CANCELLATION No 9124 C (INVALIDITY)

Tensor Marketing Limited, Yarm Road Business Park, Darlington, DL1 4XX, United Kingdom (applicant)

a g a i n s t

Medi Direct International Ltd, Unit 24 Wilford Business & Industrial Park Ruddington Ian, Wilford, Nottingham, NG11 7EP, United Kingdom (EUTM proprietor), represented by Trade Mark Direct, 4 The Mews, Bridge Road, Twickenham, London Richmond upon Thames, TW1 1RF, United Kingdom (professional representative).

On 29/11/2018, 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 goods of European Union trade mark No 11 731 619 for the figurative mark:

The application is based on the non-registered trade mark ‘CIRCULATION PRO’ purportedly used in the course of trade in the United Kingdom. The applicant invoked Article 60(1)(c) EUTMR in connection with Article 8(4) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

Observations by the applicant of 17/03/2014

The applicant has been using the unregistered mark ‘CIRCULATION PRO’ in the United Kingdom since 2011 in relation to ‘electrical muscle and tissue stimulating apparatus’ which help improve circulation by sending electrical impulses through the soles of the user’s feet to the lower leg. The goods are therefore identical or highly similar to the EUTM proprietor’s products. It has filed evidence to prove the use of the mark. This evidence will be discussed in detail below.

The marks at issue are almost identical. The small differences in stylisation in the EUTM proprietor’s mark are negligible.

The applicant claims that the evidence filed proves that it has acquired goodwill in its unregistered mark, and that use of the EUTM proprietor’s mark will give rise to misrepresentation and damage will occur.

Observations by the EUTM proprietor of 01/07/2014

The EUTM proprietor’s case mainly rests on its claim that the applicant did not start using its sign in the United Kingdom until 2013, around the time the contested EUTM was applied for, namely on 11/04/2013. More specifically, it states that the applicant only used the mark ‘in connection with a generic, unbranded device, prior to November 2013’. It is only after this date that the applicant appears to have used any branded packaging bearing the earlier mark. It has not provided any evidence of sales of its goods using the mark ‘CIRCULATION PRO’ prior to the date of filing of the EUTM proprietor’s registration.

The EUTM proprietor also claims that the CE certification provided by the applicant shows that the certificate is for a product called ‘Health Expert Electronic Muscle Stimulator, Model AST-300C’. This suggests that the applicant is not placing the goods on the market in its own name. To conclude, the applicant has failed to show that it has acquired any goodwill in the earlier mark.

The EUTM proprietor claims that the applicant’s mark is descriptive in relation to the products at issue. Although it is possible to build up goodwill in a quasi-descriptive mark if there is use shown of it in the trade mark sense, in general, the more descriptive the mark, the more goodwill must be demonstrated, for example in terms of length of use, volume of sales, amount of advertising etc. in order to establish that the mark has acquired a secondary meaning in the mind of the public. Any consumer looking at the marks at issue would be able to distinguish between them and see that they are not related, due to differences in appearance and style.

The EUTM proprietor’s mark and the applicant’s mark have co-existed on the market since at least March 2013. The applicant has not produced any evidence of actual confusion or harm resulting from the EUTM proprietor’s use of the mark. The EUTM proprietor refers to the judgment of the Patents County Court in WS Foster & Son Limited v Brooks Brothers UK Limited at paragraph 56:

‘It is well established that there are cases in which, despite the existence of the elements of the ‘classical trinity’ of goodwill, likelihood of deception and damage, a Claimant will not be able to restrain the use of a confusingly similar mark by a Defendant. One subset of these cases is where the Defendant can justify the use of his mark on the basis of his own goodwill built up independently of the Claimant. In Phones 4U at paragraph 21, Jacob LJ described such a case of ‘honest concurrent use’ as being am example of ‘tolerated deception or a tolerated level of deception’. The Defendant in the present case claims the benefit of such a defence’.

The EUTM proprietor gives a detailed analysis of the evidence filed by the applicant. This will be dealt with below. It also files substantial evidence to prove ‘prior goodwill’ in its own mark, demonstrating the sales and marketing of its branded electro medical instruments in the United Kingdom since March 2013. These documents may be summarised as follows:

• Exhibit 1: Purchase orders dated 11/06/2013 and 08/08/2013 for the purchase of devices by the EUTM proprietor.

• Exhibit 2: emails dated 22/01/2013 and 10/04/2013 showing pre-sales preparation and publicity for the product launch.

• Exhibit 3: Profit report showing gross sales of devices of £80 040.75 and gross profit of £47 003.25 from 27/08/2013-10/06/2014.

• Exhibit 4: Statement showing total sales of branded devices for the period of 01/03/2013-11/06/2014 of £103 738.

• Exhibit 5: Statement showing total sales of branded devices via Tower Health from 27/08/2013-17/03/2014.

• Exhibit 6: email and product brochure sent to customer on 11/09/2013 advertising the owner’s branded devices for sale.

Observations by the applicant of 04/11/014

The applicant filed observations in response to arguments put forward by the EUTM proprietor. It responds to the criticisms made by the EUTM proprietor of the evidence filed by the applicant on 17/03/2014. These issues will be dealt with in detail below.

The applicant’s remaining observations may be summarised as follows:

• It disputes that the EUTM proprietor has obtained ‘prior goodwill’ in the contested mark. The first known use of the contested mark, according to the EUTM proprietor’s own evidence, is April 2013. This is long after the applicant’s first use of its mark, which was ongoing by the time the EUTM proprietor started to use its mark.

• The EUTM proprietor’s claims to sales in the United Kingdom have not been substantiated and many of its customers are not based in the United Kingdom. Sales abroad do not establish any actionable goodwill in United Kingdom passing off proceedings. This is also why the applicant has not encountered the EUTM proprietor’s products on the UK market.

• The differences between the signs are minimal and the EUTM proprietor has failed to establish why ‘CIRCULATION PRO’ is non-distinctive.

NON-REGISTERED MARK OR ANOTHER SIGN USED IN THE COURSE OF TRADE — ARTICLE 60(1)(c) EUTMR IN CONNECTION WITH ARTICLE 8(4) EUTMR

In the present case, the application is based on the non-registered trade mark ‘CIRCULATION PRO’ purportedly used in the course of trade in the United Kingdom.

According to Article 60(1)(c) EUTMR, a European Union trade mark shall be declared invalid on application to the Office 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 will 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 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 60(1)(c) in connection with 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 prior to the filing or the priority date of the contested trade mark;

• pursuant to the law governing it, prior to the filing or the priority date of the contested trade mark, the applicant acquired rights to the sign on which the cancellation 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.

In the event of an application for invalidity based on Article 60(1)(c) EUTMR in conjunction with Article 8(4) EUTMR, the invalidity applicant must show the earlier sign’s use in the course of trade of more than local significance by the filing date of the contested EUTM (or the priority date if relevant). In invalidity proceedings, the applicant also has to prove that the sign was used in the course of trade of more than local significance at another point in time, namely at the time of filing of the invalidity request. This condition stems from the wording of Article 60(1)(c) EUTMR, which states that an EUTM will be declared invalid ‘where there is an earlier right as referred to in Article 8(4) and the conditions set out in that paragraph are fulfilled’ (decisions of 05/10/2004, 606 C, and 03/08/2011, R 1822/2010-2, Baby Bambolina (fig.), § 15).

These conditions are cumulative. Therefore, where a sign does not satisfy one of those conditions, the cancellation 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.

a) 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. Furthermore, such use must indicate that the sign in question is of more than mere local significance.

The object of the condition laid down in Article 8(4) EUTMR relating to use in the course of trade of a sign of more than mere local significance is to limit conflicts between signs by precluding an earlier right that is not sufficiently definite — that is to say, important and significant in the course of trade — from preventing registration of a new European Union trade mark. A right of opposition of that kind must be reserved for signs with a real and actual presence on their relevant market. To be capable of preventing registration of a new sign, the sign relied on in opposition must actually be used in a sufficiently significant manner in the course of trade, and its geographical extent must not be merely local, which implies, where the territory in which that sign is protected may be regarded as other than local, that the sign must be used in a substantial part of that territory. In order to ascertain whether that is the case, account must be taken of the duration and intensity of the use of the sign as a distinctive element for its addressees, namely purchasers and consumers as well as suppliers and competitors. In that regard, the use made of the sign in advertising and commercial correspondence is of particular relevance. In addition, the condition relating to use in the course of trade must be assessed separately for each of the territories in which the right relied on in support of the opposition is protected. Finally, use of the sign in the course of trade must be shown to have occurred before the date of the application for registration of the European Union trade mark (29/03/2011, C‑96/09 P, Bud, EU:C:2011:189, § 157, 159-160, 163, 166).

In the present case, the contested trade mark was filed on 11/04/2013. Therefore, the applicant was required to prove that the signs on which the cancellation is based was used in the course of trade of more than local significance in the United Kingdom prior to that date. The evidence must show that the applicant’s sign has been used in the course of trade for:

Muscle and tissue stimulation apparatus.

On 17/03/2014, the applicant filed the following evidence:

• Witness Statement of Mrs Margaret Simpson, Company Secretary of the applicant’s company, dated 06/03/2014. The witness statement consists of a description of the content of the exhibits listed below. No additional information regarding use of the mark is contained in the witness statement, except for some tables of figures regarding sales volumes and revenue for ‘CIRCULATION PRO’ products from 2011-2013. These tables have not been published in an official publication, for example, an annual report and there are no supporting documents such as invoices of sales to back the figures up.

• Exhibit RP1: Extract from the UK Companies Register displaying information about the applicant’s company, ‘TENSOR MARKETING LIMITED’.

• Exhibit RP2: Advertisements in approximately 15 brochures produced by the applicant dated between early 2011 through to 2013. These brochures were apparently posted to 150 000 consumers in the UK. The brochures contain photographs such as the following:

The photograph displays apparatus designed to stimulate circulation. Although the words ‘CIRCULATION PRO’ cannot be seen on the apparatus itself, the advertisement refers to the unregistered mark. It can be assumed that the goods are offered for sale in the UK since the price appears in pounds sterling.

• Exhibit RP3: Orders placed by the applicant for products marketed under the CIRCULATION PRO trade mark. These documents correspond to about five sets of orders that have been placed by the applicant with third companies for products, some of which apparently bear the ‘CIRCULATION PRO’ mark. These orders were placed between 2011 and 2013. Some of the documents specifically mention ‘CIRCULATION PRO’ foot massager while others refer generically to products such as ‘ELECTRO FLEX’ or ‘foot massager’.

• Exhibit RP4: Copy of correspondence between the applicant and the official UK certification body for medical devices, establishing that the applicant received ‘EC certification’ on 28/01/2013 for a product entitled ‘Health Expert Muscle Stimulator, Model AST-300C’.

• Exhibit RP5: Copy of correspondence between the applicant and supplier for artwork for packaging, etc. featuring CIRCULATION PRO.

• Exhibit RP6: Copy of three advertisements placed in a publication entitled ‘YOURS’. The advertisements are undated. They display photographs of a foot massage device and ‘CIRULATION PRO’ appears in the text.

• Exhibit RP7: Mail order receipts relating to orders placed for ‘CIRCULATION PRO’ products during 2012 and on the basis of the advertisements mentioned in RP6 above.

Has the applicant succeeded in proving prior use in the course of trade of more than mere local significance of the unregistered trade mark ‘CIRCULATION PRO’?

When determining the significance of the use made of a trade sign within the meaning of Article 8(4) EUTMR, firstly, it is necessary to consider the geographical dimension, that is to say the territory in which the sign is used. Secondly, the economic dimension of the sign’s significance must be considered, which is assessed in view of the length of time the sign has been used and the degree to which it has been used, of the group of addressees among whom 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 (judgment of 24/03/2009, joined cases T‑318/06 to T‑321/06, ‘GENERAL OPTICA’ and judgment of 30/09/2010, T‑534/08, ‘GRANUflex’).

Furthermore, the Court of Justice clarified that the significance of a sign cannot be a function of the mere geographical extent of its protection, since, if that were the case, a sign whose protection is not merely local could, by virtue of that fact alone, prevent registration of a EU trade mark, even though the sign might be used only to a very limited extent in the course of trade. The sign must be used in a sufficiently significant manner in the course of trade and its geographical extent must not be merely local, which implies, where the territory in which that sign is protected may be regarded as other than local, that the sign must be used in a substantial part of that territory (judgment of 29/03/2011, C-96/09 P, Bud, EU:C:2011:189, § 158-159).

However, it is not possible to establish a priori, in an abstract manner, which part of a territory must be used to prove that the use of a sign is of more than mere local significance. Therefore, the assessment of the sign’s significance must be made in concreto, according to the circumstances of each case.

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)

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

The evidence submitted by the applicant contains some flaws, the most serious being an absence of proof of actual sales to consumers in the United Kingdom.

The applicant has filed some examples of advertising, but the adverts appear to have been placed in just one third party publication, while the other brochures have been produced by the applicant itself. Although the applicant provides some distribution figures for these brochures in the witness statement, there is no evidence of where exactly the brochures were distributed.

Regarding the orders placed by the applicant (exhibit RP3), at the most these documents prove that the applicant commissioned the manufacturing of some foot massaging products, which may or may not have borne the mark ‘CIRCULATION PRO’. However, the order forms do not serve as proof that the applicant actually put the products on the market resulting in sales to customers in the relevant territory. This could have been proved by filing invoices to customers. The mail order receipts filed as Exhibit RP7 appear to correspond to sales resulting from a platform called ‘Bauer Website’. Although it appears that over a period of months in 2012, orders were placed for ‘CIRCULATION PRO’ products via this website, no information is provided regarding who the customers were or where they were located.

The Cancellation Division considers that the evidence filed by the applicant to prove use of the unregistered mark ‘CIRCULATION PRO’ fails both in geographical terms and also as concerns the economic impact of the sign. Although there is some advertising of the goods, there is no concrete information regarding the dissemination of the advertising. None of the evidence filed satisfies the requirement to demonstrate the intensity or length of use of the sign.

Invoices are normally the cornerstone of evidence of use, since they prove actual sales made under a trade mark. In this instance, there are no invoices to prove that any sales at all were made to customers in the relevant territory. Although the applicant claims some sales via a website, there is no evidence of where these customers are located. There appears, based on slight evidence of manufacture and some advertising brochures, to be commercial activity under the earlier unregistered mark and perhaps even a presence on the market, but not one which casts a sufficiently large geographical shadow to justify the removal of a EUTM registration for a near identical mark.

Considering all the above, the Cancellation Division concludes that the evidence submitted by the applicant is insufficient to prove that the use of the earlier sign in the course of trade was of more than local significance in connection with the business activities on which the cancellation was based in the relevant territory before the date of the filing of the contested trade mark and at the time of the filing of the cancellation request.

As one of the necessary requirements of Article 8(4) EUTMR is not met, the cancellation must be rejected as unfounded insofar as it is based on the UK unregistered trade mark ‘CIRCULATION PRO’.

COSTS

According to Article 109(1) EUTMR, the losing party in cancellation proceedings must bear the fees and costs incurred by the other party.

Since the applicant is the losing party, it must bear the costs incurred by the EUTM proprietor in the course of these proceedings.

According to Article 109(7) EUTMR and Article 18(1)(c)(ii) EUTMIR, the costs to be paid to the EUTM proprietor are the representation costs, which are to be fixed on the basis of the maximum rate set therein.

The Cancellation Division

Catherine MEDINA

Lucinda CARNEY

Rhys MORGAN

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.