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A landmark High Court ruling which had potential to fundamentally change trade mark practice has been overturned on appeal. The decision means arguments already heard in a Trade Mark Registry proceeding can be re-heard again in court.

A dispute over trade marks between cosmetics giant L'Oreal and small prospective hair and cosmetic products producer Special Effects came to the High Court last year. L'Oreal had previously used the Registry's opposition proceedings to object to the smaller company registering the trade mark 'Special Effects' in the UK for hair products.

L'Oreal then launched a range of beauty products using the ‘Special FX’ name. However, their opposition to the use of ‘Special Effects’ turned out to be unsuccessful. L’Oreal was then sued by Special Effects for trade mark infringement.

In the course of the infringement proceedings it argued that L'Oreal could not oppose the validity of its trade mark because that issue had already been resolved at the Registry proceedings. Special Effects argued that there was a cause of action estoppel. It also argued that L'Oreal was guilty of abuse of process in attempting to reignite the invalidity argument.

In March last year the High Court found in favour of Special Effects. It ruled that the arguments could not be re-heard because they had already been decided at the Registry opposition proceedings (the claimant was thus estopped from relying on grounds of argument utilised in unsuccessful opposition proceedings in subsequent infringement proceedings).

However, L'Oreal appealed and the Court of Appeal heard the case in November of last year. The Court of Appeal reversed the High Court ruling, effectively re-establishing the previous status quo. It was held that estoppel does not apply to infringement proceedings, and that L’Oreal had acted within the remit allowed by the Trade Mark Act 1994.

The Court of Appeal furthermore held that the Registry's opposition proceedings did not have the finality of a court decision.