Suspension of Proceedings of the Trademark Candy Crush Case: Judgement not so sweet.
News    ·   08-10-2015

AUTHOR: Henri Mizzi, Sharon Xuereb

On 13 May 2015, (the Proprietor) initiated an action against Team Lava and Storm 8 (the Defendants) for a Community Trademark (CTM) infringement before the Maltese Courts. One of the preliminary pleas raised by the Defendants, concerned Article 104(1) of the CTM Regulations which provide, in brief, that unless special grounds exist for continuing the hearing of proceedings, a CTM Court hearing an action for an infringement of a CTM, may stay the proceedings where an application for a declaration of invalidity has already been filed at OHIM. In raising their first plea, the Defendants referred to an application for the cancellation of registration of a CTM word mark ‘CANDY’ before OHIM. The invalidity claim was filed on grounds that: (i) the mark is descriptive, and (ii) that it is not distinctive.

On 5 October 2015, the Court delivered two judgements (against Team Lava and Storm 8) on the above preliminary plea. The following has been observed on the Court’s judgements: 

-          Both parties submitted an in-depth analysis, through the engagement of expert witnesses, on ‘special grounds’ for continuing the hearing of proceedings or otherwise. The Court did not delve in this debate save for a statement that, in its view, no ‘special grounds’ existed;

-          The Court noted, in particular, that the significance behind Article 104(1) of the CTM Regulation was to avoid irreconcilable decisions. The Court referred particularly to the UK case Starbuck (HK) Limited vs BskyB Group PLC and EMI(P) Limited v BskyB PLC which concluded that: “..the presumption in favour of a stay under Article 104(1) is a strong one. That is not just because of the usual rule that a derogation from an EU general rule is to be narrowly interpreted. It is also because of the importance of the policy of avoiding inconsistent decisions in the particular context of Community trade marks…”;

-          The Court provided that the natural course of proceedings would dictate that claims for invalidity are heard before actions of infringement of the same CTMs, and that doing otherwise would be ‘impractical’ if not ‘dangerous’;

-          The Court observed that the Proprietors claimed infringement of five CTMs and that a connection existed amongst the CTMs through the use of the word ‘CANDY’. The Court noted that although the invalidity claim before OHIM was filed against one of such CTMs, the Defendants had later filed a counter-claim requesting the invalidity of the other four CTMs;

-          The Court reached the conclusion that if it were to take cognisance of and hear evidence on the claims filed by both parties, and it were to do so before OHIM would have itself decided the issue of invalidity, then this could prejudice (or the actual translation used by the Court ‘contaminate’ and ‘endanger’) the entire proceedings;

-          The Court concluded that a request for provisional and protective measures under Article 104(3) of the CTM Regulation would be considered once a detailed claim is filed before the Court (as opposed to a declaration in a note of submissions). 

As a result, all proceedings before the Maltese Court were suspended pending the outcome of the OHIM decision.

Reference to Judgements:

Sworn Application number 438/2014MCH, Civil Court, First Hall, 5 October 2015 in the names Limited vs Dr. Louis Cassar Pullicino nominat kuratur deputat sabiex jirrapprezenta lil Storm8 Studios LLC, entita' estera ta' nazzjonalita' Amerikana registrata fl-Istat ta' Delaware fl-Istati Uniti tal-Amerika bin-numru tal-file relattiv 5681701 u b'indirizz fl-Istat ta' Delaware ta' Incorporating Services, Ltd., 3500 South Dupont Highway, Dover, Delaware 19901 fl-Istati Uniti tal-Amerika, oltre ghal indirizz operattiv Ii jinsab f’1000 Bridge Pkwy, Redwood City, CA 94065, fl-Istati Uniti tal-Amerika b’digriet tal-25 ta’ Mejju 2015;

Sworn Application number 439/2014MCH, Civil Court, First Hall, 5 October 2015 in the names Limited vs Avukat Dottor Louis Cassar Pullicino bhala mandatarju specjali in rapprezentanza ta’ TeamLava, LLC, entita' estera ta' nazzjonalita' Amerikana registrata fl-Istat ta' Kalifornja fl-Istati Uniti tal-Amerika bin-numru ta’ registrazzjoni 200932910077 u b'indirizz ta' 1000 Bridge Pkwy, Redwood City, CA 94065 fl-Istati Uniti tal-Amerika.

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