Costs in a Trade Mark Opposition: It's a Lot "More" Than You Think

There are aspects of trade mark law that can play a substantial role in a decision about whether to enter into an opposition proceeding, but have tended to attract less commentary and professional discussion. One of the most notable of these aspects is the issue of costs. This is especially so when the jurisdiction involved is a small or medium-sized country. In such circumstances, the decision to go proceed with the opposition action, or to subsequently go forward upon filing, may be materially affected by the likelihood that costs will be awarded if the moving party either withdraws the action or has receives an adverse judgment, assuming that the jurisdiction authorizes costs.

This subject arose as this Kat was recently getting his paws around the latest batch of decisions issued by his own national trade marks registry. Even more than the substantive results of the decisions themselves, what really grabbed his attention were the costs that were being awarded in nearly every instance, even for procedural matters. This led me to ask myself a series of questions that I had never really thought about in a systematic fashion: how many national trade mark systems authorize their respective registries to award costs in such circumstances? What is the usual range of such awards? Is the award of such costs good or bad for the trade mark system?

Except for his own anecdotal experience, this Kat does not know the answer to the first question, beyond the fact that some countries authorize the awarding of costs in such circumstances, while others do not. And so to the initial question for our readers: does your national trade mark practice authorize the awarding of costs in an opposition proceeding?

As for the matter of the range of the costs awarded, this Kat will also rely on his anecdotal experience. On that basis, he notes that, while the amount of such awards tends to be less than the amount awarded by a court of general jurisdiction, the ratio between the two is not nearly as great as one might expect. In some instances, the award given by the registry is even greater as an absolute amount than is the comparable amount awarded by the court. Moreover, as a function of the professional hours devoted to an opposition or cancellation, his impression is that cost awards given by his national registry tend to be larger on a relative basis than the costs granted by the courts. Given the procedural simplicity of most opposition proceedings, as compared with a full-fledged action litigation action in a court of general jurisdiction, this seems surprising.

These considerations lead this Kat to two further thoughts about the circumstances in which a national registry is empowered to grant an award of costs in an opposition action.

1. If the rules governing a trade mark opposition action provide for an exchange of pleadings, submission of evidence, an oral hearing and examination of witnesses and post-hearing written summations, then there is a greater likelihood that the registry will be empowered to grant costs. That said, why a small or medium-sized jurisdiction would be interested in facilitating such a system is a mystery to this Kat, since it seems to be a disincentive for both the applicant and opposer.  This is especially so when budgets are constrained and there are alternative low-cost jurisdictions. All in all, it seems to be a misplaced use of both public and private resources.

2. When, as is becoming increasingly prevalent as a matter of practice, the trade mark registry does not carry out a substantive examination based on relative grounds, the role of the opposition is more central in maintaining the integrity of the registry. Still, in this situation, this Kat suggests that the issue of the scope of costs will likely depend on whether the opposition is maintained before the registry or the court, with the latter inclined to award costs in a greater amount. Here, as well, the question can be asked whether a small or medium jurisdiction is serving its best trade mark interests in providing for that the opposition proceeding be adjudicated before the court rather than the registry.