damages and costs.

Engineering also claims damages for breach of the Agreement. The principal head of damages claimed is Engineering’s unrecovered costs in the Registry proceedings. Swiss contends that Engineering has failed to mitigate its loss. In any event, Engineering has yet to quantify its claim. Counsel for Engineering submitted that in these circumstances the proper course was to direct an inquiry as to damages, and counsel for Swiss did not dissent from that suggestion.

I turn next to the Appeal by Swiss against the Decision, and Swiss’ application to adduce further evidence.

The principles to be applied on an application to adduce further evidence in support of an appeal to the High Court against a decision of the Registrar in an inter partes case were considered by the Court of Appeal in DU PONT Trade Mark[2003] EWCA Civ 1368, [2004] FSR 15. In summary, these are as follows: (i) the factors set out in Ladd v Marshall[1954] 1 WLR 1489 are basic to the exercise of the discretion; (ii) Ladd v Marshall is no longer a strait-jacket, on the contrary the matter is to be looked at in the round to see that the overriding objective is furthered; and (iii) in the particular context of trade mark appeals, the additional factors set out in Hunt-Wesson Inc’s Trade Mark Application[1996] RPC 233 may be relevant.

The first Ladd v Marshall requirement is that the new evidence could not have been obtained with reasonable diligence for use at first instance. In my judgment this requirement is plainly not satisfied.

The second requirement is that the new evidence would probably have an important influence on the result of the case. In my judgment this requirement is not satisfied either. So far as construction of the Agreement is concerned, the new evidence does not assist Swiss for the reasons given above. The only other way in which the new evidence could affect the result of the Appeal would be if Swiss were to be permitted to raise its arguments of estoppel, variation and acquiescence despite not having raised them before the hearing officer. In my judgment Swiss has not shown any good reason why it should be permitted to do so. Even if Swiss were to be permitted to raise those arguments, they would not assist it for the reasons given above.

The third requirement is that the new evidence is credible. I have no reason to doubt that this requirement is satisfied.

Turning to the additional factors identified in Hunt-Wesson, I do not consider that any of these are of significance in the present case.

Accordingly, I refuse Swiss permission to adduce the further evidence.

For the reasons given above, I have concluded that the hearing officer correctly construed the Agreement.

As noted above, Swiss contends that, even if the Agreement on its true construction amounts to consent on the part of Swiss to Engineering registering the Trade Mark in respect of the Goods in Class 14, such consent is irrelevant to Swiss’ objection under section 5(1) of the 1994 Act. On the face of it, section 5(5) of the 1994 Act provides such consent is not merely relevant, but determinative. Swiss contends, however, that section 5(5) has been impliedly repealed.

The starting point for this contention is the CFI’s decision in Omega v OHIM (cited above). In that case Swiss applied to register the Trade Mark together with the Ω symbol as a Community trade mark in various classes. The application for certain goods in Class 9 and services in Class 42 was opposed by Engineering on various relative grounds under Article 8 of the Regulation. Engineering also contended that the application in Class 9 was contrary to an agreement between the parties. (The agreement relied on was a different agreement to the Agreement. As I understand it, it was the same agreement that had previously been in issue before Pumfrey J.) Swiss disputed that its application was in breach of the agreement, and also argued that Engineering had failed to comply with the agreement when filing an earlier Community trade mark application.

In Decision 537/2002, the Opposition Division upheld the opposition in its entirety under Article 8(1)(b), but held that the agreement could not be taken into account because it was not a “fact” within Article 74(1) of the Regulation. This provides:

Swiss appealed. In Case R 330/2002-2 the Second Board of Appeal dismissed the appeal. The Board held that the agreement was unclear. It did not say that the agreement was either inadmissible or irrelevant. Moreover, it referred to its own earlier decision in Case R 590/1999-2 CompAir Ltd v Naber + Co KG. In that case it had expressly rejected the argument that a coexistence agreement was irrelevant, and on contrary had held that the Office must have due regard to it. (I note that a coexistence agreement was also taken into account by the First Board of Appeal in Case R 24/2003-1 Etat Français v Sociedad Anónima Vichy Catalan and that in Case R 1167/2006-1 British Sky Broadcasting Group plc v Vortex SA the First Board of Appeal interpreted a coexistence agreement and concluded that it did not preclude the application in dispute.)

Swiss then appealed to the CFI. It appears that on the appeal Swiss argued that the agreement authorised it to register the trade mark applied for. OHIM disputed this, but contended that the agreement was irrelevant anyway. The judgment does not elaborate on the reasons advanced by OHIM for this contention. The CFI dismissed the appeal. In its judgment the CFI said at [49]:

Counsel for Swiss submitted that the last sentence of this passage amounted to a holding by the CFI that, as matter of law, an agreement by an opponent to consent to registration of a trade mark by an applicant was irrelevant to an objection by the opponent on relative grounds under Article 8 of the Regulation. I have to say that I am doubtful whether this is correct. As counsel for Swiss accepted, that is not what that sentence actually says. Even assuming that that is what the CFI meant, however, the reasons for that conclusion are not articulated.

In trying to understand what those reasons might be, some light is shed by an article previously published in a personal capacity by Arnaud Folliard-Monguiral, who represented OHIM on the appeal, Coexistence in Community trade mark disputes: conditions and implications [2006] JIPLP 703 at 708 (footnote omitted):

M. Folliard-Monguiral went on to acknowledge that the Boards of Appeal did take unequivocal coexistence agreements into account, but said that they were reluctant to interpret provisions which left room for ambiguity. He therefore offered this suggestion at 709 (footnote omitted):

The first reason identified in the passage quoted in paragraph 110 above is the reason which was given by the Opposition Division in the Omega case. With all due respect, I am unable to agree with the proposition that the existence of an agreement between the parties is not a fact. On the contrary, it seems to me to be a very palpable fact. Interpretation of the agreement may in some legal systems (such as that of England Wales) be a question of law, but that is another matter.

The second reason, as I understand it, is that Article 8 of the Regulation contains no provision corresponding to Article 4(5) of the Directive. That is undoubtedly true, but I do not see that it follows that a coexistence agreement is irrelevant. I shall return to this point below.

As to the third reason, I do not understand why the fact that a coexistence agreement is a private right should mean that it is irrelevant. After all, an opponent can invoke a private right as a relative ground of objection under Article 8. Furthermore, Article 52(3) (now 53(3)) of the Regulation is explicit that a coexistence agreement is relevant to an application for a declaration of invalidity.

The next step in Swiss’ argument is to say that the rationale for coexistence agreements containing consents to registration being irrelevant is that there is no need for any legislative provision for consent in a system where the relevant office cannot raise relative grounds of its own motion. Thus when an applicant applies to register a Community trade mark, OHIM cannot itself raise a relative ground of objection under Article 8. Any such objection must be raised by the proprietor of the earlier trade mark or other earlier right in opposition proceedings. I can see that in such circumstances it might be thought that there is no need for a separate legislative provision. If the putative opponent has consented to registration, it is unlikely to oppose. Moreover, if it does oppose despite having consented, then the coexistence agreement can be relied upon the applicant as an affirmative answer to the opponent’s objection.

It does not follow, however, that coexistence agreements are irrelevant when trade mark applications are opposed on relative grounds. As the Second Board of Appeal of OHIM said in a decision concerning the application of Article 52(2) of the Regulation, Joined Cases R 946/2007-2 and R 1151/2007-2 Sedea Electronique SA v Visionic Ltd at [28]:

As the case law shows, a party may oppose a trade mark application despite having previously consented to it and (expressly or impliedly) undertaken not to oppose it. In my view it would be unjust if such a party were to be permitted successfully to oppose the application in contravention of its contract. I do not regard it as a satisfactory answer to say that the applicant can apply to a competent national court for an injunction to restrain the opponent from pursuing the opposition, even assuming that there is a competent national court which has both subject matter and personal jurisdiction.

Furthermore, Article 52(3) (now 53(3)) of the Regulation confirms that consent by the proprietor of the earlier right is relevant to a relative grounds objection even though OHIM can no more raise such an objection ex officio after registration than it can before registration. Counsel for Swiss submitted that Article 52(3) showed that consent was a bar to an invalidation action, but not to an opposition. In my view, to interpret the Regulation in that way would be bizarre: why should an application be refused in opposition proceedings if it could not be invalidated once registered on precisely the same grounds?

I have not investigated the travaux préparatoires for Article 52(3), but in my view there is a more likely explanation for the existence of this provision when there is no corresponding provision in relation to opposition proceedings. This is that Article 52(3) is intended to meet a concern that a coexistence agreement which provides consent to registration of a trade mark might not be regarded, particularly by a national court hearing a counterclaim, as providing a sufficient basis for a declaration of invalidity once the mark has been registered.

The next step in Swiss’ argument is that, whereas the United Kingdom originally implemented the Directive by legislation which required the Registrar to raise objections on relative grounds ex officio during examination, the Secretary of State has recently exercised the power conferred on him by section 8 of the 1994 Act to require objections on relative grounds to be raised by the proprietors of the rights in question in opposition proceedings: see the Trade Marks (Relative Grounds) Order 2007, SI 2007/1976. Counsel for Swiss submitted that in these circumstances the rationale for section 5(5) had “evaporated”, and accordingly it should be treated as having been impliedly repealed.

Even if the first two steps in Swiss’ argument are both sound, which for the reasons I have given I doubt, I cannot accept the third step. Section 5(5) was not repealed when the Secretary of State exercised his power under section 8, and there is no reason to think that that was an oversight. Nor are the new provisions inconsistent with it. Furthermore, Article 4(5) of the Directive provides an explicit basis for it. In these circumstances it cannot be concluded that section 5(5) has been impliedly repealed.

For the avoidance of doubt, I would like to make it clear that no issue has been raised in these proceedings as to the compatibility of the Agreement with either domestic or European Union competition law. Nor has it been suggested that the Agreement is unenforceable as being in restraint of trade.

Engineering’s application for summary judgment succeeds. The Appeal is dismissed. I will hear counsel as to the appropriate form of order.