CH /2005/APP/0230

Neutral Citation No: [2005] EWHC 1729 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
ON APPEAL FROM THE TRADE MARK REGISTRY
Royal Courts of Justice
Strand
London WC2A 2LL

Friday, July 29 2005

Before

MR JUSTICE LAWRENCE COLLINS

Between
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GENERAL CIGAR CO INC.
Appellant
and

PARTAGAS Y CIA S.A.
Respondent
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Mr James Mellor (instructed by Marks & Clerk) for the Appellant
Mr Benet Brandreth (instructed by Boult Wade Tennant) for the Respondent
Mr Michael Edenborough (instructed by the Treasury Solicitor) for the Registrar of Trade Marks

Hearing:  July 20, 2005
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JUDGMENT

Mr Justice Lawrence Collins:
I	Introduction
1.	Cifuentes y Cia SA was originally a Cuban cigar firm, which was founded by Ramon Cifuentes Llano.  Later it was run by his son Ramon Cifuentes Toriello.  Its most famous brand was Partagas. After Fidel Castro took power in Cuba and nationalised the Cuban cigar companies, Ramon Cifuentes Toriello went to the Dominican Republic and later worked with General Cigar Co, Inc, New York (“General Cigar”) to develop the Partagas brands.  Partagas y Cia, S.A., a Spanish company (“Partagas”), is owned by the Cuban government, and it continues the Cifuentes business in Cuba in association with other members of the family. Each side claims to be the successor to the original business. At the hearing I was told that neither party in fact yet markets cigars under the Cifuentes brand in the United Kingdom.
2.	Partagas is the applicant for registration and registered proprietor in respect of the following trade marks: (1) Application 2010923 (dated February 9, 1995):CIFUENTES; and (2) Registration 2020149 (application dated May 11, 1995): CIFUENTES label. 
3.	General Cigar has the following registration and application: (1) Registration 1475209 (application dated September 2, 1991): CIFUENTES WINKS; and (2) Application 2019582 (dated May 4, 1995): CIFUENTES.
4.	The problem in this matter arises from the fact that General Cigar was required in 1994 as a condition of registration to disclaim its right to the use of the word CIFUENTES in this form: “Registration of this mark shall give no right to the exclusive use of the word ‘Cifuentes.’ ”
5.	Consequently, the cascade of trade marks is as follows:
Proprietor	No.	Date of Application	Mark	
General Cigar	1475209	September 2, 1991	CIFUENTES
WINK (registered)	
Partagas	2010923	February 9, 1995	CIFUENTES  (application)	
General Cigar	2019582	May 4, 1995	CIFUENTES (application)	
Partagas	2020149	May 11, 1995	CIFUENTES label (registered)	
II	General Cigar’s 1991 registration of CIFUENTES WINKS and the Trade Marks Act 1938 (“the 1938 Act”)
6.	General Cigar originally sought to register only the word CIFUENTES under the 1938 Act.
7.	The 1938 Act continued the distinction between registration under Part A (section 9) and Part B (section 10) of the Register. The broad distinction was that, while registration in Part B could be obtained in respect of certain marks which could not, by reason of insufficient distinctiveness, be registered in Part A, the rights conferred were more limited.
8.	Section 14 of the 1938 Act provided:
“14.  If a trade mark 
(a)	contains any part not separately registered by the proprietor as a trade mark; or
(b)	contains matter common to the trade or otherwise of a non-distinctive character;
the Registrar or the Board of Trade or the Court, in deciding whether the trade mark shall be entered or shall remain on the register, may require, as a condition of its being on the register,
(i)	that the proprietor shall disclaim any right to the exclusive use of any part of the trade mark, or to the exclusive use of all or any portion of any such matter as aforesaid, to the exclusive use of which the tribunal holds him not to be entitled; or
(ii)	that the proprietor shall make such other disclaimer as the tribunal may consider necessary for the purpose of defining his rights under the registration:
Provided that no disclaimer on the register shall affect any rights of the proprietor of a trade mark except such as arise out of the registration of the trade mark in respect of which the disclaimer is made.”
9.	Accordingly, the position under section 14 of the 1938 Act was that, as a condition of registration, the Registrar could require a disclaimer of matter common to the trade or otherwise of a non-distinctive character. The disclaimer was of “any right to the exclusive use of any part of the trade mark.” But the proviso to section 14 provided no disclaimer was to affect any “rights of the proprietor of a trade mark except such as arise out of the registration of the trade mark in respect of which the disclaimer is made.” 
10.	The Registrar’s practice with regard to the use of surnames was that sections 9 and 10 of the 1938 Act were interpreted as prohibiting registration of surnames otherwise than upon proof of distinctiveness unless the surname in question was so rare that its signification as a surname could be disregarded altogether (and so registrable in Part A) or sufficiently rare that it could be regarded as inherently capable of distinguishing (and so registrable in Part B). The Trade Marks Registry adopted practice guidelines set out in the Guide to the Examination of Trade or Service Marks, which depended on the number of times a name appeared in telephone directories: see Kerly, Trade Marks and Trade Names, 12th ed 1986, paras 8-53 and 8-54, and DU PONT Trade Mark [2004] FSR 293, CA, at para 29 (quoting from AL BASSAM Trade Mark [1994] RPC 315, 383-4).  
11.	Since 2004 the Registrar no longer considers whether there is a predetermined number of persons with the same name above which a name may be regarded as devoid of distinctive character. In DU PONT Trade Mark [2004] FSR 293, CA, at paras 29-32, it was held by the Court of Appeal that the Registrar’s guidelines were not conclusive for the purposes of registration. In Case C-404/02 Nichols plc v Registrar of Trade Marks, September 16, 2004 the European Court ruled that the criteria for assessment of the distinctive character of trade marks constituted by a personal name were the same as those applicable to other categories of trade mark, and that stricter criteria of assessment based, for example on (inter alia) a pre-determined number of persons with the same name, above which the name might be regarded as devoid of distinctive character, could not be applied.
12.	But the former practice prevailed during the course of General Cigar’s application. In May 1992 the Trade Marks Registry rejected General Cigar’s application for Part A of the register (section 9 of the 1938 Act) because it consisted of the geographical location Cifuentes which was also a common surname (appearing 272 times in the Madrid telephone directory).  It was rejected for Part B because it did not satisfy the requirements of section 10 of the 1938 Act, because it was not considered capable of distinguishing General Cigar’s goods from other similar goods.  In May 1994 the application was accepted for advertisement in Part A by an amendment to add the word WINKS so as to read CIFUENTES WINKS in reliance on its existing trade mark WINKS.  The Trade Marks Registry required that General Cigar should give a disclaimer: “Registration of this mark shall give no right to the exclusive use of the word ‘CIFUENTES’ ”.  
III	The Trade Marks Act 1994 (“the 1994 Act”)
13.	The 1994 Act was enacted, according to its long title, in order to make new provision for trade marks, implementing Council Directive 89/104/EEC of December 21, 1988 approximating the trade mark laws of Member States (“the Trade Marks Directive”), to make provision in connection with Council Regulation (EC) 40/94 of December 20, 1993 on the Community Trade Mark (“the Community Trade Mark Regulation”), and to give effect to the Madrid Protocol relating to the International Registration of Marks of June 27, 1989 and to certain provisions of the Paris Convention for the Protection of Industrial Property of March 20, 1883, and also to make new provision for connected purposes.
14.	The 1994 Act came into force on October 31, 1994. On February 9, 1995 Partagas filed a notice of opposition and also applied for its own registration of the mark CIFUENTES.
15.	The following provisions of the 1994 Act are directly relevant:
“5.-(1)   A trade mark shall not be registered if it is identical with an earlier trade mark and the goods or services for which the trade mark is applied for are identical with the goods or services for which the earlier trade mark is protected.
(2)   A trade mark shall not be registered if because -
(a)	it is identical with an earlier trade mark and is to be registered for goods or services similar to those for which the earlier trade mark is protected, or
(b)it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.
…
9.- (1) The proprietor of a registered trade mark has exclusive rights in the trade mark which are infringed by use of the trade mark in the United Kingdom without his consent.
The acts amounting to infringement, if done without the consent of the proprietor, are specified in section 10.
   (2) References in this Act to the infringement of a registered trade mark are to any such infringement of the rights of the proprietor.
   (3) The rights of the proprietor have effect from the date of registration (which in accordance with section 40(3) is the date of filing of the application for registration):
Provided that‑
(a)	no infringement proceedings may be begun before the date on which the trade mark is in fact registered; and
(b)	no offence under section 92 (unauthorised use of trade mark, &c. in relation to goods) is committed by anything done before the date of publication of the registration.
10.- (1) A person infringes a registered trade mark if he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered.
   (2)  A person infringes a registered trade mark if he uses in the course of trade a sign where because
(a)	the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered, or 
(b)	the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,
there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark.
   (3)  A person infringes a registered trade mark if he uses in the course of trade a sign which
(a)	is identical with or similar to the trade mark, and
(b)	is used in relation to goods or services which are not similar to those for which the trade mark is registered,
where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark.
…
13.-(1)  An applicant for registration of a trade mark, or the proprietor of a registered trade mark, may –
(a)	disclaim any right to the exclusive use of any specified element of the trade mark, or
(b)	agree that the rights conferred by the registration shall be subject to a specified territorial or other limitation;
and where the registration of a trade mark is subject to a disclaimer or limitation, the rights conferred by section 9 (rights conferred by registered trade mark) are restricted accordingly.
16.	Opposition to registration is provided for by section 38(2) of the 1994 Act and Rule 13 of the Trade Mark Rules 2000. Applications for declaration of invalidity are governed by section 47 of the 1994 Act and Rule 33 of the Trade Mark Rules. Section 47(2) provides:
“The registration of a trade mark may be declared invalid on the ground -
(a)	that there is an earlier trade mark in relation to which the conditions set out in section 5(1), (2) or (3) obtain, or
(b)	that there is an earlier right in relation to which the condition set out in section 5(4) is satisfied,
unless the proprietor of that earlier trade mark or other earlier right has consented to the registration.”
17.	The transitional provisions of the 1994 Act provided that all existing marks registered under the 1938 Act were transferred on commencement to the register kept under the 1994 Act (1994 Act, Sch 3, para 2(1)).  
18.	Any condition entered on the former register ceased to have effect (para 3(1)), but “a disclaimer or limitation entered on the former register in relation to an existing registered mark … shall be transferred to the new register and have effect as if entered on the register in pursuance of section 13 of this Act.” (para 3(2)).
19.	Thus although the registration of the CIFUENTES WINKS mark predated the coming into force of the 1994 Act, the transitional provisions of the 1994 Act provided that it (and the disclaimer) would be transferred to the new register (Schedule 3, para 2(1)), and that the disclaimer would have effect as if entered on the register pursuant to section 13 of the 1994 Act.
IV	The proceedings
20.	General Cigar opposes the application by Partagas for registration of the CIFUENTES name and seeks to have Partagas’ registration of the CIFUENTES label declared invalid. In respect of the application for registration, the grounds of opposition set out by General Cigar are based on section 5(2)(b) of the 1994 Act. It claims that it is the proprietor of an earlier registered trade mark which it considers to be confusingly similar to that of Partagas and that it is registered for goods which are the same or similar to those for which Partagas seeks registration.  In its statement of grounds of opposition it said that the presence or absence of a disclaimer in respect of a registration could not affect whether the public was likely to confuse two trade marks in the market place.
21.	General Cigar’s application for a declaration of invalidity in respect of Partagas’ registration is based upon sections 5(1) and 5(2)(b).  The section 5(1) ground is based upon General Cigar’s Application 2019582. The section 5(2)(b) ground is also based upon General Cigar’s Application 2019582 and Registration 1475209.
V	The European aspect
22.	Sections 5 and 10 of the 1994 Act contain parallel provisions. Section 5 deals with grounds for refusal of registration, and section 10 deals with infringement. Sections 5(1) and 10(1) deal with identity of marks and goods and sections 5(2) and 10(2) deal with (broadly) similarity of marks or goods where “there exists a likelihood of confusion on the part of the public, which includes the likelihood of association” with the earlier trade mark (in the case of section 5(2)) or the trade mark (in the case of section 10(2)). 
23.	These provisions derive from Articles 4 and 5 of the Trade Marks Directive:
	Article 4(1):
  “A trade mark shall not be registered or, if registered, shall be liable to be declared invalid:
(a)	if it is identical with an earlier trade mark, and the goods or services for which the trade mark is applied for or is registered are identical with the goods or services for which the earlier trade mark is protected;
(b)	if because of its identity with, or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association with the earlier trade mark.”
Article 5(1):
“The registered trade mark shall confer on the proprietor exclusive rights therein.  The proprietor shall be entitled to prevent all third parties not having his consent from using in the course of trade:

(a)	any sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered;
(b)	any sign where, because of its identity with, or similarity to, the trade mark and the identity or similarity of the goods or services covered by the trade mark and the sign, there exists a likelihood of confusion on the part of the public, which includes the likelihood of association between the sign and the trade mark.”
24.	So far as identity is concerned, in C-291/00 LTJ Diffusion SA v Sadas Vertbaudet SA, March 20, 2003, the European Court ruled for the purposes of Article 5(1)(a) of the Trade Marks Directive a sign is identical with the trade mark where it reproduces, without any modification or addition, all the elements constituting the trade mark or where, viewed as a whole, it contains differences so insignificant that they may go unnoticed by the average consumer (para 54).
25.	As to likelihood of confusion, the European Court has held that the likelihood of confusion must be appreciated globally, taking account of all relevant factors relevant to the circumstances of the case. The perception of marks in the mind of the average consumer plays a decisive role. The average consumer normally perceives a mark as a whole and does not proceed to analyse its various details. The more distinctive the earlier mark, the greater the risk of confusion: Case C-251/95 SABEL v Puma [1997] ECR I-6191; Case C-39/97 Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc [1998] ECR I-5507; 117; Case C-342/97 Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel B.V. [1999] ECR I-3819; C-425/98 Marca Mode CV v Adidas AG [2000] ECR I-4881. 
26.	The Trade Marks Directive contains no provisions on disclaimer. The Community Trade Mark Regulation contains provisions on refusal of registration (Article 8) and infringement (Article 9) which substantially mirror Articles 4 and 5 of the Trade Marks Directive.
27.	Article 38(2) of the Community Trade Mark Regulation provides:
“Where the trade mark contains an element which is not distinctive, and where the inclusion of said element in the trade mark could give rise to doubts as to the scope of protection of the trade mark, the Office may request, as a condition for registration of said trade mark, that the applicant state that he disclaims any exclusive right to such element. Any disclaimer shall be published together with the application or the registration of the Community trade mark, as the case may be.”
28.	The Community Trade Mark is administered by the Office for Harmonisation in the Internal Market (“OHIM”).  Appeals from decisions of the Opposition Division lie to a Board of Appeal, and thence to the European Court.
29.	The OHIM Opposition Guidelines, March 2004, state: 
“However, complications will arise when trade marks have been registered with a disclaimer affecting distinctive parts.  This could happen firstly because national laws entitle the disclaiming of distinctive elements at the will of the applicant (usually to overcome relative objections).  But secondly, it may also happen when the disclaimer covers several non distinctive elements that, nevertheless, have some distinctive character in their particular combination.
And, as regards CTMAs it may even happen that a disclaimed element is devoid of distinctive character only in a part of the EU because it is a word only understood by those speaking a particular language or languages.
The main criteria to solve the possible combinations of disclaimers in the earlier rights and or in the CTMA covering either non distinctive elements or distinctive elements has to be derived from the principles on the comparison of signs developed by the ECJ.
According to this jurisprudence, the assessment of likelihood of confusion relies on the overall impression produced by the signs on consumers of the relevant market. Consumers are ignorant on whether a disclaimer has been introduced in the register or not.
…
… it has also to be borne in mind that the disclaimer produces legal effects as regards to the scope of protection granted to the owner of the trade mark. By inserting a disclaimer, the ius prohibendi of the trade mark proprietor is reduced as regards the disclaimed element. Under these circumstances, the owner of the earlier mark does not have any exclusive right to the disclaimed element and cannot hinder its registration or use.” (pp 291-2)
30.	I was referred to 2 decisions of the Board of Appeal, and 3 decisions of the Opposition Division.
31.	In Case R473/2000-3 registration was sought for a figurative mark for cigarettes, consisting of a crest and the word PALERMO. The opponent had registered in Finland and Sweden a figurative mark with a crest and the word FREE, but with a disclaimer of the word FREE. The opponent relied on its own disclaimer to suggest that there would be confusion between the two figurative marks. The Opposition Division decided that there was no likelihood of confusion and the decision was upheld by the Board of Appeal. The disclaimer was aimed at defining the scope of protection of the registered mark. A disclaimer per se did not affect the assessment on the confusing similarity between two marks within the context of the opposition proceedings.
32.	 In Case R73/2001-1 registration was sought by Diane Von Furstenberg Studio, of Connecticut, for DIANE VON FURSTENBERG THE COLOR AUTHORITY for a range of perfumes etc and clothes. There was opposition by Furstenberg GmbH, Germany, based on registrations of figurative marks in the United Kingdom (in 1965 and 1977), Germany, Greece, Sweden etc. containing the word FURSTENBERG. The United Kingdom registration had a disclaimer of any right to the exclusive use of the name FURSTENBERG. The opposition was based on the likelihood of confusion. The Board of Appeal said that, although in the United Kingdom competitors were free to use the word Furstenberg, a disclaimer did not affect the assessment on the confusing similarity between two trade marks in the Community Trade Mark system, citing Case R 473/2000-3. The public in the United Kingdom would not be aware of the disclaimer. The disclaimer was redundant because the surname appeared to be entirely distinctive. Under the 1994 Act,  disclaimed material can be removed by making an application. “To say the least, the disclaimer appears somewhat arbitrary. In any case, the practice of a national office in an age when the Community directive had yet to be implemented is not binding on the Office.” (para 22)
33.	In Decision 651/1999 the applicant sought to register D.E.A.L. The opponent had a figurative trade mark registered in the United Kingdom containing the words D DEAL where the exclusive right to the use of the word DEAL was disclaimed (in 1995). The opposition failed because the disclaimer to the exclusive use of DEAL meant there could be no likelihood of confusion. The Opposition Division said:
“In UK registration No 1 451 565, ‘D DEAL’ the exclusive right to the use of the word ‘DEAL’ was disclaimed.  The disclaimer is a limitation of the registration.  This means that the opponent was not granted the exclusive right to use the disclaimed word, which the registration under normal circumstances would have granted him.  Therefore, the opponent cannot hinder use or registration of the disclaimed word on the basis of UK Registration No 1 451 565.
In this case the opponent is opposed to the registration of the word mark ‘D.E.A.L.’.  The opposition is grounded on the similarities between the disclaimed word ‘DEAL’ and the contested mark ‘D.E.A.L.’.  There are no other similarities between the marks than the presence of the disclaimed element.  As the opponent does not have the exclusive right to the word ‘DEAL’ there can be no likelihood of confusion under the terms of Article 8(1)(b) CTMR.
34.	In Decision 773/1999 the applicant sought to register the word FREEMAN as a trade mark for tobacco products. The opponent had registrations for the word and figurative mark FREE in Finland and Sweden, and in both countries there was a disclaimer for the word FREE. The Opposition Division noted that in Finnish and Swedish trade mark practice, a disclaimer had the effect that the proprietor could not prevent others from using or registering an identical or similar word, unless it had received distinctiveness to function as a trade mark through extensive use. Consequently, when comparing the marks, less value had to be given to the mere word FREE. The marks were on that basis neither visually or phonetically similar.
35.	In Decision 708/2001 the applicant sought to register TRAVELCARD. The opponent had a number of figurative marks in various member states with the words AIR TRAVEL CARD. In some of those states there was a disclaimer of the word elements. The Opposition Division decided that there was no likelihood of confusion. Its approach was to disregard the disclaimed words AIR TRAVEL CARD and only take into account the figurative element: “… the protection granted in those cases is limited to the figurative element of each of the trade marks in question.”
36.	There is no case on these principles in the European Court. I was referred to Case C-104/00P DKV Deutsche Krankenversicherung AG v Office for Harmonisation in the Internal Market (“COMPANYLINE”), September 19, 2002. In that case the applicant sought registration of the word COMPANYLINE as a trade mark for services relating to insurance and financial affairs. Although it offered to disclaim COMPANY and LINE, registration was refused on the ground of lack of distinctiveness. On the appeal it argued that its disclaimer prevented it from monopolising those words for descriptive purposes, and that therefore it should have been entitled to have them registered in combination. OHIM argued in the European Court that no disclaimer can affect a sign’s distinctiveness or descriptiveness. Advocate General Ruiz-Jarabo Colomer said (para 81):
“I wholly concur with the views expressed by the Office in its defence: nothing in the Regulation requires a sign to be assessed more leniently on the basis of other provisions limiting the protection afforded by descriptive signs.”
37.	All that this is saying is that an applicant cannot increase the distinctiveness by making a disclaimer. The European Court did not address any issue arising out of the disclaimer.
VI	Effect of disclaimer under the 1938 Act and the 1994 Act
1938 Act and GRANADA Trade Mark
38.	As I have said, section 14 of the 1938 Act provided that no disclaimer was to affect any rights of the proprietor except such as “arise out of the registration.” In GRANADA Trade Mark [1979] RPC 303 it was argued that disclaimed matter was not within the protection given by registration and therefore had to be disregarded in making comparisons of identity or resemblance under section 12(1) of the 1938 Act, which provided:
12. -    (1)…no trade mark shall be registered in respect of any goods or description of goods that is identical with or nearly resembles a mark belonging to a different proprietor and already on the register in respect of-
	(a)	the same goods,
	(b)	the same description of goods, or 
	(c)	services or a description of services which are associated with those goods or goods of that description.
39.	It was decided in the Registry (Mr Myall) that, while an infringement action could not be based solely on a disclaimed element, the criteria in an action for infringement were essentially different from those which had to be considered in an opposition based on the grounds in section 12(1). The right to object on the grounds in section 12(1) was not a right “arising out of the registration of the trade mark.”  A disclaimer did not in itself affect the question whether or not confusion was likely when that question was for determination under section 12(1). Disclaimers did not go into the market place, and the public generally had no notice of them. Matter which was disclaimed was not necessarily disregarded when questions of possible confusion or deception of the public, as distinct from the extent of the proprietor’s exclusive rights, were concerned:  GRANADA Trade Mark [1979] RPC 303.
40.	Section 4(2) of the 1938 Act provided:
“ The right to the use of a trade mark given by registration as aforesaid shall be subject to any conditions or limitations entered on the register, and shall not be deemed to be infringed by the use of any such mark as aforesaid in any mode, in relation to goods to be sold or otherwise traded in any place, in relation to goods to be exported to any market, or in any other circumstances, to which, having regard to any such limitations, the registration does not extend.”
41.	Section 68(1) defined limitations as “any limitations of the exclusive right to the use of a trade mark given by the registration … including limitations of that right as to mode of use, as to use in relation to goods to be sold, or otherwise traded in, in any place within the United Kingdom, or as to use in relation to goods to be exported to any market outside the United Kingdom.”  Accordingly, a limitation concerned the mode of use of the whole registration, in particular by way of a geographical limitation or a colour limitation (section 16).  
42.	In FOUNTAIN Trade Mark [1999] RPC 490 (the appointed person, Mr Geoffrey Hobbs QC) it was held (at 494) that disclaimers were limitations for the purposes of sections 4(2) and 68(1) of the 1938 Act, and on that basis similarities attributable to nothing more than the presence of a disclaimed feature could not support an action for infringement of a registered mark under the 1938 Act. But the position with regard to opposition under section 12(1) was not the same. It had long been recognised that it rendered marks ineligible for registration on a somewhat broader basis than that upon which their use would be regarded as actionable in infringement proceedings. That had led to the prevailing view that objections under section 12(1) were not restricted to the residue that is left after disclaimers have been taken into account: a disclaimed element must neither be ignored nor given less significance than it deserves when due allowance has been made for the degree to which it is non-distinctive of the relevant goods or services. On that approach, similarities attributable to nothing more than the presence of a disclaimed feature may be sufficient to sustain an objection to registration under section 12(1): GRANADA Trade Mark [1979] RPC 303.  
43.	The European Ltd v. The Economist Newspaper Ltd [1998] FSR 283, CA, contains references to the disclaimer by the plaintiff of a monopoly in the use of the word EUROPEAN in the device registered by it under the 1938 Act, but it is plain (see Hobhouse LJ at 292) that this was not a disclaimer under the 1938 Act, but simply a reference to a position taken in argument. The case turned on whether there was likely to be confusion between the marks in the light of the fact that the word was descriptive: see pp 289-290. 
1994 Act and PACO/PACO LIFE IN COLOUR Trade Marks 
44.	In PACO/PACO LIFE IN COLOUR Trade Marks [2000] RPC 451(“PACO”)  the Hearing Officer, Mr James, decided: 
(1)	Section 5(1), (2) and (3) of the 1994 Act used substantially the same wording as section 10(1), (2) and (3) and it appeared that this was to prevent the registration of trade marks which, in use, would be contrary to the equivalent provisions of section 10.
(2)	Section 10 of the 1994 Act was clearly based on Article 5 of the Trade Marks Directive. 
(3)	Since section 10(2) was based on Article 5(1)(b) of the Trade Marks Directive, the nature of the exclusive right conferred by sections 9 and 10 was an exclusive right to the sign for trade mark purposes.
(4)	Therefore the exclusive right disclaimed under section 13 extended to the use by another party as a trade mark of that which has been disclaimed. If the only point of similarity with the registered mark is the disclaimed element, use of the later mark would not infringe.
(5)	It was difficult to accept that Parliament could have intended a disclaimer to be taken into account for infringement purposes but not when it came to an application to register something which could lawfully be used as a trade mark.
(6)	FOUNTAIN Trade Mark [1999] RPC 490 had been decided under the 1938 Act, section 12 of which rendered marks ineligible for registration on a broader basis than use which would be considered actionable in infringement proceedings, but that was not the position under the 1994 Act.
(7)	Although the public had no knowledge of disclaimers, this applied as much to section 10(2) as to section 5(2). The success of an opposition or action for infringement under section 10(2) depended on the likelihood of public confusion.
(8)	Section 13 also dealt with limitations, and if disclaimers did not apply to section 5 then neither did other limitations of rights to colour or territory. Both were potentially relevant to the likelihood of confusion.
(9)	Disclaimers could also arise in respect of Community Trade Marks. Article 38(2) of the Community Trade Mark Regulation made clear that the purpose of a disclaimer with regard to a Community Trade Mark was to remove any doubts over the scope of protection of a Community Trade Mark. There was no distinction between the scope of protection for the purposes of opposition or infringement.
(10) If section 13 limited the effect of a disclaimer on a national registration to infringement, the Registrar would be attributing a broader meaning to disclaimers on Community Trade Marks than to disclaimers attached to national registrations.
(11)	The reference in section 13 to section 9, and not to section 5, was because section 9 conferred rights by virtue of having a registered trade mark; by contrast section 5 conferred no rights on the proprietor arising from registration. The ability to oppose a registration under section 5 was not a right which stemmed from being the proprietor of an earlier registered trade mark as anyone could oppose an application. 
(12)	The entry of a disclaimer should be regarded as an admission by the proprietor that the disclaimed matter was not to be regarded as in itself distinctive of trade origin and therefore use of the disclaimed matter by another party without other similarities could not give rise to a likelihood of confusion. 
(13)	It was irrelevant that the disclaimer was applied automatically in line with the Registrar’s practice at the time. The effect of a disclaimer did not depend upon the reason it was entered in the Register. If the position changed, the proprietor could file a fresh application for registration without a disclaimer.
45.	PACO was applied in TORREMAR Trade Mark [2003] RPC 89 (Mr Geoffrey Hobbs QC, as the appointed person), where it was said (at 98):
“Objections under s5(2) are conceptually indistinguishable from actions under s10(2) of the Act: they serve to ensure that trade marks whose use could successfully be challenged before the courts are not registered: Case C-39/97 Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc [1998] ECR I-5507, para 21.
It follows that an objection under s5(2) cannot succeed in a case where the resemblance between the marks in issue is attributable to nothing more than the presence in the earlier trade mark of an element for which protection has been disclaimed: PACO/PACO LIFE IN COLOUR Trade Marks [2000] RPC 451.”
46.	The Trade Marks Registry’s practice (Disclaimers – Section 5) is set out in Practice Amendment Circular 3/00 (PAC 3/00), which is based on the decision in PACO, and states:
“Where the only component of the earlier trade mark which could be regarded as creating a similarity with the later trade mark is the subject of a disclaimer to any exclusive right the examiner will not consider the marks to be similar enough to creative a likelihood of confusion.”
VII	Hearing Officer’s decision
47.	In the present matter the decision of the Hearing Officer, Mr M Knight, was as follows:
(1)	Identical or very similar goods were involved, and matters rested, in respect of both the opposition and the invalidation, on a comparison of the trade marks.
(2)	The contention that PACO and PAC 3/00 only applied to post-registration issues was rejected. The fact that the 1994 Act brought into effect a whole new regime for the registration and protection of trade marks made it as likely as not that the sweeping changes included change to the disclaimer regime.  Simply because it was a domestic provision (but within the scope of the provisions of the Trade Marks Directive) did not mean that the old domestic regime, as derived from the 1938 Act, should continue.  The Community Trade Mark Regulation was a stand alone regulation, not dependent upon the Trade Marks Directive, and did not directly restrict the rights of proprietors because of the application of a disclaimer.
(3)	No reference to the European Court was necessary because the law in relation to section 13 (disclaimers), a domestic provision and its application to pre- and post- registration issues, as set out in sections 5 and 10 of the 1994 Act, were clear.
(4)	In view of the disclaimer of the word CIFUENTES attached to the General Cigar’s registration, applying the global appreciation test and the practice set out in PAC 3/00, based upon the reasoning set out in PACO, the comparison was between the word CIFUENTES and the word WINKS.
(5)	CIFUENTES was not similar to CIFUENTES WINKS such as to cause confusion amongst the relevant public and the opposition based upon section 5(2)(b) failed.
(6)	In relation to the invalidation proceedings, in Case C-291/00 LTJ Diffusion SA and Sadas Vertbaudet SA, March 20, 2003 the European Court held that Article 5(1)(a) of the Trade Marks Directive must be interpreted as meaning that a sign is identical with the trade mark where it reproduces, without any modification or addition, all the elements constituting the trade mark or where, viewed as a whole, it contains differences so insignificant that they may go unnoticed by the average consumer.
(7)	The differences between the two trade marks visually and conceptually were very significant and would be seen to be so by the relevant public – wholesalers, tobacconists as well as by the cigar smoking population.  Although the Partagas trade mark encompassed the whole of the word CIFUENTES which was the word the subject of the application for registration by General Cigar, the added items meant that the respective trade marks could not be considered identical even when taking the broadest view possible of the way in which the trade marks might be used. 
(8)	In relation to the grounds of invalidation based upon section 5(2)(b), General Cigar, had put forward two earlier trade marks, 2019582 and 1475209. 
(9)	For the reasons given in the opposition, the disclaimed element CIFUENTES could not be taken into account in the comparison of trade marks under Section 5, and the invalidation allegation based upon trade mark 1475209 was dismissed.
(10)	So far as General Cigar’s Application 2019582 is concerned, it was an application for registration which pre-dated the registration in suit. The main element in each trade mark was the word CIFUENTES. Although there were other features in the trade mark of Partagas, it was the word CIFUENTES which would both strike the eye and be the element used by all the relevant public to request the product.  Therefore, there was such a degree of similarity between the registered trade mark of Partagas and the earlier trade mark applied for by General Cigar that there did exist a likelihood of confusion on the part of the public.  Therefore the request for a declaration of invalidity in respect of Registration 2020149 based upon Application 2019582 succeeded.
(11)	But, as a result of the decision in the opposition case, Partagas had an earlier right than General Cigar to the word CIFUENTES in Application 2010923.  It might well be that General Cigar’s earlier application would not be accepted by the Trade Marks Registry or if accepted Partagas might choose to oppose General Cigar’s Application 2019582 on the basis of it.  Implementation of that part of the decision was stayed until the matter of the General Cigar application had been decided. Either it would be placed on the register, in which case the Partagas registration would be declared invalid, or if that earlier right were not sustained then the Partagas registration would remain on the register.
(12) 	As each side had had a measure of success, each side should bear its own costs.
VIII	The arguments
General Cigar
48.	General Cigar contends that PAC 3/00 is wrong, and hence it has the senior rights in a mark that contains the word CIFUENTES, and that effectively allows it to prevent the further registration of any application that contains that word (subject only to the overall requirement for the existence of the likelihood of confusion). This contention is based upon the argument that disclaimers should only operate post-registration, i.e. in infringement matters, and not affect registration matters per se, i.e. oppositions.
49.	The real issue concerns the true interpretation of section 13.  Section 13 refers expressly to section 9 (rights conferred by registered trade mark) and does not refer to section 5.  
50.	The reasoning in PACO requires reconsideration, not least because: (a) only one aspect of the issue was considered in that case; (b) when examined, parts of the reasoning are artificial; and (c) it produces a technical result which is divorced from reality.
51.		The effects of a disclaimer were reflected in the standard wording, itself derived from section 14 of the 1938 Act, as in the disclaimer in this matter: “Registration of this mark shall give no right to the exclusive use of the word CIFUENTES”.  “Exclusive use” concerned infringement.  By contrast, in an opposition, by relying on an earlier mark the opponent was not asserting any exclusive use of the element which he had disclaimed.  Instead, the whole of the registered mark was considered and assessed under sections 11 and 12 of the 1938 Act.
52.		In addition to disclaimers, a mark might be registered subject to a condition or limitation.  Each of these was different in character from a disclaimer.  Generally, a condition was imposed to prevent a mark being used in a way which would be deceptive e.g. in relation to certain goods.  A limitation was an essential part of the registration itself.  The effect of a limitation in opposition proceedings depended on the nature of the limitation and the mark itself: i.e. a limitation was just that and was not an excision.
53.	In these circumstances, section 13 of the 1994 Act: (a) referred separately to disclaimers and limitations; (b) reflected accurately the nature of a disclaimer: “disclaim any right to the exclusive use of any specified element of the trade mark;” and (c) went on to provide that “the rights conferred by section 9 (rights conferred by a registered trade mark) are restricted accordingly,” without mentioning section 5.
54.	In one respect, section 13 is not entirely clear because a limitation (e.g. geographically or to a specific colour or mode of use) would have had effect in opposition proceedings under the 1938 Act and there is no reason to suppose (particularly bearing in mind the nature of a limitation) why limitations were not intended to continue to have the same effect under the 1994 regime. 
55.	There is good reason why, in respect of disclaimers, section 13 only referred to the infringement rights (under section 9) and not to the relative grounds for refusal in section 5, because that reflected the position under the 1938 Act, whence disclaimers originated.
56.	Under the 1994 Act, a disclaimer would continue to operate when the mark was asserted by way of infringement because that is where an exclusivity of use is being asserted.  By contrast, in an opposition (where there is no assertion of exclusive use), the whole of the registered mark would be assessed against the mark applied for.
57.	It would be a very strange result if a disclaimer entered under the regime of the 1938 Act and worded to suit that regime was to be interpreted as having much wider effect under the 1994 Act, and an effect not reflected in its wording.
58.	The principal flaw in the PACO and TORREMAR reasoning is that both decisions ignore the obvious reasons why section 13 refers expressly to section 9 and not section 5.
59.	The reasoning in PACO is artificial at key points, namely: (1) the introduction of the notion that the exclusive right in sections 9 and 10 is an exclusive right to the mark “for trade mark purposes” (para 49).  This notion is drawn from a short quotation from Case C-63/97 BMW v. Deenik [1999] ECR I-905, which was dealing with an entirely different point; (2) this reasoning is then used to equate section 10(2) with section 5(2), and (para 51), the Hearing Officer failed to appreciate or deal with the reasons why Parliament intended exactly what section 13 provides; (3) instead, he referred to FOUNTAIN Trade Mark and used it to reinforce the conclusion he has already reached; (4) he referred (para 55) to the fact that section 13 dealt with disclaimers and limitations, but failed to deal with the essential differences between them; (5) he referred (para 56) to Article 38(2) of the Community Trade Mark Regulation, but failed to appreciate that Article 38(2) does not help.  There was no provision in the Trade Marks Directive concerning disclaimers, with the result that both section 13 and United Kingdom disclaimers are home-grown; (6) in paragraphs 58-61, he put forward a reason (paras 58-61) why section 13 did not refer to section 5.  This reasoning is highly artificial, when there is a much more obvious reason,  as set out above; (7) in the final part of the reasoning, paras 62-63, the Hearing Officer takes a dictum of Millett LJ (made in the particular context of The European) and applies it as a rule of law to disclaimers in general and for all purposes under the Act.  This is particularly artificial in the context of the Trade Marks Directive and the 1994 Act.  The case law of the European Court makes it clear that the distinctiveness and hence the scope for likelihood of confusion can change over time through the use made of the mark; (8) it is no answer to say (paragraph 64) that the proprietor of a registration with a disclaimer could reapply under the 1994 Act for the mark without a disclaimer.  That is what General Cigar did with Application 2019582 on May 4, 1995 but were beaten to it by 2-3 months.  This is tantamount to saying October 31, 1994 was year zero, for any pre-existing registration with a disclaimer.
  60.	The removal of the artifice, and the solution to the problem comes with allowing a normal global assessment to take place under section 5.  If this is done, then a series of consequences follows: (a)  contrary to the finding of the Hearing Officer in this case, the evidence is not irrelevant; (b) the opposition to Application 2010923 succeeds; (c) the impediment to Application 2019582 falls away; and (d) the application to invalidate Registration 2020149 succeeds.
Partagas
61.	Partagas contends that PAC 3/00 is right, and so the opposition to its application (the second in the series) for the word mark CIFUENTES (with no disclaimer) brought by General Cigar based upon the earliest mark in the series, namely the word mark CIFUENTES WINKS, but with a disclaimer to the exclusive use of the word CIFUENTES, fails, because the only common component is the disclaimed word. As a result, Partagas could invalidate the third mark in the series, which is General Cigar’s application for the word CIFUENTES (but with no disclaimer), and so the application for a declaration of invalidity by General Cigar against Partagas’ registered device mark (the fourth in the series) that contains the word CIFUENTES also fails, because (a) vis-à-vis General Cigar’s first mark, by the operation of PAC 3/00, the disclaimer effectively negates any similarity; and, (b) vis-à-vis General Cigar’s application (the third in the series), conflict is avoided because that mark would never get onto the register due to Partagas’ application (the second in the series).
62.	The 1994 Act is expressly said to “make new provision for registered trade marks…”  It is unclear why the position in relation to the 1938 Act should be of relevance let alone why it should automatically carry over.  The wording of the sections dealing with disclaimers is different.  Further, it is clear from the removal of the provision for conditions on trade marks that the general issue of disclaimers, limitations and conditions was under review.  Moreover, the purpose of the 1994 Act was to bring into domestic law the Trade Marks Directive and to make provision for the Community Trade Mark Regulation.  It would be surprising in that context if the provisions of the 1938 Act had been carried over wholesale.
63.	The suggestion that disclaimers were treated differently is not based on express provisions in the 1938 Act but on the authorities dealing with those provisions.  The authorities suggested that there was a perception that the grounds of opposition to registration in section 12 of the 1938 Act were broader than those of infringement: FOUNTAIN Trade Mark, where there was no challenge to the correctness of the approach to disclaimers.  In consequence to say that the position under the 1938 Act was different appears to be no more than to say that the approach taken by the hearing officer in GRANADA Trade Mark [1979] RPC 303 and not challenged in FOUNTAIN was to the effect that disclaimers were not applied when considering registrability. It is possible that the approach taken in FOUNTAIN should have been challenged.
64.	The motivation for treating disclaimers differently in relation to registrability does not extend to the 1994 Act.  Under the 1994 Act and the Trade Marks Directive there has been a conscious attempt to match the prohibition against registration to the provisions for infringement.  
65.	The correct starting point for any consideration of the effect of a disclaimer should be section 13 of the 1994 Act and not the 1938 Act.  The wording of that section is plain as to its effect.  The trade mark proprietor gives up any rights to rely upon the specified element on its own.  That disclaiming is not qualified in any way, for example by the addition of the words “for infringement purposes”.  The wording of the final part of the section makes it clear that it is intended to amplify but not confine the disclaiming: “and where the registration…”  There is no reason to treat that as restricting the scope of the “exclusive use.” General Cigar assumes “use” does not cover use for the purpose of opposing a registration even though this would seem to run contrary to the common-sense understanding of “use”.
66.	The provisions under section 5 mirror the provisions under section 10.  It is artificial to treat the exclusive use as applying only to infringement and not to registration.  The function of the trade mark system is to act as an indication of origin of the goods so marked and the same purpose underlies both section 5 and section 10.
67.	The decision in PACO reflects both the common-sense interpretation of section 13 and the distinctions from the position under the 1938 Act.  General Cigar has numerous criticisms of that decision but all effectively proceed from the initial starting point that section 13 of the 1994 Act is an attempt to carry over the scheme under the 1938 Act.
68.	If the proprietor is concerned about losing priority and believes the basis for the disclaimer has gone because it only arose under a particular approach to trade marks prevalent under the 1938 Act then the proper approach is to persuade the registrar of this and have the disclaimer removed under section 64(5): “The registrar may remove from the register matter appearing to him to have ceased to have effect”.
69.	General Cigar suggests that there is something artificial about the effect of disclaimers in relation to registrability.  The artificiality is said to be illustrated by the fact that if the excluded matter is not taken into consideration that does not allow the remaining material to be considered in isolation.  But this suggestion reflects a misunderstanding of the effect of the disclaimer.  The purpose of the disclaimer is not to remove the specified matter from the mark but from being the sole part of the mark that is relied upon.  Thus the difficulty for General Cigar in the present case arises from the fact that the sole part of Partagas’ mark that overlaps is that part which has been expressly disclaimed.  Had Partagas tried to register CIFUENTES BLINKS then the CIFUENTES WINKS mark in its entirety would have been the relevant comparison. 
70.	The only artificiality that arises is the product of the artificiality inherent in the very nature of a disclaimer itself.  Once disclaimers are permitted at all, their artificiality cannot be the grounds on which they are limited to infringement rather than registrability.
Registrar of Trade Marks
71.	The Registrar contends that PAC 3/00 is right. It supports the reasoning of Mr Knight and the reasoning in PACO upon which PAC 3/00 was based, and the reasoning in TORREMAR Trade Mark.
72.	At the time that the first mark was registered, disclaimers could be imposed by the Registry upon the applicant under section 14 of the 1938 Act. Thus, in a case where a disclaimer was being contemplated, but it was not accepted by the applicant, then in all likelihood the application would have been refused at that time. In such a case, there would be no senior registration upon which to oppose any subsequent registrations. This gives the same result as PAC 3/00.
73.	The fallacy in General Cigar’s argument is that it presumes that once a mark is registered, then each and every component of that mark contributes materially to the distinctive characteristic of the mark. This is a false assumption. In the case of the hypothetical example of a word bordered by a plain black rectangle, it is extremely unlikely that the border would be subject to an express disclaimer, because it is so obviously non-distinctive. The border’s non-distinctiveness may be illustrated as follows: if that border were the only common component between the senior mark and a later application, then the likelihood of confusion would not be established. All that an express disclaimer provides is a clear indication on the face of the register that the disclaimed component is non-distinctive at the date of filing for the purposes of trade mark registration, and so no exclusive trade mark rights may be claimed therein. Accordingly, a subsequent application for a trade mark is free to use that component. Disclaimers do not affect any common law rights that might subsist.
74.	Under the 1994 Act, disclaimers cannot be made a condition precedent for registration, but they may be voluntarily adopted. Under the transition provisions (1994 Act, Sched 3, para 3(2)), pre-existing disclaimers shall be deemed to have effect as if entered under section 13 of the 1994 Act. Thus, an old disclaimer must now be deemed to be voluntary. Accordingly, a disclaimer amounts to a voluntary admission that the disclaimed component is non-distinctive for the purposes of trade mark registration. PAC 3/00 gives effect to that voluntary admission of non-distinctiveness.
75.	In a case such as the present one, envisage that the senior mark is a two component mark, one of which is disclaimed because it is non-distinctive at the time of filing. If subsequently, there is an application by another party to register the disclaimed component, then that should only succeed if that component has become distinctive of that other party. If that component remains non-distinctive of any one particular trading source, then the subsequent application would fail on absolute grounds. Alternatively, if that component in the meantime had become distinctive (through use) of the original registrant, then that original party would be able to object to the subsequent application, based upon its common-law rights, rather than its limited registered trade mark rights.
76.	This analysis protects the original registrant if the originally disclaimed component becomes distinctive of it. Further, if that originally disclaimed component remains non-distinctive of any party it would be unregistrable by the subsequent party. However, if it has become distinctive, for whatever reason, of the other party, then that new party is entitled to register it.
77.	When considering post-registration matters, i.e. infringement, one is considering the actual or threatened use of the allegedly infringing sign. Yet the same is true when considering registration matters, i.e. opposition or invalidations, because the correct comparison is between the mark as registered and the proposed notional and fair use of the junior mark. Thus, in each case, one is considering use, be it actual, threatened or notional and fair. If General Cigar’s contentions are correct, then different results would be reached when considering infringement and registrability. Yet, as each depends upon use and the likelihood of confusion, that would be illogical.
78.	It is important to note the policy behind allowing disclaimers. In essence, General Cigar’s argument amounts to saying that the purported policy is that a party can have an exclusive right to the registration of a sign, even though (under the 1994 Act) it is deemed to have voluntarily acknowledged that it can have no exclusive right to use it. In this case, that amounts to claiming a right to prevent anyone else from registering the disclaimed component. The Registrar contends that there is no justification for such a purported policy. In contrast, the whole purpose of registration is to give those who use or propose to use a trade mark, the means of preventing others from acquiring the goodwill that would accrue to a business operated under and by reference to that mark, and so confusing the public as to trade source. The approach advocated by General Cigar is contrary to the purpose of having a Trade Marks Register.
79.	The practice under the 1938 Act arose from the case of GRANADA Trade Mark [1979] RPC 303. The matter was never fully considered by the courts, and so there was no higher judicial consideration of the point. Further, given that the 1994 Act was implemented to give effect to the Trade Marks Directive and so to introduce a fundamental change in trade mark law and practice, it is illogical to suppose that the legislature intended that this particular old practice was to continue unaltered. Clear words to that effect would have been needed (as for example were used in section 7(3), where it is expressly stated that the phrase “honest concurrent use” “means such use … as would formerly have amounted to honest concurrent use for the purposes of section 12(2) of the Trade Marks Act 1938”).
VII	Conclusions
80.	The present case involves a relatively narrow question.  First, it arises in this context because of the interplay between the 1938 Act and the 1994 Act caused by the assimilation, as a result of the transitional provisions of the 1994 Act, of the imposed disclaimer under the 1938 Act, section 14, and the voluntary disclaimer under section 13 of the 1994 Act.  Secondly, both Partagas and the Registrar accept that disclaimed matter may be relied on in conjunction with other parts of the mark.  The problem arises in the present case from the fact that the only part of General Cigar’s mark which overlaps with Partagas’ mark is the part which has been disclaimed.  The practice reflected in PACO and in PAC 3/00 is that if the only point of similarity with the registered mark is the disclaimed element, the disclaimed element cannot be relied upon either in opposition proceedings or in infringement actions.
81.	The question is one of construction of section 13, and in particular whether it has the effect that where the only point of similarity with the mark applied for or registered is the disclaimed element, the application for registration may be resisted on that ground or registration may be declared invalid on that ground.
82.	The essence of the argument for an interpretation of section 13 which allows the disclaimed element to be used for the purposes of opposition or invalidity proceedings is as follows. First, that interpretation is supported by the wording of, and the practice under, the 1938 Act. Second, as a matter of general policy, it is also supported by the law and practice under the Community Trade Mark Regulation, and it is desirable that there should not be inconsistency. Third, as a pure matter of construction of section 13: (a) it appears in a part of the Act under the heading “Effects of Registered Trade Mark” which deals with infringement; (b) the last part of section 13(1) provides that where the registration is subject to a disclaimer or limitation “the rights conferred by section 9 (rights conferred by registered trade mark) are restricted accordingly”, and section 9 deals exclusively with infringement; and (c) on that basis, the words “disclaim any right to the exclusive use of any specified element” refer to what have been described as post registration rights, and do not affect the right to rely on the disclaimed matter in opposition or invalidity proceedings.
83.	So far as the point on the 1938 Act is concerned, there was at one stage in the argument some suggestion on the part of General Cigar that there were Parliamentary materials which might be admitted and relevant under Pepper v Hart [1993] AC 593, but it became clear that the materials relied on were not sufficient to make it arguable that it was intended that the law and practice under the 1938 Act was intended to be carried over into the 1994 Act.  Indeed, all the material is to the opposite effect.  The long title of the 1994 Act makes it clear that new provision was to be made, and as early as 1990 it was said in Department of Trade and Industry, Reform of Trade Marks, 1990, Cm 1203, Introduction, para 12 that “the aim of a new Trade Marks Act will be to provide, as far as possible, a new and self sufficient law of trade marks, while at the same time simplifying the text of the law”.
84.	Nor do I consider that the practice on the Community Trade Mark supports General Cigar’s position, even if it were relevant.  First, for the reasons given above in section V above, there is nothing in the opinion of Advocate General Ruiz-Jarabo Colomer in the CompanyLine case which is of any relevance to the present case.  Second, the practice of OHIM is largely dealing with the question on which there is common ground in the present proceedings, namely where the disclaimed element is part of a registered mark which, as a whole, is relied on to show a likelihood of confusion. The sole exception is the decision of the Board of Appeal in FURSTENBERG, and I do not consider that this decision (rendered in 2001) on likelihood of confusion under Article 8 of the Community Trade Mark Regulation can have any bearing on the construction of section 13 of the 1994 Act. 
85.	The main purposes of the 1994 Act were to implement the Trade Marks Directive and to make whatever provision was necessary for the Community Trade Mark.
86.	There is an obvious parallelism between Articles 4 and 5 of the Trade Marks Directive and sections 5 and 10 of the 1994 Act.  I accept the argument that it is difficult to imagine that Parliament could have intended a disclaimer to be taken into account for infringement purposes but not for opposition/invalidity purposes. One of the uses to which a trade mark may be put is as a bar to others registering similar marks.  In effect section 5 of the 1994 Act serves to pre-empt the need for an infringement action by preventing the registration of marks the use of which would otherwise infringe. 
87.	I accept the argument for the Registrar that General Cigar’s suggested distinction between the effect of a disclaimer upon registration matters and infringement issues is based upon a false premise. A disclaimer only applies to part of a mark (because the whole of a valid mark could never be disclaimed, otherwise it would not be distinctive), and so a disclaimer only has any relevance when the marks under consideration are similar, rather than identical. This is because a disclaimer operates to affect the scope of protection by influencing the analysis of the likelihood of confusion. This concept is common to both section 10 (infringement) and section 5 (registrability), and should be applied equally in each scenario.
88.	It is also important to note that Mr Mellor for General Cigar, conceded more than once that his argument did not apply to an agreement under section 13(1)(b), namely that “the rights conferred by the registration shall be subject to a specified territorial or other limitation”.  Indeed, it would be absurd if a territorial limitation could not be relied on in an opposition, for example, under section 5(1).  That concession entirely undercuts any argument based on the context of the part of 1994 Act in which section 13 occurs, and also any argument based on the reference in the final part of section 13(1) to the rights conferred by section 9,  when that part of section 13(1) refers not only to disclaimer, but also to limitation.
89.	Consequently I reject the interpretation of the expression “any right to the exclusive use” which draws a parallel between that expression and the interpretation given to the expression “arising out of the registration of the trade mark” in section 12(1) of the 1938 Act.  It is not necessary for me to decide whether the practice under the 1938 Act was right.  Consequently, I am satisfied that the decision of the Hearing Officer in PACO was correct.  I accept that some criticisms could be made of the reasoning, particularly in relation to the reliance on European law.  For example, it seems to me that Case C-63/97 BMW v Deenik [1999] ECR I-905 was not material. Nor do I think that the reference to the Community Trade Mark carries the matter any further.  Nor do I think that the reference to The European Ltd v The Economist Newspaper Ltd [1998] FSR 283 is of any assistance, since it would appear that the Hearing Officer (who is not alone in this) was led by the references to disclaimer in that decision to consider that there had been a disclaimer on registration, when it is apparent from the report that in fact the disclaimer was a purely forensic one.  But I reject the contention on the part of General Cigar that the reasoning in PACO is artificial.  It seems to me to be in accordance with the structure and intent of the Trade Marks Directive and the 1994 Act as applied both to disclaimers and limitations.
90.	Nevertheless in the unusual circumstances of this case there is an element of unfairness in the result because of the interplay of the 1938 Act and the 1994 Act, and the Registrar’s guidelines for surnames, now superseded as a result of the decision of the Court of Appeal in DU PONT and of the European Court in Nichols plc.  In the skeleton argument for Partagas, Mr Brandreth, in reliance on Kitchin and Mellor, The Trade Marks Act 1994: Text and Commentary, suggested that where a proprietor was concerned about losing priority and believed the basis for the disclaimer had gone because it arose only under a particular approach to trade marks prevalent under the 1938 Act, then the proper approach was to apply to have the disclaimer removed under section 64(5), which provides that the Registrar may remove from the register matter appearing to him to have ceased to have effect.  In those circumstances, it might be appropriate to stay any further action in these proceedings, until (if General Cigar proposes to make such application) that application has been made and disposed of, but Mr Brandreth reserved the right to argue that such a stay should not be granted because the matter should have been raised in the opposition/invalidity proceedings.  I will therefore hear further argument on it in due course if General Cigar proposes to make an application.
91.	The Hearing Officer decided that each side should bear its own costs, on the basis that General Cigar had won on some of the issues.  Mr Brandreth at the hearing for the first time suggested that since Partagas had succeeded on both aspects, the costs order should be reversed, and General Cigar should be ordered to pay all of costs before the Hearing Officer.  There had, however, been no cross appeal and the matter had not even been raised in the skeleton argument.  In those circumstances, I do not think it would be right for me to interfere with the discretion of the Hearing Officer to deal with costs on an issue based approach.  
92.	The appeal will therefore be dismissed.