CANCELLATION No 13 250 C (INVALIDITY)

Enprani Co., Ltd., 88, Chukhang-daero 296 beon-gil, Jung-gu, Incheon, Republic of Korea (applicant), represented by Salvador Ferrandis IP Legal SLP, C/ Joaquin Costa n 24, 28002 Madrid, Spain (professional representative)

a g a i n s t

Michael Ratkowski, Eutiner Straße 6, 23611 Bad Schwartau, Germany (EUTM proprietor), represented by Anwaltssozietaet Bergmann, Travemünder Allee 6a, 23568 Lübeck, Germany (professional representative).

On 10/04/2017, the Cancellation Division takes the following

DECISION

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

2.        European Union trade mark No 12 016 911 is declared invalid in its entirety.

3.        The EUTM proprietor bears the costs, fixed at EUR 1 080.

REASONS

The applicant filed an application for a declaration of invalidity against all the goods and services of European Union trade mark No 12 016 911 ‘HolikaHolika’ (filed on 27/09/2013 and registered on 14/01/2014), namely:

Class 3:         Bleaching preparations and other substances for laundry use; Cleaning, polishing, scouring and abrasive preparations; Soaps; Perfumery, essential oils, cosmetics, hair lotions; Dentifrices; Scouring solutions; Make-up removing preparations; Astringents for cosmetic purposes; Alum stones [astringents]; Aloe vera preparations for cosmetic purposes; Amber [perfume]; Antistatic preparations for household purposes; Antiperspirants [toiletries]; Aromatics [essential oils]; Flavorings for beverages [essential oils]; Breath freshening strips; Breath freshening sprays; Ethereal essences; Ethereal oils; Essential oils of citron; Essential oils of cedarwood; Eyebrow cosmetics; Eyebrow pencils; Soap for brightening textile; Cake flavourings [essential oils]; Bath salts, not for medical purposes; Cosmetic preparations for baths; Balms other than for medical purposes; Beard dyes; Mustache wax; Bergamot oil; Pumice stone; Skin whitening creams; Bleaching preparations [decolorants] for cosmetic purposes; Laundry bleach; Bleaching salts; Bleaching soda; Extracts of flowers [perfumes]; Polish for furniture and flooring; Floor wax; Deodorants for pets; Deodorants for human beings or for animals; Disinfectant soap; Deodorant soap; Detergents other than for use in manufacturing operations and for medical purposes; Diamantine [abrasive]; Canned pressurized air for cleaning and dusting purposes; Scented wood; Sachets for perfuming linen; Scented water; Javelle water; Depilatories; Depilatory wax; Scale removing preparations for household purposes; Color-brightening chemicals for household purposes [laundry]; Colorants for toilet purposes; Paint stripping preparations; Color-removing preparations; Cosmetic dyes; Greases for cosmetic purposes; Degreasers other than for use in manufacturing processes; Varnish-removing preparations; Stain removers; Gaultheria oil; Geraniol; Shining preparations [polish]; Laundry glaze; Starch glaze for laundry purposes; Glass cloth; Smoothing preparations [starching]; Smoothing stones; Bases for flower perfumes; Hair dyes; Hair spray; Hair lotions; Cosmetic creams; Cosmetic preparations for skin care; Heliotropine; Henna [cosmetic dye]; Ionone [perfumery]; Jasmine oil; Adhesives for affixing false hair; Adhesives for cosmetic purposes; Adhesives for affixing false eyelashes; Eau de Cologne; Corundum [abrasive]; Cosmetics; Cosmetic kits; Cosmetic pencils; Cleaning chalk; False nails; False eyelashes; Lacquer-removing preparations; Lavender oil; Lavender water; Leather bleaching preparations; Waxes for leather; Leather preservatives [polishes]; Lip glosses; Lipsticks; Floor wax removers [scouring preparations]; Lotions for cosmetic purposes; Air fragrancing preparations; Almond milk for cosmetic purposes; Almond oil; Almond soap; Massage gels other than for medical purposes; Medicated soap; Carbides of metal [abrasives]; Cloths impregnated with a detergent for cleaning; Preparations for unblocking drain pipes; Preparations to make shiny the leaves of plants; Douching preparations for personal sanitary or deodorant purposes [toiletries]; Musk [perfumery]; Mouth washes, not for medical purposes; Nail art stickers; Nail polish; Nail care preparations; Washing soda, for cleaning; Soda lye; Neutralizers for permanent waving; Oils for toilet purposes; Oils for cosmetic purposes; Oils for cleaning purposes; Hair waving preparations; Oils for perfumes and scents; Perfumery; Perfumes; Pastes for razor strops; Mint for perfumery; Mint essence [essential oil]; Polishing creams; Polishing preparations; Denture polishes; Polishing paper; Polishing rouge; Polishing stones; Polishing wax; Pomades for cosmetic purposes; Potpourris [fragrances]; Dry-cleaning preparations; Furbishing preparations; Quillaia bark for washing; Shaving preparations; Shaving soap; Shaving stones [astringents]; After-shave lotions; Fumigation preparations [perfumes]; Joss sticks; Windscreen cleaning liquids; Cleansing milk for toilet purposes; Cleaning preparations; Preparations for cleaning dentures; Rose oil; Rust removing preparations; Non-slipping liquids for floors; Non-slipping wax for floors; Safrol; Ammonia [volatile alkali] [detergent]; Sandpaper; Whiting; Cosmetic preparations for slimming purposes; Grinding preparations; Abrasive paper; Abrasives; Make-up; Make-up preparations; Make-up powder; Emery; Emery cloth; Emery paper; Sandcloth; Tailors' wax; Beauty masks; Shoe cream; Shoe polish; Shoe wax; Shoe wax and cobblers' wax; Antiperspirant soap; Soaps; Soap for foot perspiration; Shampoos; Silicon carbide [abrasive]; Sunscreen preparations; Sun-tanning preparations [cosmetics]; Laundry starch; Badian essence; Talcum powder, for toilet use; Wallpaper cleaning preparations; Terpenes [essential oils]; Turpentine, for degreasing; Oil of turpentine for degreasing; Cosmetics for animals; Shampoos for pets; Toiletries; Cakes of soap; Toilet water; Tripoli stone for polishing; Dry shampoos; Drying agents for dishwashing machines; Tissues impregnated with cosmetic lotions; Petroleum jelly for cosmetic purposes; Volcanic ash for cleaning; Laundry wax; Laundry blueing; Laundry soaking preparations; Laundry preparations; Hydrogen peroxide for cosmetic purposes; Cotton wool for cosmetic purposes; Cotton sticks for cosmetic purposes; Fabric softeners for laundry use; Incense; Cosmetic preparations for eyelashes; Mascara; Dental bleaching gels; Dentifrices; Decorative transfers for cosmetic purposes; Essential oils of lemon.

Class 44:        Medical services; Veterinary services; Hygienic and beauty care for human beings or animals; Agriculture, horticulture and forestry services; Aromatherapy services; Tree surgery; Pharmacy advice; Health spa services; Public baths for hygiene purposes; Hospices; Sauna services; Solarium services; Pet grooming; Turkish baths; Alternative medicine services; Blood bank services; Midwife services; Medical assistance; Chiropractics; Flower arranging; Hairdressing salons; Landscape gardening; Hospitals; Speech therapy services; Opticians' services; Services of a psychologist; Health care; Veterinary assistance; Dentistry; Aquaculture services; Plant nurseries; Rest homes; Health centers; Nursing homes; Medical clinic services; Sanatoriums; Beauty salons; Visagists' services; Aerial and surface spreading of fertilizers and other agricultural chemicals; Massage; Rehabilitation for substance abuse patients; Gardening; Horticulture; Health counseling; Hair implantation; In vitro fertilization services; Nursing, medical; Wreath making; Artificial insemination services; Landscape design; Manicuring; Tree planting for carbon offsetting purposes; Physiotherapy; Plastic surgery; Lawn care; Vermin exterminating for agriculture, horticulture and forestry; Tattooing; Telemedicine services; Therapy services; Animal grooming; Animal breeding; Weed killing; Farming equipment rental; Medical equipment rental; Rental of sanitation facilities; Pharmacists' services to make up prescriptions.

The applicant invoked Article 52(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant argues that the contested mark is identical to the applicant’s famous mark HOLIKA HOLIKA, registered for identical marks in several jurisdictions across the seven seas. The EUTM proprietor, when filing the contested mark, was aware of the applicant’s mark used for cosmetics and of its recognition at least in Korea. The applicant’s mark was created in 2010 in Korea and has been used since then for cosmetic products. Since 2012, the applicant has operated various stores also in Canada and entered Mexican and Indonesian market. Since early 2013, HOLIKA HOLIKA cosmetics reached the EU market through online retailers. The applicant contends that the mark is one of the most recognized trade marks for cosmetics, also in the EU. It concludes that the EUTM proprietor must or at least should have known about the applicant’s mark at the time of filing of the contested mark. As for the dishonest intention of the EUTM proprietor, the applicant points out that the EUTM proprietor started the marketing of the goods under the mark HOLIKA HOLIKA already in July 2013, that is, before the filing of the contested mark. Since September 2014 he advertised the mark on his website as if his company were the sole authorized distributor of the products. In April 2015 he added that HOLIKA HOLIKA is a Korean brand owned by the applicant, founded in 2010. Despite this recognition of the applicant’s ownership, the EUTM proprietor tried to hinder the applicant’s presence on the EU market by contacting the applicant’s distributors on Amazon claiming trade mark infringement. In addition, the applicant emphasizes that the EUTM proprietor also filed applications for other famous Korean trade marks and that, on two occasions, namely by the decisions of the Cancellation Division No 9705 C of 26/02/2015 and 9574 C of 02/02/2015, his marks were cancelled on the ground of bad faith. The applicant concludes that all the above mentioned demonstrates the bad faith of the EUTM proprietor when filing the contested trade mark.

The EUTM proprietor did not file observations in response to the invalidity request.

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.

To support its claims, the applicant submitted the following documents:

• Excerpt from the applicant’s Korean website describing the history of the mark.

• Excerpts from the applicant’s Canadian website and Facebook page, showing Holika Holika cosmetic products, with first posts from 2012.

• Excerpts from the applicant’s websites and Facebook pages in Philippines and Indonesia, first posts from June 2013.

• Blog articles related to the applicant’s brand in Canada and Philippines, dated 20/04/2013, 02/06/2013 and September 2013.

• Excerpts from websites of online shops obtained using the internet archive services Wayback Machine, showing cosmetics under the mark ‘Holika Holika’ in online shops koreanqueens.com in May 2013, koreankosmetics.co.uk in April 2013, mineralook.com in May 2013, cosmeticacoreana.es with comments on the Holika Holika products from as early as 2012, urbanoutfitters.com in June 2014, BBCream Italia (undated).

• Excerpts from the EUTM proprietor’s websites obtained using the internet archive services Wayback Machine, showing advertising of the brands ‘Baviphat’, ‘Skin Food’ and ‘Tony Moly’ in the first half of 2013 and adding ‘Holika Holika’ in July 2013; in September 2014 an announcement appeared informing that only Royal Spa may offer the brand ‘Holika Holika’ in Europe; in April 2015 another promotional message is displayed: Holika Holika is a Korean cosmetics brand and owned by Enprani Co. Ltd. The brand, founded in early 2010, is home to more than 60 product lines; some of the products offered on the Facebook pages of the applicant appear also on these EUTM proprietor’s websites.

• Email correspondence between the applicant and the EUTM proprietor from 2016 (the applicant informing the EUTM proprietor that legal actions will follow), the EUTM proprietor and the applicant’s distributor (from 2016, regarding the EUTM proprietor’s infringement letters to Amazon) and between the applicant and its distributor (from 2016, discussing the EUTM proprietor’s request to the distributor to pay USD 500 to the EUTM proprietor).

• Decision of the Cancellation Division No 9705 C of 26/02/2015.

• Registration information for the contested mark and the marks of the applicant.

• Blog articles regarding sponsorship of the applicant’s mark of several South Korean bands (CN Blue singing in a Holika Holika event in a shopping mall in 2011; in November 2013 the actress Park Shin Hye danced and singed for the cosmetic brand she endorses, Holika Holika; in May 2012 the band SISTAR and the actor Jung II Woo endorsed the brand Holika Holika).

• Articles from online magazines and blogs (Elle.es, Vanitatis, Allure.com, Korean Queens Blog, Al otro lado del espejo and Beauté de Porcelain) dated from August 2012 to November 2014 informing about the Holika Holika cosmetics brand ‘with original packaging and exotic ingredients’, declaring ‘revolution in cosmetics’ or simply mentioning the Holika Holika products.

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’.

The applicant argues that the EUTM proprietor must have known about the applicant’s mark due to its reputation in Korea and use also in other territories, including the EU. Although the evidence submitted is not sufficient to show that the applicant’s mark had a reputation in Korea or elsewhere before the filing of the contested mark (27/09/2013), it shows that the applicant did use the mark, mainly in Korea, and that it expanded also to other geographic areas such as Canada, Philippines and Indonesia, before the filing of the contested mark. Moreover, the website printouts acquired via WayBack Machine of European online shops together with several articles in European magazines or blogs show that the mark was not a stranger in the EU territory, even before the filing of the contested mark. In addition, the extracts from the EUTM proprietor’s website, which show that the EUTM proprietor sells and advertises the applicant’s products, is a strong indication of EUTM proprietor’s knowledge of previous use by the applicant of the sign at issue. In view of the foregoing, the Cancellation Division considers that it is extremely unlikely that the EUTM proprietor did not know about the mark of the applicant and came up with the name Holika Holika independently.

As regards the EUTM proprietor’s dishonest intention, the applicant claims that the EUTM proprietor, despite explicitly admitting the ownership of the mark by the applicant, continues to hinder the applicant’s presence on the EU market. In this regard, the Cancellation Division considers particularly relevant the excerpt from the EUTM proprietor’s website submitted by the applicant where the following is stated: ‘Holika Holika is a Korean cosmetics brand and owned by Enprani Co. Ltd. The brand, founded in early 2010, is home to more than 60 product lines. (…)’. Although this statement appeared on the website only in 2015, that is, after the filing of the contested mark, it shows that the EUTM proprietor does not (or at least did not, in 2015) use the mark as an independent trade mark owner but pretends to be associated with the applicant and acknowledges that the mark in fact belongs to the applicant. This is reinforced by the fact that the Holika Holika products offered on the EUTM proprietor’s website are products of the applicant as they appear on the (prior in time) websites and Facebook pages of the applicant. Another objective circumstance is, in the present case, the fact that the EUTM proprietor contacted the applicant’s distributors and, at least in one occasion, demanded payment for offering goods under the mark on Amazon. As can be inferred from the email conversations submitted by the applicant, the EUTM proprietor stopped one distributor from selling the applicant’s product in the Czech Republic and intended to prevent another distributor from offering the products on Amazon unless a fee is paid. Thus, the EUTM proprietor tried, on the one hand, to be associated with the applicant in the eyes of the potential clients, and, on the other hand, actively blocked the applicant’s presence on the market. Although these events occurred only after the filing of the contested mark, it is noted that events occurring after the relevant date may still be relevant for the assessment of the situation as it was at the relevant date if they shed light on the circumstances and can be used for interpreting the owner’s intention at the time of filing the EUTM.

Admittedly, the fact that, after successfully registering the EUTM at issue, the EUTM owner serves formal notice on other parties to cease using a similar sign in their commercial relations is not in itself an indication of bad faith. Such a request falls within the scope of the rights attaching to the registration of an EUTM (14/02/2012, T-33/11, Bigab, EU:T:2012:77, § 33). However, in circumstances where this request is connected with other factors, it might be an indication of the intention to prevent another party from entering the market. The Cancellation Division finds that the other factors are present in the case at hand. The fact that the EUTM proprietor actively tried to prevent the applicant from using the mark, whilst publicly advertising the mark as belonging to the applicant and offering the applicant’s goods, is a strong indication of dishonest intentions of the EUTM proprietor.

Moreover, the case-law identified other potentially relevant factors to assess the existence of bad faith, which include the circumstances under which the contested sign was created, the use made of it since its creation, the commercial logic underlying the filing of the application for registration of that sign as an EUTM and the chronology of events leading up to that filing (08/05/2014, T-327/12, Simca, EU:T:2014:289, § 39; 26/02/2015, T-257/11, COLOURBLIND, EU:T:2015:115, § 68). The circumstances under which the sign was created are unknown as the EUTM proprietor did not provide any explanation to this effect. There is no indication of any commercial logic underlying the filing of the application for the contested mark except for the EUTM proprietor associating the mark with the applicant and offering the applicant’s products, while also trying to get financial compensation for use of the mark by the applicant’s distributor. Such a commercial trajectory does not indicate good faith of the EUTM proprietor in using the sign, rather the opposite.

Finally, the filing of other trade marks previously used by Korean owners by the EUTM proprietor such as ‘Tony Moly’, ‘Mizon’ or ‘Baviphat’ adds to the combination of events. Those marks were filed before the filing of the contested mark or at the same time. Two of those marks were already cancelled by the EUIPO on the ground of bad faith of the EUTM proprietor. The fact that the EUTM proprietor filed other trade mark applications in bad faith under circumstances similar to those in the present case, is a factor that has to be taken into account in the course of the assessment of the evidence filed. The EUTM proprietor has not provided any type of explanation that may justify the filing of these trade marks. In this regard, the Boards of Appeal repeatedly stated that filing of other trade marks under dubious circumstances or appearing as a misappropriation of other trader’s goodwill is a strong indication of the EUTM proprietor’s dishonest business intentions (25/02/2013, R 2448/2010-4, AERMACCHI MILANO, § 22 and 12/01/2016, R 3135/2014-2, § 89-96).

The EUTM proprietor has not submitted any arguments or evidence in reply to the invalidity application. As such, the EUTM proprietor has not indicated the reasons for registering the mark or commented on any use of the sign that would allow the Cancellation Division to reach a different conclusion than that EUTM proprietor did indeed act in bad faith at the time of the filing of the application for the contested EUTM. From the explanation and evidence provided by the applicant it can only be ascertained that the EUTM proprietor knew of the use of the mark by the applicant and by registering the contested mark it has effectively usurped the applicant’s trade mark rights. Consequently, the Cancellation Division concludes that the applicant sufficiently demonstrated that the EUTM proprietor acted in bad faith when filing for the contested trade 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.

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.