CANCELLATION No 10 819 C (INVALIDITY)

Cateco INC, 41 avenue Joncas, Montmagny Quebec GB5 4C9, Canada (applicant), represented by T Mark Conseils, 31 rue Tronchet, 75008 Paris, France (professional representative)

a g a i n s t

Eco Pets Italia S.R.L, via a. Massena 12/7, 20145 Milan, Italy (EUTM proprietor)

On 13/07/2016, 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 European Union trade mark No 13 219 613 CATEKO’ (the EUTM) filed on 01/09/2014 and registered on 16/12/2014. The request is directed against all goods covered by the EUTM namely:

Class 21: Litter trays.

Class 31: Bedding and litter for animals.

The applicant invoked Article 52(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant argues that the trade mark has been applied for in bad faith. The applicant states it is a Canadian company which produces cat litter pans (Class 21) which already holds a Canadian trade mark application (No 1 667 305) as well as an EUTM (No 13 274 592 CATECO filed on 19/09/2014 and currently under opposition) and evidence is provided to support the claims.

The applicant refers to the proprietor company and the fact this was created on 31/07/2014, which is after that of the creation of the applicant’s Canadian company and of the afore-cited trade marks. Reference is also made to the proprietor’s registration of a domain name (cateko.it) as well as this contested mark, all filed after the marks of the applicant [sic]. The applicant details the name of the person connected with all these rights.

The applicant refers to an international exhibition for pet supplies (INTERZOO) which took place in Nuremberg, Germany in May 2014 and the fact that many professionals within the pet supply business were present. In this exhibition the applicant’s distributor (Canada litter Inc.) demonstrated the CATECO pan litter product. Photos are submitted showing a booth with the wording ‘Canada litter’ and some litter trays and reference is made to a prize, ‘Innovation ticket’, which was won for its products. The applicant submits that the proprietor also attended the show and that due to the high visibility of its CATECO trade mark during the exhibition the proprietor would have known of its mark and of the use of the mark in Germany. The applicant submits evidence showing that Mr Piero Paganelli owns 50% of ‘Eco pets Italia’ and via its website reference is made to ‘Eco Pets International LLC’ and reference is also made to the fact that the same Mr Piero Paganelli is the key contact for ‘Eco Pets International LLC’.

The applicant further opines that the proprietor has demonstrated its bad faith as it has opposed the applicant’s aforementioned EUTM to prevent the applicant from using the trade mark

Shortly after the exhibition, the proprietor company was created, as was the domain name, and the mark at issue was filed, the latter being nearly identical to that of the applicant covering similar/identical goods. The applicant submits that such a situation is not purely coincidence.

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

• Extract from the Canadian Business register (in French with English translation) concerning the applicant’s company showing the details of the business;

• Extract concerning Canadian trade mark application No 1 667 305 CATECO (filed on 11/03/2014, formalised on 14/03/2014 and published on 14/05/2014);

• Extract concerning EUTM No 13 274 592 ‘CATECO’ filed on 19/09/2014 (currently opposed);

• Extracts (in Italian) from the Milan Chamber of Commerce concerning the constitution of the proprietor company on 31/07/2014;

• Extract from www.nic.it/web-whois showing the registration of the domain name cateko.it as being created on 02/08/2014 by the applicant as well as a domain dossier;

• Extract from the proprietor’s website;

• Photos showing the INTERZOO exhibition and specifically a photo showing and an ‘INNOVATIONTICKET’ being exchanged and a further document stating ‘Congratulations! Your idea has caught our attention’ and then it is stated that the contestant can introduce their new product at the FRESNAPF headquarters. Information about the prize is also submitted;

• Web extract concerning INTERZOO 2016 (26-29 May 2016, Nuremberg);

• A page with an excel table entitled ‘INTERZOO 2014’ showing a list of exhibitors amongst which is ‘Canada litter’ (the applicant’s distributor). A further page is also submitted showing ‘ECO PETS INTERNATIONAL, LLC’, with a note ‘SolarRaptor SolarStinger Jellyflap’ with the indication ‘USA’.

The EUTM proprietor firstly clarifies the close link between the ‘Eco Pets International Company’ and itself, gives details on the relationship and submits that all have been involved in the CATEKO’ project development. However, its version of events is that on 19/01/2011, the CEO of ‘Eco Pets International’ registered the trade mark ‘EKOKAT’ in the USA and Canada (extract submitted) and this trade mark was used in the respective territories. At the end of 2012 it was decided to move into the EU market and it was for this reason that Mr Paganelli eventually went on to form ECO PETS Italia (the EUTM proprietor). Together with an advertising agency it was decided to create a new version of the aforementioned trade mark specifically for the EU market, hence, CATEKO’ was conceived.

In 2013, the domain name was registered and participation in the ZOOMARK exhibition requested. On 20/03/2013 a draft incorporating the trade mark CATEKO’ was presented and on 21/03/2013 a page for CATEKO’ on LegalForce.com was created, pending registration in the US and Canada. Thus the proprietor submits that in March 2013 its trade mark was already in use and was incorporated in a public domain and it was also decided that the mark at issue should be used exclusively for the EU market and EKOKAT only for the US and Canada. The proprietor claims that its participation in the ZOOMARK exhibition gave the trade mark high international visibility and samples, promotional materials, brochures were heavily distributed. The success achieved at the exhibition led to international dissemination of the trade mark. All of these events are prior to those mentioned by the applicant.

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

Annex 1: Extract from TradeMarkia concerning legal notice of ‘EkoKat’ trade mark (use since 01/01/2011):

Annex 2a: Different figurative versions of the marks on a business card for Piero Paganelli (Eco Pets International);

Annex 2b: Photos of the Eco Pets international booth at San Francisco Green Festival;

Annex 2c: Leaflet for EkoKat;

Annex 3: Information concerning the set up of cateko.com (source unknown) showing date of creation as 31/01/2013 for Eco pets International LLC;

Annex 4: Email concerning participation in the ZOOMARK international 2013 exhibition dated 31/01/2013 from Pascale Sonvio (of ZOOMARK) to Mr Paganelli;

Annex 5: Extract from FotoSearch (TStock photography and stock footage) which shows an invoice to Piero Panagelli of Eco Pets International LLC for a service (unknown);

Annex 6: Email to Mr Panagelli from Monica Raimondi (graphicamente.it) dated 20/03/2013 and showing the following in the context of proposed packaging;
Annex 7: Mail dated 21/03/2013 from trademarkia.com advising that the Cateko business page is now searchable;

Annex 8: Application for admission to the ZOOMARK 2013 international exhibition (09-12 May 2013);

Annex 9: Business cards for various Eco pets International/Europe workers include

Annex 10a-b: Photos of the exhibition booth clearly featuring as well as photos showing packaging with the trade mark for Cat litter;

Annex 11-12: Email dated 28/05/2013 and bill (31/05/2013) for services (from graphicamente.it) for the aforementioned graphics;

Annex 13: Codes for Cateko products;

Annex 14: Analysis of international competitors and of CATEKO’ products;

Annex 15: Document dated 28/07/2013 showing packaging with aforementioned trade mark stating it is now on sale.

Annex 16: Email to Mr Paganelli confirming booth for INTERZOO 2014 as well as related information.

ABSOLUTE GROUNDS FOR INVALIDITY – ARTICLE 52(1)(b) EUTMR

General principles

Article 52(1)(b) EUTMR provides that a European Union trade mark will be declared invalid where the applicant was acting in bad faith when it filed the application for the trade mark.

There is no precise legal definition of the term ‘bad faith’, which is open to various interpretations. Bad faith is a subjective state based on the applicant’s intentions when filing a European Union trade mark. As a general rule, intentions on their own are not subject to legal consequences. For a finding of bad faith there must be, first, some action by the EUTM proprietor which clearly reflects a dishonest intention and, second, an objective standard against which such action can be measured and subsequently qualified as constituting bad faith. There is bad faith when the conduct of the applicant for a European Union trade mark departs from accepted principles of ethical behaviour or honest commercial and business practices, which can be identified by assessing the objective facts of each case against the standards (Opinion of Advocate General Sharpston of 12/03/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 60).).

Whether an EUTM proprietor acted in bad faith when filing a trade mark application must be the subject of an overall assessment, taking into account all the factors relevant to the particular case (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 37).

The burden of proof of the existence of bad faith lies with the invalidity applicant; good faith is presumed until the opposite is proven.

Outline of the relevant facts

Reference is made to the facts and evidence as set out at the beginning of the decision.

Assessment of bad faith

The applicant’s assertions are purely based on the fact that the proprietor ‘must have known’ about the trade mark in question due to a particular exhibition that took place in 2014. In fact the applicant’s arguments and basis for this filing appear to hinge on this exhibition and the fact that the applicant’s trade mark was ‘heavily exposed’ therein and that the proprietor as a fellow exhibitor and competitor would have been aware of this.

The more long-standing the use of an earlier mark, the more likely it is that at the time of filing the contested EUTM the EUTM proprietor would be aware of it. However, as stated in case-law, the fact that the EUTM proprietor knows or must know that the invalidity applicant has been using an identical/similar sign for identical/similar goods for which a likelihood of confusion may arise is not sufficient for a finding of bad faith (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 40). In order to determine whether there was bad faith, the EUTM proprietor’s intentions at the time of filing must also be taken into account.

The applicant has not submitted any evidence concerning the use of its mark. The only evidence (and arguments) to support the applicant’s claims that the proprietor ‘must have known’ about its marks relate to the exhibition, ‘INTERZOO’, which took place in 2014. The applicant surmises that as both parties were present and the applicant’s mark was highly visible then the proprietor seized this moment to misappropriate the mark.

Aside from the fact that this point is in itself rather debateable, largely due to an absence of evidence, particularly of use, the proprietor has successfully demonstrated that in fact it had already used its mark in 2013 and the mark was promoted and exposed in a similar exhibition that took place already in 2013, thus before the exhibition referred to by the applicant. In fact the claims made by the proprietor are fully backed up by evidence which does not reveal any illicit intention of any description. Moreover, the filing dates of the marks pertaining to both parties have been set out at the beginning of this decision and in listing the evidence these do not support the applicant’s contentions. The applicant’s EUTM was filed after the contested mark and though it is true that the Canadian mark was applied for previously, it is also true that it is difficult to presume bad faith for non-EU signs and where a short period has elapsed between the third country filing and the EU filing (Pollo Tropical chicken on the grill, EU:T:2012:39, § 61). In this respect the Canadian trade mark was only filed six months after the contested mark. Such a short time space is also not indicative in itself of bad faith and moreover would have to be assessed in the context and depending on the other pieces of evidence.

The evidence shows the relationship between the proprietor and the related international company and the idea behind the creation of the mark. The applicant’s evidence set out to purportedly demonstrate that the proprietor had set up the company and trade mark purely upon finding out about the applicant’s trade mark. Nonetheless, the evidence and arguments subsequently submitted by the proprietor paint a completely different picture. The contested mark CATEKO’ is the European version of the EKOCAT American brand which was its predecessor. Both marks coincide in the notions of ‘ecological’ (the presence of a ‘K’ does not detract from this finding as it will just be perceived as a trendy or modern spelling) and in ‘CAT’ regardless of the differing positioning. As such the creation of the trade mark is based on a previous trade mark pertaining to the same group of companies.

The evidence supports the arguments provided by the proprietor, namely that the trade mark is the result of trade mark evolution and development and follows a branding strategy for a different continent.

The overall assessment of bad faith must bear in mind the general principle that the ownership of a European Union trade mark is acquired by registration and not by prior adoption by way of its actual use. Particularly when the invalidity applicant is claiming rights to a sign which is identical or similar to the contested EUTM, it is important to remember that Article 52(1)(b) EUTMR moderates the ‘first-to-file’ principle, according to which a sign may be registered as an EUTM only in so far as this is not precluded by an earlier mark with effect either in the European Union or in a Member State. Without prejudice to the possible application of Article 8(4) EUTMR, the mere use of a non-registered mark does not prevent an identical or similar mark from being registered as an EUTM for identical or similar goods or services (14/02/2012, T‑33/11, Bigab, EU:T:2012:77, § 16-17 and 21/03/2012, T‑227/09, FS, EU:T:2012:138, § 31-32).

The fact that the signs are identical does not establish bad faith on the part of the EUTM proprietor, where there are no other relevant factors (01/02/2012, T‑291/09, Pollo Tropical chicken on the grill, EU:T:2012:39, § 90).

The registration of a supposedly similar sign is not a clear indication of an abusive or fraudulent intention. It is rather an indication that the EUTM proprietor intended to use its mark on the marketplace in accordance with the trade mark functions set out in the EUTMR. Moreover, for conflicts with similar signs, the EUTMR foresees a different solution under Article 53 EUTMR, ‘Relative grounds for invalidity’. For this reason alone the case cannot be subsumed under the notion of ‘bad faith’ (14/06/2010, R 1795/2008‑4, ZAPPER-CLICK, § 19).

Bearing in mind the foregoing, the contested mark is CATEKO’ and the applicant refers to its own CATECO brand and it is clear that the signs are highly similar and even identical in some aspects. However, as clearly illustrated above, the similarities between the signs are not necessarily indicative of any potentially abusive situation. The signs incorporate ‘CAT’ and ‘ECO’ (short for ecological) and the marks are no more than a sum of these two terms. Clearly ‘CAT’ refers to the intended user and ‘ECO’ to the ecological properties of the goods, thus the distinctive nature of the signs is low and as such it is not difficult to imagine that more than one trader may come up with trade marks containing the same terms or notions perhaps configured slightly differently. Thus the actual sign and its content is also something that, in the specific circumstances, is not indicative of bad faith.

Moreover the proprietor has explained and demonstrated how the mark came into being and that it was based on a previous trade mark used and registered in the US, namely, EKOKAT. Again, note the content of the trade mark, namely relaying the same notions of ‘ecological’ and ‘cat’ though in a different order and with use of the letter ‘K’.

As previously illustrated, bad faith places the burden of proof on the applicant and in this regard the applicant has not submitted any evidence that could support its contentions or indicate the proprietor’s bad faith. There is no evidence that allows the Cancellation Division to determine any form of bad faith since there is nothing suggestive of a dishonest intention. On this point it is also relevant to revert to the applicant’s other claims that the proprietor’s bad faith can also be demonstrated via is opposition to the applicant’s CATECO trade mark. In this respect, the filing of notices of opposition per se is not an indicator of possible bad faith on the part of the EUTM proprietor; further facts would be required (04/05/2011, R 1354/2010‑1, yello, § 17). In fact, trade mark owners should be actively protecting their intellectual property rights on all sides and this includes situations where they file oppositions against trade marks which are identical or similar to their own. Such action does not constitute in itself an act of bad faith but part of the usual trajectory in trade mark matters. Moreover, the facts of the case do not indicate any fraudulent behaviour of any kind on behalf of the proprietor.

The documentation presented does not demonstrate that the proprietor departed from the accepted principles of ethical behaviour or honest commercial and business practices. In fact the evidence submitted by the proprietor demonstrates purely legitimate objectives and expectations, namely to expand its activities into a different market.

Conclusion

In the light of the above, the Cancellation Division concludes that the application should be rejected.

COSTS

According to Article 85(1) EUTMR, the losing party in cancellation proceedings must bear the fees and costs incurred by the other party.

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

According to Rule 94(3) EUTMIR and Rule 94(7)(d)(iv) EUTMIR, the costs to be paid to the EUTM proprietor are the representation costs, which are to be fixed on the basis of the maximum rate set therein.

Although the winning party is no longer represented by a professional representative at the time of rendering this decision, it was represented by a professional representative within the meaning of Article 93 EUTMR in the course of the cancellation proceedings. Therefore, the winning party incurred representation costs which it is entitled to recover, in accordance with Rule 94(7)(d) EUTMIR.

The Cancellation Division

Lucinda CARNEY

Vanessa PAGE

Frédérique SULPICE

According to Article 59 EUTMR, any party adversely affected by this decision has a right to appeal against this decision. According to Article 60 EUTMR, notice of appeal must be filed in writing at the Office within two months of the date of notification of this decision. It must be filed in the language of the proceedings in which the decision subject to appeal was taken. Furthermore, a written statement of the grounds of appeal must be filed within four months of the same date. The notice of appeal will be deemed to be filed only when the appeal fee of EUR 720 has been paid.

The amount determined in the fixation of the costs may only be reviewed by a decision of the Cancellation Division on request. According to Rule 94(4) EUTMIR, such a request must be filed within one month from the date of notification of this fixation of costs and shall be deemed to be filed only when the review fee of EUR 100 (Annex I A(33) EUTMR) has been paid.