CANCELLATION No 13 173 C (INVALIDITY)

Krasnyj Octyabr, ul. Malaya Krasnoselskaya d. 7, str. 24, 107140 Moscow, Russia (applicant), represented by Von Füner, Ebbinghaus, Finck, Hano, Mariahilfplatz 3, 81541 Munich, Germany (professional representative)

a g a i n s t

Lackmann Fleisch- und Feinkostfabrik GmbH, Erlenstr. 23, 77815 Bühl, Germany (EUTM proprietor), represented by LSH Rechtsanwälte, Schlossberg 20, Stadtbau-Gebäude, 75175 Pforzheim, Germany (professional representative).

On 03/04/2017, 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 10 861 763 ‘SKASKA’. The request is directed against all the goods and services of the EUTM, namely goods and services in Classes 29, 30, 31, 32, 33, 35 and 43. The applicant invoked Article 52(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant argues that it owns International registration No 1 109 345  and has been using this sign extensively since 1927 in Russia for sweets and candy. The applicant has also been active in Germany. The customers are Russian-speaking immigrants. The EUTM proprietor considers himself a market leader in Germany in production of typical foods for Eastern European migrants. Since the target public is the same, the EUTM proprietor must have known about the applicant’s mark. As regards dishonest intention of the EUTM proprietor, the applicant claims that given the reputation of the applicant’s sign among Russian-speaking consumers, it is clear that the EUTM proprietor wanted to take advantage and exploit this reputation. The applicant argues in detail about the existence of a likelihood of confusion between the contested mark and the applicant’s sign. The fact that the EUTM proprietor filed opposition against the applicant’s international registration also proves dishonest intention of the EUTM proprietor.

In support of its observations, the applicant filed the following evidence:

• A pricelist from 1927, in Russian, with a translation into English showing ‘Skazka’ as one of the products.
• Tables of unknown origin showing turnover figures for products under the name ‘Skazka’ in Russia and several European countries in the time period from 2008 to 2015.
• A printout from Badische Zeitung dated 24/08/2011, in German.

The EUTM proprietor did not file any observations within the time limit set by the Office. In its belated observations, the EUTM proprietor refutes the applicant’s arguments.

After the closure of the adversarial part of the proceedings, the applicant filed other observations in which it elaborates on its arguments submitted previously, explaining in detail relationships between a group of companies to which the applicant belongs. As for the knowledge of the EUTM proprietor of the applicant’s mark, the applicant claims that, in addition to the reputation of the applicant’s mark which necessarily leads to the presumption of knowledge, the EUTM proprietor knew about the applicant’s mark because of a contract concluded in 2013 between the director of the EUTM proprietor and one of the companies related to the applicant. As for dishonest intention, the applicant adds that the EUTM proprietor sent several cease and desist letters to the German distributors of the applicant and even obtained a preliminary injunction from the Regional Court of Hamburg against one of the applicant’s distributors.

Attached to these observations are the following documents:

• A printout from www.candyindustry.com listing 2016 global top 100 candy companies, ‘United Confectionary Manufacturers’ ranking as 17th.

• Excerpts from Russian register of legal entities regarding companies ‘Krasnyj Octyabr’, ‘Penzenskaya Konditerskaya Fabrika’ and ‘Konditerskaya Firma TAKF’, for all these companies the company ‘Obhedinennye Konditery’ is listed as ‘controlling organization’.

• A statement from the CEO of ‘Obhedinennye Konditery’ claiming that this company is the leading Eastern European confectionery holding with head office in Moscow. According to the statement, the sweets labelled with the mark Skazka were exported to Germany and the sales reached almost 4500 kg in 2008, 5600 kg in 2009 and 2072 kg in 2010.

• Declaration from the company ‘Ulan GmbH’ confirming that the company imported and sold in Germany confectionery under the mark Skazka in 2010 (812kg), 2009 (1400kg) and 2008 (840kg).

• A contract dated in 2013 signed by the EUTM proprietor, in Russian with no translation provided.

• Two cease and desist letters dated in 2016 sent by the EUTM proprietor to ‘Monolith Ost GmbH’ and ‘Mix Markt 98 OHG’ regarding the mark Skazka.

• A preliminary injunction issued by Regional Court in Hamburg on 26/09/2016 prohibiting the company ‘Mix Markt 98 OHG’ the use of the mark  in relation to confectionery.

• A document by the EUTM proprietor addressed to the District Court of Nurnberg requesting a preliminary injunction that would prohibit ‘Monolith Ost GmbH’ to use the sign  in relation to confectionery.

Preliminary remarks

The applicant filed the majority of the documents only after the adversarial part of the proceedings was closed. In principle, these documents thus should not be taken into account. However, in the present case, as it becomes evident from the assessment below, even taking those documents into consideration the application cannot be successful.

Moreover, some of the documents (namely the contract and the printout from Badische Zeitung) were filed in languages other than the language of the proceedings and no translation was provided. According to Rule 38(2) EUTMIR, where the evidence in support of the application is not filed in the language of the revocation or invalidity proceedings, the applicant must file, on its own motion, a translation into that language within two months from the filing date of the evidence in support of the application. If the applicant does not provide translations for the evidence, any document in support of the application which is not translated by the applicant into the language of proceedings within the time limit specified in Rule 38(2) EUTMIR will be deemed not to have been received by the Office and, therefore, will not be taken into account (Rule 98(2) EUTMIR) (see decision of 05/03/2012, R0826/2010-4, ‘MANUFACTURE PRIM 1949’, para. 25). Therefore, the abovementioned documents cannot be taken into account.

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.

Assessment of bad faith

The Case-law shows four cumulative factors to be particularly relevant for the existence of bad faith:

• Identity/confusing similarity of the signs,
• EUTM proprietor’s knowledge of the use of an identical or confusingly similar sign,
• dishonest intention on the part of the EUTM proprietor,
• degree of legal protection enjoyed by both signs.

The applicant did not provide any evidence indicating that the EUTM proprietor knew about the applicant’s mark at the time of filing of the application of the contested mark (07/05/2012). It claims that the EUTM proprietor must have known about the applicant’s mark on account of the longstanding use of the mark by the applicant or its affiliated companies in Russia and more recently also in Germany. Although it is possible in some specific cases to assume the knowledge of the EUTM proprietor, the present case is not such a case. The applicant did not prove that its mark had a reputation in Europe at the time of filing to such an extent that it would be possible to assume the EUTM proprietor’s knowledge of it. The evidence filed by the applicant consists of a declaration of an interested party, a list of large companies with no mention of the mark, tables with sales figures of unknown origin and declarations from a distributor. Most of this evidence is of limited probative value as it does not originate from independent parties or its source is not known. In any case, even considering that the numbers of products sold in different countries and specifically in Germany are correct, they do not show any level of general recognition of the mark among the public. The figures are not so overwhelming as to assume, on the basis of the figures only, that the EUTM proprietor must have known about the mark. The applicant’s assertions that both parties target the same market segment, that is, the Russian immigrants in Germany, do not call these conclusions into question as there is no evidence that the applicant’s mark was known among these circles.

Moreover, the applicant claims that the contract between ‘Penzenskaya Konditerskaya Fabrika’ and the EUTM proprietor concluded in 2013 shows that the EUTM proprietor specifically knew about the mark. First, as explained above, this document cannot be taken into account as it was submitted in Russian and no English translation was provided. Second, the contract was concluded only after the filing of the contested mark and, thus, even if it concerned the contested mark, which cannot be assessed on account of the lack of translation, it would not demonstrate that the EUTM proprietor knew about the sign at the time of filing of the contested mark.

Finally, the Cancellation Division points out that the word ‘Skazka’ (the contested mark, ‘Skaska’, is the form of its pronunciation) is not an invented combination of letters but it is a meaningful word in Russian (it is the Russian equivalent to a tale) and it cannot be excluded that two entities start using the same word in relation to candy without one knowing about the other.

In addition, the mere knowledge by the EUTM proprietor of the applicant’s mark would not be sufficient to conclude bad faith. The applicant has to show some type of dishonest intention on the part of the EUTM proprietor at the time of filing of the mark. In the present case, the applicant argues that the dishonest intentions of the EUTM proprietor can be inferred from the fact that it filed opposition against the applicant’s international registration, that it sent cease and desist letters to the two distributors of the applicant and that it requested, and in one case already obtained, a preliminary injunction prohibiting the distributors from using the sign   in Germany in relation to confectionery. In addition to the fact that the events described by the applicant happened in 2016, that is, four years after the filing of the contested mark, they in any event do not show dishonest intentions of the EUTM proprietor. An owner of a trade mark is entitled to use legal measures to protect its rights against other entities using the same or similar marks. The fact that the EUTM proprietor did actually enforce its trade mark rights does not demonstrate that four years before such enforcement it had applied for the trade mark in bad faith.

The Cancellation Division finds it useful to emphasize that the burden of proof is on the applicant. The applicant failed to show any relationship between the two parties before the filing of the contested mark or any other indication that the EUTM proprietor knew about the applicant’s mark. It also failed to back up with any serious evidence its assertion that it is reasonable to assume the EUTM proprietor’s knowledge of the mark. Since there is no proof that the EUTM proprietor knew about the applicant’s mark or that the EUTM proprietor’s intention at the time of filing for the mark was not honest, it cannot be concluded that it filed the application for the contested mark in bad faith.

As the bad faith of the EUTM proprietor at the time of filing of the contested mark was not demonstrated, the application for a declaration of invalidity must be rejected.

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

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.