CANCELLATION No 18 424 C (INVALIDITY)

Dyno Battery, Inc., 4248, 23rd Avenue, West Seattle Washington 98199, United States of America (applicant), represented by Gevers, Brussels Airport Business Park, Holidaystraat 5, 1831 Diegem, Belgium (professional representative)

a g a i n s t

Battery Supplies NV, Nijverheidslaan +50/56, 8540 Deerlijk, Belgium (EUTM proprietor), represented by Cape IP Law, Pieter van Reysschootlaan 2 bus 0102, 9051 Gent, Belgium (professional representative).

On 23/05/2019, 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 and services of European Union trade mark No 11 865 301 for the figurative mark , namely against all the goods and services in Classes 9 and 35. The application is based on United States trade mark registration No 1 758 134 for the word mark ‘DYNO’ for lead acid batteries in Class 9. The applicant invoked Article 60(1)(b) EUTMR in connection with Article 8(3) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

First round of observations by the applicant

The applicant gives an outline of the relationship between itself and the EUTM proprietor, explaining that it is a battery manufacturer and that in 2001 it started an exclusive distributor relationship with the EUTM proprietor for the sale of batteries in Europe. The products were marketed by the EUTM proprietor under the trade mark ‘DYNO EUROPE’ and the applicant made 96 shipments of products to the EUTM proprietor. The applicant explains that the commercial relationship between the parties ended by the end of 2007.

However, the EUTM proprietor continued to use the trade mark and on 03/06/2013 filed an application for the contested trade mark, namely for the figurative mark ‘Dyno EUROPE’, with the word ‘Dyno’ depicted in the same font as the trade mark ‘DYNO’ used by the applicant. The applicant states that it has never given its consent to file the application for the contested trade mark.

In support of its observations, the applicant filed the following evidence:

• Exhibits 1 and 2: evidence in relation to the earlier mark on which the application for invalidity is based, in particular an extract from the USPTO database in relation to United States trade mark registration No 1 758 134 ‘DYNO’, renewed on 13/09/2012.

• Exhibit 3: copies of invoices issued by the applicant and addressed to the EUTM proprietor, including a summary listing all details of the invoices dated 2001-2007.

• Exhibit 4: copies of purchase orders from the EUTM proprietor for batteries, some mentioning that the products must bear the trade mark ‘DYNO EUROPE’.

• Exhibit 5: printout from the applicant’s website showing the sign ‘Dyno’ on batteries.

First round of observations by the EUTM proprietor

The EUTM proprietor first explains the relationship between the parties and points out that it is a leading European supplier of all types of batteries, battery chargers and accessories with a worldwide distribution network and with suppliers in Europe, United States, China and India. It points out that its marketing expenditures are significant (more than EUR 250 000 per year), as is the turnover for battery products (between EUR 8 and 9 million in the last 3 years). It further explains that the applicant is a battery manufacturer and that the parties had a business relationship in the period between 2001 and 2007, with the EUTM proprietor purchasing batteries from the applicant (supplier) during that period.

In 2007, due to serious quality problems, the parties terminated their relationship. The EUTM proprietor claims that in 2001 the applicant gave permission to the EUTM proprietor to use the mark ‘Dyno’ not only for the applicant’s products, but also for batteries from other manufacturers (exhibit 1), and that when the business relationship ended in 2007 it did not request the EUTM proprietor to stop using the trade mark ‘Dyno Europe’. It was only later and by accident that the EUTM proprietor became aware of the applicant’s memorandum sent to the applicant’s customers (exhibit 2).

Regarding the application of Article 8(3) EUTMR, the EUTM proprietor argues that there was no agent or representative relationship between the parties, and, in any event, the filing of the contested trade mark was permitted and justified and the applicant showed no interest in the trade mark ‘Dyno Europe’ in Europe. It claims that the relationship was a pure supplier (seller-customer) relationship and that the applicant has not shown any contract or other document to prove a trust relationship, since it merely submitted invoices and purchase orders between the parties. The parties acted as two independent parties with independent businesses in different markets.

Furthermore, the EUTM proprietor argues that even if the relationship between the parties were recognised as that of an agent or representative, the relationship expired in 2007 and the contested mark was filed in 2013. Six years is far too long for the existence of post-contractual obligations of trust and confidentiality, since such fiduciary obligations are not meant to last forever but for a certain transitional period. In this regard, it referred to decisions from the Board of Appeal (19/11/2007, R 73/2006‑4, PORTER / PORTER (II), § 26; 16/10/2017, R 2153/2015‑4, MOULDPRO, § 60).

In support of its observations, the EUTM proprietor filed the following evidence:

• Exhibit 1: letter dated 12/03/2001 from the applicant to the EUTM proprietor stating ‘please accept this writing as permission to use Dyno Battery Inc.’s brand for your own marketing efforts. We are committed to manufacturing premium quality lead acid electric storage batteries and hope the products you choose to market along side ours will be premium quality also’.

• Exhibit 2: memorandum entitled ‘Distributor misrepresentation’ dated 24/02/2010 issued by the applicant and informing its customers that Dyno Battery, Inc. and Battery Supplies NV stopped their commercial relationship in 2007 and are completely different business entities. The memorandum informs customers that, although the EUTM proprietor has another supplier, it is still using the name ‘Dyno Europe’.

• Exhibit 3: copies of a catalogue dated 2013 for batteries, depicting the contested sign; pictures of batteries and promotional goods (cap, umbrella, golf ball, polo, etc.) bearing the contested trade mark and pictures of exhibition stands where batteries and chargers are presented.

Second round of observations by the applicant

The applicant comments on the evidence submitted by the EUTM proprietor and claims that the documents in exhibit 3 are irrelevant. It further clarifies that the parties terminated their relationship not because of quality problems, but because of the raising of prices. It also argues that the memorandum submitted by the EUTM proprietor shows that the applicant no longer agreed to the use of the trade mark after the breakdown of the relationship in 2007. In addition, it points out that during the distributor relationship, the EUTM proprietor benefited from the reputation of the applicant’s trade mark and, as of 2007, used it to its own advantage.

Regarding the relationship between the parties, the applicant considers that the memorandum clearly identifies the EUTM proprietor as a former distributor of the applicant. Furthermore, as stated in the Office’s Guidelines, the term ‘agent’ and ‘representative’ should be interpreted broadly to cover all kinds of relationships based on any business arrangement where one party represents the interests of another. It reiterates that it never authorised the EUTM proprietor to file the contested trade mark.

In support of its observations, the applicant filed the following evidence:

• Exhibit 6: exchange of emails between the parties dated 02/02/2007 about the raising of prices.

• Exhibit 7: letter from the applicant to the organisers of MATEXPO 2005 dated 05/07/2005 identifying the EUTM proprietor as the ‘direct importer’ of the applicant’s goods.

• Exhibit 8: letter from the applicant to the EUTM proprietor, undated (referring to a correspondence of 22/12/2000), in relation to the marketing of Dyno batteries.

Second round of observations by the EUTM proprietor

The EUTM proprietor mainly reiterates its observations and comments on the applicant’s observations and evidence. It argues that there was not a distribution relationship between the parties but a mere supplier relationship between two unrelated companies, devoid of any obligation of trust. The EUTM proprietor points out that the memorandum mentioning the term ‘distributor’ was drawn up by the applicant itself and was addressed to its customers and not to the EUTM proprietor, and it does not constitute evidence of an alleged distribution relationship. The same applies to the letter sent to the organisers of Matexpo and to the letter sent the EUTM proprietor, which was not replied to (exhibits 7 and 8 of the applicant’s previous observations). It therefore considers that these documents have no legal value.

Finally, the EUTM proprietor argues that the memorandum does not prove that the applicant requested the EUTM proprietor to stop using the trade mark, as it is addressed to the applicant’s customers and not to the EUTM proprietor. It concludes that no document has been submitted in this regard and at no point did the applicant contest the use of the trade mark.

To support its observations, the EUTM proprietor submitted an affidavit from its auditor, dated 20/09/2018, about the sales figures and advertising costs of ‘Dyno Europe’ battery products.

UNAUTHORISED FILING BY AN AGENT OR REPRESENTATIVE OF THE TRADE MARK OWNER — ARTICLE 60(1)(b) EUTMR IN CONNECTION WITH ARTICLE 8(3) EUTMR

According to Article 8(3) EUTMR, upon opposition by the proprietor of the trade mark, a trade mark shall not be registered where an agent or representative of the proprietor of the trade mark applies for registration thereof in his own name without the proprietor’s consent, unless the agent or representative justifies his action.

The grounds for refusal of Article 8(3) EUTMR are subject to the following cumulative requirements:

• the signs are identical or only differ in elements which do not substantially affect their distinctiveness;

• the goods and services are identical or equivalent in commercial terms;

• the EUTM proprietor is an agent or representative of the owner of the earlier mark;

• the contested EUTM was filed without the consent of the owner of the earlier mark;

• the agent or representative fails to justify its acts.

These conditions are cumulative. Therefore, where one of the conditions is not satisfied, the invalidity application based on Article 8(3) EUTMR cannot succeed.

Article 8(3) EUTMR has its origin in Article 6septies of the Paris Convention (PC), which was introduced into the convention by the Revision Conference of Lisbon in 1958. The protection it affords to earlier trade mark proprietors consists of the right to prevent, cancel, or claim as their own unauthorised registrations of their marks by their agents or representatives, and to prohibit use thereof, where the agent or representative cannot justify its acts.

Article 8(3) EUTMR offers protection to the earlier trade mark proprietor where there is proof that a relationship exists and the trade mark proprietor never consented to the agent’s or the representative’s registering the proprietor’s trade mark in its own name. It is designed to prevent the misuse of a mark by the agent, as the agent may exploit the knowledge and experience acquired during its business relationship with the proprietor and therefore improperly benefit from the effort and investment that the proprietor himself has made (06/09/2006, T‑6/05, First Defense Aerosol Pepper Projector, EU:T:2006:241, § 38).

Agent or representative relationship

It is sufficient for the purposes of Article 8(3) EUTMR that there is some agreement of commercial cooperation between the parties of a kind that gives rise to a fiduciary relationship by imposing on the EUTM proprietor, whether expressly or implicitly, a general duty of trust and loyalty as regards the interests of the applicant. It follows that Article 8(3) EUTMR may also extend, for example, to licensees of the applicant, or to authorised distributors of the goods for which the mark in question is used.

Nevertheless, some kind of cooperation agreement has to exist between the parties. If the EUTM proprietor acts completely independently, without having entered into any kind of fiduciary relationship with the applicant, it cannot be considered an agent within the meaning of Article 8(3) EUTMR (13/04/2011, T‑262/09, First Defense Aerosol Pepper Projector, EU:T:2011:171, § 64).

The burden of proof regarding the existence of an agent-principal relationship lies with the applicant in invalidity proceedings (13/04/2011, T‑262/09, First Defense Aerosol Pepper Projector, EU:T:2011:171, § 64, 67).

In view of this, it is appropriate to start the analysis with an assessment of the relationship between Battery Supplies NV (the EUTM proprietor) and Dyno Battery, Inc. (the applicant).

In support of its claims under Article 8(3) EUTMR, the applicant submitted a copy of the registration of the earlier United States trade mark registration No 1 758 134, invoices issued and addressed to the EUTM proprietor, including a summary listing all details of the invoices dated 2001-2007 (exhibit 3), purchase orders from the EUTM proprietor (exhibit 4) and a printout from the applicant’s website showing the sign ‘Dyno’ on batteries (exhibit 5). No distribution agreement between the parties was submitted.

From the evidence on file, in particular exhibits 3 and 4, it can be established that a certain commercial relationship existed between the parties, the applicant being the supplier of the EUTM proprietor for batteries to be sold under the trade mark ‘Dyno Europe’.

However, the fact that EUTM proprietor could be considered as a customer or a client of the applicant cannot amount to an ‘agent or representative’ for the purposes of Article 8(3) EUTMR, since such persons are under no special obligation of trust to the applicant.

The applicant neither proved a distributor relationship nor submitted evidence that would be capable of demonstrating that the relationship between the parties gave rise to a fiduciary relationship by imposing on the EUTM proprietor a general duty of trust and loyalty as regards the applicant’s interest.

The evidence submitted by the applicant shows that the EUTM proprietor ordered some goods from the applicant (exhibit 4) and that the applicant sold its products to the EUTM proprietor (exhibit 3). It therefore suggests that the nature of the relationship between the parties was that of a buyer and seller. Such a relationship could have been established without prior agreement between them.

There is no evidence of the EUTM proprietor taking part in the applicant’s marketing strategy (on the contrary, it can be deduced from exhibit 1 of the EUTM proprietor that the applicant gave its consent for the EUTM proprietor to use the trade mark ‘Dyno’ because of the marketing efforts of the EUTM proprietor itself) or of the applicant providing business management assistance to the EUTM proprietor in relation to the commercialisation of the goods under the trade mark at issue. There is no indication that the applicant agreed to enter with the EUTM proprietor into any type of business relationship other than that of selling products to it with the trade mark ‘Dyno Europe’.

As correctly pointed out by the EUTM proprietor, although the word ‘distributor’ is mentioned in the memorandum, this document, which originates from the applicant and addresses the applicant’s customers, cannot constitute evidence that the relationship between the parties was more than that of merely buyer and seller. The same can be said in relation to the letter sent by the applicant to the organisers of Matexpo, which identifies the EUTM proprietor as the ‘agent/representative/importer’ for the applicant (exhibit 7). Finally, the letter from the applicant to the EUTM proprietor referring to the marketing of ‘Dyno’ batteries (exhibit 8) is a mere unilateral proposal from the applicant and it has not been replied to.

Circumstances such as sales targets imposed on the EUTM proprietor, payment of royalties, production of the goods covered by the mark under licence or help in the setting up of a local distribution network would be strong indications of a commercial relationship of the type covered by Article 8(3) EUTMR.

In the present case, there is no such evidence and there are no indications that the EUTM proprietor considered itself to be more than a customer/buyer of the applicant’s goods. To the contrary, the correspondence submitted (exhibit 1 of the EUTM proprietor) shows that the applicant gave permission to the EUTM proprietor to use the mark ‘Dyno’ not only for the applicant’s products, but also for batteries from other manufacturers/suppliers.

Therefore, the applicant failed to submit any evidence showing the existence of an agent-principal relationship with the EUTM proprietor. The evidence submitted does not show that the proprietor acted on behalf of the applicant, but merely that there was a seller-customer relationship that could have been established without a prior agreement between them. Such a relationship is not sufficient for Article 8(3) EUTMR to be applicable (13/04/2011, T‑262/09, First Defense Aerosol Pepper Projector, EU:T:2011:171, § 67).

Furthermore, for the sake of completeness, even if there had been an agent or representative relationship, the time factor plays an important role and the amount of time that passed between the end of the agreement/relationship and the filing of the application is relevant.

The agent/representative relationship must be established prior to the filing date of the contested EUTM. In the present case, the filing date of the contested mark is 03/06/2013.

The agreement between the parties does not have to be technically still in force when the application is filed. The reference to a filing made by an ‘agent or representative’ should not be understood as a formal requirement that must be present at the time the EUTM application is filed. Article 8(3) EUTMR also applies to agreements that expired before the filing date of the EUTM application, provided that the time that has lapsed is of such duration that it can be reasonably assumed that the obligation of trust and confidentiality was still present when the EUTM application was filed (13/04/2011, T‑262/09, First Defense Aerosol Pepper Projector, EU:T:2011:171, § 65).

The parties concluded their business relationship in 2007 (this is not disputed by either party) and the contested mark was filed on 03/06/2013, namely six years after the termination of their relationship. Post-termination fiduciary obligations are not meant to last forever, but for a certain transitional period after the termination of the agreement, during which the parties may redefine their commercial strategies. Six years is far too long to consider that there would have been post-contractual obligations on the part of the EUTM proprietor towards the applicant, and the Cancellation Division considers that any post-contractual relationship between the parties had ended by the time of the filing of the EUTM (19/11/2007, R 73/2006‑4, PORTER / PORTER (II), § 26; 16/10/2017, R 2153/2015‑4, MOULDPRO, § 60, where five years was considered far too long to consider that there would have been post-contractual obligations on the part of the EUTM proprietor).

Article 8(3) EUTMR and Article 6septies PC do not protect a trade mark proprietor who is careless and makes no efforts to secure trade mark protection on its own behalf. Post-contractual fiduciary obligations mean that none of the parties may use the termination of an agreement as a pretext for getting rid of its obligations, for example by terminating an agreement and immediately afterwards filing a trade mark.

The rationale of Article 8(3) EUTMR and Article 6septies PC is to prevent a situation where a representative in country A of a principal who owns trade marks in country B, and who is meant to market the trade-marked goods and observe the interests of the latter in country A, uses the filing of a trade mark application in country A as a weapon against the principal, for example to force the principal to continue with the representative and to prevent him from entering the market in country A. This rationale likewise applies if an agreement exists, but the representative terminates it to take advantage and file a trade mark for the same reasons.

However, this does not create absolute rights for the principal to obtain trade mark protection in other countries. The mere fact that the principal holds a trade mark in country B does not give him an absolute right to obtain trade marks in all other countries; the trade marks registered in different countries are in principle independent from each other and may have different proprietors, in accordance with Article 6(3) PC. Article 6septies PC is an exception to this principle and only to the extent that the contractual or de facto obligations of the parties involved justify this. Only to that extent is it justified that the ensuing EUTM would ‘belong’ to the principal under Article 21 EUTMR (19/11/2007, R 073/20064, PORTER / PORTER (II), § 26). In the present case, the applicant has not taken any action to register the trade mark in the European Union in all these years.

Conclusion

In the light of the above, the Cancellation Division concludes that the application must be rejected as not well founded under Article 60(1)(b) EUTMR in connection with Article 8(3) EUTMR.

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

Jessica LEWIS

Frédérique SULPICE

Ana MUÑIZ RODRIGUEZ

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.