CANCELLATION No 10 726 C (INVALIDITY)

Showroom Sp. z o.o., Włoska 10, 00-777 Warszawa, Poland (applicant), represented by Kancelaria Prawno-patentowa Anna Belz, Północna 6/24, 20-064 Lublin, Poland (professional representative).

a g a i n s t

E-Gab, Naamloze Vennootschap, Assesteenweg 96, 1740 Ternat, Belgium (EUTM proprietor), represented by Gevers, Brussels Airport Business Park, Holidaystraat, 5, 1831 Diegem, Belgium (professional representative).

On 04/08/2021, 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 all the services of European Union trade mark No 10 543 304 , namely services in Class 35. The application is based on a Polish non-registered trade mark ‘SHOWROOM’. The applicant invoked Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR and Article 52(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant claims that its legal predecessor, Xceed Michal Juda, acquired the domains shwrm.com and shwrm.pl on 03/08/2011 and the following day ordered a graphic design for a logo. The logo was created and Xceed Michal Juda acquired copyright to it through a contract with the designer. At the end of August 2011 the logo was publicly available on Facebook with information on business activity in the field of fashion carried out under the logo / trade mark. In September 2011 the website where the mark was displayed launched intensive activity and in November the project was presented in a competition. On 10/08/2012 the applicant filed an application for an EU trade mark consisting of the above logo. The application was opposed by the EUTM proprietor and the opposition is based on the contested trade mark, which was filed on 05/01/2012. The applicant contends that the EUTM proprietor, when filing the contested mark, must have known, as a major retailer in the area of fashion, that another entity had been using the mark, in particular since the activity of the applicant is based on the internet. It argues that the EUTM proprietor initially used the ‘showroom 86’ mark in a form different from the one registered but that it registered the mark in the ‘two word’ form, thus imitating the applicant’s mark. It claims that, although the word ‘showroom’ is used often in commerce, the graphic design containing the two words one above the other is unique. In the applicant’s opinion, the dishonest intention of the EUTM proprietor can be inferred from the fact that it did not, during the above mentioned opposition proceedings, agree to a settlement proposed by the applicant, which shows that the EUTM proprietor merely intends to block the applicant from using the mark. As regards Article 8(4) EUTMR, the applicant makes references to Polish law and claims that the mark was used, before the filing of the contested mark, with more than a mere local significance.

Upon a letter from the Office requesting a clarification regarding the earlier rights on which the application is based, the applicant invokes Article 53(2)(c) EUTMR as ‘additional basis of application’ and makes references to the Polish Act on Copyright and Related Rights and Act on Combating Unfair Competition.

The EUTM proprietor rebuts the applicant’s arguments, stating that the applicant started to use the mark only a few months before the filing of the contested mark and only on the Polish market. The EUTM proprietor, being a Belgium entity with no knowledge of the Polish language, did not browse internet sites in Polish before filing for the contested mark and thus, did not know about the applicant’s website. Moreover, it argues that the applicant failed to show that based on its use of the non-registered mark, it is entitled, according to the Polish law, to prohibit the use of the EUTM proprietor’s mark.

The applicant reiterates its previous arguments, it emphasizes the similarity of the signs and it provides further evidence relating to the Polish law of copyright.

Preliminary remark

The applicant filed the invalidity request on 16/04/2015, indicating in the application form that it is based on Article 52(1)(b) EUTMR and Article 53(1) EUTMR in conjunction with Article 8 EUTMR. In the observations filed together with the application form, which form an integral part of the application as a whole, the applicant explains arguments in support of the application. These arguments relate to the bad faith of the EUTM proprietor and the earlier non-registered mark used in Poland. The acquisition of the copyright to the logo used as a non-registered trade mark is merely mentioned in the explanations of the factual background. There is no indication that the applicant also intended to base the application on Article 53(2) EUTMR, a copyright. Indeed, in the explanation letter of 26/06/2015 it lists Article 53(2)(c) EUTMR as ‘additional basis of the application’. Therefore, the inclusion of this Article within the scope of the application grounds, more than two months after filing of the application, is clearly broadening the scope of the invalidity request.

The Cancellation Division is not entitled to allow a broadening of the scope of the cancellation request. Once the cancellation request is filed, the earlier rights on which it is based and the goods and services against which it is directed cannot be extended. The same considerations apply as in opposition proceedings. Even less can such an extension be allowable in view of the fact that the pendency of cancellation proceedings prevents parallel proceedings before EUTM Courts and they result in decisions with res iudicata effect, Article 100(2) and Article 56(3) EUTMR (see decision of Fourth Board of Appeal R 1517/2007-4 of 21/12/2009, paragraph 20).

Consequently, the Cancellation Division considers that the application for a declaration of invalidity is based only on Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR (non-registered mark used in Poland) and Article 52(1)(b) EUTMR (bad faith of the EUTM proprietor at the time of filing of the contested mark).

NON‑REGISTERED MARK OR ANOTHER SIGN USED IN THE COURSE OF TRADE (ARTICLE 8(4) EUTMR)

Pursuant to Article 53(1)(c) EUTMR a European Union trade mark shall, on request to the Office, be declared invalid where there is an earlier right as referred to in Article 8(4) EUTMR and the conditions set out in that paragraph are fulfilled.

According to Article 8(4) EUTMR, upon opposition by the proprietor of a non‑registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for shall not be registered where and to the extent that, pursuant to the EU legislation or the law of the Member State governing that sign:

(a) rights to that sign were acquired prior to the date of application for registration of the European Union trade mark, or the date of the priority claimed for the application for registration of the European Union trade mark;

(b) that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.

Therefore, the grounds of refusal of Article 8(4) EUTMR are subject to the following requirements:

• the earlier sign must have been used in the course of trade of more than local significance;

• pursuant to the law governing it, prior to the filing of the contested trade mark, the opponent acquired rights to the sign on which the opposition is based, including the right to prohibit the use of a subsequent trade mark;

• the conditions under which the use of a subsequent trade mark may be prohibited are fulfilled in respect of the contested trade mark.

These conditions are cumulative. Therefore, where a sign does not satisfy one of those conditions, the application for declaration of invalidity based on a non‑registered trade mark or other signs used in the course of trade within the meaning of Article 8(4) EUTMR cannot succeed.

1. Prior use in the course of trade of more than mere local significance

The condition requiring use in the course of trade is a fundamental requirement, without which the sign in question cannot enjoy any protection against the registration of a European Union trade mark, irrespective of the requirements to be met under national law in order to acquire exclusive rights. This requirement of Article 8(4) EUTMR is subject to EU law standards and must be assessed accordingly, regardless of the fact that national legislation may not require actual use in the case of some specific earlier rights.

Furthermore, such use must indicate that the sign in question is of more than mere local significance. The rationale of this provision is to restrict the number of conflicts between signs by preventing an earlier sign which is not sufficiently important or significant from challenging either the registration or the validity of a European Union trade mark.

The applicant based the application on a non-registered trade mark ‘SHOWROOM’ used in the course of trade in Poland for the following services in Class 35: online advertising and promotion via a computer network and the internet; retail services in relation to clothing and fashion accessories; clothing accessories, footwear, headgear, swimsuits, underwear, spectacles, jewellery, precious stones, watches, bags and suitcases, belts, retail services in relation to goods being leatherwear namely wallets, purses, belts, handbags key rings, clothing and fashion accessories.

The applicant submitted the following documents to prove use of the earlier sign:

• Printout from Business Activity Central Register and Information record about the company Xceed Michal Juda.

• Notary agreement from 30/05/2012 between Michal Juda and the applicant for the sale of ‘organized part of the enterprise’, specifically the internet business connected with the www.shwrm.pl website.

• Printouts from registry of domain names where the applicant is indicated as the owner of the domain names shwrm.pl and shwrm.com and invoice from 03/08/2011 showing the acquisition of the two domain names shwrm.pl and shwrm.com by Xceed Michal Juda.

• The contract between Xceed Michal Juda and Aleksandra Niepsuj for creation of the logo for fashion online platform ‘Showroom’ dated 04/08/2011 and respective email correspondence containing three options of the design of the logo.

• An email from Karol Karpinski (Facebook administrator) confirming that Fanpage Showroom was created on 26/08/2011 (initial profile picture included), most recent profile picture placed on 07/10/2013.

• Printout of the posts from 30/08/2011, 13/09/2011 and 06/12/2011.

• Printouts with contents of the shwrm websites from the internet archive services – ‘showroom’ is described as ‘facebook’s application for independent marks operating in the fashion field, and for designers and artists as well. It makes the presentation and sale of products possible on the individual fun page’.

• Printouts of the results of Google search for the word ‘showroom’.

• Printouts with information about 270 internet orders between 15/09/2011 and 02/01/2012 through Showroom internet service, from different towns in Poland.

• Documents regarding the participation of the Showroom project in the contest for internet start-ups of Fund HardGamma.

Rights falling under Article 8(4) EUTMR may only be invoked if their use is of more than mere local significance. The proprietors of rights the use of which is of mere local significance retain their exclusive rights under the applicable national law pursuant to Article 111 EUTMR. The question whether the use of a non-registered sign is of more than mere local significance will be answered by applying a uniform European standard (18/04/2013, T‑506/11 & T‑507/11, Peek & Cloppenburg, EU:T:2013:197, § 19, 47-48).

The General Court held that the significance of a sign used to identify specific business activities must be established in relation to the identifying function of that sign. That consideration means that account must be taken, firstly, of the geographical dimension of the sign’s significance, that is to say of the territory in which it is used to identify its proprietor’s economic activity, as is apparent from a textual interpretation of Article 8(4) EUTMR. Account must be taken, secondly, of the economic dimension of the sign’s significance, which is assessed in view of the length of time for which it has fulfilled its function in the course of trade and the degree to which it has been used, of the group of addressees among which the sign in question has become known as a distinctive element, namely consumers, competitors or even suppliers, or even of the exposure given to the sign, for example, through advertising or on the internet (24/03/2009, T‑318/06 - T‑321/06, General Optica, EU:T:2009:77, § 36-37 and 30/09/2010, T‑534/08, Granuflex, EU:T:2010:417, § 19).

Therefore, the criterion of ‘more than mere local significance’ is more than just a geographical examination. The economic impact of the use of the sign must also be evaluated. Consideration must be given, and the evidence must relate, to these elements:

a) the intensity of use

b) the length of use

c) the spread of the goods

d) the advertising under the sign and the media used for that advertising, including the distribution of the advertising.

The signs invoked under Article 8(4) EUTMR must be in use not only at the time of filing of the contested mark but it must continue to be used at the time of filing of the invalidity request. In this regard, the Cancellation Division refers to the decision of the second Board of Appeal in case R-1822/2010-2, where the Board confirmed that ‘the requirement to show use of the sign, and thus to show its continued existence between the filing date of the contested EUTM and the filing of the invalidity request, is a matter that must be proved. Rule 19(1) and (2)(d) EUTMIR state that, where an opposition is based on Article 8(4) [EUTMR], evidence of, inter alia, its ‘continued existence’ must be adduced within the period given by the Office for presenting or completing facts, evidence or arguments in support of the opposition. Failure to prove the existence, validity and scope of protection of the earlier mark or right within that period will lead to the opposition being rejected as unfounded (Rule 20(1) EUTMIR). In the Board’s opinion, these Rules apply mutatis mutandis to cancellation proceedings’.

This was confirmed by the General Court in judgment of 23/10/2013 in case T-581/11. The Court held that the earlier right relied on in support of an opposition must still exist at the time that notice of opposition is filed. By analogy, the earlier right relied on in support of an application for a declaration of invalidity must still exist at the time that application is made. This presupposes normally that the sign in question must still be in use at the time of the filing of the notice of opposition or of the application for a declaration of invalidity. Indeed, it is precisely the use of the sign in the course of trade which is the basis of the existence of the rights to that sign (23/10/2013, T‑581/11, Baby Bambolina, EU:T:2013:553, § 26 and 27).

In the present case, the evidence does not contain any indication at all as regards use of the non-registered mark at the time of filing of the invalidity request (16/04/2015). The most recent mention in the evidence is that the last profile picture update on the Facebook page was made on 07/10/2013. This is not a particular business activity that could be considered to be a proof of actual use of the mark in the course of trade. The relevant events that could contribute to prove that the mark was used in the course of trade (such as the sales operations or the participation in the Internet start-ups contest) are dated in 2011 (one order was made in January 2012). This gap of four years between the last commercial activities and the filing of the invalidity request is too long for any assumptions to be made that the use continued, in particular when it is evident that the previous use of the mark was not longstanding but only started in the second half of 2011.

Therefore, the applicant failed to show that the invoked non-registered mark was used in the course of trade at the time of filing of the invalidity application.

In any case, the Cancellation Division considers that, although some use of the mark was proven for 2011 (prior to the filing of the contested trade mark on 05/01/2012), such use is not sufficient to be considered of more than mere local significance. The evidence shows that a Facebook page was set up in the end of August 2011 and a website was in operation where the mark was displayed. This served as a platform for fashion designers to show their products and it was possible to also purchase those products via the internet. From September 2011 to January 2012, 270 orders were placed for individual products, a substantial percentage of which was subsequently annulled. The value of the orders varies between a few Euros to the maximum of about EUR 100. In view of the size of the market in the fashion industry, less than 200 inexpensive products sold in Poland (as mentioned above, not all of the 270 orders were in fact executed) in a period of four months before the filing of the contested mark cannot be considered to be use of more than mere local significance in terms of both time and economic significance.

It follows that the applicant failed to prove that the earlier non-registered mark was used in the course of trade with more than mere local significance. Since one of the requirements of Article 8(4) EUTMR is not fulfilled, the application has to be rejected insofar as it is based on Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR.

BAD FAITH – 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, § 60).

Whether a 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’s line of argumentation can be summarized as follows:

The EUTM proprietor should have known, when filing for the contested trade mark, that the applicant had already been using the mark ‘showroom’. The applicant’s business activity is based on the Internet, therefore, had the EUTM proprietor done a simple search, it would have discovered the applicant’s mark. The applicant suggests that the EUTM proprietor imitated the applicant’s mark because it (the EUTM proprietor) initially used the mark ‘showroom 86’ in a way which differed from the filed trade mark application. In the contested trade mark the word ‘showroom’ (which, the applicant admits, is often used in commerce) is displayed in two words ‘show’ and ‘room’, the former above the latter. The applicant claims that this manner of representation of the word is unique and the applicant owns a copyright to it. The dishonest intention of the EUTM proprietor can be inferred, according to the applicant, from the fact that in a parallel dispute between the parties the EUTM proprietor refused to accept the applicant’s proposal for friendly settlement.

In support of its arguments, the applicant filed printouts from the websites of the EUTM proprietor.

First, it is noted that there is no evidence that the EUTM proprietor actually knew about the applicant’s start-up. The parties had no business or other relations together before the filing of the contested mark. The applicant relies on the ‘presumed knowledge’ of the EUTM proprietor. It is true that the European Court of Justice, when defining some of the relevant factors for assessment of bad faith, held that one of those factors is whether the EUTM proprietor knew or ‘must have known’ about the previous use of the sign. With regard to the expression ‘must know’, a presumption of knowledge, by the EUTM proprietor, of the use by a third party of an identical or similar sign may arise, inter alia, from general knowledge in the economic sector concerned of such use, and that knowledge can be inferred, inter alia, from the duration of such use. The more that use is long-standing, the more probable it is that the EUTM proprietor will, when filing the application for registration, have knowledge of it (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 39).

In the present case, the previous use of the mark by the applicant was not longstanding. The applicant’s mark had appeared on the internet roughly four months before the EUTM proprietor filed the application for the contested mark and the websites as well as Facebook profile were in Polish. This can hardly be considered use of such significance as to raise expectations that other (non-Polish) entities, even in the same commercial field, would have known about the mark. The applicant’s arguments that the EUTM proprietor should have carried out a google search before filing for the mark, must be dismissed. There is no inherent obligation for the owners of trade marks to investigate which signs are currently used in each and every Member States prior to filing trade mark applications. The Court referred to general knowledge in the economic sector for cases when the mark had been used for a long time and is known within the business field. Indeed, it formulated the condition as ‘must have known’ instead of ‘could have known’. In the present case, although it is true that the EUTM proprietor could possibly have found out, if it had searched for ‘showroom’ on the internet, that a Polish entity runs a website with this sign. On the other hand, that scenario is rather unlikely, considering that the EUTM proprietor is a Belgium entity and nothing indicates that it would have any interest in the Polish market so as to browse websites in Polish.

In summary, the applicant did not prove that the EUTM proprietor knew about the mark, the use of the applicant’s mark was too insignificant to allow for a presumption that the EUTM proprietor must have known about it, the EUTM proprietor was not obliged to carry out internet investigation to find the applicant’s mark and the applicant did not prove that the EUTM proprietor did do the search and found the mark.

Moreover, as the applicant itself admits, ‘showroom’ is a rather commonly used word in the field of fashion (in fact, according to Collins online dictionary it means ‘a room in which goods are on display’) and its distinctiveness in relation to retail of clothing is, if not non-existent, at least very limited. Therefore, the mere fact that it is possible to find ‘showroom’ being used on the internet in relation to sales of clothing is not particularly significant since it is used by many.

The applicant claims that the EUTM proprietor imitated the applicant’s mark by displaying the word showroom in two words one above another. This observation is of little relevance. There is nothing unusual on splitting a longer word into two parts and displaying the parts above each other, in particular where, such as in the present case, the longer word (‘showroom’) is in fact a conjunction of two existing words (‘show’ and ‘room’) and it is split into those words. The applicant’s mark has a very specific typeface which is not reproduced or copied in the contested mark. Therefore, no conclusions as regards the EUTM proprietor’s bad faith can be made on the basis of the mere fact that the mark is displayed as ‘show’ and ‘room’, above each other, as this is not an uncommon arrangement and it is perfectly conceivable that the EUTM proprietor started to use the word in this manner independently, without any previous knowledge of the applicant’s mark.

Finally, the applicant’s claims as regards the dishonest intention of the EUTM proprietor have to be dismissed as well. It is the right of a trade mark owner to protect its trade mark rights and enter into disputes with other entities whom it considers to be infringing its rights. Without any indications to the contrary, the fact that the EUTM proprietor did not accept the applicant’s proposal of territorial split must be interpreted as legitimate protection of its right from the part of the EUTM proprietor rather than an indication of its dishonest intention.

It follows from the above that the applicant failed to prove that the EUTM proprietor knew or must have known about the applicant’s use of the mark. It also failed to show that the EUTM proprietor had any dishonest intentions when it filed the application for the trade mark. Consequently, bad faith of the EUTM proprietor at the time of filing of the contested mark was not shown and the application for declaration of invalidity must be rejected insofar as it was based on the ground of Article 52(1)(b) EUTMR.

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) 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

María Belén IBARRA DE DIEGO

Michaela SIMANDLOVA

Ewelina SLIWINSKA

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.