Sudden Death in Alicante

We note two recent OHIM design appeal decisions which demonstrate their remarkable, and regrettable, unsympathetic attitude towards design owners on renewal fee payments. 

In R 1011/2009-3 and R 1012/2009-3, the proprietor (an EU subsidiary of Korean company who have made substantial inward investments into Europe) had transferred representation for the designs concerned from one reputable firm of attorneys to another and, unfortunately, it seems that amongst other cases, in error the wrong file was sent over and the right file was not.  The recipients had the correct number of files and therefore didn't chase the missing one, or take over responsibility at OHIM, and the senders didn't resign responsibility at OHIM. 

Two years later, the renewal fee wasn't paid.  The Loss of Rights notice went on 17 November 2008 to the previous representatives, who forwarded it to the new representatives on 5th December.  That was the first point at which the "true" representatives became aware of the position, and therefore the very first point at which the applicant could have complied with the renewal payment.  The application for restitutio in integrum was filed two months later, on 4th February 2009, two months from the point at which the applicant was able to comply and therefore, from the point of view of the applicant, in time.

OHIM took a different view.  They held that since the change in representation had not been recorded, the date of sending to the old representative triggered the two month period, which therefore expired on 18 January.  The application for restitutio was therefore out of time.  The Appeal Board upheld the first instance.

We beg to differ.  It is not that OHIM's reasoning is illogical.  Mechanistically, one can follow their logic.  But these decisions, together with a host of others, fly in the face of reality and fairness to the proprietor.  The analysis is from OHIM's point of view, not that of the proprietor, and the proprietor here has done nothing wrong.  They registered their IP rights at OHIM.  They selected attorneys on OHIM's list, people who OHIM accepts as, and holds out to be, fit for purpose (and who are, to my direct knowledge, perfectly suitable).  They did not want their rights dropped, and they instructed their attorneys to renew them.  So why are they punished?

The underlying notion is that the acts of the agent are attributed to the principal, which is the whole basis of agency.  But:

1. It is stretching that notion to say that unintended, uninstructed, and unauthorised errors of the representative should be attributed to the principal. 
2. In this case, the errors in question were at least partly those of a person who, from the principal's point of view, was no longer their agent. 
3. As far as the principal knew, the previous agent should already have withdrawn in favour of the new one.

The statute is quite clear that it is the removal of the cause of non-compliance that is the issue.  That is a factual issue, and to give a deemed date (when the previous representative got the letter) rather than a real one (when the proprietor actually became aware of it) is to supply a fictional answer to a factual enquiry.

More generally, errors occasionally occur, even in the best-run machine.  If OHIM themselves never made an error, they might be in a moral position to impose extremely high standards on their users - but believe me, dear reader, they make plenty, and this case would certainly have been decided differently if the Board of Appeal applied OHIM's own error rates.

If intellectual property rights are, in general, a public good (and we have to start from that assumption, or else there is no logic in the existence of OHIM) then the underlying public policy should not be to try to kill them off on formalistic grounds.  Who benefits by this kind of logic-chopping?  Certainly not the applicant, who has done nothing wrong, and has in return lost their rights for ever.  Not, we presume, the public in general which benefits in general from the existence of creativity and its protection.  Not OHIM - they lose future fee income on this case.  Not the poor representatives, whose only sin was to make a slip.  Not the other clients of their insurers, who ultimately pay higher premiums, raising the cost of IP protection generally.  Perhaps one might assume that competitors benefit from the untimely death of a duly registered design - but in this case, they certainly have lost no legitimate expectation, since the application for restitutio was on file very shortly after two months from the lapse notice - long before anyone could have inspected the file and concluded that the rights were irretrievably lost.  And, of course, the statute itself would explicitly protect any such legitimate expectations.

These are, so far as anyone knows, valuable intellectual property rights.  The applicant has spent money at OHIM getting them registered.  It will often be possible to re-file a lost trade mark, but these designs can never be re-filed - they would lack novelty over their own publication by OHIM - and so they are lost for ever.   We strongly urge OHIM to drop the doublethink, to see matters from a real-world point of view, and to protect their users' investments in valuable IP rights from these arbitrary and disproportionate extinctions.