A trademark opposition occurs where a person applies to register a trademark and a third party wishes to prevent registration of that mark or wishes to limit the scope of the trademark. As part of the application process, the trademark application is laid open for opposition over an opposition period, during which anyone can file an opposition.
Oppositions can be filed on absolute grounds or relative grounds. Examination by the UK trademarks registry itself is based upon absolute grounds and objections by third parties on relative grounds are left for the third parties to resolve in an opposition procedure.
Absolute grounds include grounds such as that the mark is not capable of distinguishing the goods or services of one undertaking from another, for example because the mark consists of words which are generic in trade and which any trader ought to be able to use. The trademarks registry themselves examine the mark on absolute grounds before the opposition period commences, but it is still open for third parties to oppose trademark applications on absolute grounds even where the trademarks registry have raised no objections based on absolute grounds during the first stage of examination.
Relative grounds include that the mark applied for is identical or similar to an existing registered trademark or an earlier right of a third party.
In terms of costs for a trademark application, the cost of the basic procedure before the trademarks registry where no opposition occurs is fairly predictable and consists of the initial official fee for the application, a trademark attorney fee for filing the application, and a trademark attorney fee for prosecuting the application through to registration. If there is an objection based upon absolute grounds then that may result in a a variable cost. The basic procedure for the trademarks registry is non – contentious, and is a matter between the applicant and the trademarks registry to determine if the mark is registrable and for which goods or services.
The opposition procedure is a contentious matter as there is a third-party who objects to the applicant registering their trademark. Where where an opposition is filed the costs of the application can increase significantly.
Opposition costs before the United Kingdom intellectual property office
In calendar year 2019 there were 4117 UK trademark oppositions conducted by the United Kingdom intellectual property office, which represents by volume of the majority of disputes dealt with by the UKIPO. Out of 107,527 trademark applications in 2019, this represents around 4% of all UK trademark applications encountering an opposition, although in previous years the percentage of trademark applications encountering opposition has been higher.
What are the overall costs actually incurred in a trademark opposition?
Each side, the applicant and the opponent incur costs separately through official fees and paying their professional representatives.
Where the trademark applicant is an applicant in person, then the costs on their side if they are successful are primarily the official fees for filing the trademark application.
Where the opponent is self representing in person, then the actual costs on their side if they are successful would be primarily the official opposition fee of £200.
Where either side is represented, there are also the professional fees of the trademark representatives to pay. In general, there is no upper limit to how much cost can actually be accumulated on either side in a trademark opposition in paying their trademark professional representatives. Each party can spend as much or as little as they wish on their own costs for professional representation in addition to the official fees for filing the opposition by the opponent.
There is no generally accepted fixed cost for professional representation in a UK trademarks registry opposition procedure, it is a matter between the professional representative and the client, but costs for professional representation in the range £2,000-£6,000 plus VAT on each side are common.
Where there has been a parallel negotiation of the settlement agreement, in addition to the costs of the formal opposition procedure, there may be professional representative costs for the parallel negotiations These can be significant in themselves.
We are aware of opposition costs including negotiation costs, levied by the other side’s professional representatives in oppositions where we have acted, in the region of up to £23,000 plus VAT. Undoubtedly there will be other instances which we do not have personal experience of where the costs incurred will be even higher. We have little information on how much different trademark representatives are charging their clients.
How much are the costs awarded by the UK trademarks registry?
The UK trademarks registry have scale of fees to be awarded in oppositions.
Costs awarded to a successful applicant include the initial opposition official fee which is either £100 if the opposition is based only on sections Sections 5(1) and/or 5(2) grounds, or £200 if the opposition is based on grounds other than Sections 5(1) and/or 5(2).
Additionally, there is a scale of costs for professional fees as set out in Tribunal practice notice TPN 4/2007
The trade marks registry has the power to award costs in trade mark opposition proceedings, similar to a court. Normally during an opposition, each party applies for an award of costs to be paid by the other side. At the end of the opposition proceedings the Trade Marks Registry considers those requests, and awards costs to be paid by the unsuccessful party to the successful party.
The costs awarded by the registry do not normally cover the full legal costs for the opposition, i.e. the actual costs incurred on either side, but represent a contribution to those costs which are fixed according to a Trade Marks Registry scale.
The Trade Marks Registry does have the discretion to award costs higher than the scale in exceptional circumstances. Those exceptional circumstances are usually when one party has behaved unreasonably towards the other party, for example by persistent late filing of evidence, filing large volumes of evidence above the usual page limit, cancelling hearings or asking for hearings to be rearranged at the last minute or other unreasonable behaviour which generally frustrates the efficiency of the proceedings.
The costs work both ways. If you are successful in the opposition then you can claim some of your costs from the other side. Similarly, if the other side are successful in the opposition then they can claim an award of costs to be paid to them by you.
The costs are broken down by stage of the procedure, with cost limits for each stage as follows:
What happens if the opposition is settled by agreement between the parties without a decision from the trade marks registry?
Where there is a settlement between the parties, resulting in withdrawal of the opposition, the trade marks registry will not normally make an award of costs against either party, because the opposition will have been withdrawn before the formal decision on the opposition has been issued.
If you reach a settlement agreement with the other side, then there would usually but not always be a clause to withdraw the opposition proceedings, and there may also be a clause in the agreement setting out the treatment of costs, i.e. whether one side will pay the other side’s costs, or whether each side pays their own costs, or setting out the proportions of costs to be paid by each side.
A common clause in an opposition settlement agreement is that each side pays their own costs, but it is entirely a matter of negotiation between the applicant and the opponent.
There are many variations and permutations of clauses and settlement agreements, but in general the settlement agreement is a legally binding agreement where, and so the amount of any costs to be paid by virtue that agreement is a contract between applicant and the opponent.
If there is no clause in the settlement agreement concerning the apportionment of costs, and the settlement agreement states that the opposition will be withdrawn, the trade mark applicant may then apply for an award of costs from the trade marks registry as being successful in the formal opposition proceedings. The trade marks registry may award costs up to the stage of the procedure that has been reached according to the trade marks registry fixed scale of costs.
What happens if an unsuccessful party fails to pay an award of costs made by the trade marks registry?
Whilst the UK trade marks registry has the power to award costs it does not have the power or the inclination to enforce those awards.
The UK intellectual property office maintain a list of parties who have failed to pay costs awarded by the UKIPO, which is viewable online. However this list is quite obscure and not well publicised. Although it names parties who have failed to pay costs, as a warning to others dealing with those parties, it does nothing to recover the actual costs.
To enforce an award of costs made by the UK trade marks registry , this may be taken to the Small Claims Court or County Court who will normally enforce the award under the usual money claims procedure. This procedure itself incurs additional costs in making the application and obtaining the judgement on the costs. Once the judgement is obtained, it can be enforced the same as any other UK court order. Parties who fail to pay awards of costs from a court are in contempt of court and may be subject to imprisonment, or a fine or other sanctions as ordered by the court.
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