CANCELLATION No 22 601 C (REVOCATION)

Shanghai Panati Co, B1, F23, JunYao Plaza, 789 ZhaoJiaBang Rd., ShangHai 200032 People’s Republic of China (applicant), represented by Pons Consultores de Propiedad Industrial, S.A., Glorieta Rubén Darío, 4, 28010 Madrid, Spain (professional representative)

a g a i n s t

Castel Freres, 24, rue Georges Guynemer, 33290 Blanquefort, France (EUTM proprietor), represented by Inlex IP Expertise, Plaza San Cristobal, 14, 03002 Alicante, Spain (professional representative).

On 03/04/2020, 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 6 785 109 (figurative mark) (the EUTM). The request is directed against all the goods covered by the EUTM, namely

Class 33: Still wines.

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

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant filed a request for revocation on 29/05/2018 claiming that the contested EUTM has not been put to genuine use for a continuous period of five years in relation to the goods for which it is registered.

The EUTM proprietor filed observations and evidence of use (Annexes 1 to 11, listed below). It provided a detailed explanation of the evidence submitted. It argued that the EUTM proprietor is a French wine production and trading company founded in 1949 which belongs to the top three major wine operators worldwide. The EUTM proprietor is active on different kinds of wine markets which include local and ethnic niche markets. It distributes not only French wines but also ethnic wines from Tunisia, Morocco, Australia, Chile, Argentina, South Africa, India and China.

For almost 20 years the EUTM proprietor has had a strong interest in Chinese wines and has become a leader on the Chinese wine market. Given its interest in China, the EUTM proprietor has also tried to make Chinese wines known to European consumers.

Since 2009 there have been trade mark conflicts in France, in relation to the mark , between the EUTM proprietor and Mr. Daozhi Li Yu, who is indirectly linked to the applicant. It is assumed that there is a connection between this conflict and the present revocation request.

The EUTM, , reads, in Latin characters, KASITE and is pronounced KA-SI-TE. It constitutes the transliteration of the applicant’s name (‘Castel’) and was adopted for the Chinese market.

The EUTM proprietor has sold an average of 18 000 bottles of wine per year under the EUTM (Annex 4). This is more than the total annual sale of Chinese wines in French supermarkets. The EUTM proprietor sells its wine in 222 establishments which constitute 25 % of the Chinese restaurants [in France]. While marketing Chinese wines may be difficult because consumers may prefer local beer and wine, the EUTM proprietor has succeeded in building up a significant market share.

In reply, the applicant submitted that the EUTM proprietor did not prove genuine use of the contested EUTM. In particular, the sign used does not constitute an acceptable variation of the EUTM as registered.

The mark which appears in the evidence is mainly composed of the word element ‘DRAGON DE CHINE’ and an unusual representation of a dragon. This concerns, for example, Annexes 8, 9, 10 and 11. On the other documents, such as the invoices and the catalogues, including Annexes 7, 8 and 10, the trade mark is merely referred to as ‘DRAGON DE CHINE’ and ‘KA SI TE’. The relevant public does not speak Chinese, so they will perceive the contested EUTM as three Chinese characters which, for them, are illegible and incomprehensible. The relevant public will not be able to translate the contested EUTM to ‘KASITE’ or ‘DRAGON DE CHINE’. In conclusion, the EUTM proprietor did not prove the genuine use of the EUTM as registered during the relevant period.

The document submitted as Annex 4 is an internal document. It refers to the marketing of ‘KASITE’ but not the contested EUTM . Therefore, it does not prove that still wines were sold to customers under the EUTM. It also does not prove that the products were intended for EU consumers.

The evidence submitted is insufficient to determine whether the EUTM was genuinely used with regard to the place, time, extent and nature of use.

In its response the EUTM proprietor filed further evidence of use, including Annexes 1bis, 4bis, 7bis and 9bis, listed below. It provided a detailed explanation of the evidence submitted.

In its response the applicant insisted that the evidence is insufficient. It proceeded to analyse individual pieces of the evidence, essentially reiterating its previous arguments.

In reply the EUTM proprietor submitted an extract from the company register with information about the EUTM proprietor and reiterated its previous arguments.

GROUNDS FOR THE DECISION

According to Article 58(1)(a) EUTMR, the rights of the proprietor of the European Union trade mark will be revoked on application to the Office, if, within a continuous period of five years, the trade mark has not been put to genuine use in the Union for the goods or services for which it is registered, and there are no proper reasons for non-use.

Genuine use of a trade mark exists where the mark is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services. Genuine use requires actual use on the market of the registered goods and services and does not include token use for the sole purpose of preserving the rights conferred by the mark, nor use which is solely internal (11/03/2003, C‑40/01, Minimax, EU:C:2003:145, in particular § 35-37, 43).

When assessing whether use of the trade mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether commercial exploitation of the mark is real, particularly whether such use is viewed as warranted in the economic sector concerned to maintain or create a market share for the goods or services protected by the mark (11/03/2003, C‑40/01, Minimax, EU:C:2003:145, § 38). However, the purpose of the provision requiring that the earlier mark must have been genuinely used ‘is not to assess commercial success or to review the economic strategy of an undertaking, nor is it intended to restrict trade-mark protection to the case where large-scale commercial use has been made of the marks’ (08/07/2004, T‑203/02, Vitafruit, EU:T:2004:225, § 38).

According to Article 19(1) EUTMDR in conjunction with Article 10(3) EUTMDR, the indications and evidence of use must establish the place, time, extent and nature of use of the contested trade mark for the goods and/or services for which it is registered.

In revocation proceedings based on the grounds of non-use, the burden of proof lies with the EUTM proprietor as the applicant cannot be expected to prove a negative fact, namely that the mark has not been used during a continuous period of five years. Therefore, it is the EUTM proprietor who must prove genuine use within the European Union, or submit proper reasons for non-use.

In the present case, the EUTM was registered on 08/01/2009. The revocation request was filed on 29/05/2018. Therefore, the EUTM had been registered for more than five years at the date of the filing of the request. The EUTM proprietor had to prove genuine use of the contested EUTM during the five-year period preceding the date of the revocation request, that is, from 29/05/2013 to 28/05/2018 inclusive, for the contested goods listed in the section ‘Reasons’ above.

On 04/10/2018 and 19/04/2019 the EUTM proprietor submitted, in particular, the following evidence as proof of use.

• Annexes 1 and 1bis: expert opinions of Chinese translator Philippe Kantor concerning the transcription of French words to Chinese. Mr Kantor explained that the most common way to transcribe a French word to Chinese is by using the Chinese transcription system known as ‘pinyin’, where one Chinese character represents one syllable. The characters are taken from a relatively small corpus of Chinese characters. In the Latin alphabet, the three Chinese characters are written ‘KA SI TE’. The word ‘ka-si-te’ does not mean anything particular in Chinese and will be perceived as the phonetic transcription of a foreign word such as ‘CAST’ or ‘CASTEL’.

• Annex 2: three letters from different companies (FDL, La Passion des Terroirs, BBC Vins et Spiritueux) about their business relationship with the applicant.

• Annex 3: a document from the company IRI with general information on annual sales volumes of still wines and Chinese wines in France in the years 2014 to 2017.

• Annexes 4 and 4bis: two documents in French, together with a translation into English, in which the proprietor’s auditors and Mr Philippe Castel respectively provide information about the turnovers for KASITE ( ) wines between 2014 and 2016.

• Annex 5: a three-page document from ‘GIRA Foodservice’ with general information about the consumption of wine in the years 2015, 2016 and 2017.

• Annex 6: a single-page document from Maison Bedhet Valette ‘MBV’ with general information about customer shares in Asian, French, Indian, Italian and other ethnic restaurants in 2017 in France. The information shows that ‘Asian’ restaurants have the largest customer share.

• Annexes 7 and 7bis: invoices issued by the company Maison Bedhet Valette certifying the sale of KASITE wine between 2014 and 2016; invoices issued by the EUTM proprietor concerning sales of KASITE wine to the company METRO between 2014 and 2016.

• Annex 8: excerpts from the EUTM proprietor’s French-language catalogues from 2014, 2015, and 2016. The excerpts show product information about KASITE wine together with a picture of the wine bottle.

• Annexes 9 and 9bis: a product information sheet from 2015. The document contains information about KASITE wine together with a picture of a wine bottle.

• Annex 10: a catalogue for the company Maison Bedhet Valette (‘MBV’) from 2016 which appears to be a company that sells wines. The catalogue lists KASITE wines on page 49.

• Annex 11: a product information sheet from 2017. The label on the bottle and the way the product is identified are essentially the same as on the product information sheet of 2015.

Assessment of genuine use — factors

Time of use

The evidence must show genuine use of the European Union trade mark within the relevant period.

All of the evidence listed above is dated within the relevant period. Therefore, the evidence of use sufficiently indicates the time of use.

Place of use

The evidence must show that the contested European Union trade mark has been genuinely used in the European Union (Article 18(1) EUTMR and Article 58(1)(a) EUTMR).

The invoices, catalogues and other documents show that the place of use is France. This can be inferred from the language of the documents (French), the currency mentioned (Euro) and the addresses indicated.

According to case-law and following the ‘Leno Merken’ case (19/12/2012, C‑149/11, Onel / Omel, EU:C:2012:816, § 44), Article 18(1) EUTMR must be interpreted as meaning that the territorial borders of the Member States should be disregarded when assessing whether an EUTM has been put to ‘genuine use’ in the Union. As the Court indicated in ‘Leno Merken’ (19/12/2012, C‑149/11, Onel / Omel, EU:C:2012:816, § 55), it is impossible to determine a priori, and in the abstract, what territorial scope should be chosen in order to determine whether the use of the mark is genuine or not. A de minimis rule cannot be laid down. All the relevant facts and circumstances must be taken into account, including the characteristics of the market concerned, the nature of the goods or services protected by the trade mark and the territorial extent and scale of the use as well as its frequency and regularity (19/12/2012, C‑149/11, Onel / Omel, EU:C:2012:816, § 58). Use of an EUTM in the UK (15/07/2015, T‑398/13, TVR ITALIA (fig.) / TVR et al., EU:T:2015:503, § 57) or even in London and its immediate surroundings may be geographically sufficient (30/01/2015, T‑278/13, now, EU:T:2015:57).

Consequently, taking into account the relevant circumstances in the present case, the characteristics of the market and the territorial extent, it is considered that the evidence is sufficient to satisfy the European requirements or standards for genuine use. Therefore, the evidence relates to the relevant territory.

Nature of use: use as a trade mark

Nature of use requires, inter alia, that the contested European Union trade mark is used as a trade mark, that is, for identifying origin, thus making it possible for the relevant public to distinguish between goods and services of different providers.

The evidence shows that the contested EUTM was used as a trade mark. The evidence filed by the EUTM proprietor shows that the EUTM was affixed to the products (i.e. it appeared on the label of the wine bottles). In the catalogue of 2015 (Annex 8), for example, the bottle is presented with the following label:

In the same catalogue wine is identified as follows:

On the product information sheet of 2015, submitted as Annexes 9 and 9bis, the bottle is shown with the following label:

Furthermore, the product is identified as follows:

On the product information sheet of 2017, submitted as Annex 11, the label on the bottle and the way the product is identified are essentially the same as on the product information sheet of 2015.

Throughout this material, the EUTM is identifiable as a separate element on the label of the wine bottles. It also appears with the KASITE wines in the catalogues.

Consequently, the documents show a link between the goods in question and the use of the mark, and that the EUTM was used in accordance with its essential function, which is to guarantee the commercial origin of the goods for which it is registered.

Nature of use: use of the mark as registered

‘Nature of use’ in the context of Article 10(3) EUTMDR further requires evidence of use of the mark as registered, or of a variation thereof which, pursuant to Article 18(1)(a) EUTMR, does not alter the distinctive character of the contested European Union trade mark.

The purpose of Article 18(1)(a) EUTMR, which avoids imposing strict conformity between the form in which the trade mark is used and the form in which it was registered, is to allow its proprietor, when exploiting it commercially, to vary it in such a way that, without altering its distinctive character, enables it to be better adapted to the marketing and promotion requirements of the goods or services concerned (23/02/2006, T‑194/03, Bainbridge, EU:T:2006:65, § 50).

The applicant essentially argued that the sign used does not constitute an acceptable variation of the EUTM because the EU consumer will see it alongside further elements, in particular ‘KASITE’ and ‘DRAGON DE CHINE’, and it considers the three Chinese characters to be illegible and incomprehensible.

There is no legal precept in the European Union trade mark system that obliges the opponent to provide evidence of the earlier mark alone when genuine use is required within the meaning of Article 47 EUTMR. Two or more trade marks may be used together in an autonomous way, or with the company name, without altering the distinctive character of the earlier registered trade mark (06/11/2014, T‑463/12, MB, EU:T:2014:935, § 43).

The Court has confirmed that the condition of genuine use of a registered trade mark may be satisfied both where it has been used as part of another composite mark or where it is used in conjunction with another mark, even if the combination of marks is itself registered as a trade mark (18/04/2013, C‑12/12, Colloseum Holding, EU:C:2013:253, § 36.). Similarly, the Court has clarified that use can be genuine where a figurative mark is used in conjunction with a word mark superimposed over it, even if the combination of those two marks is itself registered, to the extent that the differences between the form in which that trade mark is used and that in which it was registered do not change the distinctive character of that trade mark as registered (18/07/2013, C‑252/12, Specsavers, EU:C:2013:497, § 31).

The documents submitted as Annexes 8, 9 and 9bis show the EUTM on the label of the wine bottles sold by the EUTM proprietor. It is accompanied, in particular, by the words ‘DRAGON DE CHINE’ and ‘KA SI TE’ as well as the representation of a dragon. However, given the separation between these elements, the EUTM will be perceived as an autonomous sign. When confronted with the label, there is no doubt that French consumers realise that they are about to purchase a Chinese wine. Therefore, they may expect the label to contain Chinese characters such as the EUTM . As the sign is positioned next to the word ‘KA SI TE’, these consumers are very likely to understand that ‘KA SI TE’ is the Latin equivalent to the Chinese characters of the EUTM, as is explained in Annexes 1 and 1bis. Therefore, contrary to the applicant’s view, consumers will perceive the EUTM as a trade mark which is used in an autonomous way together with other trade marks on the same product. Furthermore, the fact that, on the invoices, the product is referred to as KASITE is sufficient to conclude that they refer to the EUTM proprietor’s KASITE wines which also carry the EUTM.

Consequently, the evidence gives sufficient indications of the use of the mark as registered or in a form the same as that registered and, therefore, constitutes use of the contested EUTM under Article 18 EUTMR.

Extent of use

Concerning extent of use, it is settled case-law that account must be taken, in particular, of the commercial volume of the overall use, as well as of the length of the period during which the mark was used and the frequency of use (08/07/2004, T‑334/01, Hipoviton, EU:T:2004:223, § 35).

The Court has held that ‘[u]se of the mark need not … always be quantitatively significant for it to be deemed genuine, as that depends on the characteristics of the goods or service concerned on the corresponding market’ (11/03/2003, C‑40/01, Minimax, EU:C:2003:145, § 39).

As mentioned earlier in this decision, it is not possible to determine a priori, and in the abstract, what quantitative threshold should be chosen in order to determine whether use is genuine or not. A de minimis rule cannot therefore be laid down. When it serves a real commercial purpose, even minimal use of the mark can be sufficient to establish genuine use (27/01/2004, C‑259/02, Laboratoire de la mer, EU:C:2004:50, § 25, 27).

The assessment of genuine use entails a degree of interdependence between the factors taken into account. Thus, the fact that commercial volume achieved under the mark was not high may be offset by the fact that use of the mark was extensive or very regular, and vice versa. Likewise, the territorial scope of the use is only one of several factors to be taken into account, so that a limited territorial scope of use can be counteracted by a more significant volume or duration of use.

Furthermore, assessing the circumstances of the case may include giving consideration, inter alia, to the nature of the goods or services, the characteristics of the market concerned and the scale and frequency of use of the mark (11/03/2003, C‑40/01, Minimax, EU:C:2003:145, § 39).

The evidence cannot be assessed in absolute terms but must be assessed in relation to other relevant factors. In this respect, the evidence should be viewed in relation to the nature of the goods and the structure of the relevant market (30/04/2008, T‑131/06, Sonia Sonia Rykiel, EU:T:2008:135, § 53).

The evidence indicates that Chinese wines belong to a niche segment on the French wine market. The document submitted as Annex 3 shows that between 2014 and 2017 Chinese wines generally represented a rather small portion of the overall wine market in France. The document supports the EUTM proprietor’s claim that the sale of the KASITE wines relies more on a network of Chinese restaurants than on distribution through supermarkets. In this context, the EUTM proprietor has achieved — according to Annexes 4 and 4bis — significant turnovers with KASITE wines, in different geographical areas in France, in the three consecutive years 2014, 2015 and 2016. The document quotes the reference numbers 146345, 146346, 146924 and 146925 for these years. In each of these years, the total turnover exceeded EUR 80 000. The evidence suggests that the EUTM proprietor sold an average of 18 000 bottles of wine per year under the EUTM (Annex 4). Furthermore, Annexes 7 and 7bis consist of more than 140 pages of invoices showing the sale of KASITE wines to a variety of different clients in different regions of France. Many of the clients appear to be restaurants. The invoices confirm the sale of KASITE wines in 2014, 2015 and 2016 and identify, in particular, the reference numbers 146345 and 146346. These numbers are also used in Annexes 4 and 4bis, thus corroborating the information contained in those documents.

There are sufficient indications to conclude that the Chinese wines sold by the EUTM proprietor are a niche product on the wine market in France. In this respect, it should be noted that evaluation of proof of use is a question of whether the EUTM proprietor has seriously tried to acquire a commercial position on the relevant market. It is sufficient to submit evidence which proves that the minimum threshold for a finding of genuine use has been passed.

The EUTM proprietor has shown that it used the trade mark consistently in the relevant time period for its KASITE wines. The contested EUTM appears on the bottles, which are shown on the catalogues and advertising material. Moreover, all the invoices refer to KASITE, which is the Latin equivalent of , and several include reference numbers which can be linked to the product.

Therefore, contrary to the applicant’s view, taking into account the evidence in its entirety and based on an overall assessment, the Cancellation Division considers that the evidence shows a real commercial exploitation of the EUTM which is not merely token and is of a sufficient extent and constancy as to strive to maintain or create a market share for the goods designated by the mark.

Use in relation to the registered goods

Article 58(1)(a) EUTMR and Article 10(3) EUTMDR require that the EUTM proprietor proves genuine use for the contested goods and services for which the European Union trade mark is registered.

The contested EUTM is registered for still wines. The evidence shows that the mark has been used for these goods.

Therefore, the EUTM proprietor has shown use for all the registered goods.

Overall assessment

In order to examine, in a given case, whether use of the earlier mark is genuine, an overall assessment must be made taking account of all the relevant factors in the particular case. That assessment implies a certain interdependence between the factors taken into account. Thus, a low volume of goods marketed under that trade mark may be compensated for by high intensity of use or a certain constancy regarding the time of use of that trade mark or vice versa (08/07/2004, T‑334/01, Hipoviton, EU:T:2004:223, § 36).

Taking into account all the above, and the characteristics of the specific market at issue, the Cancellation Division considers that genuine use of the contested mark has been sufficiently demonstrated for the relevant factors time, place, extent and nature of use for the contested goods in Class 33.

Conclusion

It follows from the above that the EUTM proprietor has proven genuine use for all the contested goods. Consequently, the application for revocation must be rejected as unfounded.

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

Elena NICOLÁS GÓMEZ Martin LENZ Judit NÉMETH

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.