CANCELLATION No 11 901 C (INVALIDITY)

Future Factory Limited, c/o Westgarth Financial Management Limited, 36 Westgarth Avenue, Colinton, Edinburgh EH13 0BD, United Kingdom (applicant), represented by Bond Dickinson LLP, 1 Whitehall Riverside, Leeds LS1 4BN, United Kingdom (professional representative)

a g a i n s t

RSVP Design Limited, 2 Darluith Park, Brookfield, Johnstone, Renfrewshire PA5 8DD, United Kingdom (EUTM proprietor), represented by Shepherd and Wedderburn LLP, 1 Exchange Crescent, Conference Square, Edinburgh EH3 8UL, United Kingdom (professional representative).

On 14/03/2017, the Cancellation Division takes the following

DECISION

1.        The application for a declaration of invalidity is rejected in its entirety.

2.        The applicant bears the costs, fixed at EUR 450.

REASONS

The applicant filed an application for a declaration of invalidity against European Union trade mark No 3 337 979 ‘COLOURBLIND’ (word mark) (the EUTM). The request is directed against all the goods and services covered by the EUTM, namely:

Class 9:        Teaching apparatus and instruments; apparatus for recording, transmission or reproduction of sound or images particularly for instructional, educational, teaching and training purposes; magnetic data carriers, recording discs particularly for instructional, educational, teaching and training purposes; computers; computer software, computer programs; computer software relating to instructional, educational, teaching and training services; computer software relating to teamwork, teambuilding, management, management skills, business, business skills, personal development skills, team development skills, motivation and communication; interactive computer software; media bearing computer programs and software; media bearing recordings in sound and/or visual form; compact discs; CD ROMs; DVDs; video cassettes; audio cassettes all relating to instruction, education, teaching and training, and covers and containers for video and audio cassettes and discs relating to instruction, education, teaching and training; electronic publications; computer software and publications in electronic form supplied on-line from databases, from facilities provided on a global computer network or the Internet; parts and fitting for all the aforementioned goods.

Class 16:        Printed matter; printed publications; pamphlets; books; booklets; instructional and teaching material; training manuals; instructional manuals; questionnaires; brochures; reports; management guides; business documentation; printed materials relating to business consulting, management consulting, communication, human resources and training.

Class 28:        Games and playthings; gymnastic and sporting articles; games; business training games; management training games; games in the form of team building exercises; apparatus for playing games; articles for use in playing games, educational games; teaching games; games for adults; role playing games; parts and fittings for all the aforementioned goods.

Class 35:        Business management; business administration; office functions; advertising; business consultancy services; business organisation consultancy; management consultancy; business research; business development; business planning; business mediation; business survey services; business strategy services; business and management appraisal services; preparation of business and management reports; business and management research; business and communication strategy development and monitoring; human resources management; project management; performance management and motivation services; business or organisation efficiency services, organisation effectiveness studies; business team assessment, modification and development; data collection and management; testing and analysis for selection of personnel; corporate image studies; compilation of statistical information; providing strategies for achieving objectives, goals and changes for businesses; promoting initiatives and plans to direct, organise and focus businesses; providing methodologies for initiating business improvement; monitoring and assessment of business projects and business changes; team building services; team management; services in the fields of organisational development, efficiency and/or performance; personnel recruitment, selection, placement, deployment, management and employment; identifying personnel training needs, information, advisory and consultancy services relating to all the aforementioned services.

Class 41:        Education, providing of training, team development training; leadership training; mentoring; personal development training; executive and personal coaching and training, training in communications; organising and conducting classes, workshops, training courses, seminars, symposiums, conferences and exhibitions; vocational education services; design of educational and training programmes, courses, examinations and qualifications; production of video and audio cassettes for training and educational purpose; design and provision of aptitude and assessment tests; educational, instructional, coaching and training services relating to motivational, inspiration, teamwork and leadership matters; development of educational materials in the field of business and business training; dissemination of educational materials in the field of business and business training; electronic publishing; entertainment for training and educational purposes; sporting and cultural activities for training and educational purposes; information, advisory and consultancy services relating to the aforementioned services.

The applicant invoked Article 52(1)(b) EUTMR, and Article 53(1)(c) EUTMR in connection with Article 8(4) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

On 07/10/2015, the invalidity applicant filed an application for invalidity based on two grounds: Article 52(1)(b) EUTMR (bad faith), and Article 53(1)(c) EUTMR in connection with Article 8(4) EUTMR invoking a non-registered trade mark ‘COLOURBLIND’ (word mark) claimed to be used in the course of trade in the European Union, and in Belgium, Denmark, Germany, Spain, France, Ireland, Hungary, The Netherlands, Austria, Portugal, Finland and the United Kingdom.

In relation to Article 52(1)(b) EUTMR, the invalidity applicant claims that it currently produces and markets an experimental learning tool (‘toolbox’) under the name COLOURBLIND. The name and the product were created in 1991 by Mr Cox. In 1993, the company Pangyrus Limited was incorporated, and in 1994 Mr Cox was appointed there as a director. During 1995, Mr Peacock, a director of the applicant (Future Factory Limited), was introduced to Mr Cox. On 08/02/1996, the applicant was incorporated and Mr Cox was appointed as a director there. In October the same year, also Mr Peacock was appointed as a director of the applicant. In November 1996, the applicant started selling the COLOURBLIND toolbox, following Mr Peacock’s and Mr Cox’s agreement to ‘pool resources’. Since 1996, the COLOURBLIND toolbox is sold by the applicant. Between 1998 and 2003, several business arrangements were made. In 1998, Cordyn Group Limited was incorporated via the merger of the applicant, Pangyrus Limited and Edinburgh Consulting Group Limited. On 06/05/2003, Pangyrus Limited was dissolved. In August 2003, Mr Cox resigned as a director of the applicant. On 08/08/2003, Mr Cox set up a company, being the EUTM proprietor (RSVP Design Limited). The applicant claims that, at that time, the EUTM proprietor was not using the sign. According to the applicant, by applying for the registration of the EUTM on 03/09/2003 in the knowledge that it did not have any intellectual property rights in the name COLOURBLIND, and that the rights vested in the invalidity applicant, the EUTM proprietor was acting in bad faith.  

Under Article 53(1)(c) EUTMR in connection with Article 8(4) EUTMR, the invalidity applicant claims that it has used the name COLOURBLIND in the European Union and various Member States, in particular the United Kingdom, in relation to teaching apparatus and instruments, printed matter and materials, educational games, team building exercises, experimental learning tools, educational services. Such use predates the filing date of the EUTM. For the United Kingdom, the applicant is entitled to prevent the use of the EUTM under the common law tort of passing off. The applicant claims that it has established substantial goodwill and reputation under the name COLOURBLIND, in particular in the United Kingdom, and submits the following documents:

Annex 1:        A copy of the applicant’s product portfolio in the form of undated presentation slides. The document refers to ‘Colourblind 1’ (team integration tool) and ‘Colourblind 2’ (advanced version), and contains the applicant’s contact information.

Annex 2:        Over 70 invoices, issued from 02/11/1996 to 27/06/2007, showing sale of the COLOURBLIND toolbox to various customers (around a hundred of units sold). Whilst some invoices contain an indication that they were issued by the applicant, some others do not show the issuing entity’s name, yet contain a VAT number that corresponds to that of the applicant.

Annex 3:        A document, dated June 2002, entitled ‘Future Factory Communications Activities’ which shows the applicant’s use of the name COLOURBLIND for ‘packaged’ team development exercises, among other marks and learning tools.

Annex 4:        An undated marketing brochure entitled ‘Future Factory – Turning the Learning Curve Full Circle’. It contains a description of the COLOURBLIND toolbox. In addition, the brochure features a quotation from Mr Cox, being referred to as the company’s Creative Director.

The applicant argues that there is a likelihood that a misrepresentation will occur and the relevant consumers will believe that the goods and services offered under the contested EUTM originate from the applicant. Given the likelihood of misrepresentation, the applicant is likely to suffer damage to its goodwill, in the nature of both loss of sales and loss of control of the quality of goods.

In its reply of 23/03/2016, the EUTM proprietor states that the applicant has been aware of the EUTM proprietor’s use of the contested EUTM since 04/02/2005 (the registration date of the contested EUTM), at the latest. The proprietor points out that the General Court has already determined, in previous proceedings with a similar factual background, that the EUTM proprietor did not act in bad faith when applying to register the EUTM (decision of 12/05/2009, No 2590 C; decision of 23/03/2011, R 751/2009-4 – ‘COLOURBLIND’; 26/02/2015, T-257/11, COLOURBLIND, EU:T:2015:115). In the previous proceedings, the invalidity applicant was Pangyrus Limited (a company in the same group as the applicant in the present proceedings).

The EUTM proprietor argues that the applicant could have made the invalidity application against the EUTM at any time since its registration; however, the applicant remained inactive ‘when faced with a situation which he would be in a position to oppose’. Accordingly, the applicant has acquiesced to the EUTM proprietor’s use of the contested EUTM for over ten years, within the meaning of Article 54(2) EUTMR.

In relation to Article 52(1)(c) EUTMR, the EUTM proprietor argues that the invalidity applicant’s assertion that it had prior rights in the contested mark has no basis in fact. It is uncontested by the parties that Mr Cox created the COLOURBLIND name and toolbox in 1991. Trade mark rights, therefore, vested in him until they were transferred to the EUTM proprietor by means of an assignment on 28/08/2003. The EUTM proprietor emphasises that there is no other document that deals expressly with the ownership of the COLOURBLIND mark.

The EUTM proprietor states that, between 1993 and 1998, Pangyrus Limited sold the product to a number of parties (including the applicant) under an implied licence from Mr Cox. The applicant then sold the product under a similar implied licence from Mr Cox between 1998 and 2003. In 2003, Mr Cox parted ways from Pangyrus Limited and the applicant in order to form the EUTM proprietor.

The EUTM proprietor argues that since Mr Cox was the owner of the mark then goodwill accrued to him; the applicant could not ‘acquire’ a mark that truly belongs to someone else by using it. The EUTM proprietor accepts that during the period from 1998 until 2003 the applicant marketed and sold the COLOURBLIND product under an implied licence from Mr Cox who was a director of the applicant from 08/02/1996 to 01/08/2003. If Mr Cox had not been associated with the applicant in this way, he would have been entitled to take action against the applicant to prevent sale of the product on the basis of his intellectual property rights in the product. The EUTM proprietor points out that on 09/11/2003, the applicant was contacted and informed that this implied licence had been terminated.

To support its arguments, the EUTM proprietor submits, in particular, the following documents:

Annexes 1-3:        Decision of the Cancellation Division of 12/05/2009, 2590 C. Decision of the Board of Appeal of 23/03/2011, R 751/2009-4. Judgment of the General Court of 26/02/2015, T-257/11.

Annex 4:        Assignment of the COLOURBLIND trade mark by Mr Cox to RSVP Design Limited, signed on 28/08/2003.  

Annex 5:        Letter from Mr Cook, the Managing Director of RSVP Design Limited, to Mr Peacock, the Managing Director of Future Factory Limited, dated 06/10/2003, informing Mr Peacock of the assignment of rights in COLOURBLIND from Mr Cox to RSVP Design Limited.

Annex 6:        Letter from Mr Cook, the Managing Director of RSVP Design Limited, to Mr Peacock, the Managing Director of Future Factory Limited, dated 21/11/2003, specifically withdrawing any implied rights in respect of COLOURBLIND from Future Factory Limited, and its distributors or resellers.

Annex 7:        Purchase order from Telecommunications Systems Group to Mr Cox in respect of the COLOURBLIND toolbox dated 31/03/1993.

Annex 8:        Two invoices, dated 1998, showing sales by Pangyrus Limited of the COLOURBLIND toolbox.

Annex 9:        Numerous invoices, dated from 1996 to 2003, showing sales by Future Factory Limited of the COLOURBLIND toolbox.

Annex 13:        Witness statement, dated 20/06/2008, by Mr Peacock, a Director and shareholder of Pangyrus Limited, and also the Managing Director and shareholder in Future Factory Limited.

Annex 14:        Witness statement, dated 21/03/2016, by Mr Cox.

In its rejoinder of 30/09/2016, the invalidity applicant criticises the EUTM proprietor’s arguments. The applicant states that Mr Peacock is not the sole officer of the applicant, or Pangyrus Limited, and submits extracts from the UK Companies House detailing the officers of these entities. As regards the previous proceedings against the EUTM, the applicant states that Mr Peacock had been advised, incorrectly, to bring the proceedings in the name of Pangyrus Limited, however, the previous representative failed to recognise and correctly advise that the goodwill in the COLOURBLIND mark accrued to the applicant, not Pangyrus Limited. As a result of the incorrect advice, Mr Peacock and the applicant were not aware of the applicant’s goodwill and unregistered rights in the COLOURBLIND mark until after the General Court judgment.  

The applicant argues that the fact that Mr Cox created the name COLOURBLIND does not amount to ownership of the goodwill in the mark. As regards the assignment between Mr Cox and the EUTM proprietor, the applicant denies that the assignment concerns the EUTM, as the assignment is dated prior to the filing date of the contested EUTM. The applicant contends that it is not seeking to establish its rights on the basis of any right derived from Mr Cox. On the contrary, the applicant is seeking to rely on its own rights established through its use of the COLOURBLIND mark. Even if it is accepted that Mr Cox had any goodwill to assign, this goodwill is separate from the applicant’s rights. In the view of the applicant, the EUTM proprietor has failed to provide any evidence of an implied licence. In addition, the applicant claims that Mr Cox, along with the other directors of the EUTM proprietor, approached the applicant to purchase the COLOURBLIND product on 02/08/2003.

In relation to Article 52(1)(b) EUTMR, the invalidity applicant states that it is irrelevant that Mr Cox was the creator of the product, as this does not determine the ownership of the trade mark rights. The fact that Mr Cox approached the applicant about purchasing the mark shows that the proprietor was aware of the applicant’s rights prior to the relevant date.

In relation to Article 53(1)(c) EUTMR, the applicant claims that, as it was not aware of its rights, it was in no position to challenge the EUTM until it was provided with correct legal advice. In connection with the EUTM proprietor’s defence claim to acquiescence, the applicant states that the five-year successive period starts, at the earliest, from the date of the General Court judgment (26/02/2015), because only after this judgment the applicant sought new legal advice. The applicant asserts that the General Court judgment indicates, in paragraph 48, that the applicant owns the goodwill in COLOURBLIND.

In its rejoinder of 18/11/2016, the EUTM proprietor rebuts the applicant’s arguments. It is argued that reliance on incorrect legal advice is not relevant to the applicant’s decision not to take action whether it was in a position to do so. Even if the Office does not conclude that the applicant has acquiesced, the applicant has submitted no evidence that it had rights capable of protection before the contested EUTM was registered. In reply to the applicant’s assertion that, in paragraph 48 of the General Court judgment, it was indicated that the applicant owns the goodwill in COLOURBLIND, the EUTM proprietor emphasises that the sentence was taken out of context and, instead of being a conclusion of the Court, it was a mere reference to the parties’ submissions.

ABSOLUTE GROUNDS FOR INVALIDITY – ARTICLE 52(1)(b) EUTMR

General principles

Article 52(1)(b) EUTMR provides that a European Union trade mark will be declared invalid where the applicant was acting in bad faith when it filed the application for the trade mark.

There is no precise legal definition of the term ‘bad faith’, which is open to various interpretations. Bad faith is a subjective state based on the applicant’s intentions when filing a European Union trade mark. As a general rule, intentions on their own are not subject to legal consequences. For a finding of bad faith there must be, first, some action by the EUTM proprietor which clearly reflects a dishonest intention and, second, an objective standard against which such action can be measured and subsequently qualified as constituting bad faith. There is bad faith when the conduct of the applicant for a European Union trade mark departs from accepted principles of ethical behaviour or honest commercial and business practices, which can be identified by assessing the objective facts of each case against the standards (Opinion of Advocate General Sharpston of 12/03/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 60).

Whether an EUTM proprietor acted in bad faith when filing a trade mark application must be the subject of an overall assessment, taking into account all the factors relevant to the particular case (11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 37).

The burden of proof of the existence of bad faith lies with the invalidity applicant; good faith is presumed until the opposite is proven.

The relevant facts have been outlined in the Summary of the parties’ arguments above.

Assessment of bad faith

It must be observed that, in its judgment in ‘Lindt Goldhase’, the Court of Justice provided some clarification regarding the way in which the concept of bad faith should be understood.

According to the Court, in order to determine whether the applicant for registration is acting in bad faith for the purposes of Article 52(1)(b) EUTMR, account must be taken of all the relevant factors specific to the particular case which obtained at the time of filing the application for registration of a sign as a European Union trade mark, in particular: (i) the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product or service capable of being confused with the sign for which registration is sought; (ii) the applicant’s intention to prevent that third party from continuing to use such a sign; and (iii) the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought (11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 53).

That being so, it is apparent from the wording used by the Court in that judgment that the factors listed are only examples drawn from a number of factors which can be taken into account in order to decide whether the applicant for registration was acting in bad faith at the time when the trade mark application was filed.

In the context of the overall analysis undertaken pursuant to Article 52(1)(b) EUTMR, account may also be taken of the origin of the contested sign and its use since its creation, the commercial logic underlying the filing of the application for registration of that sign as a European Union trade mark, and the chronology of events leading up to that filing (14/02/2012, T-33/11, Bigab, EU:T:2012:77, § 21; 11/07/2013, T-321/10, Gruppo Salini, EU:T:2013:372, § 30).

It is in the light of the foregoing considerations, in so far as they apply to the present case, that the invalidity applicant’s claim has to be assessed in connection with the alleged bad faith on the part of Mr Cox or, by extension, on the part of the EUTM proprietor, at the time when the application for registration of the contested trade mark was filed (03/09/2003).

In the previous proceedings against the EUTM referred to by the EUTM proprietor, the Board of Appeal implicitly found, and this was confirmed by the General Court, that bad faith on the part of Mr Cox could constitute bad faith on the part of the EUTM proprietor (RSVP Design Limited), insofar as he had created that company and was one of its directors at the relevant time. The same applies to the present proceedings.

It is not disputed by the parties that the COLOURBLIND sign was invented by Mr Cox in 1991. Nor it is disputed that, at the relevant time, Mr Cox was aware of the use of an identical sign for an identical or similar product.  

It is common ground that, having created the COLOURBLIND sign, Mr Cox used it until he set up Pangyrus Limited in 1993, which is also shown in Annex 7 of the proprietor’s submissions. As regards the use of the sign thereafter, the evidence adduced by the EUTM proprietor (the two invoices in Annex 8) shows that Pangyrus Limited marketed the COLOURBLIND product in 1998. Later on, the product was marketed by the invalidity applicant. As shown in the invoices submitted by the applicant (Annex 2), Future Factory Limited sold the product from 1996 to 2007. That is supported by the invoices adduced by the EUTM proprietor (Annex 9), showing sales until 2003.  

As Mr Cox created the COLOURBLIND sign in 1991 and since he was a shareholder of Pangyrus Limited and the invalidity applicant, and then of Cordyn Group after the 1998 transfer, and by dint of his posts at Pangyrus Limited and the applicant before his resignation from both companies in 2003, he was closely and continuously involved, from 1991 until 2003, in activities leading to the use of that sign and was necessarily aware of that use: he may thus be regarded as ‘well informed’ as to the use of that sign during that period.

Nonetheless, it should be borne in mind that such awareness on the part of Mr Cox is not sufficient, in itself, to establish that he acted in bad faith: consideration must also be given to his intention at the time when the application for registration was filed (11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 40-41; 11/07/2013, T-321/10, Gruppo Salini, EU:T:2013:372, § 26).  

It should be borne in mind that, according to case-law, the intention of the person applying for the trade mark at the relevant time is a subjective factor which must be determined by reference to the objective circumstances of the particular case (11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 42).

Aside from presenting its version of the time line of events and repeatedly claiming that the EUTM proprietor was acting in bad faith when it applied for the contested EUTM registration, because the creation of the product and its name does not determine ownership of trade mark rights, the invalidity applicant does not adduce convincing evidence that would give context to Mr Cox’s actions or intentions.

One of the points raised by the invalidity applicant is that, in August 2003, prior to forming his own company and filing for the registration of the EUTM, Mr Cox, along with his business partners, approached the applicant attempting to purchase the COLOURBLIND product. This statement is not backed up by any evidence, though. In any event, that would not be sufficient in itself to demonstrate dishonest intention of Mr Cox, nor would it lead to a finding of bad faith on the part of the EUTM proprietor.

The applicant has not produced any documents proving that Mr Cox had transferred to it his exclusive rights in the COLOURBLIND sign; nor has it produced any documents from which such transfer could have been objectively inferred. The mere fact that the applicant undertook the marketing and selling of the COLOURBLIND toolbox between 1996 and 2003 does not prove dishonest intention, even the more because Mr Cox was the Creative Director in the applicant, as shown in the evidence submitted by the applicant (the marketing brochure in Annex 4 featuring the quote of Mr Cox).

In addition, in the light of the evidence produced, it cannot be excluded that Mr Cox considered himself to have rights in the sign in question up until the moment of their transfer to the EUTM proprietor and that the invalidity applicant (along with Pangyrus Limited) made use of that sign under an informal agreement (or an implied licence, as referred to by the EUTM proprietor) from 1996 to 2003. There is evidence that, when Mr Cox left the applicant in 2003, the applicant was informed about the fact that Mr Cox terminates any agreements in connection with the COLOURBLIND sign and product, and also about the fact that Mr Cox’s new company, the EUTM proprietor, is willing to apply for the registration of the EUTM. The filing for the registration of the EUTM thus could have followed a commercial logic, in the sense that the EUTM proprietor was making steps to legally protect the name for the training tool package, being invented by its shareholder, Mr Cox, and assigned to the EUTM proprietor. Rather than suggesting dishonest intention, those facts and evidence demonstrate the candour and good faith of Mr Cox and the EUTM proprietor.

Consequently, since the burden of proving bad faith lies with the invalidity applicant and the existence of bad faith must be established on the basis of objective evidence, it must be concluded that the invalidity applicant has failed to prove that the application for registration of the contested trade mark was filed by the EUTM proprietor in knowing disregard of the invalidity applicant’s rights in the sign in question; nor, by extension, has the applicant proven dishonest intention on the part of Mr Cox.

It follows from all of the foregoing that the invalidity applicant has not adduced evidence demonstrating, or from which it could be objectively inferred, that the EUTM proprietor’s behaviour constituted conduct in bad faith at the relevant time.

In the light of the above, the Cancellation Division concludes that the invalidity applicant’s claim in relation to Article 52(1)(b) EUTMR is unfounded and the application for a declaration of invalidity must be rejected.

The Cancellation Division will continue the examination of the invalidity applicant’s claim in relation to Article 53(1)(c) EUTMR in connection with Article 8(4) EUTMR.

RELATIVE GROUNDS FOR INVALIDITY – ARTICLE 53(1)(c) EUTMR IN CONNECTION WITH ARTICLE 8(4) EUTMR

The invalidity application is based on a non-registered trade mark, ‘COLOURBLIND’, claimed to have been used in the course of trade in the European Union, and in Belgium, Denmark, Germany, Spain, France, Ireland, Hungary, The Netherlands, Austria, Portugal, Finland and the United Kingdom, in relation to teaching apparatus and instruments, printed matter and materials, educational games, team building exercises, experimental learning tools, educational services.

According to Article 53(1)(c) EUTMR, an EU trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings, where there is an earlier right as referred to in Article 8(4) EUTMR and the conditions set out in that paragraph are fulfilled.

The grounds of invalidity 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 invalidity applicant acquired rights to the sign on which the invalidity application 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 invalidity application 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.

Preliminary remark

With regard to the non-registered trade mark in the European Union, it must be noted from the outset that non-registered trade marks are not protected under European Union law. Therefore, such rights cannot be validly considered as the basis for an invalidity application on the grounds of Article 53(1)(c) EUTMR in connection with Article 8(4) EUTMR, since they do not exist as such. As a consequence, the present application must be rejected as unfounded insofar as it is based on a non-registered trade mark ‘owned’ in the European Union.

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 that a European Union trade mark is declared invalid.

Rights falling under Article 8(4) EUTMR may only be invoked if their use is of more than mere local significance. The proprietors of rights the use of which is of mere local significance retain their exclusive rights under the applicable national law pursuant to Article 111 EUTMR. The question whether the use of a non-registered sign is of more than mere local significance will be answered by applying a uniform European standard (18/04/2013, T-506/11 & T-507/11, Peek & Cloppenburg, EU:T:2013:197, § 19, 47-48).

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 (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).

The Cancellation Division finds it useful to recall that the evidence submitted by the applicant on 07/10/2015 consists of i) undated product presentation slides; ii) invoices issued between 02/11/1996 and 27/06/2007; iii) a document of June 2002 relating the Future Factory’s communication activities; iv) an undated marketing brochure. For the sake of completeness, the Cancellation Division notes that the evidence submitted by the applicant on 30/09/2016 consists of printouts from the UK Companies House and does not show use of the sign in question.

The items of evidence that are dated pertain to a period from 1996 to 2007. As regards the evidence adduced by the EUTM proprietor, although the invoices included in its submissions show some use of the COLOURBLIND sign by the invalidity applicant, that evidence does not demonstrate time of use that would go beyond the time shown in the documents submitted by the applicant itself.

In order to succeed on the grounds laid down in Article 8(4) EUTMR, the invalidity applicant is required to demonstrate use of the sign in the course of trade of more than mere local significance in the relevant territories, both at the time of filing for registration of the contested EUTM (03/09/2003) and at the time of filing of the invalidity application (07/10/2015).

Although the evidence shows use of the sign before and after the filing date of the contested EUTM, there is an eight-year gap between the period of use shown in the evidence and the filing date of the invalidity application in 2015.

The invalidity applicant alleges in its explanation of grounds, paragraph 6, that it ‘currently produces and markets an experimental learning tool under the name COLOURBLIND’ and, in paragraph 7.8, that ‘from around 1996 to present, the COLOURBLIND toolbox is sold by the applicant’. Thus the applicant’s statements capture also the time of the filing of the invalidity request. However, the evidence does not contain proof that would support the applicant’s assertions regarding use of the sign beyond 2007.

As indicated above, the sign invoked under Article 8(4) EUTMR must be in use not only at the time of filing of the contested mark but it must continue to be used at the time of filing of the invalidity request. In this regard, the Cancellation Division refers to the decision of the second Board of Appeal in case R-1822/2010-2, where the Board confirmed that ‘the requirement to show use of the sign, and thus to show its continued existence between the filing date of the contested EUTM and the filing of the invalidity request, is a matter that must be proved. Rule 19(1) and (2)(d) EUTMIR state that, where an opposition is based on Article 8(4) EUTMR, evidence of, inter alia, its ‘continued existence’ must be adduced within the period given by the Office for presenting or completing facts, evidence or arguments in support of the opposition. Failure to prove the existence, validity and scope of protection of the earlier mark or right within that period will lead to the opposition being rejected as unfounded (Rule 20(1) EUTMIR)’. These rules apply mutatis mutandis to cancellation proceedings.

This was confirmed by the General Court in judgment of 23/10/2013 in case T-581/11, ‘Baby Bambolina’. The Court held that the earlier right relied on in support of an opposition must still exist at the time that notice of opposition is filed. By analogy, the earlier right relied on in support of an application for a declaration of invalidity must still exist at the time that application is made. This presupposes normally that the sign in question must still be in use at the time of the filing of the notice of opposition or of the application for a declaration of invalidity. Indeed, it is precisely the use of the sign in the course of trade which is the basis of the existence of the rights to that sign (23/10/2013, T-581/11, Baby Bambolina, EU:T:2013:553, § 26 and 27).

In the present case, there is no evidence of use of the sign in question from 2007 to 2015. Eight years is not an insignificant period of time. Even on the assumption that there was some use of the sign, over such a long period the extent of use might have changed, in terms of its commercial scale, territorial scope or frequency. For instance, the applicant’s product portfolio might have changed due to a decrease in demand for the COLOURBLIND toolbox on the part of the public. Therefore, there is no evidence that would allow for establishing that the sign in question was used in the course of trade of more than mere local significance in the relevant territories over a period of eight years before the time of filing of the invalidity application.

Since the applicant has failed to demonstrate the ‘continued existence’ of the sign at the time of filing the invalidity request, the Cancellation Division concludes that the evidence submitted by the applicant is insufficient to show that the earlier sign was used in the course of trade of more than mere local significance, in the relevant territories, in connection with the goods and services and at the relevant points of time.  

It follows from the above that the invalidity applicant failed to prove that the earlier non-registered mark was used in the course of trade of more than mere local significance.

Moreover, the Cancellation Division notes that in its written submissions the invalidity applicant focuses its line of arguments on the non-registered sign used in the United Kingdom. The applicant claims that it is entitled to prevent the use of the contested EUTM under the common law tort of passing off and invokes the United Kingdom case of Reckitt & Colman Products Ltd v Borden Inc. However, the invalidity application does not contain the applicable law or arguments in relation to the remaining territories.

Consequently, the application for a declaration of invalidity must be rejected insofar as it is based on Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR.

CONCLUSION

The application for a declaration of invalidity must be rejected in its entirety.

Considering that the application for a declaration of invalidity under Article 53(1)(c) EUTMR in connection with Article 8(4) EUTMR is unsuccessful, it is unnecessary to examine the defence claim raised by the EUTM proprietor in relation to Article 54(2) EUTMR (acquiescence).

COSTS

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

Since the applicant is the losing party, it must bear the costs incurred by the EUTM proprietor in the course of these proceedings.

According to Rule 94(3) EUTMIR and Rule 94(7)(d)(iv) EUTMIR, the costs to be paid to the EUTM proprietor are the representation costs, which are to be fixed on the basis of the maximum rate set therein.

The Cancellation Division

Oana-Alina STURZA

Solveiga BIEZA

Michaela SIMANDLOVA

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 Cancellation 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 shall be deemed to be filed only when the review fee of EUR 100 (Annex I A(33) EUTMR) has been paid.