OHIM and unpaid costs orders: what should we do?

From time to time, trade mark practitioners in Europe and their clients raise the subject of costs orders in OHIM proceedings and what happens on the many occasions when they are not complied with.  In the paragraphs which follow, Désirée Fields (McDermott Will & Emery UK, London) articulates both the legal and the ethical dimensions to unpaid costs orders. She writes:

The topic of unpaid OHIM costs orders has been a subject of much debate.  For many businesses, which pay out several hundred or thousands of pounds in legal fees, the relatively small amount of costs which OHIM awards against the losing party are really a drop in the ocean.  Whether the topic really deserves so much debate is therefore questionable. 

From a pure ethical perspective, one would think that a losing party should simply comply with any order as to costs.  However, in some cases, costs orders against a losing party appear to be fundamentally unfair.  We all know that OHIM refunds the opposition fee of 350 Euros to the opponent in cases where a trade mark application or an opposition is withdrawn during the cooling-off period.  However, what happens when an applicant repeatedly attempts to contact an opponent to reach an amicable settlement only to receive a response at the last moment that they are unwilling to discuss co-existence or to extend the cooling-off period? If the applicant subsequently decides to withdraw its application to avoid further conflict, time and expense and the withdrawal is actioned shortly following the expiry of the cooling-off period, is it really fair to demand that the applicant reimburse the opponent for the opposition fees and costs?

Who should pay the costs in such a case? The law is clear on the point. The applicant has to pay. The line has to be drawn somewhere. But that still does not make it fair. However, considering the fact that OHIM costs orders remain unpaid in so many cases anyway and the costs of attempting to enforce costs orders are likely to exceed the amount of the actual award, perhaps it is time to simply abolish the whole system?

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Posted by: Blog Administrator @ 11.11
Tags: OHIM unpaid costs orders,

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