CANCELLATION No 12 505 C (INVALIDITY)

Federatia Fabrica de Pensule, str. Henri Barbusse nr. 59-61, 400616 Cluj Napoca, Romania (applicant), represented by Aurelian Tudor Ginsca, Bulevardul Eroilor 48/4, 400129 Cluj Napoca, Romania (professional representative)

a g a i n s t

Federația Galeriilor și Artiștilor din Fabrica de Pensule, st. Mecanicilor, nr. 23, 400000 Cluj-Napoca (Cluj), Romania (EUTM proprietor), represented by Adelina Stanciu, Nicolae Iorga 61, Sfantu Gherghe, 520089 Covasna, Romania (professional representative).

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

DECISION

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

2.        European Union trade mark No 14 361 224 is declared invalid in its entirety.

3.        The EUTM proprietor bears the costs, fixed at EUR 1 150.

REASONS

The applicant filed an application for a declaration of invalidity against all the goods and services of European Union trade mark No 14 361 224, (filed on 14/07/2015 and registered on 27/10/2015).The application is based on a non-registered trade mark and a company name ‘FEDERATIA FABRICA DE PENSULE’, used in the course of trade in Romania, on a right to a name and on a copyright. The applicant invoked Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR, Article 53(2) EUTMR and Article 52(1)(b) EUTMR.

The contested goods and services are the following:

Class 16:         Paper and cardboard; Decoration and art materials and media; Stationery and educational supplies; Printed matter; Paintings; Paintings [pictures], framed or unframed; Paintings and calligraphic works; Portraits; Art prints; Graphic art reproductions; Reproductions of paintings.

Class 35:        Business analysis, research and information services; Commercial trading and consumer information services; Business assistance, management and administrative services.

Class 41:        Conducting of exhibitions for educational purposes; Conducting of exhibitions for entertainment purposes; Art exhibition services; Museum exhibitions; Conducting workshops and seminars in art appreciation; Organisation of artistic competitions; Organising of competitions for education; Arranging of competitions for training purposes; Arranging of competitions for entertainment purposes; Conducting workshops and seminars in self awareness; Providing museum facilities [presentation, exhibitions]; Editing of printed matter containing pictures, other than for advertising purposes; Issue of publications; Providing electronic publications; Publication of posters.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant argues that Fabrica de Pensule / The Paintbrush Factory is a collective space for contemporary art initiated in 2009 by a group of 60 artists and cultural agents in Cluj, Romania. There are over 200 cultural events each year organised in the Fabrica de Pensule. The applicant is a Federation with a legal identity distinct from its members and its aim is to support, promote and develop the dissemination of culture and to offer a unified program to a large community. It represents the cultural centre and events and provides space management in the Factory. The website www.fabricadepensule.ro has been active since 2009 and is referred to by reputed travel guides such as the Lonely Planet. The three original applicants for the EUTM are closely connected to the Federation through associations they represent (Sabot Association of Daria Dumitrescu, Intact Foundation of Liviu Florian Stefan and Bazis represented by Zsolt Berszan Markos). These associations collaborated with the Federation in the past and Sabot Association was even one of the founding members of the Paintbrush Factory Federation in 2009. The applicant points out that the mark is registered in the form that reproduces exactly the logo of the Federation. The applicant considers that by registering the mark the three original applicants for the EUTM appropriated illegally and unjustifiably the reputation of the Paintbrush Factory built over the years by the collective effort of the members of the Federation and that the application for the EUTM was made in bad faith. Moreover, the EUTM violates the applicant’s right to the name and its copyright to the logo that is identical to the EUTM.

After the transfer of the mark requested by the three original owners to ‘Federatia Galeriilor si Artistilor din Fabrica de Pensule’ on 12/02/2016, the applicant points out that the new owner is a recently created entity controlled by two of the three original owners of the EUTM. The applicant considers this action to be a confirmation of the ill-will of the three original owners as they are trying to legalize the act of registering the mark by hiding their true identities.

To support its arguments, the applicant submitted the following evidence:

• Copy of the Constitutive Act of the Federation showing Sabot Association as a founding member.

• Judgment Nr. 151/cc/2009 dated 14/10/2009 of the Cluj Civil Tribunal confirming that the applicant Federation has legal capacity and is a legal person.

• Contracts between the Federation and Sabot Association (represented by its President, Daria Dumitrescu), Association Bazis (represented by its president, Berszan Zsolt) and Intact Foundation (represented by its president Stefan Liviu Florian) dated in 2014; the agreements are ‘financing agreements’ where the applicant provides monetary resources to the associations to be used for artistic events; one of the obligations of the associations resulting from the agreements is to promote the name of the applicant. Sabot Association features in additional sponsor agreements. In the round seal accompanying the signature of the applicant, the logo  appears.

• Email correspondence between members of the Federation and the three applicants for the EUTM.

• A copy of Execution and Copyright Transfer Agreement regarding the graphic representation of the logo ‘Paintbrush Factory’, dated 25/01/2010 between the applicant and Eugen Cosorean and certificate of acceptance dated 01/02/2010 showing the logo . These documents are signed only by Mr Cosorean. Declaration of Eugen-Gabriel Cosorean stating that he is the author of the logo with the name ‘The Paintbrush Factory’ and that he designed this logo for the applicant and transferred all copyrights to the applicant free of charge as stipulated in the agreement of 25/01/2010. The authenticity of this declaration was confirmed by a notary on 22/01/2016.

• Statistics of hits on the website www.fabricadepensule.ro.

• Leaflets and posters advertising cultural events taking place in Fabrica de Pensule dated in 2015 and before.

The EUTM proprietor claims that a distinction must be made between the Federation (the applicant), which was founded in 2009 by several associations, and the Community of the Factory which is made up by all the artists, gallerists and cultural managers who carry or have carried out over time their activity in the space of the Paintbrush Factory. The Community nourishes and develops the activities of the Federation and is involved in its decision-making process, as a non-statutory body. The EUTM proprietor contends that in recent years, the decisions and actions of the Federation ceased to reflect the wishes and needs of the Community members and gives examples of what, in its opinion, is unfair, non-transparent or biased behaviour of the Federation in relation to some of the Community members. The EUTM proprietor claims that after several failed attempts of communication with the Federation, the original applicants for the EUTM decided that the only ‘unperverted’ solution to continue to protect the artistic activity in the Factory was to register the EUTM. The original applicants have been active members of the Community since 2009 and through their associations carried out many projects in the Factory. Therefore, the registration of the EUTM was requested by the members of the Community itself, which is the only entity owning the concept and the brand of Paintbrush Factory. It argues in detail about the argument that the Federation is not the only entity that contributed to the repute of the mark Paintbrush Factory but that this was achieved through the collective work of the members of the Community, present and past. It emphasizes that the number of members of the Federation is smaller than that of the Community. The EUTM proprietor argues that admittedly, it is easier to manage the entity with fewer members but contests the reluctance of the Federation to accept new members. As the Community does not have legal capacity, the mark could not have been registered in its name, which is why the original applicants took it upon themselves to register the mark in their own names and transfer it to the Federation of Galleries and Artists of the Paintbrush Factory (the current EUTM proprietor). The EUTM proprietor has awarded the entire Community of the Factory, including the applicant, the consent to use the EUTM for one year. It intends to renew the consent. This, the EUTM proprietor believes, shows that the intention of the original applicants was to make the mark available for the entire Community. Moreover, the EUTM proprietor claims that the public will not be deceived by the EUTM because the mark should be in use by everyone who is active within the Factory and it does not belong to the applicant. Furthermore, the EUTM proprietor argues that the knowledge of the applicant for a trade mark of another mark is not, per se, conclusive as to bad faith and that the existence of a dispute between the parties does not show, as such, bad faith of the applicant for a trade mark. It argues that the original applicants did not act in bad faith because they never considered that the mark belonged to the applicant. As for the logo, the EUTM proprietor submits email communication to show that the logo cannot belong to the applicant because at the time when it was made, the applicant did not yet exist as a legal entity. The contract of copyright transfer submitted by the applicant is not valid as it is not signed by the Federation and, since the Community was never informed about it, it is not enforceable against the EUTM proprietor or the original applicants.

The EUTM proprietor submits the following documents to support its claims:

• Large volumes of electronic correspondence, seemingly between some of the members of the Federation and some members of the Community, as well as Norwegian Embassy employees. Some of the emails dated in September 2009 regard the choice of the logo for the Paintbrush Factory.

• Minutes of the meeting of a local evaluation Commission in which one member of the commission (the Deputy Mayor) announced that she was put under pressure by Istvan Szakats (representing the Federation), after an incorrect information had leaked from the evaluation Commission and Mr Szakats was not pleased with the contents of that information. Mr Szakats denies everything.

• Minutes of the meeting of the Federation’s Board of Directors dated 11/01/2016; among the discussed points are expulsion of Sabot association from the Factory and the possibility to seek legal actions, possible reorganization of the Federation and clarification of the relationship between the Community and the Federation; how to recover loans granted to members of the Factory; possible admission of new entities etc.

• Excerpt from the civil suit with the applicant as a plaintiff where it is stated that the Federation is composed of the General Assembly and the Board of Directors but considering that the members are only legal entities, the consultative body is the Community of the Factory, a body which is not statutory but in practice the General Assembly adopts the decisions of the Community. The Community is comprised by all the artists and organizations operating in the space of the Paintbrush Factory.

• Activity reports regarding the three associations controlled by the three original applicants and a mention in www.transilvaniareporter.ro regarding a vernisage organized by Galeria Bazis and Galeria Sabot and in www.slicker.ro containing the names of galleries (including Bazis and Intact) and the exhibitions.

• Notification made by the EUTM proprietor consenting to the use of the EUTM and a national mark by members of the Community for one year, sent on 01/04/2016.

The applicant submitted further observations in Romanian but did not provide the translation into the language of the proceedings within the time limit set by Rule 96(1) EUTMIR. Therefore, according to Rule 98(2)(a) EUTMIR, these observations are not taken into account.

The Cancellation Division will first examine the applicant’s request pursuant to Article 52(1)(b) EUTMR.

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 documents submitted by both parties to support their claims were listed above.

Preliminary remark

As stipulated by Article 52(1)(b) EUTMR, the bad faith that is assessed is that of the applicant when he filed the application for the trade mark. Therefore, the relevant moment of time is the filing of the contested mark (14/07/2015) and bad faith has to be assessed taking into account the behavior and the intention of the three original applicants for the EUTM, namely Berszán Márkos Zsolt, Stefan Liviu-Florian and Teodora-Daria Dumitrescu. The fact that the mark was later transferred to the current owner of the EUTM, Federația Galeriilor și Artiștilor din Fabrica de Pensule, is irrelevant.

Assessment of bad faith

As stated above, whether or not a EUTM proprietor acted in bad faith when filing a trade mark application is subject to an overall assessment. One factor that must be taken into consideration is whether or not an EUTM proprietor knew, or must have known, at the time of filing that a third party was using an identical or similar trade mark for identical or similar goods capable of being confused (11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 39 and 40). However this is not in itself sufficient. The degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought may also be taken into consideration (11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 51 and 53).

As stated in 11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 40-42, ‘(…) in order to determine if there is bad faith, consideration must also be given to the applicant’s intention at the time when files the application or registration. It must be observed in that regard that, as the Advocate General states in point 58 of her Opinion, the applicant’s intention at the relevant time is a subjective factor which must be determined by reference to the objective circumstances of the particular case’.

Bad faith might be applicable when the parties involved have or have had any kind of relationship, such as (pre-/post-) contractual relationships, giving rise to mutual obligations and a duty of fair play in relation to the legitimate interests and expectations of the other party (13/11/2007, R 336/2007-2, CLAIRE FISHER / CLAIRE FISHER, § 24).

The essential question is whether the relationship between the parties created a close enough link to suggest that it is fair to expect the EUTM proprietor not to file an identical EUTM application independently without giving the invalidity applicant prior information and sufficient time to take action against the contested EUTM (13/12/2004, R 582/2003-4, EAST SIDE MARIO’S, § 23).

In the present case, it is undisputed that the applicant is involved in the operation of a cultural centre in Cluj, Romania, known as Fabrica de Pensule (The Paintbrush Factory). It is also undisputed that Daria Dumitrescu, one of the original applicants for the EUTM, is the president of Sabot Association, one of the founding members of the applicant Federation. This is also shown by the documents submitted by the applicant, namely the Constitutive Act of the Federation and the contracts between the Federation and the Sabot Association. The other two original applicants for the EUTM were also involved, through their respective associations, in the activities of the Paintbrush Factory centre, as shown by the contracts between the Federation and those Associations. This fact is also not disputed by either party. Therefore, there is no dispute about the issue that the three original applicants for the EUTM were aware of the fact that the sign ‘Fabrica de Pensule’ was being used.

The core of the dispute between the parties is the intention of the three applicants for the EUTM, including the question of ownership of the mark and logo ‘Fabrica de Pensule’.

The applicant claims that the name and logo belongs to the Federation and that the three applicants for the EUTM, by registering the EUTM in their names, misappropriated the renown of the Paintbrush Factory. On the other hand, the EUTM proprietor argues, in essence, that the mark and the logo do not belong to the Federation but to the Community formed by all the artists, managers, associations and other entities involved in the activities in the Factory in the past and in the present. The recognition of the name was achieved by a collective effort of all those entities and not only by the Federation which is formed by only several associations. The three applicants felt that recently, the Federation’s decisions did not reflect the will of the Community and filing of the application for the EUTM was a strategy how to solve this problem. It argues that the good intentions of the applicants are demonstrated by the fact that they transferred the mark to the current owner, who then notified members of the Community, including the applicant, of its consent given to the members of the Community to use the mark.

The applicant presented documents that cast serious doubts as to the intentions of the three applicants for the EUTM. The Federation was founded in 2009 and has legal capacity, as confirmed by the Cluj Civil Tribunal. Creation of an entity that has legal capacity to act seems like a reasonable step in administering a project that consists of many entities active in the same space. As it can be inferred from other documents, the Federation indeed acted as a legal entity representing the common Paintbrush Factory project. The contracts with the associations according to which the Federation provided financial resources to the associations for specific purposes related to art and culture as well as the email correspondence suggesting that the Federation obtained resources from other entities and then distributed those resources to persons connected to the factory, imply that the Federation acted, vis-à-vis third parties, as a legal entity representing the interests of the artistic community of the Factory, obtaining grants and subsidies for the cultural activities carried out in the Factory and  passing these obtained resources on to the individual entities involved. Moreover, the Federation submitted a contract and a declaration regarding the copyright to the following logo:

According to these documents, the author of this logo, Mr Cosorean, designed this logo and transferred all the rights connected to it to the Federation.

The EUTM proprietor contests these documents pointing out that they are not signed by the Federation. However, all the documents are signed by Mr Cosorean, the author of the logo. The EUTM applicant does not dispute the authorship of Mr Cosorean but merely the validity of the transfer. Moreover, Mr Cosorean features as one of the designers in the email conversation provided by the EUTM proprietor in which the people involved in the founding of the Federation discussed different designs to be used by the Federation. Therefore, it is undisputed that Mr Cosorean is the author of the logo. Therefore, regardless of the legal issues regarding copyright transfers according to the Romanian law, these documents show that the author of the logo intended to create it for the Federation. It is also an important indicator that this logo appears in the contracts next to the signature of the Federation. All the above mentioned supports the finding that the Federation was the entity using the logo and representing the Factory in the eyes of the outside world.

Filing for an EUTM essentially identical to the logo displayed above (the only difference being additional translations of the expression ‘The paintbrush factory’ into other languages) by three individuals who had close relationship with the Federation would then indeed seem to be a misappropriation of the sign.

The arguments of the EUTM proprietor against the above finding are, on the other hand, unconvincing. First, the argument that the mark belongs to the Community of the factory is rather vague, in particular in view of the fact that it seems to be impossible to know who are the members of this Community as they, according to the EUTM proprietor, include everyone involved in the activities carried out in the Factory, including those who were involved in the past but not anymore. Such a Community is a very vague gathering of subjects with no legal capacity as a whole and can hardly be considered to be an owner of anything in any other than a very poetical sense. Second, even if it was considered that this Community has some type of moral entitlement to the sign, the three applicants can in no way be considered to be the representatives of the Community. The EUTM proprietor does not even put forward any reason why those three individuals should have the exclusive right to the sign instead of the Community or what is the basis of their assumption that they represent the wishes of the entire Community. Finally, the fact that the EUTM proprietor granted its consent with the use of the mark to entities involved in the Factory cannot overcome any of the previously mentioned. The consent was only given after the invalidity request had been filed so it is not clear that it was the intention of the three applicants to grant this consent when they applied for the mark. Moreover, this consent was only granted for a period of one year and the EUTM proprietor reserves the right to revoke the consent in case the conditions required by it are not fulfilled. It is thus evident that the EUTM proprietor is not giving away the mark for unconditional use to the Community but that the EUTM proprietor intends to keep control over the exclusive rights to the mark.

The EUTM proprietor submitted a large volume of email conversations between seemingly some of the three applicants for the EUTM and the members of the Federation, among other people. These show various levels of conflict between the people exchanging the emails and some of them express disagreements on the administrative processes in the Federation, the decisions made by the Federation, distribution of funds received, etc. It is not for the Cancellation Division to assess the administrative processes ongoing within the Federation. Without taking any position on the internal disputes between the Federation and the three original applicants for the EUTM, the Cancellation Division only assesses the trade mark aspects of the matter in view of Article 52(1)(b) EUTMR.

 

Considering all the above, the Cancellation Division concludes that the three original applicants for the EUTM, by misappropriating a sign that had been used by an entity with whom they had close relationship, breached the duty of fair play that they had towards the Federation and, therefore, they acted in bad faith when filing for the contested mark.

Since the lack of good faith at the time of filing of the application for registration brings about the invalidity of the contested trade mark as a whole (11/07/2013, T-321/10, Gruppo Salini, EU:T:2013:372, § 48), the contested mark must be declared invalid in its entirety.

Conclusion

In the light of the above, the Cancellation Division concludes that the contested EUTM was filed in bad faith under Article 52(1)(b) EUTMR, the application is totally successful and the European Union trade mark should be declared invalid for all the contested goods and services.

Since the application for cancellation has been entirely successful under Article 52(1)(b) EUTMR, the Cancellation Division does not find it necessary to assess the remaining claims raised by the invalidity applicant.

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

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

The Cancellation Division

Pierluigi M. VILLANI

Michaela SIMANDLOVA

Elisa ZAERA CUADRADO

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.