DECISION

of the Second Board of Appeal

of 23 December 2016

In Case R 763/2016-2

Third Estate LLC DBA Dope Couture
454 N. Fairfax Ave. Los Angeles California 90036 United States of America	Cancellation Applicant / Appellant

represented by Marks & Clerk LLP, Fletcher House, Heatley Road, The Oxford Science Park, Oxford OX4 4GE, United Kingdom

v

Axcez Trading AB
Box 4021 SE-461 04 Trollhättan Sweden	EUTM Proprietor / Respondent

represented by Zacco Sweden AB, Valhallavägen 117, SE-114 85 Stockholm, Sweden

APPEAL relating to Cancellation Proceedings No 9 621 C (European Union trade mark registration No 11 518 313)

The Second Board of Appeal

composed of T. de las Heras (Chairperson and Rapporteur), C. Negro (Member) and C. Govers (Member)

Registrar: H. Dijkema

gives the following

Decision

Summary of the facts

1. On 21 June 2013, Axcez Trading AB (‘the EUTM proprietor’) registered the mark

DOPE

filed on 25 January 2013, for the following list of goods and services:

Class 9 – Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling, checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling electricity; apparatus for recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs; compact discs, DVDs and other digital recording media; mechanisms for coin-operated apparatus; cash registers, calculating machines, data processing equipment, computers; computer software; fire-extinguishing apparatus; computer programs and software regardless of recording media or dissemination purposes; software recorded on magnetic media or downloadable from the external network; face shield adapted for use with helmets; helmets, helmets for protection against accidents; protective helmets; protective helmets for cyclists; protective helmets for skiers; protective helmets for snowboarders; protective helmets for skateboarders; protective sports helmets; safety helmets; sports bags adapted (shaped) to contain protective helmets; sports helmets; sports bags adapted (shaped) to contain protective helmets; helmets for sports; protective helmets; sunglasses; visors; cases and bags adapted for products according to the above mentioned goods; eyeglass cases; eyeglasses; lenses; goggles for sports; eyeglass cords; spectacle frames; goggles; goggles for skiing; goggles for snowboarding; headphones; gloves for protection against accidents and injuries; cameras;

Class 25 – Clothing, footwear, headgear; shirts, hoodies, jersey shirts; vests; sweaters; braces for clothing; collars (clothing); underwear; clothing; sweat absorbent underwear; clothing apparel; outerwear; jackets; (other than for protection against accidents and injuries); headbands (clothing); clothing of imitations of leather; clothing of leather; t-shirts; camisoles; hats; caps; shirts; socks; beach wear; gloves (clothing); gloves (other than for protection against accidents and injuries); sports headgear (other than helmets); pants; jeans; tights; shorts; swimwear; shorts; footwear for use in snowboarding and skiing; sports and leisure shoes and boots;

Class 28 – Game consoles for use with large screen or monitor, games and playthings; gymnastic and sporting articles not included in other classes; decorations for Christmas trees; skis; snowboard; skateboard; rods; accessories for skis, snowboards, skateboards and rods included in this class, namely, knee and elbow pads, wheels, skateboard trucks, wax and grip tape;

Class 35 – Advertising; business management; business administration; office functions; dealer services and compilation of a variety of goods, on behalf of others (excluding the transport thereof), to enable customers to conveniently view and purchase video game consoles for use with large screen or monitor, computer programs and software regardless of recording media or dissemination purposes, face shield adapted for use with helmets, helmets, helmets for protection against accidents, protective helmets, protective helmets for cyclists, protective helmets for skiers, protective helmets for snowboarders, protective helmets for skateboarders, protective sports helmets, safety helmets, sports bags adapted (shaped) to contain protective helmets, sports helmets, sports bags adapted (shaped) to contain protective helmets, helmets for sports, protective helmets, sunglasses, visors, cases and bags adapted for products according to the above mentioned goods, eyeglass cases, eyeglasses, lenses, goggles for sports, eyeglass cords, spectacle frames, goggles, goggles for skiing, goggles for snowboarding, headphones, gloves for protection against accidents and injuries, cameras, clothing, footwear, headgear, shirts, hoodies, jersey shirts, vests, sweaters, braces for clothing, collars (clothing), underwear, clothing, sweat absorbent underwear, clothing apparel, outerwear, jackets, (other than for protection against accidents and injuries), headbands (clothing), clothing of imitations of leather, clothing of leather, t-shirts, camisoles, hats, caps, shirts, socks, beach wear, gloves (clothing), gloves (other than for protection against accidents and injuries), sports headgear (other than helmets), pants, jeans, tights, shorts, swimwear, shorts, footwear for use in snowboarding and skiing, sports and leisure shoes and boots, games and playthings, gymnastic and sporting articles, decorations for Christmas trees, skis, snowboard, skateboard, rods, accessories for skis, snowboards, skateboards and rods included in this class, namely, knee and elbow pads, wheels, skateboard trucks, wax and grip tape, through retail, wholesale, through mail order catalogues, via electronic media, websites or shopping programs via television; distribution of printed advertising material; distribution of samples;

Class 41 – Education; providing of training; entertainment; sporting and cultural activities; production of films designed to entertain or to grab attention.

2. On 23 July 2014, Third Estate LLC DBA Dope Couture (‘the cancellation applicant’) filed a request for declared the invalidity of of the registered mark in its entirety.

3. The grounds of invalidity were based on Article 52(1)(b) and 53(1)(c) EUTMR, the latter in conjunction with Article 8(4) EUTMR.

4. The earlier non-registered rights on which Article 8(4) EUTMR was invoked are reproduced below:

5. The grounds of the invalidity request can be summarized as follows:

• The cancellation applicant argues that it has used the mark ‘DOPE’ in relation to ‘clothing, footwear and headgear’ since at least 2009 throughout the EU. The EUTM proprietor’s company was founded after the cancellation applicant began trading with the earlier rights. Therefore, the EUTM proprietor must have known about the cancellation applicant’s mark.

• It is clear from the EUTM proprietor’s website that it tried to wholly appropriate the cancellation applicant’s name, trade on the reputation of this name and applied for the mark in bad faith. Moreover, it contends that the contested goods and services are identical or similar to the goods for which the earlier marks were used and that the marks are identical or highly similar and that there is a likelihood of confusion between them. It provides evidence of use of the earlier rights.

6. The cancellation applicant provided the following evidence of use of its earlier rights:

• Declaration of Matte Fields, owner and Chief Executive Officer of the cancellation applicant, in which it is stated that the cancellation applicant is a US based company with its principal business in Los Angeles, California. It has been selling its products (high-end street wear) through an online store and a physical store located in Los Angeles since 2007. The continuous use and promotion of the brand has led to international recognition of the mark which is demonstrated, inter alia, by the fact that a number of celebrities wear DOPE fashion. Dope has developed extensive common law rights in the EU, including Sweden and the United Kingdom. It has spent approximately USD 17 000 in connection with advertising in Europe since November 2012. A table with total revenues from April 2009 to October 2013 was provided for each EU Member State, a list of invoices and one invoice to Sweden dated in 2012 for 72 articles of clothing.

• Photographs allegedly appearing in the press showing different people wearing ‘DOPE’ clothing or headgear; dates and sources are written below the photographs, all dates postdate the date of filing of the contested mark (25 January 2013).

• Several emails from the end of 2012 and beginning of 2013 including links to websites ‒ one of them showing people wearing clothing and headgear with the mark ‘FUCK HUMBLE’, which is apparently a collaboration between Dope Couture and King Chip.

• Invoices dated between 2009 and 2012 and some payment information from 2008 and 2009. One invoice was presented for the following countries: Austria, Belgium, Bulgaria, Denmark, Estonia, Spain, Finland, Greece, Ireland, Luxembourg and Poland; each one for the sale of one or a few (maximum six) items of clothing.

• Two invoices were presented for Germany (63 items sold in total), the United Kingdom (two items), Italy (15 items) and Portugal (74 items).

• Three invoices were submitted for sales of less than a hundred articles in total to The Netherlands and four invoices for sales of approximately 100 articles to clients in France.

• Information of five payments made from the United Kingdom (for 7 articles of clothing), two payments from France (3 articles) and one from Denmark (two articles), all made in 2008.

• Catalogues containing ‘DOPE’ clothing and headgear products – lines of 2008, 2009 and 2012, prices in USD.

• Copies of press articles or blogs: An article from www.mirror.co.uk about Dizzie Rascal who went to a club and smoked marihuana; the person’s photograph accompanies the article where he is wearing a ‘DOPE’ hat (allegedly from 2012); an article from www.xxlmag.com from 2012 containing an interview with Dope Couture Founder – he only speaks about using the mark in the USA; three blogs from 2008 and two from 2012 showing ‘DOPE’ clothing or people wearing ‘DOPE’ clothing.

• Pictures of celebrities (such as Justin Bieber, Lady Gaga, Eminem, etc.) wearing ‘DOPE’ clothing and the number of followers these celebrities have on Twitter.

• The cancellation applicant’s Facebook page and the number of fans from the EU (the most fans are from Germany – 27 346) and the numbers of likes.

• The numbers of visitors of the cancellation applicant’s website (in 2014 and 2015).

• Cancellation applicant’s website using the Internet archive service ‘wayback machine’ showing the mark in relation to clothing from 2008.

• Traffic data from Twitter for the last three months of 2013.

7. The EUTM proprietor’s observations on the invalidity request can be summarized as follows:

• The EUTM proprietor points out that the majority of evidence provided by the cancellation applicant does not show use of the earlier marks before the filing date of the contested mark.

• The EUTM proprietor had no knowledge of the cancellation applicant’s mark at the time of filing for the contested mark and that the cancellation applicant did not provide any proof thereof. The application was filed at the time when already several Swedish and EUTM applications were pending and the application for the contested EUTM was a natural expansion of the protection.

• The documents submitted by the cancellation applicant do not prove use of more than mere local significance of the earlier marks. It also contends that the specific requirements in each Member State are not fulfilled.

8. On 1 March 2016, the Cancellation Division issued its decision No 9 621 (‘the contested decision’) which rejected the declaration of invalidity in its entirety.

9. The contested decision can be summarized as follows:

Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR

• 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.

• 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.

• Already in the declaration of Matte Fields which includes the table with revenues for each of the Member States and the list of invoices, it is clear that no sales whatsoever were made in some of the countries and in others, the sales volumes are negligible. The table shows alleged sales revenues for nearly four years including most of 2013, that is, a period postdating the filing date of the contested mark. For most of the states, the revenues were a few thousand US dollars or even less during the four years. These low sales are not accompanied by any other forms of use such as advertisement. The cancellation applicant claims that it has spent approximately USD 17 000 in connection with advertising in Europe since November 2012; this sum is very small overall, not country-specific and includes a period from November 2012 to July 2014, out of which only three months are before the filing of the contested mark. Therefore, the sum in fact spent for advertising before the filing of the contested mark in each country is not known. In any case, the overall sum spent is essentially negligible.

• For the vast majority of Member States, the sales claimed in the table are very low, there is no specification of how these sales spread in terms of territory of those states and time, the actual invoices submitted do not even reach the sums given in the table and there is no evidence of advertising or any other supporting activities related to the marks.

• The only Member States in which, according to the presented table, the sales of articles under the contested mark reach volumes that are worth further consideration are France, Germany and the United Kingdom. However, it must be noted that both the table and the list of invoices included in the declaration originate from the cancellation applicant (the declaration is made by the cancellation applicant’s owner and CEO) and as such, their probative value is limited. Statements coming from the sphere of the owner of the earlier mark (drawn up by the interested parties themselves or their employees) are generally given less weight than independent evidence. This is because the perception of the party involved in the dispute may be more or less affected by personal interests in the matter.

• The final outcome depends on the overall assessment of the evidence in each individual case. In general, further material is necessary for establishing evidence of use, since such statements have to be considered as having less probative value than physical evidence (labels, packaging, etc.) or evidence originating from independent sources. Therefore, the probative strength of the further material submitted is very important. An assessment should be made of whether the content of the affidavit is sufficiently supported by the further material (or vice versa).

• The documents in support of the declaration are the physical invoices, catalogues and extracts from the Internet. As regards France and Germany, there are a few invoices and payments showing sales of around 100 items in France and 60 in Germany. Other evidence that could relate to those territories is the social media references, specifically the numbers of fans of the cancellation applicant’s Facebook page by country. The data appears to be from 2014, which, considering the fast development of events on Facebook, says essentially nothing about the situation in January 2013. In any case, the number of fans from France and Germany is less than 30 000, which could hardly serve as a proof of a significant use of the mark in a market of such size. There are no other documents showing any use in those territories as all the other evidence is in English and shows no connection to either Germany or France. Consequently, the evidence supporting the declaration is far from corroborating the statements made there.

• As far as the United Kingdom is concerned, the cancellation applicant submitted two invoices from 2012 and five payment documents from 2008 showing sales of nine items in total. The remaining documents are in English but references to UK territory are very scarce. The prices in the catalogues are in US dollars and addresses are in the USA. The Internet extracts may be from British media but do not specifically refer to the presence of the mark on the UK market. The article in the Mirror newspaper is about a person caught smoking marihuana and the only reference to the mark is that this person is wearing a ‘DOPE’ cap on the photograph accompanying the article. The other article is an interview where the cancellation applicant’s founder talks about its business in the USA. The blogs do not contain perceptible references to the UK territory. The fact that some people, mostly American celebrities, connected with music or specifically rap, can be seen on the Internet wearing clothing labelled with the earlier mark, cannot be considered use of the mark in the course of trade in the United Kingdom, no matter how many Twitter followers these people may have. Moreover, these ‘celebrity references’ are mostly undated or postdate the filing date of the contested mark. The social media references either give information about the period after the filing of the contested mark or are inconclusive. For example, the number of fans of the cancellation applicant’s Facebook page in 2014, from what can be seen in the document, was a little over 6 000. This, in a country populated by 64 million people, could even serve as a proof of very low significance of the mark on this market.

• Considering all the above, while there are indications that there was some marginal use of the marks in several Member States of the EU, the evidence is not sufficient to prove that the marks were used in the course of trade of more than a local significance in either of the Member States invoked by the cancellation applicant. As regards France, Germany and the United Kingdom, the information given by the cancellation applicant’s CEO was not corroborated by any further objective or independent evidence and for the rest of the Member States, even the data provided by the cancellation applicant’s CEO shows negligible sales volumes and the low sales volumes are not compensated by long-term or regular use or advertising.

• Since the cancellation applicant failed to prove that its non-registered trade marks were used in the course of trade of more than mere local significance in any of the relevant territories, one of the necessary requirements of Article 8(4) EUTMR is not met and the application for declaration of invalidity must be rejected insofar as it was based on Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR.

Bad faith: Article 52(1)(b) EUTMR.

• The cancellation applicant did not provide any evidence indicating that the EUTM proprietor knew about the cancellation applicant’s marks at the time of filing of the application of the contested mark. It limits itself to a claim that since the EUTM proprietor was founded some three years after the cancellation applicant started to use its mark, it must have known about it. Although it is possible in some specific cases to only assume the knowledge of the EUTM proprietor, the present case is not such a case. The cancellation applicant did not prove that its mark had a reputation at the time of filing to such an extent that it would be possible to assume the EUTM proprietor’s knowledge of it. As seen above, it did not even prove that its marks were used in any of the European countries in the course of trade of more than mere local significance. The EUTM proprietor is based in Sweden and (as illustrated by the documents provided by it) the majority of its business takes place in Sweden. The only document related to Sweden submitted by the cancellation applicant is one invoice for less than a hundred products. To claim that, based on such use of the mark in that territory, it should be supposed that the EUTM proprietor knew about the earlier mark, is far removed from reality. The possibility that the EUTM applicant learned about the mark ‘DOPE’ on the Internet remains a hypothetical possibility and nothing more, in particular when the evidence of the presence of the mark on the Internet before the time of filing of the contested mark is scarce.

• The burden of proof is on the cancellation applicant. However, it failed to show any relationship between the two parties or any other indication that the EUTM proprietor knew about the mark. It also failed to back up its assertion that it is reasonable to assume the EUTM proprietor’s knowledge of the mark with any serious evidence. Since there is no proof that the EUTM proprietor knew about the cancellation applicant’s mark, it cannot be concluded that it filed the application for the contested mark in bad faith.

• As the bad faith of the EUTM proprietor at the time of filing of the contested mark was not shown, the application for declaration of invalidity must be rejected insofar as it was based on the ground of Article 52(1)(b) EUTMR.

10. On 26 April 2016, the cancellation applicant filed a notice of appeal against the contested decision.

11. On 1 July 2016, the cancellation applicant filed its grounds of appeal. It attached three screenshots as additional evidence.

12. On 9 November 2016, the EUTM proprietor filed its observations on the grounds of appeal.

Submissions and arguments of the parties

13. The cancellation applicant requests that the Board annul the contested decision and allow the invalidity request. Its reasons can be summarized as follows:

• The cancellation applicant has already submitted sales figures and a sworn declaration, supplemented with sales data and invoices. There is no requirement to submit every invoice. The evidence is sufficient to show use of more than local significance in at least the United Kingdom, Germany and France.

• The UK invoices show that the mark ‘DOPE’ had acquired goodwill before the EUTM proprietor filed its mark. The Cancellation Division did not assess the economic dimension of the sign’s significance.

• The owner of the cancellation applicant’s company has reviewed the sales figures provided and the internal sales table and believes that the discrepancy between the figures may be because the cancellation applicant switched billing systems during the relevant period and only has access to the records for the new system.

• The Cancellation Division held that the declaration was of limited value. This is refuted on the basis of the celebrity endorsement press photographs, invoices and market evidence.

• The use of the mark in the UK was still sufficient for a finding of goodwill under the UK law of passing off. There was commercial activity in 2009 and 2013 (USD 120 088 in sales).

• There is no requirement under the law of ‘passing off’ for sales to be significant. It is only necessary to show ‘commercial activity’. In 2011 alone, the cancellation applicant carried out 147 transactions.

• Some of the celebrities shown in the evidence are from the United Kingdom.

• The cancellation applicant has been working with a PR firm in the UK. It has been instrumental in product placement. The email evidence relates to this relationship.

• English reputation once established can be supplemented by evidence of a foreign reputation and activities abroad.

• The cancellation applicant clearly has a reputation in the US. This is relevant to the assessment of whether the mark has ‘goodwill’.

• There is clearly a risk that consumers in the UK will be confused and make an economic link between the goods of the EUTM proprietor and the cancellation applicant.

14. The EUTM proprietor requests that the contested decision be upheld. Its arguments can be summarized as follows:

• The cancellation applicant failed to satisfy the requirement under EU law that its non-registered marks were used in the course of trade of more than local significance.

• The cancellation applicant has not established that it possesses rights as a matter of national law. In the grounds of appeal, it only seeks to rely on the law of passing off in the United Kingdom.

• In the absence of supporting documents, there is no way of evaluating the assertions made by Mr Fields in his declaration. The sales figures and sales data are misleading.

• The ‘discrepancy’ referred to is unclear. If it intends to refer to the few invoices and does not reach the sums given in the tables, then the cancellation applicant has failed to discharge the burden of proof by submitting more objective or independent evidence.

• The declaration is not totally devoid of all value, but the few invoices do not support the sales data and the sales figures.

• The endorsements and press photographs are not relevant because they are not dated or are dated after the filing date of the EUTM.

• According to English law, reputation, no matter how extensive, is insufficient to found a claim in passing off. Since ‘goodwill’ is territorial according to the law of each jurisdiction, it is only through use of the sign within the jurisdiction that goodwill can be established. The cancellation applicant’s worldwide reputation outside the UK is insufficient to afford rights in that country.

• On the basis of the exhibited materials, only around USD 46 239 of sales occurred prior to the filing date of the EUTM proprietor’s mark on 25 January 2013. Even if this sum is correct, it is not proven. Only two invoices have been submitted to prove sales in the UK.

• Nothing is known of the nature of the 147 ‘transactions’ relied on in the declaration.

• From the Starbucks judgment, significant goodwill must be shown. Protection of a mark on the basis of trivial trading activities is not sufficient.

• The cancellation applicant has adduced negligible evidence of any activities which target UK consumers. It simply possesses a US website targeted at US customers

• No new evidence has been filed in relation to Germany and France. Therefore, it must be deemed that the cancellation applicant has no rights under law in these Member States to prohibit the EUTM proprietor’s mark.

• The new evidence filed on appeal has little relevance, even if it were taken into account.

Reasons

Preliminary remark on the applicable Regulations

15. The EU trade mark application was filed before the entering into force (on 23 March 2016) of the new European Trade Mark Regulation, which was introduced by Amending Regulation (EU) No 2015/2424. Therefore, the former Community Trade Mark Regulation (CTMR) is applicable to this appeal (04/10/2016, T-549/14, Castello / Castellò (fig.) et al., EU:T:2016:594, § 33), at least for non-strictly procedural provisions (13/06/2013, C-346/12 P, Milram, EU:C:2013:397, § 2). However, for easy reference the Board will refer to ‘EUTMR’ and the new terminology introduced by the amending Regulation, albeit the material changes in the Regulation will not be applied to the case at hand.

16. Since the new European Union Trade Mark Implementing Regulation (EUTMIR) will not enter into force until 1 October 2017, the Board will keep on referring to the current Community Trade Mark Implementing Regulation (EC) No 2868/95 (CTMIR).

17. The appeal complies with Articles 58, 59 and 60 EUTMR and Rule 48(1) CTMIR. Therefore, it is admissible.

Scope of appeal

18. The cancellation applicant sought to invalidate the contested registration on two grounds, on ‘bad faith’ pursuant to Article 52(1)(b) EUTMR and on relative grounds pursuant to Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR.

19. The contested decision rejected the invalidity request on both grounds.

20. On appeal, the cancellation applicant only disputes the rejection of the invalidity request raised under Article 53(1)(c) EUTMR. Therefore, in what follows, the Board will limit itself to examining the appeal with respect to this provision.

Article 53(1)(c) EUTM in conjunction with Article 8(4) EUTMR

21. Article 53 EUTMR, bearing the title ‘Relative grounds for invalidity’ provides the following in relevant part:

‘1. An EU trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings:

(…)

(c) where there is an earlier right as referred to in Article 8(4) and the conditions set out in that paragraph are fulfilled.

(…)’

22. Article 8(4) EUTMR provides in relevant part:

‘4.   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 Union 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 EU trade mark, or the date of the priority claimed for the application for registration of the EU trade mark;

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

(…)’

23. The contested EUTM was filed on 25 January 2013.

24. 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 and T-507/11, Peek & Cloppenburg, EU:T:2013:197, § 19, 47-48).

25. 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).

26. 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 (sales made under the sign); b) the length of use; c) the spread of the goods (location of the customers); and d) the advertising under the sign and the media used for that advertising, including the distribution of the advertising.

27. Although at the outset of proceedings the cancellation applicant invoked Article 8(4) EUTMR, in the context of Article 53(1)(c) EUTMR, in relation to every Member State of the European Union, it nevertheless only appeals against that part of the contested decision which rejected the invalidity request in the United Kingdom.

28. Therefore, the Board will only evaluate the merits of the invalidity request in the context of that territory.

29. On this point, the Cancellation Division found the evidence insufficient for the invalidity request to succeed. The Board concurs with that assessment and refers to the relevant part of the contested decision.

30. Confirmation of the insufficiencies is clear from the following assessment.

31. The broad lines of the invalidity request are given in the sworn declaration (hereafter ‘the Declaration’) of Mr Matte Fields, the CEO of the cancellation applicant’s company (Exhibit B, of 23 July 2014).

32. The Declaration describes the cancellation applicant’s business in the field of ‘high-end street-ware’, located in Los Angeles in the United States of America. Mr Fields refers to two outlets, one being an on-line retail store and the other being a physical shop located in Los Angeles.

33. Mr Fields refers to the ample trade mark protection of the ‘DOPE’ marks in the United States of America, a list of celebrities who have appeared in public wearing ‘DOPE’ fashion goods and claims that ‘customers across the world’ have visited the ‘DOPE’ store. Mr Fields also maintains that ‘DOPE’ has developed ‘extensive common law rights’ in the European Union including the United Kingdom. He also asserts that ‘DOPE’ promotion and marketing began in the European Union around November 2012 and that USD 17 115 was spent in connection with advertising, promotion and protection of the ‘DOPE’ marks in the European Union since November 2013.

34. The claims made in the Declaration are general. Mr Fields refers to the ‘EU’ or the European Union without distinguishing between the Member States. He talks of ‘worldwide sales and distribution’, that the mark has been ‘continuously promoted’ and has created ‘substantial goodwill’ and ‘a number of businesses and traders in the Member States will be familiar with the [cancellation] applicant and its activities’. Clearly, the Declaration serves its purpose in giving an overview of the business. However, the claims must backed up by solid proofs (see by analogy 12/12/2002, T‑39/01, Hiwatt, EU:T:2002:316, §  44-47).

35. The sales figures shown in the table filed with the Declaration indicate that the total revenue for the United Kingdom market from 19 April 2009 to 25 October 2013 is a little over USD 120 000, which amounts to around USD 30 000 a year. Nevertheless, nothing is known about the type of revenue or what goods were concerned, or even if such goods showed the mark ‘DOPE’. The printout of web orders attached to the Declaration say nothing about the nature of the goods or the use of the mark on such goods. Given that the evidence shows that the cancellation applicant’s on-line retail outlet sells collections under diverse trade marks, no solid conclusions can be drawn from the sales’ data. In particular, it is not possible to evaluate the percentage of the sales figures which pertain to articles sold under the ‘DOPE’ mark and what portion is sold under the other diverse ‘collection’ marks or, indeed, what other sources of revenue may be included in the figure.

36. The Board is compelled to agree with the Cancellation Division that the sales are ‘negligible’. In addition, a more generalized doubt must be raised over the accuracy of the figures given in the Declaration. The cancellation applicant itself admits that the ‘discrepancy’ in the figures (it is not clear what ‘discrepancy’ it refers to) may have been caused by a change in the ‘billing system’ during the relevant period.

37. The Board notes, in agreement with the Cancellation Division, that of the few solid pieces of data given in the Declaration, the figure of USD 17 115 spent in connection with ‘advertising, promotion and protection of the DOPE marks in the EU since November 2012’ is remarkably little. The Declaration was drawn up in July 2014; therefore, it follows that roughly USD 8 000 had been spent each year in that period with respect to the entire European Union—which amounts to around USD 300 annually for each Member State. In the Board’s view, the amount is so negligible it can have no material weight in these proceedings. Furthermore, the cancellation applicant, in its grounds of appeal, fails to explain such a dramatic absence of spending on advertising and promotion.

38. The paucity of advertising expenditure is not the only noteworthy weakness in the evidence. During the first-instance proceedings the cancellation applicant submitted a mere two invoices showing the shipment of goods from its company in Los Angeles to destinations in the United Kingdom. It is true that Mr Fields refers to them as ‘selected invoices’; it is also true that he was not obliged to file countless numbers of them. Nevertheless, it is striking, that even after the contested decision found them to be insufficient, the cancellation applicant did not file more material of this nature as additional evidence on appeal. Moreover, not only are the two invoices scant proof of commercial activity, the quantity of goods indicated is hardly impressive. They concern the sale of a mere two shirts to a customer in Hertfordshire and another two shirts to a customer in Suffolk.

39. The catalogue extracts (Annexe B, submitted on 21 April 2015) show clothing bearing the ‘DOPE’ mark, but also clothing bearing diverse other marks or slogans such as ‘Thyves Saint Laurent’, ‘Steal From The Rich’, ‘Flirting With Crime’, ‘Heart Breaker Love Taker’ and so on. The catalogue exhibits do not show that these third-party marks are used together with ‘DOPE’ on the same goods. The catalogue extracts seem aimed at the public in the United States of America (the price in dollars, the American spelling); at the very least, there is no evidence to suggest the catalogue was circulated in the United Kingdom.

40. Although the cancellation applicant also filed ‘transaction details’ in the form of PayPal extracts (Annexe A, submitted on 21 April 2015), they clearly related to customers purchasing articles from the online web-store in 2008. Sales to the United Kingdom are scant, a mere eight articles, with just two being indicated as ‘DOPE’, the others being ‘Jacob Link Black’, ‘Jacob Link White’, ‘Gucci Link Grey’ and ‘Gucci Link Black’.

41. The screenshots of the cancellation applicant’s web-store (see Exhibit A filed on 23 July 2014 and additional ones filed on appeal) and the website’s performance figures (Annexe G submitted on 21 April 2015) do little to indicate commercial activity in the United Kingdom. It is not possible to deduce the existence of actual business activities, and even less of activities which have a certain economic dimension, from the mere presence of an Internet site. The submission of screen shots does not establish the intensity of the alleged commercial use of the rights relied on, which may be shown by, inter alia, a certain number of visits to the site, the emails received via the site or the volume of business generated (19/11/2014, T-344/13, FUNNY BANDS, EU:T:2014:974, § 29). For the same reasons, the face-book exhibits (Annexe F filed on 21 April 2015) have little weight. The fact that it counts only 6 294 ‘fans’ in the United Kingdom, coupled with the fact that the screen shot indicates one date to be November 2014, which is outside the relevant period, says little about the cancellation applicant’s commerce in the United Kingdom.

42. It is true that the cancellation applicant has adduced a great mass of material in the form of photographic exhibits. However, according to the cancellation applicant’s own labelling, all of the material is outside the relevant time-frame (see Exhibit C of 23 July 2014 showing celebrities in ‘press coverage and placement from February 2013 to May 2014’). Although exhibits outside the relevant period can be taken into account and, indeed, may establish continuity in trade that does not mean that evidence dated within the relevant period may be dispensed with.

43. The same flaw attaches to Annex C filed on 21 April 2015. The press exhibit shows a celebrity (Dopey Dizee) with a cap bearing the ‘DOPE’ mark. However, it appeared in the UK newspaper on 27 January 2015 outside the relevant period. In any case, the article is about the celebrity and his habits, not about the trade mark which only gets an incidental mention.

44. The key exhibits, therefore, do not lend support to the claim that the cancellation applicant has exercised any real commercial activity in the United Kingdom. It is clear from the evidence that its trade outside the United States of America is exclusively conducted from its US web-store. Although the exhibits show that it has shipped goods to other parts of the world, including the United Kingdom, evidence that any trade has been conducted in that country under the ‘DOPE’ trade mark is practically zero. In reality, the cancellation applicant is offering a retail service on the Internet where goods bearing the mark ‘DOPE’ along with other trade marks are sold world-wide. The locus of that trade is firmly centred in Los Angeles and turns on the Internet web-store which, although accessible to a global public, cannot be counted as legitimate commercial activity for the territory of the United Kingdom.

45. To sum up, the promotional and advertising expenditure in relation to the ‘DOPE’ marks in the relevant period across the European Union as a whole, and in the United Kingdom in particular, is practically non-existent. A mere two invoices showing that a handful of garments were sold in the relevant period provide little supporting weight to the Declaration. The PayPal transactions do not make reference to what goods were bought. The Internet, media and social media exhibits suggest trade activity, but it is impossible to quantify where, when, to what extent and in relation to which goods. The mere fact that a number of celebrities have been photographed wearing shirts with the ‘DOPE’ logo would carry more weight in the context of solid sales, advertising and figures. But since these are absent, such exhibits have little weight.

46. In fact, it is hard to pint-point any exhibit, or combination of exhibits, or other data, that show any commercial use of the mark ‘DOPE’ in the United Kingdom. Although it is not disputed that goods bearing the ‘DOPE’ mark have been bought online and shipped to individuals in the United Kingdom, this cannot, on its own, be deemed use of the mark in that territory. Commercial activity has been practically zero during the relevant period. The cancellation applicant has not advertised its goods through the press or other media outlets in the United Kingdom. The cancellation applicant has no sales outlets in the United Kingdom. No press releases or articles have been written in the United Kingdom about ‘DOPE’ clothing. No financial transactions have taken place in the United Kingdom; all have been carried out through the on-line store in American dollars. No catalogues featuring the cancellation applicant’s ‘high-end’ accessory items were ever distributed in the United Kingdom. In that country, no third-party sells ‘DOPE’ clothing. The goods are not found in other retailers’ shops. The cancellation applicant has not adduced any opinion-poll, market survey evidence, or market share data, to show that its mark is known in the United Kingdom for clothing or accessories. The little sales data submitted is divorced from exhibits and nothing demonstrates the mark has been actually used.

47. For all the aforesaid reasons, the Board finds that the cancellation applicant has not used its signs in the course of trade of more than ‘mere local significance’ in the United Kingdom.

48. Moreover, Article 8(4) EUTMR requires that that with regards to the Member State in question, namely the United Kingdom, the ‘sign confers on its proprietor the right to prohibit the use of a subsequent trade mark’. In the context of the United Kingdom, the right is the law of ‘passing off’.

49. Article 5(4) of the United Kingdom Trade Marks Act 1994 provides the following:

‘A trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented

(a) by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade…

(…)’

50. To succeed in a ‘passing off’ action, three conditions must be established: 1) goodwill; 2) misrepresentation; 3) damage. The conditions are cumulative; therefore, if one is absent, then the ‘passing off’ action must fail (see The Weekly Law Reports 13 April 1990, Reckitt & Colman Products Ltd v Borden and Others, p. 499, § E-H, filed by the cancellation applicant in the first-instance proceedings).

51. Nevertheless, in these proceedings, because of lack of use of the sign in the United Kingdom, the cancellation applicant has failed to establish ‘goodwill’. To have reputation—even if it were generated by celebrities wearing t-shirts bearing the ‘DOPE’ logo—is not, on its own, enough to establish ‘goodwill’. ‘Goodwill’ is inseparable from the business to which it adds value and exists where the business is carried on. Moreover, the mark must have become distinctive in the relevant territory for the goods in question. However, since genuine use has not been shown for the mark ‘DOPE’ in the United Kingdom, there is no ‘business’ and hence no ‘goodwill’. As a result, the action of ‘passing off’ must fail since one of the necessary conditions for its application is absent.

52. In conclusion, the Board recalls that Article 53(1)(c) EUTMR, in conjunction with Article 8(4) EUTMR, permits the annulment of a EUTM when the opposing non-registered sign fulfils four cumulative conditions: 1) it must be used in commerce in the relevant territory; 2) its use must be more than merely local; 3) the right must have been acquired before the filing date of the contested mark; 4) that the sign confers on its proprietor the right to prohibit the use of a subsequent trade mark. In this instance, no genuine use of the sign, not even merely ‘local’ use, has been shown in the relevant territory. The invalidity request must be rejected if at least one of those conditions is not fulfilled. In fact, for the reasons given above, the cancellation applicant has failed to satisfy any of them.

53. The contested decision is upheld

Costs

54. Pursuant to Article 85(1) EUTMR, the cancellation applicant, as the losing party, must bear the costs of the appeal proceedings. Pursuant to Article 85(6) EUTMR and Rule 94(3) last sentence CTMIR, it is therefore ordered to reimburse the costs of the EUTM proprietor’s professional representation for the appeal proceedings at the level laid down in Rule 94(7)(d) CTMIR (EUR 550). As to the invalidity proceedings, the Cancellation Division ordered the cancellation applicant to bear the EUTM proprietor’s representation costs in the amount of EUR 450.

Order

On those grounds,

THE BOARD

hereby:

1. Dismisses the appeal;

2. Orders the cancellation applicant to bear the total amount of EUR 1 000 in respect of the costs of the EUTM proprietor in the appeal and invalidity proceedings.

Signed T. de las Heras

Signed C. Negro

Signed C. Govers

Registrar: Signed H. Dijkema