• ALICANTE ABSTRACT

    ECJ AFFIRMS RULES on New Evidence in OHIM Appeals, Alters Reasoning

    In our Spring 2007 issue, we commented on the Advocate-General’s opinion in OHIM v Kaul GmbH (C-29/05 P), which awaited ECJ judgment on the admissibility of new evidence on appeal from OHIM. The recent ruling affirms that such evidence is admissible only at the discretion of the Boards of Appeal, underscoring the importance of getting OHIM evidence right at first instance.

     

    AGREEMENT ON DISCRETION

    In agreement with the Advocate-General, the ECJ held that, as departments of OHIM, the Boards of Appeal enjoy a discretion under Article 74 (2) CTMR to consider new facts or evidence submitted for the first time on appeal. They were not, however, obliged to do so. A Board might legitimately disregard new facts or evidence where it would not affect the outcome of the case, for example, or where the circumstances of the late submission otherwise weighed against taking the new points or materials into account.

    The ECJ affirmed the Advocate-General’s view that the Article 74 (2) discretion tended to support administrative efficiency. It functioned as an incentive for parties to prepare cases diligently at first instance, since late-filed facts or evidence would not necessarily be admitted. Moreover, keeping the door open to admitting late-filed facts or evidence in appropriate cases helped to ensure that marks capable of being successfully challenged through further proceedings such as cancellation are not registered in the first place.

     

    NEW AND SIMPLER REASONING

    The ECJ and the Advocate-General diverged, however, on the question of when the discretion arose.

    The Advocate-General had argued that a Board of Appeal only enjoyed a discretion to admit late-filed facts or evidence where the decision under challenge was flawed in some way. The ECJ rejected that restriction, ruling that the Boards enjoy a discretion to admit late-filed facts or evidence in all appeals. There is no need to prove that a decision at first instance was flawed as a sine qua non for obtaining a fresh review. The Boards of Appeal, as departments of OHIM, are entitled—and indeed required—“to carry out a new, full examination of the merits…, in terms of both law and fact.”

    In contrast, the Court of First Instance is not a department of OHIM and is limited to reviewing the legality of Board of Appeal decisions. It cannot take into account facts or evidence not before the lower tribunal. As acknowledged by the Advocate-General, therefore, new facts and evidence have no place before the Court of First Instance.

     

    COMMENT

    This important procedural ruling succinctly distils the rules on new facts and evidence before the Boards of Appeal.

    The ECJ’s simple approach affirms the role and powers of the Boards of Appeal and shines a welcome light in an area previously overshadowed by inconsistency. Moreover, by eschewing the Advocate-General’s more complex reasoning, the ECJ’s simple recognition of a Board of Appeal’s discretion to admit, or to reject, new facts or evidence in all cases is a bright-line rule that can be applied clearly across the board.

    Time will tell how the discretion will operate in practice. It will doubtless provoke controversy in borderline cases. It may be eminently arguable, for example, whether new facts or evidence would affect the outcome of a case, and it is hard indeed to envisage all possible circumstances where relevant new submissions should be rejected despite their potential importance. A party’s inexplicable failure to submit available new facts or evidence at first instance in an opposition, and the impact on costs arising from that omission, might found a decision to reject new evidence under the ECJ’s reasoning. However, would such a decision be administratively sound where the evidence is relevant and it is clear that the spurned party will bring cancellation proceedings later?

    As the Boards of Appeal begin to apply Kaul, these and other questions will test the scope of the discretion. Given the importance of admissibility questions in contested proceedings, this developing area of procedure will remain of key importance to parties. How the Boards navigate it will be keenly observed.