Apple stops abuse of process

Summary judgment and striking out

 

Courts and Tribunals have the authority to prevent abuse of its procedures that could result in unfairness for the parties involved. In the context of trade mark disputes, this typically arises to prevent a party that is estopped from its action, has no real chance of success or because its action is an abuse of process.

 

A party may seek summary judgment on a case, i.e. have the entire case thrown out because the other party actions amount to an abuse of process. In such cases, it is for one party to raise the issue, substantiate the allegation and bear the burden of proof on an application to strike out.

 

In deciding whether to strike out a case on the grounds of abuse of process, the Tribunal must make a ‘broad, merits-based judgment which takes account of all the facts of the case’.[1] The concept of abuse of process should only be applied when the facts clearly demonstrate an abuse.

 

Apple’s claims

 

Apple’s abuse of process claims was based on three grounds:

 

i. The Applicant’s intention was to extract revenue from Apple

The only evidence provided by Apple to support this claim was that the Applicant had requested compensation for loss of earnings, which the Hearing Officer deemed to be inadequate to support the argument. Therefore, this ground failed.

 

ii. The Applicant aims to ‘vex Apple and put Apple to considerable expense’

During the evidence rounds, it was established, among other things, that:

 

(a) the Applicant filed cancellation actions against Apple’s four EU trade mark registrations[2] which contained the term ‘iPhone’. The EU cancellation proceedings have been suspended while the EU IPO considers Apple’s separate abuse of process applications which are currently pending.

 

(b) the Applicant contacted Apple’s legal team threatening to cancel five of its UK trade mark registrations containing the term ‘iPhone’, and suggested Apple surrender the registrations as a “discreet solution”. Apple did not respond. The Applicant subsequently filed the cancellation actions.

 

(c) the Applicant later filed UK and EU trade mark applications for the below marks covering “smartphones”, “tablet computers” and “smartwatches” goods in Class 9.

 

 

(d) Apple filed observations against the above applications, to which the UK IPO asked the Applicant for further information regarding his intended use of the marks. The Applicant did not respond to the UK IPO but contacted Apple stating if they challenged the applications, competitors would copy the above signs and register them. Apple did not respond.

 

Apple argued that the Applicant’s newly filed applications demonstrated an intention to vex Apple and put it to expense with opposition costs. Further, Apple argued that the Applicant must know the merits of success for the invalidity actions were “hopeless”.

 

The Applicant filed evidence based on several cases from the EU IPO and UK IPO establishing that the ‘iPhone’ mark is prima facie descriptive for internet phones. The Applicant did not submit further arguments relating to acquired distinctiveness beyond reliance on these cases, except for a specific EU decision which concerned a provisional refusal to the registration by Apple of ‘iPhone’ in relation to goods in classes 9 and 28 on grounds that the mark was descriptive/non-distinctive (the “EU Refusal”).

 

In response, Apple addressed the EU Refusal by pointing out that the trade mark was already registered in the UK and that they had not conducted a survey in the EU (which requires separate surveys in various member states) due to cost constraints.

 

The Hearing Officer agreed with Apple's submissions and stated that while the term "iPhone" may initially seem descriptive or non-distinctive for internet phones or smartphones, it has acquired distinctiveness for these products and closely related items like phone chargers. In any case, for goods that are less related, such as exercise equipment and toy musical instruments in class 28, the ‘iPhone’ mark is distinctive.

 

As there were no opposing submissions, the Hearing Officer sided with Apple, stating that pursuing invalidity actions would be a significant waste of time and resources as the Applicant would have no chance of success. Consequently, the invalidity actions were struck out.

 

(iii) The Applicant seeks to improperly acquire Apple’s trade marks for his own use and financial benefit.

 

On the final claim, Apple relied on emails from the Applicant which requested the surrender of Apple’s UK trade marks following the EU Refusal. Apple did not respond. The Applicant’s three applications which include ‘iPhone’, ‘iPad’ and ‘iWatch’, were opposed by Apple, following which the Applicant wrote to Apple stating that if his applications are registered in the UK and EU, it would contact Jeff Bezos and propose a Partnership, and if unsuccessful, it would contact other “billionaires and investors”.

 

The Hearing Officer concluded that the Applicant's repeated filings, correspondence with Apple, and submissions to the UK IPO Tribunal were all part of an effort to pressure Apple into giving up the iPhone Marks, allowing the Applicant to register its own trade marks containing the term associated with Apple such as "iPhone" and use them for financial gain.

 

The Hearing Officer found that the invalidity actions were filed with an underlying improper motive, without which the actions would not have been filed, constituting an abuse of process. Accordingly, the Hearing Officer struck out the invalidity actions.

 

Conclusion

 

This case demonstrates that when assessing an abuse of process application, evidence and the establishment of facts will be key. The Applicant’s actions against Apple, together with its open correspondence, showed its intentions were improper and amounted to an abuse of process.

 

The decision also highlights the importance of filing submissions to support arguments made before the Tribunal.

 

Should you require advice on the subject matter of this article, please contact the author or your usual attorney.  We would be delighted to assist.

 

 

^[1] Johnson v Gore Wood & Co [2002] 2 AC 1

^[2] 3 EU and 1 IR designating EU