OPPOSITION No B 2 262 106

Callaway Golf Company, 2180 Rutherford Road, Carlsbad, California 92008-7328, United States of America (opponent), represented by DLA Piper UNITED KINGDOM LLP, 3 Noble Street, London  EC2V 7EE, United Kingdom (professional representative)

a g a i n s t

Golf Tech Golfartikelvertriebs Gesellschaft mit beschränkter Haftung, Carlbergergasse 66, 1230 Wien, Austria (applicant), represented by Piaty Müller-Mezin Schoeller, Glacisstr. 27/II, 8010 Graz, Austria (professional representative).

On 03/04/2017, the Opposition Division takes the following

DECISION:

1.        Opposition No B 2 262 106 is upheld for all the contested goods.

2.        European Union trade mark application No 11 692 977 is rejected in its entirety.

3.        The applicant bears the costs, fixed at EUR 650.

REASONS:

The opponent filed an opposition against all the goods of European Union trade mark application No 11 692 977 for the sign ‘AQUA I DRY’. The opposition is based on the non-registered trade mark ‘AQUA DRY’, used in all the Member States of the European Union. The opponent invoked Article 8(4) EUTMR.

NON-REGISTERED MARK OR ANOTHER SIGN USED IN THE COURSE OF TRADE – ARTICLE 8(4) EUTMR

The examination of the opposition will begin with the non-registered trade mark used in the United Kingdom. The use of the non-registered marks in the remaining Member States of the European Union will be assessed only if required.

According to Article 8(4) EUTMR, upon opposition by the proprietor of a non-registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for will not be registered where and to the extent that, pursuant to the Union legislation or the law of the Member State governing that sign:

1. rights to that sign were acquired prior to the date of application for registration of the European Union trade mark, or the date of the priority claimed for the application for registration of the European Union trade mark;

2. that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.

Therefore, the grounds of refusal of Article 8(4) EUTMR are subject to the following requirements:

• the earlier sign must have been used in the course of trade of more than local significance prior to the filing of the contested trade mark;

• pursuant to the law governing it, prior to the filing of the contested trade mark, the opponent acquired rights to the sign on which the opposition is based, including the right to prohibit the use of a subsequent trade mark;

• the conditions under which the use of a subsequent trade mark may be prohibited are fulfilled in respect of the contested trade mark.

These conditions are cumulative. Therefore, where a sign does not satisfy one of those conditions, the opposition based on a non-registered trade mark or other signs used in the course of trade within the meaning of Article 8(4) EUTMR cannot succeed.

1. Prior use in the course of trade of more than mere local significance

The condition requiring use in the course of trade is a fundamental requirement, without which the sign in question cannot enjoy any protection against the registration of a European Union trade mark, irrespective of the requirements to be met under national law in order to acquire exclusive rights. Furthermore, such use must indicate that the sign in question is of more than mere local significance.

The rationale behind the condition laid down in Article 8(4) EUTMR relating to use in the course of trade of a sign of more than mere local significance is to prevent earlier rights which have only been used in a small geographical area, or for which only token use can be demonstrated, from blocking the registration of a new EUTM throughout the European Union. Therefore, the criterion of ‘more than mere local significance’ is more than just a geographical examination. The economic impact of the use of the sign must also be evaluated. Consideration must be given, and the evidence must relate, to the following elements:  

1. Intensity of use (sales made under the sign);

2. Length of use;

3. Spread of the goods (location of the customers); and

4. Advertising under the sign and the media used for that advertising, including the distribution of the advertising (see 24/03/2009, T-318/06 – T-321/06, General Optica, EU:T:2009:77, § 36-37 and 30/09/2010, T-534/08, Granuflex, EU:T:2010:417, § 19).

Finally, use of the sign in the course of trade must be shown to have occurred before the date of the application for registration of the European Union trade mark (29/03/2011, C-96/09 P, Bud, EU:C:2011:189, § 157, 159, 160, 163 and 166).

In the present case, the contested trade mark was filed on 27/03/2013. Therefore, the opponent was required to prove that the sign on which the opposition is based was used in the course of trade of more than local significance in the United Kingdom prior to that date for:

Golf bags and accessories therefor.

On 29/06/2015, the opponent filed inter alia the following evidence:

• Witness statement by Mr. Nick McInally, Marketing Director of Callaway Golf Europe Limited, a subsidiary of Callaway Golf Company. The witness statement is dated 29 June 2015 and covers the following main points:

The opponent is an American global sporting goods company that designs, manufactures, markets and sells golf equipment, golf accessories and golf lifestyle-related products in more than 110 countries worldwide. The opponent’s company was founded in 1982 and is based in Carlsbad, California and is one of the world’s largest makers of premium, performance golf products. The opponent’s core markets in the European Union (EU) are the United Kingdom, Germany and Sweden, although it sells goods in most EU countries. The opponent has been using the mark ‘AQUA DRY’ on golf bags and accessories in the EU since at least January 2011.

Numerous exhibits are attached to the witness statement to demonstrate use. These documents may be summarised as follows:

• Graphs and statistics provided by ‘Golf Datatech’, an independent market share provider, universally considered to be the most reliable source of golf market data information available in Europe. The data shows, among other things, that from January 2012 to December 2014, the opponent was the leading provider of golf bags in the United Kingdom, with market share peaking at 19.14%. Furthermore, from January 2011 to March 2015, the opponent was consistently ranked as a market leader as a distributor of golf bags in the UNITED KINGDOM.

• Purchase orders, dated between 2010 and 2015, showing that a high number of golf bags bearing the ‘AQUA DRY’ sign were purchased by Callaway Golf Europe Ltd from a third party sourcing agent. The number of ‘AQUA DRY’ golf bags ordered from 2010 until the relevant date is 20 772.  

• Sales figures for ‘AQUA DRY’ golf bags for the whole of the EU. The figures by volume for the UNITED KINGDOM are as follows:

2011	2012	2013	2014	2015 (up to May)
1509	1016	2378	2135	541

The figures in monetary terms (GBP) are as follows:

2011	2012	2013	2014	2015 (up to May)
GBP 124,206	GBP 85,445	GBP195,503	GBP196,651	GBP 60,191

• Screenshots from various websites of companies all over the EU, and in particular in the UNITED KINGDOM, showing ‘AQUA DRY’ golf bags offered for sale. These screenshots show that ‘AQUA DRY’ golf bags were available for purchasing at least as early as 29 April 2011.

• A sample of invoices for sales made, inter alia, in the UNITED KINGDOM. The invoices for sales made in the UNITED KINGDOM cover the period 2 November to 30 November 2010, 4 January to 16 March 2011 and 15 March to 13 June 2012.

 

• Market share: Golf Datatech, referred to above, was asked to analyse its sales by market from January 2011 to the relevant date, per market and per month. An email from Golf Datatech, dated 6 May 2015, shows that 15.4% of all UNITED KINGDOM retailers reported handling an ‘AQUA DRY’ golf bag during 2011, either in stock or as a sale. From the sample reviewed, it appears that ‘AQUA DRY’ golf bags accounted for 3.14% of all golf bag sales in the UNITED KINGDOM during 2011.

• Exhibition: the ‘AQUA DRY’ golf bag was exhibited at the Harrogate Golf Show, which takes place in the UNITED KINGDOM each October. The bag was exhibited in 2010, 2011, 2012 and 2013.

• Screenshots of videos promoting the ‘AQUA DRY’ golf bags and showing endorsement by golfing professionals.

The opponent has demonstrated considerable sales in the United Kingdom before the applicant filed to register the contested mark; GBP 124,206 already in 2011. Invoices have been supplied covering the period to 2010 to 2013 and purchase orders that predate and postdate the filing of the contested mark. The amounts involved are significant. There is also supporting evidence in the form of market share figures (3.14% of all golf bag sales in the United Kingdom during 2011 according to the independent market share provider ‘Golf Datatech’), screenshots of websites and videos containing endorsements from professionals. The earlier mark is clearly present throughout the evidence.    

The Opposition Division concludes therefore that the opponent’s sign was used in the course of trade of more than local significance in the United Kingdom for golf bags, before the filing date of the contested trade mark.  

The applicant’s argument that no evidence has been submitted in the name of the opponent in this case

In its defence, the applicant has submitted the technical argument that the evidence filed in these proceedings comes from a subsidiary of the opponent (‘Callaway Golf Europe Limited’) rather than the opponent, and therefore fails to prove that the earlier right ‘AQUA DRY’ belongs to the opponent.

The Opposition Division is aware that the corporate structure of businesses is notoriously complex. Unravelling the legal connections between the various branches of a corporate group, including license agreements, is virtually immune to simplification. In the present case, the applicant has not convinced the Opposition Division that the evidence filed in these proceedings came from a different commercial source from the opponent, or relates to another business in terms of the rights to the earlier mark ‘AQUA DRY’.  

2. The right under the applicable law

Non-registered marks are generally protected against subsequent marks according to the same criteria that are applicable to conflicts between registered marks, namely identity or similarity between the signs, identity or similarity between the goods or services, and the presence of a likelihood of confusion. In these cases, the criteria developed by the courts and by the Office with regard to Article 8(1) EUTMR can be applied mutatis mutandis when examining Article 8(4) EUTMR.

The opposition is based on a non-registered trade mark used in the United Kingdom. The opponent claims to have the right to prohibit the use of the contested trade mark under the tort of passing off.

Passing off

Passing off is a common law tort developed by English case law. In order to successfully rely on it the opponent must prove that: (i) it has acquired a goodwill or reputation in the market under the non-registered mark and its goods are known by some distinguishing feature; (ii) there is a misrepresentation by the applicant (whether or not intentional) leading or likely to lead the public to believe that goods offered by the applicant are goods of the opponent; (iii) the opponent has suffered or is likely to suffer damage as a result of the erroneous belief engendered by the applicant’s misrepresentation. The principle is commonly referred to as the ‘classical trinity’ of goodwill, misrepresentation and damage to goodwill (see Reckitt & Colman Products Ltd v Borden [1990] R.P.C. 341, HL). 

Goodwill is what can accrue to a business or sign used in the course of trade as a result of the positive reputation that it has acquired. It has been referred to as ‘the attractive force which brings in custom’ (see IRC v Muller’s Margarine [1901] A. A. 217 at 233) and is ‘what adds value to a business by reason of situation, name and reputation, connection, introduction to old customers, and agreed absence from competition, or any other things’ (Lord Lindley cited by Byrne J. in Rickersby v Reay [1903] 20 R.P.C. 380). An assertion of this property right does not require establishing a reputation for a brand name or get-up, but goodwill attached to the goods and services which are supplied by association with the identifying name or get-up: ‘It is well settled that (unless registered as a trade mark) no one has a monopoly in his brand name or get up, however familiar these may be. Passing off is a wrongful invasion of a right of property vested in the plaintiff; but the property which is protected by an action for passing off is not the plaintiff’s proprietary right in the name or get up which the defendant has misappropriated but the goodwill and reputation of his business which is likely to be harmed by the defendant’s misrepresentation’ (Harrods Limited v. Harrodian School Limited [1996] RPC 679).

Goodwill is normally proved by evidence of trading activities, advertising, consumers’ accounts, etc. Genuine trading activities, which result in acquiring reputation and gaining customers, are usually sufficient to establish goodwill.

The ‘reputation’ often referred to in relation to passing off does not necessarily have the same content as ‘reputation’ within the meaning of Article 8(5) EUTMR. The English Courts are very unwilling to assume that a business can have no customers and, thus, no goodwill. Even small businesses can have goodwill. The level of goodwill is low only where the nature of the business is transient as for example in the case of a mobile fish and chip shop (Stannard v Reay [1967] R.P.C. 589; The Law of Passing Of, Wadlow, Sweet & Maxwell 2004). The standard of proof under English law is not the same as in the case of, e.g. acquired distinctiveness (Phones 4U Ltd v Phones4u.co.United Kingdom Internet Ltd [2007] R.P.C. 5).

In the case at hand, the opponent has demonstrated use of the non-registered mark ‘AQUA DRY’ in relation to golf bags. The promotional materials and samples of business documents clearly show the use of the sign. The turnover figures show annual sales ranging from GBP 85,445 in 2011 to GBP 196,651 in 2014. The ‘AQUA DRY’ sign is clearly the sign under which the goods are provided and to which goodwill attaches.

Misrepresentation

The signs to be compared are:

AQUA DRY	AQUA I DRY
Earlier sign	Contested sign

The signs are identical but for a letter ‘I’ in the contested sign, inserted between ‘AQUA’ and ‘DRY’. Clearly the marks are highly similar.

The contested goods are:

Class 12:         Golf carts; golf carts, namely golf carts for pulling golf bags.        

Class 28:         Golf bags with or without wheels; golf clubs; travel covers for golf bags; protective hoods for golf clubs; golf gloves.        

The earlier mark enjoys goodwill for golf bags.

Misrepresentation is normally associated with deception or confusion. In order to prove misrepresentation, the opponent must demonstrate that the applicant’s trade mark is likely to lead the public to believe that the applicant’s goods originate from the opponent.

In an action for passing off the misleading nature of the representation of the defendant’s goods and services must be assessed with regard to the claimant’s customers and not to the abstract notion of the average consumer (see 11/06/2009, T–114/07 & T–115/07, Last Minute Tour, EU:T:2009:196, § 60-67). Consequently, when assessing whether there is a risk of misrepresentation, the customers of the opponent must be taken into account.

In the view of the Opposition Division, the customers who have already become familiar with the use of the mark ‘AQUA DRY’ for golf bags are likely to be misled as to commercial origin upon seeing a highly similar mark for the contested goods.

Damage

While ‘misrepresentation’ does not necessarily lead to damage being caused in all possible cases, damage is the most likely result whenever, as in the present case, the goods in relation to which the earlier sign enjoys goodwill are similar to the contested goods.

The opponent is not obliged to prove that it has suffered actual damage; it is sufficient that damage is likely. Bearing in mind the above, the Opposition Division considers, in the absence of any convincing argument to the contrary brought forward by the applicant, that, in the present case, it is more likely than not that the opponent would lose sales because its customers, who intend to buy the goods from the opponent, would erroneously buy the applicant’s goods.

3. Conclusion

Considering all the above, the Opposition Division finds the opposition is well-founded on the basis of the opponent’s earlier sign, pursuant to Article 8(4) EUTMR. Therefore, the contested trade mark must be rejected for all the contested goods.

Since the opposition is fully successful on the basis of the opponent’s non-registered trade mark used in the UNITED KINGDOM, there is no need to examine any of the other unregistered rights upon which the opposition was based.

COSTS

According to Article 85(1) EUTMR, the losing party in opposition proceedings must bear the fees and costs incurred by the other party.

Since the applicant is the losing party, it must bear the opposition fee as well as the costs incurred by the opponent in the course of these proceedings.

According to Rule 94(3) and (6) and Rule 94(7)(d)(i) EUTMIR, the costs to be paid to the opponent are the opposition fee and the costs of representation which are to be fixed on the basis of the maximum rate set therein.

The Opposition Division

Lucinda CARNEY

Rhys MORGAN

Janja FELC

According to Article 59 EUTMR, any party adversely affected by this decision has a right to appeal against this decision. According to Article 60 EUTMR, notice of appeal must be filed in writing at the Office within two months of the date of notification of this decision. It must be filed in the language of the proceedings in which the decision subject to appeal was taken. Furthermore, a written statement of the grounds of appeal must be filed within four months of the same date. The notice of appeal will be deemed to be filed only when the appeal fee of EUR 720 has been paid.

The amount determined in the fixation of the costs may only be reviewed by a decision of the Opposition Division on request. According to Rule 94(4) EUTMIR, such a request must be filed within one month from the date of notification of this fixation of costs and will be deemed to be filed only when the review fee of EUR 100 (Annex I A(33) EUTMR) has been paid.