CANCELLATION No 10327 C (INVALIDITY)

Emerald Kalama Chemical, LLC, 1296 Third St., N.W., Kalama Washington 98625, United States of America (applicant), represented by AKD N.V., Wilhelminakade 1, 3072 AP Rotterdam, the Netherlands (professional representative)

a g a i n s t

Izohan sp. z o.o., Łużycka 2, 81-963 Gdynia, Poland (EUTM proprietor), represented by Rumpel Spółka Komandytowa, Częstochowska 1 a, 93-115 Łódź, Poland (professional representative).

On 02/03/2017, the Cancellation Division takes the following

DECISION

1.        The application for a declaration of invalidity is partially upheld.

2.        European Union trade mark No 7 539 455 is declared invalid for some of the contested goods, namely:

Class 1:        Chemicals for use in industry, science and photography, as well as in agriculture, horticulture and forestry; unprocessed artificial resins, unprocessed plastics; chemical substances for preserving foodstuffs; insulating oils, joint sealing compounds, namely cement and ceramic waterproofing chemicals, unprocessed epoxy resins, adhesives used in industry, silicones.

3.        The European Union trade mark remains registered for all the remaining goods, namely:

Class 1:        Manures; fire extinguishing compositions; tempering and soldering preparations; tanning substances.

as well as for all the remaining non-contested goods in Classes 2, 17 and 19:        

Class 2:        Paints, varnishes, lacquers; preservatives against rust and against deterioration of wood; colorants; mordants; natural resins; metals in foil and powder form for painters, decorators, printers and artists, anti-corrosive coatings; insulating paints, insulating lacquers.

Class 17:        Rubber, gutta-percha, gum, asbestos, mica and goods made from these materials and not included in other classes; thermoinsulating materials, insulating fabrics, semi-processed artificial resins, artificial resins, semi-processed products, insulating tape and band, rubber solutions.

Class 19:        Building materials (non metallic); non-metallic rigid pipes for building; asphalt, pitch and bitumen; non-metallic transportable buildings; monuments, not of metal, asphalt, bitumen, bituminous products for building, bituminous coatings for roofing, bituminous coatings for building, bituminous binders for walls, tarred strips, for building, waterproof, thick-film, asphalt, dispersion, hydroinsulating flexible products, flexible products preventing the penetration of damp and water, all in the form of bituminous coatings applied in spray form.

4.        Each party bears its own costs.

REASONS

The applicant filed an application for a declaration of invalidity against European Union trade mark No 7 539 455 for the figurative mark . The application is directed against part of the goods, namely against all the goods in Class 1. The application is based on a non-registered trade mark ‘K-FLEX’ (word mark), used within the course of trade in Germany and the United Kingdom. The applicant invoked Article 53(1)(c) EUTMR in connection with Article 8(4) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant states that its company Emerald Kalama Chemical, LLC has used the trade mark ‘K-FLEX’ as of 1994 in the European Union. It explains that it operates as of 1971 and serves customers worldwide, shipping goods annually to over 70 countries. It produces various products, including performance additives such as K-FLEX® dibenzoate plasticizers and coalescents, one of the three product segments of the applicant’s company. The applicant refers to its exhibits which purportedly show use in trade (examined further on).

With reference to the German Trade Mark Act, the applicant submits that it sold K-FLEX products to the relevant public in the German market as of 22/12/1994 and thus the national law is applicable. With reference to the common law tort of passing off in the United Kingdom, the applicant refers to the three conditions that need to be established to reach a positive finding. It also submits the contents of the law and some case-law deriving from the United Kingdom regarding passing off.

In response, the EUTM proprietor notes that the evidence submitted does not prove that the applicant used his trade mark in the course of trade. The EUTM proprietor analyses all the exhibits in detail and concludes that the applicant only enclosed company materials which do not demonstrate actual use of the mark on the market. With regard to the German law, the applicant has not provided a complete translation of the legal provision invoked in accordance with the standard rules of substantiation. In addition, the applicant did not provide any document indicating that his trade mark was recognizable by 20-25% of the relevant German public (as prescribed in the respective law). Referring to English law the applicant has failed to prove the necessary conditions, namely that it enjoyed goodwill, that there is misrepresentation and damage. In conclusion, the applicant has not provided evidence of the acquisition of protection and does not state whether it fulfils the conditions of the scope of protection.  

In response, the applicant files additional observations and evidence. It explains that irrespective of the UK requirements to businesses to retain records for a maximum of six years, it has been able to retrieve a substantial number of invoices and submitted invoices for the years 2004, 2005, 2007 and 2008 in proof of the distribution and sale of K-FLEX plasticisers in the EU. The applicant largely reiterates its previous arguments on the validity of its evidence and that it complies with the requirements of the relevant legal provisions.  

The EUTM proprietor argues that the new materials presented by the applicant are not evidence for the use of the mark K-FLEX before 21/01/2009, since they do not present the date and the place on which they were distributed. For example, the brochures do not indicate the relevant territory (some were directed only at US territory) and there is no date on them. The witness statement is not supported by any external evidence and the reports presented in exhibits 24-26 are general reports on the chemical market. The applicant failed to present arguments, which can justify the cancellation request.

In reply, the applicant provides explanations in relation to the evidence. It claims that the documents in exhibit 11 are clearly dated and the invoices in exhibit 16 are relevant evidence demonstrating use in the EU, in particular the UK, in the relevant period. The patents in exhibits 19 – 23 show that the products and brand was known and offered to others in the industry.

The EUTM proprietor replied that it maintains all the arguments presented in its earlier writings. According to the proprietor, the applicant failed to present the evidence in due course and his arguments presented too late should not be taken into account. Exhibit 11 should be disregarded and the invoices in exhibit 16 do not have any value. Mentioning the product or even a brand in patent documents does not mean that the trade mark was in fact used on the EU market. The applicant has not successfully invoked Article 8(4) EUTMR, as it has not proved that he is a beneficiary of a non-registered sign. The cancellation request should be dismissed.  

NON REGISTERED MARK OR ANOTHER SIGN USED IN THE COURSE OF TRADE (Article 53(1)(c) EUTMR IN CONJUNCTION WITH ARTICLE 8(4) EUTMR)

Under Article 53(1)(c) EUTMR, an application for a declaration of invalidity of a European Union trade mark shall be met where there is an earlier right as referred to in Article 8(4) EUTMR and the conditions set out in that paragraph are fulfilled.

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 shall not be registered where and to the extent that, pursuant to the Union legislation or the law of the Member State governing that sign:

(a)        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;

(b)        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 applicant 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.

In addition, it should be taken into account that in cancellation proceedings the applicant also has to prove that the sign was used in the course of trade of more than local significance at another point in time, namely at the time of filing of the invalidity request. Such condition stems from the wording of Article 53(1)(c) EUTMR which states that a European trade mark shall be declared invalid ‘where there is an earlier right as referred to in Article 8(4) and the conditions set out in that paragraph are fulfilled’ (see decision of the Cancellation Division of 05/10/2004, No. 606 C ‘ANKER’, and 03/08/2011, R 1822/2010-2, Baby Bambolina (fig.), § 15).

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.

It must be recalled that the object of 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 limit conflicts between signs by preventing an earlier right which is not sufficiently definite — that is to say, important and significant in the course of trade — from preventing either the registration or the validity of a European Union trade mark.

The applicant invoked Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR on the basis of a non-registered trade mark ‘K-FLEX’ used within the course of trade in both Germany and the United Kingdom for the following goods in Class 1: Non-phthalate plasticizers for use in adhesives, sealants, caulks, paints, coatings, varnishes, PVC, plastisols, plastics and other polymer based applications to reduce minimum film formation temperature, alter film properties or improve performance and handling properties of products; and for use in agricultural applications.  

In the present case, the contested trade mark was filed on 21/01/2009. Therefore, the applicant was required to prove that the sign on which the invalidity application is based was used in the course of trade of more than local significance in both Germany and the United Kingdom, before 21/01/2009 and until the time of filing of the invalidity request (12/01/2015).

The applicant submitted evidence of use in the course of trade. However, it requested to keep certain commercial data contained in the evidence confidential vis-à-vis third parties. Therefore, the Cancellation Division will describe some of the pieces of evidence marked as confidential only in the most general terms without divulging any such data. The evidence consists of the following:

• Exhibit 1: Printouts from www.emeraldmaterials.com showing copyright date 2006 – 2015. The printouts contain general information and historical overview of the applicant’s company Emerald Kalama Chemical, LLC, previously known as Kalama Chemical Inc. It is mentioned that the company is a world-class organization focused on tolouene oxidation chemistry, shipping over 425 million pounds of goods over 70 countries. It has facilities in Kalama, USA and Rotterdam, the Netherlands (full contact details are shown of the business group headquarters, customer service offices and manufacturing locations both in the USA and Europe). It is explained that the business of the company is focused on three segments: Benzoates and intermediates; Aroma chemicals/flavor and fragrance and K-FLEX® non-phthalate plasticizers and coalescents. There is a product description of the K-FLEX® plasticizers, used in a wide range of applications including adhesives, caulks, sealants, coatings and/or vinyl/plastisol applications and in indirect food-contact applications.

 

• Exhibit 2: Extract from the Chemical Economics Handbook by SRI Consulting dated 2009 displaying figures and estimates in relation to the ‘Western European consumption of plasticizers’. In particular, there is data in relation to the consumption (in thousands of metric tons) of various types of plasticizers (including benzoates, phthalates, epoxy, etc.) in 2005, 2008, 2013 and data about the average growth rate as well as the Western European consumption by country in 2008 (including for the UK and Germany).

• Exhibit 3: Witness Statement dated 11/01/2015 by Mr. E. Gotch, CEO of the applicant company. The witness statement contains information about the position and experience of Mr. Gotch, the company Emerald Kalama and its development, the plasticizers market in general and the K-FLEX plasticizer. It is mentioned that in 1994 Kalama Chemicals set up an agency agreement with the UK-based company Euram Chemicals Ltd. for the purpose of selling K-FLEX plasticizers in Europe. Mr. Gotch explains that, for sales development, the applicant relied on a direct sales person assigned to the EU and the supporting efforts made by Euram Chemicals Ltd. (the distributor appointed in 1994) rather than traditional advertising due to the business to business nature of the market. According to the statement, the applicant’s sale of benzoate plasticizers in Europe in 2008 amounted to 1500 metric tons, which amounted to a market share of 20% and to a market share of 47% in the UK. The witness statement makes reference to the following annexes (I to V):

• Annex I: European market for benzoate plasticizers in 2008.
• Annex II: Copies of trade mark applications/registrations of the applicant.
• Annex III: Table showing cumulative sales revenue and cumulative sales volume of ‘K-FLEX’ plasticizers in Europe from 1998 – 2008. There is also a break up showing data in relation to 16 European countries (including Germany and the UK).
• Annex IV: Representative selection of invoices demonstrating sales of K- FLEX plasticizers in Germany (3 invoices for significant amounts dated in 2007 and 2008).
• Annex V: Representative selection of invoices demonstrating sales of K- FLEX plasticizers in the UK (4 invoices for significant amounts dated in 2007 and 2008).

Mr. Gotch also refers to facts and documents attached as Exhibits 6, 7 and 10 (listed below).

• Exhibit 4: Copy of the US registration of the K-FLEX trade mark of the applicant company registered on 08/08/1995.  

• Exhibit 5: Applications and registrations for the K-FLEX trade mark of the applicant outside the USA.

• Exhibit 6: Extract from the UK’s Companies House register showing the company details of Euram Chemical Limited, incorporated in the UK in 1986.

• Exhibit 7: Copy of the Agency Agreement between Kalama Chemical Inc. and Euram Chemicals Ltd. dated 1994. According to the agreement Euram Chemicals Ltd. is appointed to act as agent de facto representative for Kalama Chemicals Ltd. for all European sales of K-FLEX plasticizers.

• Exhibit 8: Copy of a judgment dated 28/06/2013 by the High Court of Justice Chancery Division IP Community Trade Mark Court, case HC11C01968, between British Broadcasting Group Plc., Sky IP International Limited, British Sky Broadcasting Limited, Sky International AG (claimants) versus Microsoft Corporation, Microsoft Luxembourg Sarl (defendants), in which the judge confirms the elements required to prove a passing off action.

• Exhibit 9: Copy of the judgment dated 08/02/1990, Reckitt & Coleman v Bordn Inc. outlining the elements required to prove a passing off action.

• Exhibit 10: Printouts from the website www.euramchemicals.co.uk sourced from the ‘Internet Archive Wayback Machine’ at https://web.archive.org, showing how the website appeared as at December 2002, February 2003, August 2004, December 2004, May 2005, January 2007 and November 2008. The URL shown on the bottom left hand corner of each printout includes the exact date and the domain name www.euramchemicals.co.uk. There is a special section and references to ‘K-FLEX & Kalama’ in all printouts and some of the printouts show detailed Information about the applicant and the company Euram Chemicals, referred to as ‘its exclusive agent/distributor for the K-FLEX range of benzoate plasticizers in Europe, the Middle East and Africa’.

On 04/12/2015, further to the proprietor’s claims that the evidence was insufficient to comply with the provisions of Article 8(4) EUTMR, the applicant submitted additional evidence (listed herein below). The EUTM proprietor argues that the evidence submitted by the applicant was late and, therefore, should not be taken into account.

In this regard, it is noted that even though, according to Rule 40(6) EUTMIR, the applicant has to submit evidence of use within a time limit set by the Office, this cannot be interpreted as automatically preventing additional evidence from being taken into account (18/07/2013, C-621/11 P, Fishbone, EU:C:2013:484, § 28). The Office has to exercise the discretion conferred on it by Article 76(2) EUTMR (18/07/2013, C-621/11 P, Fishbone, EU:C:2013:484, § 30).

The factors to be evaluated when exercising this discretion are, first, whether the material that has been produced late is, on the face of it, likely to be relevant to the outcome of the proceedings and, second, whether the stage of the proceedings at which that late submission takes place, and the circumstances surrounding it, do not argue against these matters being taken into account (18/07/2013, C-621/11 P, Fishbone, EU:C:2013:484, § 33). The acceptance of additional belated evidence is unlikely where the applicant has abused the time limits set by knowingly employing delaying tactics or by demonstrating manifest negligence (18/07/2013, C-621/11 P, Fishbone, EU:C:2013:484, § 36).

In this regard, the Cancellation Division considers that the applicant did submit relevant evidence within the time limit initially set by the Office and, therefore, the later evidence can be considered to be additional. The fact that the EUTM proprietor disputed the initial evidence submitted by the applicant justifies the submission of additional evidence in reply to the objection (29/09/2011, T-415/09, Fishbone, EU:T:2011:550, § 30 and 33, upheld by judgment of 18/07/2013, C-621/11 P, Fishbone, EU:C:2013:484, § 36). The additional evidence strengthens and clarifies the evidence submitted initially and enhances the conclusiveness of the evidence submitted within the time limit.

Therefore, for the above reasons, and in the exercise of its discretion pursuant to Article 76(2) EUTMR, the Cancellation Division decides to take into account the additional evidence submitted on 04/12/2015. The evidence consists of the following:

• Exhibit 11: Products brochures for the applicant’s K-FLEX plasticizers and coalescents, including their properties, varieties and applications dated January 2007, August 2013, April 2014 and March 2014.

• Exhibit 12: Samples of Kalama® K-FLEX® product labels that, according to the applicant’s explanations, are affixed to drums and/or IBCs (Intermediate Bulk Containers). The labels include reference to the specific Kalama® K-FLEX® product and its application, as well as reference to European regulations for the subject products. Some of the labels are multilingual and reflect distribution to various European countries, including the United Kingdom and Germany.

• Exhibit 13: Printout from the USPTO webpage, section Assignments, showing the history of change in ownership of the trade mark ‘K-FLEX’, currently belonging to Emerald Kalama Chemical LLC as of May 2006. 

• Exhibit 14: Extract in Dutch language from the online company register showing the company registration details for Emerald Kalama BV, founded in June 2008. According to the applicant’s explanations, in addition to sales by Euram Chemical, the K-FLEX products are also distributed by the applicant’s division Emerald Kalama Chemical B.V., an entity organized and existing under the laws of the Netherlands based in Geleen, the Netherlands and with a second location in Rotterdam, the Netherlands, at Montrealweg 15.

• Exhibit 15: Copy of the registration certificate for the EUTM ‘Kalama’ registered in the name of the applicant on 24/12/2009.

• Exhibit 16: Witness Statement of Mr. Ron Newman, managing Director of Euram Chemicals Ltd. made on 09/01/2015. The witness statement consists of 189 pages together with the annexes. In his statement Mr. Newman explains he is the managing director of the company since 1991. In addition he sets out that:

– the statement of Mr. Ed Gotch is true and accurate (paragraph 23);

– the applicant company was formerly known as Noveon Kalama Inc (paragraph 8);

– Euram is an independent company, incorporated under the laws of England and Wales (paragraph 6);

– the applicant has been a supplier of Euram in relation to the performance additive K-FLEX, a dibenzoate plasticizer as of 1992, which was formalized in December 1994 (paragraph 8).

– Euram, acting as the applicant’s company agent, sold K-FLEX plasticizers and coalescents as of December 1994 and each year it generated in the EU a turnover of several million US dollars, selling several thousands of metric tons of K-FLEX in hundreds of transactions across the EU (paragraph 17 and 18);

– it submits evidence of invoices relating to the sale of K-FLEX plasticizers and coalescents dated between 02/01/2004 up to 31/03/2005 (paragraph 20).

The following annexes are attached and referred to in the witness statement (annexes I to V):

• Annex I: Companies House Extract with details of Euram Chemicals Ltd. incorporated in 1986 in the UK.
• Annex II: Printouts from the website www.euramchemicals.co.uk showing information about the company such as activities, products, product list and contact information.
• Annex III: Copy of the 1994 Agency Agreement between the applicant and Euram.
• Annex IV: Copies of invoices dated in the period from 02/01/2004 up to 31/03/2005 itemizing K-FLEX products sold to clients in Belgium (4 invoices), Finland (10 invoices), Germany (5 invoices), Netherlands (2 invoices), Sweden (1 invoice) and the United Kingdom (around 130 invoices). The invoices demonstrate sale of K- FLEX plasticizers and some of them are for significant amounts and quantities.
• Annex V: Printouts from the website www.euramchemicals.co.uk sourced from the ‘Internet Archive Wayback Machine’ at https://web.archive.org, showing how the website appeared as at December 2002, February 2003, August 2004, December 2004, May 2005 and January 2007. The URL shown on the bottom left hand corner of each printout includes the exact date and the domain name www.euramchemicals.co.uk. There is a special section and references to ‘K-FLEX & Kalama’ in all printouts and some of the printouts show detailed information about the applicant and the company Euram Chemicals, referred to as ‘its exclusive agent/distributor for the K-FLEX range of benzoate plasticizers in Europe, the Middle East and Africa’.

• Exhibit 17: Copy of a brochure titled ‘Emerald Performance Materials, Kalama Chemical’ dated January 2007. The brochure lists details of the company products, including a special section on ‘K-FLEX® plasticizers’. Page 2 of the brochure mentions the following: ‘We offer product grades for select products that comply with US Pharmacopeia, National Formulary, Food Chemical Codex and European listings as well as Kosher and Halal listings’.

• Exhibit 18: Copies of three old brochures (one is dated 1992) showing, inter alia, information and product details about K-Flex plasticizers.

• Exhibits 19 – 23: Copies of the specifications of five PCT patent applications in the name of different companies (such as Chase Elastomer Corp., Henkel Corporation, Gloucester Co Inc. and Noveon IP Holdings Ltd), dated 1996, 1997, 1999 and 2001 designating various European countries and all including references to K-FLEX plasticizers.

• Exhibit 24: Copy of the 2003 Chemical Economics Handbook (‘CEH’) Marketing Research Report published by SRI Consulting referencing K-Flex plasticizers at pages 20, 36 and 55.

• Exhibit 25: Copy of the CEH Data Summary, a 2004 publication by the Chemical Economics Handbook – SRI Consulting referencing K-FLEX® plasticizers at pages 2 and 5.

• Exhibit 26: Copy the CEH Marketing Research Report, a 2007 publication by the Chemical Economics Handbook – SRI Consulting referencing K-Flex® plasticizers at pages 10 and 14.

The invalidity application is based on a non-registered trade mark ‘K-FLEX’ used within the course of trade in both Germany and the United Kingdom. The Cancellation Division will firstly assess the invalidity application in relation to the United Kingdom.

The General Court held that the significance of a sign used to identify specific business activities must be established in relation to the identifying function of that sign. That consideration means that account must be taken, firstly, of the geographical dimension of the sign’s significance, that is to say of the territory in which it is used to identify its proprietor’s economic activity, as is apparent from a textual interpretation of Article 8(4) EUTMR. Account must be taken, secondly, of the economic dimension of the sign’s significance, which is assessed in view of the length of time for which it has fulfilled its function in the course of trade and the degree to which it has been used, of the group of addressees among which the sign in question has become known as a distinctive element, namely consumers, competitors or even suppliers, or even of the exposure given to the sign, for example, through advertising or on the internet (judgments of 24/03/2009, T-318/06 – T-321/06, General Optica, EU:T:2009:77, § 36-37; 30/09/2010, T-534/08, Granuflex, EU:T:2010:417, § 19).

It should be noted that the evidence relating to use should be analysed as a whole rather than a piece by piece assessment and all the circumstances of the specific case have to be taken into account. Furthermore, all the materials submitted must be assessed in conjunction with each other. Pieces of evidence may be insufficient by themselves to prove the use of an earlier trade mark, but may contribute to proving use in combination with other documentation and information. This is contrary to the rather piece by piece assessment as undertaken by the proprietor.

The evidence, on the whole, shows that the applicant’s sign has been used in the course of trade in, inter alia, the United Kingdom, for non-phthalate plasticizers. The documents filed, such as the invoices, agency agreement, witness statements and printouts from web archives show that the place of use is the United Kingdom. There is ample evidence referring to not only the relevant period before 21/01/2009 but also stretching continuously through until 2014. Despite the fact that the applicant is a USA company, the goods have actually been offered in the UK, mostly via an established agent. This means that effectively there is a place of business within the relevant territory, providing the goods.

In relation to the economic extent of use, an overall assessment provides sufficient information concerning the commercial volume of use, the length of time of use and the frequency of use. It is clear that the applicant traded under the sign ‘K-FLEX’ throughout a long period of time going as far back as 1994. The figures and market share mentioned in the witness statement by Mr. Gotch (Exhibit 3) cannot be ignored. While the reliability of these figures was questioned by the proprietor, it must be mentioned that these figures were submitted in the form of a signed witness statement, which was accompanied by a number of other evidence, including invoices that corroborate intensive use and the veracity of the information in the witness statements. Moreover, the brochures and publications in various independent and specialized sources indicate that the applicant has been continuously present on the relevant market. The complexity of the brochures and the attached product labels, the technical details and thorough information about the company and its ‘K-FLEX’ product, are all factors leading to the conclusion that the applicant’s trade under the sign at issue was of more than mere local significance. The EUTM proprietor’s argument that the brochures do not indicate the relevant territory are not acceptable, as the brochures are in English language and contain references to the applicant’s European office and European legal requirements. The invoices are clearly dated and the enclosed patents are indirect evidence attesting existence of the brand. In addition, as mentioned by the applicant, account must be taken of the business to business nature of the particular product market and the direct sales method rather than traditional advertising.

Consequently, the Cancellation Division concludes that the applicant’s sign was used in the course of trade of more than local significance in the United Kingdom for non-phthalate plasticizers for use in adhesives, sealants, caulks, paints, coatings, varnishes, PVC, plastisols, plastics and other polymer based applications to reduce minimum film formation temperature, alter film properties or improve performance and handling properties of products; and for use in agricultural applications before the filing date of the contested trade mark.

2. The right under the applicable law

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

According to the EUTM proprietor the applicant has not provided evidence of the acquisition of protection and does not state whether it fulfils the conditions of the scope of protection. Contrary to these statements, the applicant duly identified the applicable law (passing off) and referred to the three criteria that need to be established. It also submitted in its observations and in Exhibits 8 and 9 the contents of the law and case-law deriving from the United Kingdom regarding passing off. Furthermore, the applicant provided in its observations arguments on how each of the three criteria applies to its specific case. Consequently, it is considered that the applicant substantiated its claim and submitted sufficient objective information on the applicable law.

Passing off is a common law tort, developed by English jurisprudence. A successful claim for passing off must satisfy three cumulative conditions. Failure to satisfy any one of them means that the claim cannot succeed. The conditions are:

Firstly, the applicant must prove that it enjoys goodwill or is known for specific goods under its mark. The evidence must show that the applicant’s mark is recognised by the public as distinctive for the applicant’s goods. For the purposes of cancellation proceedings, goodwill must be proven to have existed before the filing date of the contested trade mark and until the filing of the application for invalidity.

Secondly, the applicant must demonstrate that the proprietor’s mark would be likely to lead the public to believe that the proprietor’s goods originate from the applicant. In other words, the public would be likely to believe that goods put on the market under the contested trade mark are actually those of the applicant.

Thirdly, the applicant must show that it is likely to suffer damage as a result of the proprietor’s use of the contested trade mark.

Goodwill (passing off)

For the purposes of proving the acquisition of that right, the applicant must prove that it enjoys goodwill for the goods claimed under its mark.

Goodwill refers to the value of the reputation attached to a trading asset such as a trade mark. Goodwill does not mean ‘reputation’ or ‘enhanced distinctiveness acquired by use’ within the meaning of the EUTMR. Goodwill is normally proved by evidence of, inter alia, trading activities, advertising and consumers’ accounts. Genuine trading activities, which result in acquiring recognition by the public and gaining customers, are usually sufficient to establish goodwill. Even small businesses can enjoy goodwill. Value may be added to a business and goodwill generated without attaining the level of recognition needed to establish enhanced distinctiveness or reputation.

In the present case the applicant has shown continuous and intensive use of the trade mark ‘K-FLEX’ in the United Kingdom. It appointed the company Euram Chemicals Ltd. as its agent back in 1994, the purpose of which was to distribute and sell K-FLEX plasticizers in the UK and elsewhere in the European Union. As shown by the website extracts, the applicant and its agent offered K-FLEX plasticizers on the relevant market since 2002 (Exhibit 10). The applicant submitted a substantial number of invoices (130) covering the period 02/01/2004 up to 31/03/2005 as well as representative selection of invoices dated in 2007 and 2008. In addition, it provided some volume/turnover figures that are backed up by the selection of sample invoices at Exhibit 3. On the whole, the figures show healthy revenue over the relevant period. Again and to reiterate, the evidence also shows that the applicant’s goods were sold, offered commercially and featured in brochures and websites.

As clarified by the applicant,

goodwill is ‘the attractive force that brings in custom’ as stated by Lord Macnaghten in Commissioners of Inland Revenue v Muller & Co’s Margarine Ltd [1901]. In the same decision Lord Macnaghten also stated that goodwill was ‘easy to describe, very difficult to define. It is the benefit and advantage of the good name, reputation and connection of a business…’. Lord Lindley added that ‘Goodwill regarded as property has no meaning except in connection with some trade, business or calling. In that connection, I understand the word to include whatever adds value to a business by reason of situation, name and reputation, connection, introduction to old customers…In this wide sense, goodwill is inseparable from the business to which it adds value..’. Strictly speaking, reputation may not equate goodwill and vice-versa, since a trade mark may have a reputation within the United Kingdom but unless business is actually generated in this territory there is no goodwill. This is reflected in the afore-cited decision which tackled this question in a scenario where business had been conducted in different countries thus effectively generating goodwill in each separate territory. It was considered therein that upon abandoning business in a country the goodwill attached subsequently perished, even if the reputation lived on.

Consequently, an examination of the evidence proves that there is goodwill since the applicant’s business has been generated within the relevant territory for a continuous period of well over ten years. The evidence examined above indicates that by the filing date of the contested trade mark the applicant’s goods had been effectively present in the market for quite some time, generating transactions and sales. There is therefore ‘an attractive force which brings in custom’ which constitutes goodwill and the Cancellation Division concludes that the evidence is sufficient to prove that the applicant enjoys goodwill for its goods in the mind of the relevant purchasing public for the sign on which the application is based.

3. The applicant’s right vis-à-vis the contested trade mark

Misrepresentation (passing off)

The applicant must demonstrate that the proprietor’s mark would be likely to lead the public to believe that the proprietor’s goods originate from the applicant

The contested trade mark must be likely to lead the public to believe that goods to be offered by the proprietor are the applicant’s goods. Therefore, it is necessary to examine whether, on a balance of probabilities, it is likely that a substantial part of the relevant public will be misled into purchasing the proprietor’s goods in the belief that they are the applicant’s. 

Therefore, a comparison of the signs is required.

Furthermore, the public is unlikely to be misled where the contested goods are dissimilar to those upon which the applicant’s goodwill has been built. Therefore, the contested goods must be compared to the goods for which the applicant has shown that it has acquired goodwill through use.

1.        The goods

The application is directed against the following goods of the contested trade mark:

Class 1:        Chemicals for use in industry, science and photography, as well as in agriculture, horticulture and forestry; unprocessed artificial resins, unprocessed plastics; manures; fire extinguishing compositions; tempering and soldering preparations; chemical substances for preserving foodstuffs; tanning substances; insulating oils, joint sealing compounds, namely cement and ceramic waterproofing chemicals, unprocessed epoxy resins, adhesives used in industry, silicones.

The applicant’s non-registered trade mark is used for:

Non-phthalate plasticizers for use in adhesives, sealants, caulks, paints, coatings, varnishes, PVC, plastisols, plastics and other polymer based applications to reduce minimum film formation temperature, alter film properties or improve performance and handling properties of products; and for use in agricultural applications.

Plasticizers are chemical additives that increase the plasticity or fluidity of certain polymeric materials. They are added to materials in order to modify their physical properties. Their uses include softening and improving the flexibility of plastics and reducing brittleness. The applicant’s non-phthalate plasticizers for use in adhesives, sealants, caulks, paints, coatings, varnishes, PVC, plastisols, plastics and other polymer based applications to reduce minimum film formation temperature, alter film properties or improve performance and handling properties of products; and for use in agricultural applications are included in the broad categories of the contested chemicals for use in industry and chemicals for use in agriculture. Since the Cancellation Division cannot dissect ex officio the broad categories of the contested goods, they are considered identical to the applicant’s goods.

The contested chemicals for use in science and photography, as well as in horticulture and forestry are considered similar to the applicant’s specific chemical additives, namely non-phthalate plasticizers for use in adhesives, sealants, caulks, paints, coatings, varnishes, PVC, plastisols, plastics and other polymer based applications to reduce minimum film formation temperature, alter film properties or improve performance and handling properties of products; and for use in agricultural applications. Although these sets of goods differ in their specific uses, they have the same nature (chemicals). In addition, they may coincide in producers.

The contested chemical substances for preserving foodstuffs include various food and beverage chemical preservatives including goods such as benzoic acid, potassium benzoate, etc. These goods are similar to the applicant’s non-phthalate plasticizers. This is because some plasticizers are dibenzoate and benzoate blends which means that both sets of goods may coincide in producers. Furthermore, the nature of these goods is the same.

 

The contested unprocessed plastics, unprocessed artificial resins, unprocessed epoxy resins are, basically, amalgams of chemicals that ultimately will be put to many uses. The unprocessed resins and plastics are eventually used into a myriad of products and are in fact material that requires further processing before it can be used by an ultimate consumer. This raw material is put into a semi-finished form that can be used by a manufacturer of finished products. The contested adhesives used in industry, silicones

are chemical substances used for sticking objects together and polymers used as sealants. They are used mainly in the industrial field. The contested insulating oils, joint sealing compounds, namely cement and ceramic waterproofing chemicals are specific chemical compounds used for insulating and as cement and ceramic additives. These goods have certain links with the applicant’s plasticizers, the latter being chemicals added especially to rubbers, plastics, adhesives, resins, cement, coatings, etc. to impart flexibility and workability of the material. The mentioned contested goods can be used together with the applicant’s plasticizers. Therefore, the goods under comparison may be complementary. Furthermore, the manufacturers of these goods may coincide and they can be targeted at the same public. Therefore, the goods under comparison are similar.

 

The contested manures are fertilizers (both natural products and purely chemical products) used in agriculture for the purpose of enhancing growth. The contested fire extinguishing compositions are chemical preparations used for extinguishing fire. The contested tanning substances are chemically-based items used in the leather tanning industry. Tempering and soldering preparations are chemical preparations that include soldering chemicals and soldering fluxes which assist the soldering process, as well as metal tempering preparations. Even though the mentioned contested goods partially coincide in nature with the applicant’s goods, as most of the compared goods are chemicals, these sets of goods have a clearly different purpose and method of use. They are for use in very different fields and they also target different consumers. Bearing in mind the foregoing, the Cancellation Division considers that the goods in dispute are dissimilar.

2.        The signs

K-FLEX
Earlier sign	Contested sign

The relevant territory is the United Kingdom.

The earlier sign is a word mark and the contested sign is a figurative mark. Both marks consist of a letter, followed by a hyphen and the verbal element ‘FLEX’. The font of the letters of the contested mark is rather ordinary and is highly similar to a standard computer font such as Arial and Times New Roman.

It is relevant to consider the distinctive and dominant components of the marks in question. In the case at hand neither of the signs have any elements that are more dominant than other elements.

With respect to distinctive elements, both signs contain the element ‘FLEX’, which will be associated by the relevant public with the concept of ‘flexible, flexibility’. Therefore, it may allude to the properties/desired effect as a result of the use of some of the relevant goods such as plasticizers. Consequently, this element is weak in relation to goods where the effect of flexibility is a desirable quality or effect. Nevertheless, viewed in their entirety the distinctiveness of both marks must be seen as normal, despite the presence of a weak element in relation to part of the relevant goods.

Visually, the signs coincide in ‘-FLEX’ and thus in four of the five letters and in the hyphen separating the first letter from the remaining letters. The difference lies in the letter ‘K’ of the earlier sign as compared to the letter ‘Q’ of the contested sign. Taking into account the possible weak character of the element ‘FLEX’ of the signs, but also, the fact that the length and structure of the signs are identical, it is considered that the signs are visually similar to an average degree.

Aurally, the signs are pronounced in a highly similar manner due to the identity of the element ‘flex’ and the close similarity of sound of the letters ‘K’ versus ‘Q’. Therefore, the signs are aurally highly similar.

Conceptually, as mentioned above the element ‘FLEX’ in the signs will be associated by the relevant public with the concept of ‘flexible, flexibility’. The elements ‘K’ and ‘Q’ will be perceived as the respective alphabet letters. Consequently, the signs are similar to an average degree due to the common concept of ‘flex’ in spite of the fact that as a whole, neither the element ‘K-FLEX’ nor ‘Q-FLEX’ has a particular meaning in English.

In view of the foregoing, the signs are visually, aurally and conceptually similar.

3.        Global assessment of the conditions under the applicable law

It follows from the above that some of the contested goods are partially identical and similar to the applicant’s goods. The signs also have some relevant similarities, in particular their identical length and structure (a phonetically similar letter followed by a hyphen and the identical element ‘flex’). Under these circumstances, the Cancellation Division finds that there is a risk that the proprietor’s goods will be taken to be the applicant’s.

However, some of the contested goods are dissimilar to the applicant’s goods. Under such circumstances, the Cancellation Division finds it is unlikely that the applicant’s customers will mistake the proprietor’s goods for the applicant’s.

The applicant must show that it is likely to suffer damage as a result of the proprietor’s use of the contested trade mark

It has been concluded that, given the similarities between the signs in dispute and the identity and similarity of part of the goods in question, the applicant’s customers are likely to perceive the goods to be marketed under the contested trade mark as originating from the applicant.

While this 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 applicant has demonstrated that it enjoys goodwill in the earlier sign and the contested sign is similar to the applicant’s mark, thus leading consumers to attribute the contested sign to the applicant. The applicant is not obliged to prove that it has suffered actual damage. It is sufficient that damage is likely. A misrepresentation which leads the relevant public to believe that the proprietor’s goods are the applicant’s is intrinsically likely to damage the applicant if the fields of business of the parties are reasonably close. In the present case, it has been concluded that the goods in question are partly identical and similar and that a significant number of the applicant’s customers would consider the goods offered by the proprietor under the contested trade mark as originating from the applicant.

Under those circumstances, it is likely that the applicant would lose sales because its customers – who intend to buy its goods – would erroneously buy the proprietor’s goods.

As said by Warrington J in Ewing v Buttercup Margarine Co Ltd [1917] 2 CH 1

1. To induce the belief that my business is a branch of another man’s business may do that other man damage in all kinds of ways. The quality of goods I sell; the kind of business I do; the credit or otherwise which I might enjoy – all those things may immensely injure the other man who is assumed wrongly to be associated with me.

The Cancellation Division considers that, in the absence of any indications to the contrary, the applicant is likely to suffer damage.

4. Right under national law – Germany

In view of the aforementioned partial success, the Cancellation Division will continue with the assessment with regards to the right invoked in Germany for the remaining contested goods in Class 1.

For the sake of completeness it is reiterated that the applicant invoked ‘K-FLEX’ as a non-registered trade mark, used within the course of trade in Germany. The applicant has referred to the German Trade Mark Act (DE-TMA), §4 No 2, § 12, 14 and has provided the text of the mentioned provisions in German in its submissions. In addition, it has mentioned in its observations that according to the EUIPO Opposition Guidelines the protection acquired through use leading to recognition by the relevant public as a trade mark (§4 No 2 DE-TMA) is acquired if there is 20 to 25% recognition by the relevant German public. However, it is considered that this information is insufficient.

According to Article 76(1) EUTMR, the Office will examine the facts of its own motion in proceedings before it; however, in proceedings relating to relative grounds for refusal of registration, the Office will restrict this examination to the facts, evidence and arguments submitted by the parties and the relief sought.

According to Rule 19(2)(d) EUTMIR, if the opposition (and by analogy, an invalidity application) is based on an earlier right within the meaning of Article 8(4) EUTMR, the opposing party must provide evidence of its acquisition, continued existence and scope of protection.

Therefore, the onus is on the applicant to submit all the information necessary for the decision, including identifying the applicable law and providing all the necessary information for its sound application. According to case-law, it is up to the applicant ‘… to provide the EUIPO not only with particulars showing that he satisfies the necessary conditions, in accordance with the national law of which he is seeking application … but also particulars establishing the content of that law’ (05/07/2011, C-263/09 P, Elio Fiorucci, EU:C:2011:452, § 50). The evidence to be submitted must allow the Cancellation Division to determine safely that a particular right is provided for under the law in question, as well as the conditions for acquisition of that right. The evidence must further clarify whether the holder of the right is entitled to prohibit the use of a subsequent trade mark, as well as the conditions under which the right may prevail and be enforced vis-à-vis a subsequent trade mark.

As regards national law, the applicant must cite the provisions of the applicable law on the conditions governing acquisition of rights and on the scope of protection of the right. The applicant must provide a reference to the relevant legal provision (article number, and the number and title of the law) and the content (text) of the legal provision either as part of its submission or by highlighting it in a publication attached to the submission (e.g. excerpts from an official journal, a legal commentary or a court decision). As the applicant is required to prove the content of the applicable law, it must provide the applicable law in the original language. If that language is not the language of the proceedings, the applicant must also provide a complete translation of the legal provisions invoked in accordance with the standard rules of substantiation.

Furthermore, the applicant must submit appropriate evidence of fulfilment of the conditions of acquisition and of the scope of protection of the right invoked, as well as evidence that the conditions of protection vis-à-vis the contested mark have actually been met. In particular, it must put forward a cogent line of argument as to why use of the contested mark would be successfully prevented under the applicable law.

In the present case, the applicant did not submit sufficient information on the legal protection granted to the type of trade sign invoked by the applicant. The Cancellation Division does not have sufficient information on the legal protection granted to the type of trade sign invoked by the applicant, namely the German non-registered trade mark. The applicant makes reference in its observations to paragraph 4(2) of German Trade Mark Act and provides text of the provision in German but it does not provide the actual entire text of this provision in the language of proceedings. Moreover, the applicant’s reference merely suggests that unregistered trade marks used in the course of trade are protected provided that they acquired public recognition (20 – 25%) as a trade mark within affected trade circles, but it does not further specify the scope of this protection, namely whether a holder of such right is entitled to prohibit a use of a subsequent trade mark, under what circumstances and in relation to which goods or services. It is not sufficient for the applicant to explain vaguely how the law will be applied unless it also provides the Cancellation Division with the wording of the relevant parts of the national law. The Cancellation Division cannot apply the national law correctly without knowing its text and the conditions under which it applies.

Consequently, the application has to be rejected also insofar as it is based on the German non-registered trade mark.

5. Conclusion

Considering all the above, the Cancellation Division finds the application is well founded on the basis of the applicant’s earlier sign insofar as it is directed against the following goods:

Class 1:        Chemicals for use in industry, science and photography, as well as in agriculture, horticulture and forestry; unprocessed artificial resins, unprocessed plastics; chemical substances for preserving foodstuffs; insulating oils, joint sealing compounds, namely cement and ceramic waterproofing chemicals, unprocessed epoxy resins, adhesives used in industry, silicones.

The application is not successful insofar as the remaining goods are concerned.

COSTS

According to Article 85(1) EUTMR, the losing party in cancellation proceedings must bear the fees and costs incurred by the other party. According to Article 85(2) EUTMR, where each party succeeds on some heads and fails on others, or if reasons of equity so dictate, the Cancellation Division will decide a different apportionment of costs.

Since the cancellation is successful only for part of the contested goods, both parties have succeeded on some heads and failed on others. Consequently, each party has to bear its own costs.

The Cancellation Division

Gueorgui IVANOV Liliya YORDANOVA María Belén IBARRA DE DIEGO

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.