CANCELLATION No 15 033 C (REVOCATION)

Unite the Union, Merrion Squire 15, Dublin 2, Ireland (applicant), represented by NCTM O'Connor, Avenue de la Joyeuse Entrée 1, 1040 Brussels, Belgium (professional representative)

a g a i n s t

WWRD Ireland IPCO LLC, 251 Little Falls Drive, Wilmington, DE 19808, United States of America (EUTM proprietor), represented by Locke Lord (UK) LLP, 201 Bishopsgate, London EC2M 3AB, United Kingdom (professional representative).

On 18/10/2019 the Cancellation Division takes the following

DECISION

1. The application for revocation is rejected in its entirety.

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

REASONS

The applicant filed a request for revocation of European Union trade mark registration No 397 521 ‘WATERFORD’ (word mark) (the EUTM). The request is directed against some of the goods covered by the EUTM, namely:

Class 21: Articles of glassware, earthenware, chinaware and porcelain.

The applicant invoked Article 58(1)(c) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant has submitted extensive arguments which it had previously put forward in the prior revocation case against the same EUTM and therefore, will not be referred to again in the present proceedings. It also expands its previous arguments. It further argues that there is no res judicata in the present case as it does not apply to procedures before the EUIPO. The applicant also argues that the Cancellation Division erred in rejecting the prior application for revocation and that it must re-consider its findings. The applicant provides references to case law in order to plead that the Cancellation Division erred in the previous decision and that it incorrectly cited and relied upon certain decisions. It argues that the Irish Supreme Court judgment Waterford trade mark (Ireland) [1984] F.S.R. 390 at p.39 relied upon by the EUTM proprietor in the previous application is not relevant to the present case as there was no legal provision in the 1963 Trade Mark Act of Ireland that addressed the issue of geographical origin, but that the Court ruled that the trade mark could be registered on the basis of use. It further argues that at the time of the ruling the Waterford crystal was being produced in Waterford and therefore it was not misleading. The applicant submits a new survey carried out after the last decision was rendered which it argues proves that the relevant public in Ireland expect that Waterford crystal is made in Ireland and that this shows that as most of the crystal is no longer made in Ireland that the mark has become misleading. The applicant quotes from the WTO Agreement and the TRIPS Agreement, EU law and judgments to argue that the EUTM will mislead the public as to the geographical origin of the goods. It denies that the absolute criteria under Article 7(1)(g) EUTMR should be applied to a revocation under Article 58(1)(c) EUTMR, but even if it does apply, the use of the EUTM has become deceiving. It argues that the EUTM proprietor does not inform its consumers, or the visitors at the visitors centre, of the outsourcing of the manufacturing process with over 95% of the products no longer being made in Waterford, there are continuous references to the history of crystal and glass making in Waterford City, its products are named after Irish place names and the products bear an image taken from the Arms of the City of Waterford. Therefore, the applicant claims that the EUTM is liable to mislead the public as to the geographical origin of the goods and has become deceptive as to the geographical origin of the goods due to the use made of it by the EUTM proprietor.

In support of its arguments the applicant submits the following evidence:

• Annex 1: An opinion poll entitled ‘Waterford Study’ carried out by Millward Brown Ireland Limited (MBI) and dated 20/03/2015. The poll was carried out on 700 people in the Republic of Ireland and 300 people from Northern Ireland. The questions it asked were: 1) What do you think the City of Waterford is most famous for? 62% of the respondents answered ‘Crystal’ and 16% ‘Glass’. 2) How strongly or not do you associate Waterford City with Waterford Crystal or Waterford Glass? 70% of participants answered that they strongly associate it and 21% associate it with glass or crystal. 3) Do you expect or not that Waterford Crystal or Waterford Glass is made in Waterford City? 68% answered that they expect it to be made in the City of Waterford, while 1% believed it to be made in the County of Waterford and not the city.

The EUTM proprietor argues that there is res judicata as the application for revocation has the same subject matter and cause of action and involves the same parties as the previous case 7 522 C already adjudicated on by the Cancellation Division. It contests the arguments of the applicant and denies that the EUTM has become misleading. The EUTM proprietor also points out that the issue of relevance has already been the subject of detailed decisions from the Cancellation Division, the Boards of Appeal, the Court of First Instance and the Court of Justice and the applicant pleads its case without regard for the clear guidance provided by these tribunals. It points out that the applicant did not appeal the previous decision of the Cancellation Division in 7 522 C against the same EUTM in the present case. The EUTM proprietor also points out that the new evidence submitted in the present case by the applicant, listed as Annex 1 above, has already been examined in the related case 7 520 C in which the Cancellation Division concluded that this second survey did not clearly indicate that the public is, or is liable to be misled by the WATERFORD mark and that due to a late payment of the appeal fee the Board of Appeal held that the appeal had not been filed in a timely fashion and the aforementioned decision of the Cancellation Division has become final. The EUTM proprietor argues that the Office had initially informed the parties that the application for revocation was inadmissible but later cancelled those letters without providing reasons for its decision. The EUTM proprietor argues that the applicant has no interest in the EUTM itself but only wishes to defend the livelihood of its members which is not a justifiable ground for invoking revocation. The EUTM proprietor contests the two surveys submitted and submits decisions to show that these surveys are highly leading, unrepresentative of the relevant public and fail to demonstrate that the city of Waterford has a reputation for crystal or glass or that the EUTM proprietor’s use of the sign is inherently misleading or deceitful. The EUTM proprietor denies that the use of the EUTM will be liable to mislead the public as to the geographical origin of the goods. It states that the outsourcing of WATERFORD branded goods began in 1991 which was before the EUTM was even filed. In regards to the above cited Irish Supreme Court decision, relied upon by the applicant, the EUTM proprietor states that even if geographical indications did not exist under the 1963 Act it cannot affect the decision as the sign was held to be factually distinctive and an indication of commercial origin and the Cancellation Division upheld this finding. The EUTM proprietor requests that the application for revocation be rejected in its entirety.

The EUTM proprietor submitted the following evidence in support of its case:

• Annex 1: Copy of the decisions of the Cancellation Division of 25/11/2014 in 7 520 C, 7 522 C and 7 523 C.

• Annex 2: Copy of the applicant’s grounds of appeal in the appeal file R 237/2015-2 in relation to the cancellation 7 520 C dated 24/03/2014 with its annexes that contains the survey included in the earlier cancellations and also the second survey dated 20/03/2015.

• Annex 3: Copy of the Office’s communication to the EUTM proprietor informing it that a revocation request has been filed against their trade mark and given the number 7 520 C and with a copy of the application form and observations.

• Annex 4: Copies of press articles in which the applicant is cited as saying ‘Waterford Crystal should be made locally’ and that its intent in pursuing these proceedings is to ‘force the current owners of Waterford Crystal to repatriate manufacturing of the brand to the city’. They are dated in 2013.

• Annex 5: A copy of the Board of Appeal decision of 03/03/2016, in R 237/2015-2 ‘WATERFORD’.

• Annex 6: Copy of the Cancellation Division decision of 30/11/2016, in 7 520 C.

• Annexes 7-9: Statements of Jim Walsh, Director of the EUTM proprietor, Anthony Jones and John Connolly both employees of the EUTM proprietor all of which state that WATERFORD crystal had been produced outside of Waterford since 1991.

• Annexes 10-11: Statements of Philip Malivoire and Louis James Rothman, independent marketing and economic research consultants which conclude that the surveys have leading questions and are unreliable.

• Annex 12: Copy of the Irish Supreme Court decision of 02/03/1984 in WATERFORD trade mark (Ireland), [1984] F.S.R. 390 (1984).

• Annex 13: Statement of Mark Keller, former Sales Director for the UK and Ireland for the EUTM proprietor which claims that the goods are designed according to aesthetic appeal and not to a city or manufacturing process.

• Annex 14: Statement of David McCoy, Sales & Marketing Director at the House of WATERFORD Crystal, stating that they inform visitors that it outsources a large proportion of its manufacturing.

The applicant quotes a book entitled ‘Waterford Crystal, the Creation of a Global Brand, 1700-2009’ and insists that this shows the connection between the goods and the city of Waterford and that statements on the EUTM proprietor’s website also back up this assertion. It further shows that Waterford is famous for glassmaking and there is a link between the public mind and the city. The applicant repeats and expands its previous arguments. It insists that the trade mark WATERFORD could not be registered today and that the EUTM must be revoked as it is liable to mislead the public as to the geographical origin of the goods.

The EUTM proprietor contests the applicant’s arguments and repeats and expands its previous arguments.

Preliminary remarks

The EUTM proprietor argues that there is res judicata as the Cancellation Division took a decision on 25/11/2014, in 7522C, involving the same parties, the same subject matter (the applicant argued that the same contested EUTM had become deceptive in consequence of the use made by it by the EUTM proprietor) and the same cause of action (application for a declaration of revocation). The previous application for revocation was adjudicated on its merits and was dismissed and that the decision has become final and each of the requirements under Article 63(3) EUTMR has therefore been satisfied in the present case. Therefore, the EUTM proprietor argues that any further attempt to re-litigate issues arising from the same cause of action with the same facts and the same mark should be precluded.

The applicant contests the EUTM proprietor’s arguments in this regard. It argues that there is no res judicata in the present case as it does not apply to procedures before the EUIPO.

The Cancellation Division first notes that, contrary to the applicant’s argument, res judicata would apply in cancellation cases involving invalidity where there are the same parties, subject matter and cause of action. The applicant quotes the judgement of 14/10/2009, T‑140/08, TiMiKinderjoghurt, EU:T:2009:400, § 34 to argue that where an opposition decision has been taken and then an invalidity application is filed, in such a case res judicata would not apply, and indeed this is true. However, where two invalidity proceedings are filed fulfilling the above mentioned criteria then the case would fall under res judicata. Therefore, that argument that a decision of the EUIPO cannot fall under res judicata must be rejected.

However, in the present case the Cancellation Division considers that res judicata does not apply to the application for revocation. The reason for this is that the trade mark, in an application based on Article 58(1)(c) EUTMR, may be liable to have become misleading after the rendering of the last decision and therefore further actions cannot be prevented. However, the EUTM proprietor is correct in asserting that the Cancellation Division has examined the time frame leading up to the taking of the prior decision on 25/11/2014 and that decision was not appealed and has thus become final. The applicant had the possibility of appealing that decision if it did not agree with the findings, within the given time limit, but did not do so. It also had the opportunity to submit all relevant arguments and evidence relating to that time frame in support of its application. As such, the decision concerning the time frame prior to 25/11/2014 is final and may not be re-examined. The applicant does not have the possibility of submitting a constant stream of de novo applications until it receives a decision which is favourable, but it may make a case that the situation has changed since the last decision was notified. Therefore, the Cancellation Division will limit the examination of the application to facts and evidence which only came into existence or are dated after the prior decision of 25/11/2014. Much of the evidence submitted by the applicant refers to the period before that time and explains, clarifies or corroborates the evidence and arguments submitted prior to the previous decision, and indeed could have been submitted also at that time but the applicant chose not to submit it then. Therefore, the Cancellation Division cannot enter into a discussion or examination of these arguments or evidence as they are not relevant for the present purposes of deciding whether the mark has become misleading as a consequence of the use made by the EUTM proprietor since the date of the last decision on 25/11/2014.

The EUTM proprietor also argues that the Office initially informed the parties that the application was inadmissible but then cancelled the initial letters and stated that the application was admissible without providing adequate reasoning contrary to Article 94(1) EUTMR.

The Office sent a communication to both of the parties on 07/06/2017 it in which it stated that the application for revocation was inadmissible and invited the parties to submit their observations by 07/08/2017 and stated that the deficiency could not be remedied. It also specifically informed the parties that after this time limit the Office would take a decision on the matter (emphasis added). On 08/08/2017 the Office sent a further communication stating that despite the observations received the Office maintained its findings of inadmissibility but that an appealable decision will soon be taken (emphasis added). Finally, on 14/05/2018 the Office informed the parties that it cancelled its previous notifications of 07/06/2017 and 08/08/2017 and that it considered the application for revocation to be admissible.

The Cancellation Division notes that although the wording of the initial letters was not very clear the letters themselves left clear that an appealable decision had not yet been taken but that it was merely alerting the parties that this would happen and allowing them the possibility to submit observations. When the Office further examined the case it became apparent that the application was not in fact inadmissible and therefore the two prior letters above cited were cancelled. These letters were not final decisions and as such could be cancelled rather than revoked. Moreover, as they were not appealable decisions but mere warning letters there was no abuse of process. The Cancellation Division does recognise that it would have been optimal to have informed the parties as to why the decision was taken to cancel the letters but that this does not amount to a loss of rights or an abuse of process. The reasoning as to why the decision is admissible has been given above in the present decision and this finding may be appealed along with the present decision.

GROUNDS FOR THE DECISION

According to Article 58(1)(c) EUTMR, the rights of the proprietor of the EU trade mark will be revoked on application to the Office, if, in consequence of the use made of it by the proprietor of the trade mark or with his consent in respect of the goods or services for which it is registered, the trade mark is liable to mislead the public, particularly as to the nature, quality or geographical origin of those goods or services (emphasis added).

The reason for this ground - as well as the absolute ground of invalidity pursuant to Article 7(1)(g) EUTMR – is the general interest of consumer protection and it requires "a finding of actual deceit or a sufficiently serious risk of misleading consumers" (judgment of 30/03/2006, C 259/04, Elizabeth Emanuel, EU:C:2006:215, § 46).

The difference to the ground of invalidity is that in revocation proceedings under Article 58(1)(c) EUTMR, the deception in the minds of the consumers do not have to come from the mark itself, but in the actual use of the said mark by the proprietor. It is up to the applicant to demonstrate how the use has become misleading, "particularly about the nature, quality or geographical origin of the products." Therefore, the applicant must prove that the trade mark has become liable to mislead the public after the date of registration of the EUTM, or in the present case, since 25/11/2014, the time at which the decision of the Cancellation Division was taken and has become final. Consequently the onus for proving that the mark has become misleading rests on the revocation applicant.

The Office shall examine the facts in accordance with Article 76(1) EUTMR within the scope of factual submissions made by the revocation applicant (13/09/2013, T 320/10, Castel, EU:T:2013:424, § 28). In doing so, it may take into consideration obvious and well-known facts. However, it shall not go beyond the legal arguments presented by the applicant for revocation.

Before proceeding, it is worth noting that the applicant claimed the Cancellation Division applied an incorrect standard in the assessment of these grounds. However, the decision from the Boards of Appeal of 09/02/2016, R 237/2015-2 ‘WATERFORD’ which appealed the related cancellation case 7 520 C between the same parties confirmed that, for a trade mark to be revoked pursuant to Article 58(1)(c) CTMR, actual deceit or a sufficiently serious risk that the average consumer will be deceived must exist (14/05/2009, T-165/06, Elio Fiorucci, EU:T:2009:157, § 33 and the case-law therein cited; 01/09/2011, R 1120/2010-1, Original Stastnik Arlberger (fig.), § 19 and in relation to the corresponding provision of Article 12(2)(b) of Regulation 89/104, 4/3/1999).

The Boards also pointed out that the previous contested decision was mainly based on the fact that it has not been proven that the trade mark is liable to mislead the public, particularly as to the geographical origin of those goods. Indeed, taking into account all of the facts and evidence submitted before the Cancellation Division, the Boards stated: ‘the Cancellation Division did not err in deciding that it had not been proven that in consequence of the use made of it by the CTM proprietor in respect of the goods for which it is registered, the contested trade mark is liable to mislead the public, particularly as to the nature, quality or geographical origin of those goods’. The reason for remitting that case back to the Cancellation Division was due to the second survey having been submitted before the Boards, a survey which was carried out on the basis of the deficiencies noted by the Cancellation Division. However, taking into account the arguments and evidence filed the first time around as well as this second survey, the Cancellation Division was unable to come to a different conclusion. The second survey at issue in that case is the same survey which has been submitted by the applicant in the present case and the only evidence which applies to the relevant time frame being examined here, namely, after 25/11/2014.

The previous cancellation decision taken in relation to the same EUTM as in the present case, namely, 7 522 C, found that most of the evidence submitted did not prove the applicant’s claims. Particularly, the first survey was rejected as it did not support the applicant’s assertions but merely reflected that those surveyed recognised ‘Waterford’ in relation to glass and crystal thus reinforcing the brand exposure and knowledge of the mark. The survey did not prove that the city is famous for glass or crystal but just that respondents relate the name ‘Waterford’ with those goods. It is frequent practice for goods to be named after the area where the manufacturing process was invented, even if the products are no longer made there and consumers are aware of such practices and as such, not misled (21/10/2014, T 453/11, Laguiole, EU:T:2014:901).

As expounded in the first cancellation decision of 25/11/2014, the fact that glass and crystal has been produced (at least on and off) since 1783 in Waterford was already detailed as was the history of ‘Waterford Glass’ until its financial crisis in 2008 which led to the entity entering into receivership. At this point the manufacturing centre and original visitors centre were closed down and production took place elsewhere in Europe. It is important to note that the applicant did not demonstrate that crystal production in Waterford is reliant on locally sourced materials and nor that there is a specific ‘know-how’ in the local workforce. Additionally, the qualities associated with the goods at hand are due to the exceptional design specifications rather than the quality of materials. It is also true that melting, cooling and moulding processes can be carried out to the same standard anywhere in the world without there being any change in the nature or characteristics of the finished pieces. As put by the proprietor, the vast majority of crystal producers have had to change the way they conduct their business since the 1980’s in order to avoid closure.

Indeed, the claims made by the applicant that the proprietor is deceiving the public as it has not changed any of the ‘Irish’ names of the products to date and that it continues to use ‘Waterford’ cannot be taken as valid. To submit that the proprietor should change the names would defy commercial logic. It is common business practice that when undertakings are purchased by others or go into receivership etc, the name of the business and the products are not changed because this could lead to a devaluation of the business and its products. Indeed, ‘the brand’ is where the goodwill and the monetary value lie. Therefore it is clear that the continued use of names that give rise to an ‘Irish’ link is not in itself a deceitful practice of any sort.

Moreover, re-locating businesses is sometimes a necessary step for any companies in order to avoid going bust. As set out explicitly in the first cancellation decision of 25/11/2014, ‘Waterford Crystal/glass’ has gone and come back several times to the city and who is to say that it may not return on a permanent basis in the future. Indeed on this point the applicant submits that the production in Waterford is token as it only takes place in some workshops with in the visitor’s centre and that, apparently, visitors are not informed that real production takes place elsewhere. The first cancellation decision clearly illustrated the details concerning production and it is clear that, even if less goods are manufactured there, glass and crystal is still made in Waterford. It cannot be immediately assumed that visiting members of the public are misled or are liable to be misled about production when seeing the workshops. Clearly a visitors centre does not equate to a glass blowing facility or similar and would be perceived more as a museum. As already pointed out in the previous decision, the witness statements and the claims made therein are not supported by any exhibits and their veracity cannot be supported. Further, the Cancellation Division also agrees with the previous findings insofar as it cannot be inferred that visitors visit Waterford because of the fame of the city, as it is just as likely, if not more, that they visit the city due to the repute attached to the glass and crystal goods produced under the name of ‘Waterford’.

The whole crux of the issue therefore falls on the second survey which was carried out after the previous decision and therefore refers to the relevant period, and it is reproduced below for the sake of completeness;

1. What do you think the City of Waterford is most famous for? This was a ‘spontaneous’ question to which 62% answered crystal and 16% glass;

2. How strongly or not do you associate Waterford City with Waterford Crystal or Waterford Glass (prompted question - options from ‘strongly associate’, ‘associate’ to ‘I don’t know’); 70% of respondents ‘strongly’ associate the city with crystal or glass and 21% ‘associate’ the city with crystal or glass;

3. Do you expect or not that Waterford Crystal or Waterford Glass is made in Waterford City? 68% of respondents answered ‘Yes’ whilst 21% answered ‘No’, 4% ‘Don’t know’ and 7% ‘other’;

The proprietor’s criticisms of this survey have already been outlined previously. The Cancellation Division finds that the first question, despite being ‘spontaneous’ is still flawed and concurs with the proprietor that it could be interpreted as merely reinforcing the brand exposure and knowledge of the mark in question and does not omit the possibility that respondents have never heard of the city but on hearing the name automatically think of the mark ‘Waterford’. Nowhere in the survey are respondents asked if they are already ‘aware’ of the city of Waterford. This issue was already pinpointed in the First Survey and the Cancellation Division found that together with the evidence submitted by the applicant, namely, that in November 2000 Waterford crystal was named the top world-class brand in the United States, recognition is due to the reputation of the brand in relation to the goods and not as an indication of the place of manufacture.

Again, the Cancellation Division can only agree with the proprietor’s assertions concerning Questions 2 and 3 insofar as they are highly leading. In both cases the wording of the questions informs respondents that there is a ‘city’, ‘glass’ and ‘crystal’ all by the name of ‘Waterford’. The wording already introduces the notion that the class/crystal is made there and effectively asking respondents to confirm this via merely yes/no is highly influential.

When assessing if a given trade mark is likely to mislead, deceive, or not, account should be taken of market reality and consumers’ habits and perceptions. However, ‘false impressions/expectations’ caused by the trade mark are not tantamount to actual deceptiveness or proof that the sign is likely to mislead the consumer when the sign is merely evocative. In such cases there is no clear contrast between the impression/expectation a sign may evoke and the characteristics/qualities of the goods and services it covers.

Considering the above, the Cancellation Division is of the opinion that the second survey does not prove that the EUTM is, or may be liable to be misleading or deceptive since the issuing of the cancellation decision of 25/11/2014. Indeed, even when read in conjunction with all of the materials submitted previously and added to in this application, it is not sufficient to overcome the previous deficiencies illustrated in the prior decision. The survey still leaves room for doubt and gives rise to too many suppositions and does not clearly indicate that the public is or is liable to be misled or deceived by the mark in question.

In conclusion, the Cancellation Division considers that the use of the mark is not misleading and that there is no false indication as to the nature, quality and geographical origin. Therefore, the application for revocation of the contested EUTM is rejected in its entirety.

COSTS

According to Article 109(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 Article 109(7) EUTMR and Article 18(1)(c)(ii) 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

Ioana MOISESCU

Nicole CLARKE

Irina SOTIROVA

According to Article 67 EUTMR, any party adversely affected by this decision has a right to appeal against this decision. According to Article 68 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.