CANCELLATION No 14 840 C (REVOCATION)

Marriott Worldwide Corporation, 10400 Fernwood Road, 20817 Bethesda, Maryland, United States of America (applicant), represented by D Young & Co LLP, 120 Holborn, EC1N 2DY London, United Kingdom (professional representative)

a g a i n s t

Johann Graf, Wiener Strasse 158, 2352 Gumpoldskirchen, Austria (EUTM proprietor), represented by Salomonowitz Horak Rechtsanwälte, Tuchlauben 18/9, 1010 Vienna, Austria (professional representative).

On 15/05/2019, the Cancellation Division takes the following

DECISION

1. The application for revocation is upheld.

2. The EUTM proprietor’s rights in respect of European Union trade mark No 10 511 723 are revoked in their entirety as from 20/04/2017.

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

REASONS

On 20/04/2017, the applicant filed a request for revocation of European Union trade mark registration No 10 511 723 (figurative mark) (the EUTM). The request was initially directed against all the goods and services covered by the EUTM, namely those in Classes 14, 32, 33 and 43. Following the partial invalidation of the EUTM for all the registered services in Class 43 (pursuant to the final decision of the Board of Appeal taken on 22/10/2018 in the appeal proceedings No R 1757/2018-2 concerning the cancellation proceedings No 9 431 C), the request for revocation was maintained against all the remaining goods covered by the EUTM, namely:

Class 14: Precious metals and their alloys and goods in precious metals or coated therewith, not included in other classes; Jewellery, precious stones; Horological and chronometric instruments.

Class 32: Beers; Mineral and aerated waters and other non-alcoholic drinks; Fruit drinks and fruit juices; Syrups and other preparations for making beverages.

Class 33: Alcoholic beverages (except beers).

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

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant argues that it has searched the relevant market and found no evidence to suggest that the contested EUTM has been genuinely used. Consequently, the EUTM should be revoked as from the date of the application for revocation (20/04/2017).

The EUTM proprietor’s arguments of 23/10/2017 revolve around two main claims, firstly that he made preparations for the commencement of use and that in fact genuine use already started and secondly that there are proper reasons for non-use (as it will be detailed further down in the following section of the decision). The proprietor also submitted some evidence (which will be listed and analysed further below in the decision).

In its observations in reply of 26/01/2018, the applicant challenges the evidence filed by the EUTM proprietor, which it deems ‘clearly insufficient to demonstrate genuine use’ of the mark. It also claims that there are no proper reasons for non-use and consequently the EUTM should be revoked.

In his final reply of 26/04/2018, the EUTM proprietor contests the applicant’s claims and submits further explanations as to the documents and observations previously filed.

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 Rule 40(5) Commission Regulation (EC) No 2868/95 in conjunction with Rule 22(3) Commission Regulation (EC) No 2868/95 (in the version in force at the time of filing the application for revocation), 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 18/04/2012. The revocation request was filed on 20/04/2017. 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 20/04/2012 to 19/04/2017 inclusive, for the contested goods listed in the section ‘Reasons’ above.

The EUTM proprietor claimed on the one hand that he made preparations for the commencement of use and that such preparations even amount to genuine use and on the other hand, that there are proper reasons for non-use.

The Cancellation Division will now proceed to analyse each of these claims.

1. Preparations for the commencement of use/Genuine use

Use of the mark must relate to goods or services already marketed or about to be marketed and for which preparations by the undertaking to secure customers are under way. Mere preparation to use the mark — such as the printing of labels, producing of containers, etc. — is internal use and, therefore, not use in the course of trade for the present purposes (11/03/2003, C-40/01, Minimax, EU:C:2003:145, § 37).

Arguments of the parties

The EUTM proprietor claims that:

(i) Mr Johann Graf is the founder and majority shareholder of the Novomatic Group of Companies (hereinafter ‘Novomatic’), ‘Europe’s undisputed no. 1 in high-tech gaming technology with a turnover of around EUR 2.3 billion in 2016 and one of the largest high-tech gaming technology companies worldwide’. The proprietor agreed, ahead of further license agreements, to prepare the commencement of use of the EUTM by Novomatic.

(ii) The contested EUTM has been used ‘to check customer responses’ at the ICE Totally Gaming Trade Show, which took place in London between 07 and 09/02/2017 (hereinafter the ‘ICE Show’) which had ‘more than 30.000 visitors’. It is further explained that the ICE Show is the world’s largest event covering betting, bingo, casino, lottery, mobile, online and social gaming as well as sports betting and street game. Novomatic has the largest and most prominent stand of the trade fair and the contested EUTM has been displayed prominently by that stand (floorplans and a picture of a display board showing the EUTM were inserted in the proprietor’s submissions of 23/10/2017). Customers were also served food and drinks in connection to the contested mark. In addition, the proprietor mentions that ‘as a mere preparation, trade mark use has naturally been limited to obtaining customer response (which was very good) and customer understanding of the trade mark (as a new animal)’.

(iii) 4 000 pins (with needle) and 1 000 pins (magnetic) have been ordered ‘for the identical purpose of testing customer response to the trade mark’ (a picture of the pins was inserted in the proprietor’s submissions of 23/10/2017 and a photograph, allegedly taken on 01/03/2018, was included in the proprietor’s last observations of 26/04/2018 with a view ‘to dispel’ the applicant’s concerns).

(iv) ‘The preparations for the commencement of use even amount to genuine use in particular in Class 14 (precious metals, jewellery), 32/33 (beverages) and 43 (services for providing food and drink)’ since ‘clearly a trade fair with 30 000 + visitors of 150+ countries, the world’s most important event in the whole gaming industry and Novomatic’s prominent (and largest) stand have to be taken into consideration’.

In support of his claims, the proprietor filed on 23/10/2017 the following evidence:

• Copy of an invoice issued on 02/02/2017 by the company premium team Handel & Marketing c.U. (based in Germany) and addressed to Novomatic Gaming Industries GmbH in relation to 5 000 ‘Taurophon’ pins.

• Affidavit given on 23/10/2016 by Ms Sonja Kadlec, responsible for marketing at Novomatic (hereinafter the ‘Affidavit’). In essence, the content of this document is identical to the proprietor’s submissions of the same date as regards Novomatic, the preparations for the commencement of use at the ICE Show and the pins (see under (i) to (iii) above).

The applicant heavily disputes the documents filed by the proprietor and puts forward that such evidence is ‘entirely inadequate and does not support genuine use (or preparations for such use)’ for any of the registered goods and services. Detailed arguments are submitted in this regard whose content can be summarised as follows: (i) the EUTM does not cover badges or pins and, in any case, there is no information whether the pins were distributed and if so, when and to whom; (ii) the Affidavit has, at most, a very low probative value and there is no independent evidence to support its contents, other than an undated photograph; (iii) no evidence, explanation or detail has been provided by the proprietor as to what steps have been taken to check the responses of the consumer, what the process entailed more generally and how a display board featuring a decorative mark would provoke any response from consumers in relation to any goods and services and (iv) the applicant conducted an extensive review of numerous images and 360 degree views of Novomatic’s stand at the ICE Show and could not identify any evidence of use of the EUTM. Two photographs of Novomatic’s stand were identified which were taken from a very similar position to that of the photograph submitted by the proprietor, but which show a board bearing an image of an ice hockey player in the same location at which the board displaying the contested EUTM was allegedly placed during the ICE Show. The above raises the strong inference that the photograph showing the contested EUTM ‘has been doctored or digitally manipulated’ to make it appear that the mark was displayed at the ICE Show. In support of the above, the applicant submitted on 26/01/2018 screenshots from the website www.evolvecsl.com (the company which designed and built Novomatic’s stand at the ICE Show), screenshot from Twitter and a comparison of the three photographs (Annexes 1 to 3).

Findings of the Cancellation Division

The question to be answered is whether the evidence filed by the EUTM proprietor is sufficient for demonstrating convincing preparatory works for the use of the EUTM in relation to the registered goods in Classes 14, 32 and 33.

As shown above, the proprietor relies on the Affidavit, one photograph of a board displaying the EUTM at the ICE Show (hereinafter the ‘Photograph’), one invoice for 5 000 pins, a graphic with the technical dimensions of the pins and one photograph of a pin bearing the EUTM.

With particular reference to the probative value of the Affidavit, it is well-established in the case-law that a declaration, even if sworn or affirmed in accordance with the law under which it is rendered must be corroborated by independent evidence. This is because the perceptions of a party involved in a dispute may be more or less affected by its personal interests in the matter.

The probative value of a statement depends first and foremost on the credibility of the account it contains. It is then necessary to take account, in particular, of the person from whom the document originates, the circumstances in which it came into being, the person to whom it was addressed and whether, on the face of it, the document appears sound and reliable (judgment of 07/06/2005, T-303/03, Salvita, EU:T:2005:200, § 42).

Furthermore, it follows from the case-law that, where a statement has been established for the purposes of Article 97(1)(f) EUTMR by persons within the sphere of the proprietor of the mark, probative value can be attributed to that statement only if it is supported by other evidence (see, to that effect, judgments of 13/05/2009, T‑183/08, Jello Schuhpark II, EU:T:2009:156, § 39, of 13/06/2012, T‑312/11, Ceratix, EU:T:2012:296, § 30 and § 50 and of 12/03/2014, T‑348/12, Sport TV Internacional, EU:T:2014:116, § 33).

In other words, the final outcome depends on the overall assessment of the evidence in the particular case. The probative value of such statements depends on whether or not they are supported by other types of evidence (labels, packaging etc.) or evidence originating from independent sources.

In the case at hand and after having carefully analysed the remaining documents submitted by the EUTM proprietor (i.e. the Photograph, the invoice and the images of pins), the Cancellation Division finds the evidence clearly insufficient for allowing a conclusion that the proprietor undertook serious and effective preparations to secure customers in relation to any of the registered goods in Classes 14, 32 and 33.

As regards the Photograph, it is noted from the outset that the applicant went to great lengths to dispute the veracity of such document. The Cancellation Division will however proceed in its further assessment on the assumption that the Photograph is genuine, since this is the best light in which the proprietor’s case can be considered and which will not prejudice in any way the applicant’s interests, as it will be explained herein below.

Advertising in advance of the actual marketing of goods and services — if it is with a view to establishing a market for the goods or services — will generally be considered to constitute genuine use. It follows from case-law that a body of evidence consisting of advertising material is capable of establishing use of a mark to identify the source of the goods/services covered by that mark and, therefore, to guarantee the identity of the origin of the goods/services for which that mark is registered, which is the essential function of a mark. More specifically, the Court has held that the use of a reproduction of the contested mark in advertising carried out by means of the specialist press, on banners and in the context of a trade fair may be capable of demonstrating that it has been used outwardly (15/07/2015, T-215/13, LAMBADA (A), EU:T:2015:518, §40 and 41).

In the present case, however, even if it were to be presumed that a board showing the contested EUTM had been displayed by Novomatic’s stand during the ICE Show, there is no evidence to link the sign with any of the registered goods in Classes 14, 32 and 33. As the applicant correctly pointed out, the proprietor failed to produce any further documents to support his allegations that customers were served food and drinks under the contested EUTM. Furthermore, the Cancellation Division also endorses the applicant’s claims that (other than the mere statement that ‘customer response was very good’) the proprietor also failed to produce further explanations and supporting evidence as to the steps and measures undertaken to test consumers’ response or what that process actually entailed.

Moreover, it cannot be determined with the required degree of certainty which was the actual number of visitors to Novomatic’s stand or for how long has the board featuring the EUTM been displayed. The proprietor merely alleges that ‘the number of customers who have visited the Novomatic stand is an unreasonable task due to the limited technical means, which would most likely cause a breach of data protection regulations’, but given the size and position of the stand, ‘it can safely be assumed that each visitor (that is at least 33.500 persons) visited the stand’. Yet, in accordance with the case-law, genuine use of a mark cannot be proved by means of probabilities or suppositions but must be demonstrated by solid and objective evidence which demonstrate actual and sufficient use of the trade mark on the market concerned (15/12/2016, T-391/15, ALDIANO / ALDI, EU:T:2016:741, § 45 and the case-law cited therein).

Turning to the remaining evidence (the invoice, the graphic and the photograph of the pins), the proprietor’s statement that the pins, in combination with the Photograph and the Affidavit, contribute at least with a proportion to the proof that genuine use has been started does not find any support in the evidence submitted. Admittedly, the EUTM is registered for, inter alia, jewellery in Class 14, a broad category encompassing, among others, pins. However, what the invoice shows is that the proprietor bought 5 000 pins and there is not the slightest indication in the documents on file that such goods have actually been put on the market under the contested EUTM or have been used as promotional materials with the purpose of marketing any of the registered goods, in the context of the alleged preparatory activities for use during the ICE Show.

Finally, it has to be noted that the evidence is dated rather closely to the moment when the application for revocation was filed and more specifically less than three months before the filing of the request. It is true that there is no evidence on file that the proprietor was aware of the application for revocation, since the applicant did not produce any documents showing that it made the EUTM proprietor aware of its intention to file the revocation request; nevertheless, and in the context of the evidence as a whole (which, as mentioned, is dated less than three months before the application for revocation and moreover it is very scarce), this also raises some questions as to the proprietor’s real intentions, which the latter was not able to dispel.

Against this background, it is concluded that the very little evidence submitted is clearly not sufficient to show that the activities undertaken by the EUTM proprietor can qualify as serious and effective preparations to secure customers for any of the registered goods in Classes 14, 32 and 33. Therefore and in the absence of other solid and objective evidence, the information that can be deduced from the Affidavit, the Photograph, the invoice and the images of pins cannot justify the conclusion that there is genuine use of the contested EUTM.

2. Proper reasons for non-use

According to Article 58(1)(a) EUTMR, the EUTM proprietor may alternatively prove that there are justifiable reasons for non-use of his mark. These reasons cover, as mentioned in the second sentence of Article 19(1) of the TRIPS agreement, circumstances arising independently of the will of the owner of the trade mark that constitute an obstacle to the use of the trade mark.

As an exception to the obligation of use, the concept of proper reasons for non-use is to be interpreted rather narrowly.

‘Bureaucratic obstacles’ as such, which arise independently of the will of the trade mark proprietor, are not sufficient, unless they have a direct relationship with the mark, so much so that the use of the trade mark depends on successful completion of the administrative action concerned. However, the criterion of a direct relationship does not necessarily imply that use of the trade mark is impossible; it might suffice that use is unreasonable. It must be assessed on a case-by-case basis whether a change in the undertaking’s strategy to circumvent the obstacle under consideration would make use of the mark unreasonable. Thus, for example, the proprietor of a mark cannot reasonably be required to change its corporate strategy and sell its goods in its competitors’ sales outlets (14/06/2007, C-246/05, Le Chef de Cuisine, EU:C:2007:340, § 52).

Arguments of the parties

In summary, the EUTM proprietor submits that:

(i) The applicant has lodged a wide range of proceedings against the contested EUTM (respectively parallel registrations in other jurisdictions) and albeit the proprietor has reasons to believe that the EUTM ‘is validly registered and registration and/or use will not infringe on the applicant’s rights’, the outcome and duration of these proceedings are neither foreseeable nor solely dependent on the will of the trade mark owner. In support of his claims, the proprietor quotes a number of opposition or cancellation actions before intellectual property offices within and outside the EU as well as before EUIPO (including proceedings initiated by the proprietor against the applicant).

(ii) The applicant did not file an opposition against the registration of the contested EUTM, but has initiated a cancellation action about two years after the registration. Therefore, ‘it is the applicant’s responsibility that there is not a final decision within the grace period and that the proprietor cannot reasonably be required to use the trade mark’.

(iii) The present revocation for non-use has been filed immediately after the first five years after the registration and not in a consecutive period of five years. In the proprietor’s opinion, the five consecutive years immediately following registration (‘the first grace period’) are intended to allow trade mark applicants to test the mark, to commence preparations for use or to determine and eliminate risk of collision, whereas ‘other provisions can only apply after expiry of the five-year grace period and a five year non-use-period independent of the first grace period’. In support of these arguments he mentions the number of a decision taken in Germany (not submitted as such) and further relies on the judgment of 14/06/2007, C-246/05, Le Chef de Cuisine,
EU:C:2007:340 and the criteria set by the ECJ therein as regards the existence of a reason for non-use.

In summary, the applicant argues that the circumstances invoked by the EUTM proprietor cannot justify why the latter did not make genuine use of the mark and refers to EUIPO’s Guidelines on Proof of Use. It provides explanations as to why the proceedings claimed by the proprietor cannot be deemed as proper reasons for non-use and further refers to the findings of the General Court in case T‑250/13, SMART WATER, EU:T:2015:160 which would apply to the current proceedings as well (copy of the judgement submitted as Annex 4).

Findings of the Cancellation Division

In essence, the proprietor cites as justification for non-use the existence of a number of proceedings initiated by the applicant against the contested EUTM (or against parallel registrations in other jurisdictions), including an invalidity action before EUIPO. He further relies on the criteria set by the ECJ in its judgement of 14/06/2007 in case C-246/05, Le Chef de Cuisine as regards proper reasons for non-use namely that obstacles having a direct relationship with a trade mark which make its use impossible or unreasonable and which are independent of the will of the proprietor of that mark constitute ‘proper reasons for non-use’ of the mark.

It is noted from the outset that the proceedings initiated by the proprietor himself against the applicant’s EU and UK trade marks cannot justify the lack of use of the contested EUTM, since, as the applicant rightly observed, they are not ‘independent of the will of the proprietor but are instead entirely the result of it’.

The same conclusion must be reached as regards the other proceedings relied upon by the proprietor, which cannot be deemed as a proper justification for non-use either.

Any use of a trade mark is subject to the possibility that it may infringe third-party rights. The obligation to refrain from trade mark infringements applies to anyone who uses an identifying mark in business communications, irrespective of whether it itself has requested or been granted trade mark protection for this identifying mark. Anyone who refrains from such infringements is not acting on the basis of ‘proper reasons’, but in keeping with the legal order. Therefore, refraining from a use that would otherwise have been abusive is also not a proper reason. In such a situation, use is also not ‘unreasonable’. Anyone who, as a trade mark proprietor, is threatened with a suit for cancellation in the event that use is taken up is not exposed to any risk other than the general life risk of being taken to court wrongly from its point of view. In such a situation, the trade mark proprietor must assess the prospects of the action that may be brought against it being successful, and can either back down (forego taking up use) or defend itself against the action. In the latter case, it must accept the decision of the independent courts, where applicable in summary proceedings and also negative declaratory actions. It cannot argue that it must be protected against an appeal of the judicial decision at the second instance or in the principal proceedings by uncertainty being recognised as a proper reason for non-use until the judgment becomes final. Rather, the question of what is to happen in the period between the suit being filed (or the application for a provisional order) and the final binding decision, is again left to the courts, in that these decide on the provisional enforceability of decisions that are not yet binding. The defendant is not entitled to ignore these decisions and behave as if there are no courts (see decision of the Boards of Appeal of 09/03/2010, R 764/2009-4, HUGO BOSS/BOSS, § 22 and § 28).

Therefore, the fact that the applicant filed an application for a declaration of invalidity against the contested EUTM (or that it initiated other proceedings) does not exempt the proprietor from the obligation to use the mark in the course of trade. The Cancellation Division further endorses the applicant’s arguments and reference to the findings of the General Court in case T-250/13 in that it is up to the proprietor of the mark to conduct an adequate risk assessment of his chances to prevail in the litigation proceedings and to draw the appropriate conclusions from this evaluation as to whether or not to continue with the use of the mark.

Finally, the proprietor’s arguments that he would have been hindered from using the mark since the present revocation action has been filed ‘immediately after the first five years after the registration’ and not after expiry of the five-year grace period and a five year non-use-period independent of the first grace period’ (see under point (iii) above) cannot succeed either.

The relevant date is clearly established by Article 62(1) EUTMR, which refers to the date when the application for revocation was filed. In other words, the EUTM is subject to revocation only if it has been registered for more than five years on that date. If this condition is fulfilled, the EUTM must have been genuinely used within the five years preceding that date, which means that the five - year period is always counted backwards from the relevant date, in the present case from 20/04/2017. To reach a different conclusion and deem, as the proprietor contends, that the EUTM becomes subject to a revocation for non-use only after the expiry of a five year non-use period independent from the first five years after registration would be contrary to the provisions of the EUTMR.

Taking into account all of the above, the Cancellation Division considers that the proprietor’s arguments and evidence are not sufficient to constitute proper reasons for non-use of the contested EUTM.

Final Conclusion

It follows from the above that the EUTM proprietor has not proven that he undertook serious and effective preparations for the commencement of use of the contested EUTM for any of the goods in Classes 14, 32 and 33. Furthermore, the proprietor did not succeed in demonstrating that he had valid reasons for not using the contested EUTM either. As a result, the application for revocation is wholly successful and the contested EUTM must be revoked in its entirety.

According to Article 62(1) EUTMR, the revocation will take effect from the date of the application for revocation, that is, as of 20/04/2017.

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

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

Liliya YORDANOVA

Oana-Alina STURZA

Richard BIANCHI

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.