CANCELLATION No C 44 487 (ASSIGNMENT)

 

Hankuck Latices Co. Ltd., 175 1gongdan-ro6-gil Gumi-si, Gyeong sangbuk-do, Republic of Korea (applicant), represented by Marcin Kaszyński, Kaszubska 17/4, 70-402 Szczecin, Poland (professional representative)

a g a i n s t

CFI World Spółka Akcyjna, ul. Firmowa 16, 62-023 Robakowo, Poland (EUTM proprietor), represented by Kancelaria Patentowa Tadeusz Wilczarski, ul. Norwida 12, 83-110 Tczew, Poland (professional representative).

On 06/07/2021, the Cancellation Division takes the following

 

 

DECISION

1. The request for assignment is partially upheld.

2. European Union trade mark No 16 193 211 is assigned to the applicant for some of the contested goods, namely:

Class 1: Chemicals and chemical additives used in industry, as well as in agriculture, horticulture and forestry; chemical compositions for use in the construction industry; chemical additives used in the construction industry, in particular chemical additives for concrete, gypsum, cement, lubricants, lacquers, screed, mortar, and paints; synthetic resins, unprocessed; plastics, unprocessed; fire extinguishing compositions; adhesives, agglutinants and adhesive substances for use in the construction industry; chemicals used in the manufacture of paper; chemical preparations for use in paper making; chemical auxiliaries for the paper industry.

Class 2: Additives for paints; thinners and thickeners for coatings, dyes; inks.

3. The European Union trade mark remains in the name of the EUTM proprietor for the rest of the goods, namely:

Class 2: Paints; lacquers and varnishes; colorants; colorants, pigments and inks; mordants; raw natural resins; preservatives against rust and against deterioration of wood; undercoating for surfaces to be painted; coatings for use as primers; coatings for use on walls; metal in foil and powder form; preservatives.

Class 17: Insulation and barrier articles and materials; packing materials; flooring underlayment, sealing compounds; elastomers; insulating paints and varnishes; insulation for building purposes; insulating and sealing foams; insulating paints; sealing agents for use in the construction industry; insulating substances; fluid seals; fibres for insulating purposes.

Class 19: Building materials (non-metallic); grouting materials; asphalt, pitch and bitumen; concrete; cement; gypsum; plaster; cement mixes; bitumen based compositions; mortar for building; floors, not of metal; flooring screeds; non-metallic flooring materials; spackling compound.

4. Each party bears their own costs.

REASONS

The applicant filed a request for assignment in relation to all the goods of European Union trade mark 16 193 211 ‘HIDIS’.

The applicant invoked Article 60(1)(b) EUTMR in conjunction with Article 8(3) EUTMR on the basis of:

 Korean trade mark registration no. 40-1272741 ‘HIDIS’.

 Well-known trade mark no. 40-1272741 ‘HIDIS’ in the European Union, Korea and Poland.

 Non-registered trade mark ‘HIDIS’. The territories mentioned in relation to this mark are Korea and the European Union.

 International trade mark registration No. 1451 233 designating the European Union ‘HIDIS’.

The applicant specified that the relief sought was the assignment of the contested EUTM in its entirety pursuant to Article 21(2)(a) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS AND EVIDENCE FILED

The applicant argues that its company is registered under Korean jurisdiction, it is a producer in the chemical market in the whole world and has been using the mark ‘HIDIS’ for twenty years. It mentions that the EUTM proprietor is a company registered in Poland and acts as a distributor within the chemical market in Europe, in particular in Poland.

In 2016 the applicant (HLC) and the EUTM proprietor (CFI) initiated a business cooperation regarding the distribution of the applicant’s products, in particular products labelled with the abovementioned trademark, in the territory of Poland and Europe. According to the companies’ oral agreement, the EUTM proprietor would act as the applicant’s distributor in Europe. To this effect, representatives of both companies met and orally settled the rules of their cooperation. Both parties agreed that the EUTM proprietor would assist the applicant in registering its trademarks within the European Union in order to protect its industrial property.

The mark “HIDIS” on which these proceedings are based was filed by the applicant in the Republic of Korea on 20/12/2016 and registered on 28/07/2017. On 22/12/2016 the EUTM proprietor applied for the registration of the contested mark as a European trade mark.

Due to the lack of knowledge about provisions of EU law as well as the conduct in trust with CFI, the applicant did not realize that the former had registered a number of the former’s trademarks in its name. Both companies had had a business relationship (CFI was the distributor of HLC’s products) till 2019, but after relevant changes in the structure of ownership of CFI in 2018 and 2019 the relationship between companies deteriorated. In 2019 HLC realized that the EUTM proprietor had registered the marks in its own name and demanded that it transferred them in its favor. Despite a preliminary declaration that the demands would be satisfied, the EUTM proprietor has not complied with such demands and requests a payment for the transfer.

The evidence filed by the applicant is:

 Attachment no.1: registration certificates from the Korean Intellectual Property Office relating to the marks ‘HIQUE’, ´HISOL´, ´HIDIS´ and ‘HIRESOL’.

 Attachment no. 2: registration certificates from the World Intellectual Property Organization regarding the marks ‘HISOL D180’; ‘HISOL’; ‘HIQUE’; ‘HIDIS’; ‘HIRESOL’.

 Attachment no. 3 – an exchange of emails between the parties.

 Attachment no. 4 – a screenshot from the EUTM proprietor’s webpage where it is stated that ‘CFI World S.A. is the sole distributor of HLC in Poland- the owner of such brands as Hisol, Hiresol, Hique and Hidis’.

 Attachment no. 5 – screenshots from the applicant’s website showing the applicant´s portfolio, including pigments and polymers ‘HIQUE’, thickeners ‘HISOL’, dispersants ‘HIDIS’ and thickeners ‘HIRESOL’.

 Attachment no. 6 – a screenshot from CBCHEMIE website.

 Attachment no. 7 - screenshots from TRiiSO website in which the following can be read: ‘Hankuck Latices (HLC) is a global manufacturer of high performance additives for the formulation of waterbased paints and coatings. HLC's product portfolio includes the HISOL range of hydrophobically modified alkali swellable emulsion thickeners (HASE), HIRESOL range of hydrophobically modified ethoxylated urethanes (HEUR) thickeners, HIQUE opaque polymers, HIRET water retention aids, and HIDIS dispersing agents’.

 Attachment no. 8 - screenshots from Rushimset website

 Attachment no. 9 – a statement signed by the President of the Board of the applicant’s company in which he comments on the history of the company, he explains that the products branded with the trademarks are well-known in the chemical industry in the whole world, and adds that in 2016 the applicant initiated a business cooperation with CFI World S.A., which became the distributor of the applicant’s goods in Europe, in particular in Poland. He also adds that the majority of agreements between the parties were settled orally, and the parties did not cooperate on a rigid written agreement because both intended to build up a long-lasting cooperation based on trust and loyalty. That is why the registration steps taken by the proprietor were not strictly verified by the applicant, and when the applicant realised that the marks had not been registered in its name it began conversations to rectify this situation. It was decided that the matter was to be resolved amicably and during a meeting at the European Coating Show in Nurnberg, Germany (19—21/03/2019) Mr Klaudiusz Dominiak (the CEO of the EUTM proprietor) promised to transfer the trademarks to the applicant. This assertion was repeated during the next meeting in Seoul, held in 14/05/2019, and also in e-mail correspondence between the parties. Despite initial declarations, the proprietor first ignored the demands to transfer the rights and finally, after a written demand from the applicant to this effect, it formally refused to satisfy these demands without additional remuneration. What is also important, the proprietor seemed to condition approval to transfer the rights on the continuation of the cooperation between the parties.

 Attachment no. 10 – a letter of confirmation signed on 26/11/2019 in which the company N. Krallis S.A. states that as agents and distributors of the applicant since 2002 they had put goods branded with a number of trademarks, among others ‘HISOL’, on the Greek, Albanian and Cypriot markets.

 Attachment no. 11 contains correspondence between the parties, among others a letter dated 09/03/2020 from the applicant with a request of transfer of the European Union trade marks from the proprietor to the applicant.

The EUTM proprietor argues that in March 2016 one of their customers informed them of the existence of the product Hisol D180 from a Korean company called Nae Woi. The proprietor was informed that this company had a local distributor in Poland, namely HSH Chemie. The proprietor found out that Nae Woi was not a producer but a kind of international agent cooperating with the applicant in these proceedings, Hankuck Latices. In July 2016 Hankuck Latices expressed its interest in cooperating with the proprietor; in summer 2016 the EUTM proprietor found out that the relationships between Hankuck Latices and Nae Woi were deteriorating given that the latter was not selling the original product Hisol D180 from Hankuck but a counterfeit product of their own. The EUTM proprietor contacted Hankuck, which informed them that their cooperation with their former agent Nae Woi was terminated. Then, seeing that the original trademarks were not protected in Europe, the proprietor suggested that they should be registered in order to secure a proper development in Poland. Both parties, CFI World and Hankuck Latices, were very interested in promoting all product series from Hankuck Latices portfolio, and in a meeting that took place at Hankuck Latices’ office in Korea on 17/11/2016, the protection of the trademarks was discussed with the general manager Mr. Mike Kim and his son Mr. Greg Kim, with the former agreeing to protect the series ‘Hisol’, ‘Hiresol’, ‘Hique’ and ‘Hidis’. It was agreed that the series would be protected in Europe because at that time CFI World planned to develop Hankuck products not only in Poland.

CFI World was already cooperating with a company from Austria and had agents in Germany, Swiss and the Baltic countries. The agreement included the promotion of Hankuck’s products in these countries. In December 2016 the EUTM proprietor applied to obtain protection for ‘Hisol’, ‘Hiresol’, ‘Hique’ and ‘Hidis’ while it started to promote Hankuck’s products under the original names. The proprietor alleges that it made important promotions, and it twice organized technical seminars in Poland with events for 100 people. The first seminar took place in 2017, with Mr. Mike Kim and Mr. Greg Kim attending the event; Mr. Mike Kim gave an speech and informed customers that CFI World was Hankuck’s representative.

With its own financial effort CFI World promoted Hankuck’s products at the European Coating Show, an international Exhibition held in Nurnberg in 4th-6th April 2017 which is the biggest event for the sector. The photos from exhibition (annex 1) show a CFI World banner that also promotes their business partners including Hankuck Latices and product series names Hisol / Hiresol / Hique and Hidis. The names of the trademarks appear next to the name Hankuck Latices as the owner of these brands.

From November 2016 to August 2018 CFI World’s sales team was very active in promoting Hankuck’s products. Every CFI’s Area Sales Manager and two technicians spent around 30%, 50%, 70% of working time for projects related to Hankuck products, which amounted to salaries costs around EUR 100.800,00. The EUTM proprietor mentions several emails reporting on the protection procedure. On 06/07/2017 the proprietor sent an email including a certificate of registration for the marks ‘Hidis’ and ‘Hique’, and on 10/08/2017 an email was sent including a registration certificate for ‘Hiresol’, which merited a ‘thank you’ response from the applicant. Each certificate clearly stated who owns the rights and what classes are protected. In addition, Hankuck shared documents related to termination of its cooperation with the company Nae Woi; these documents were translated into Polish and presented to customers as important information, all to present Hankuck as real producer and as a sign of openness and trust.

In 2018 two meetings were held with Hankuck in Korea, the first one in early August, with Mr. Mike Kim unavailable; he was available in second meeting, held in September 2018; the proprietor was informed that Hankuck had decided to appoint a second distributor in Poland (Konimpex Chemicals). This came as a shock to the proprietor given that in the last two years CFI had promoted Hankuck very actively with costs of EUR 147.000 (EUR 100.800 in employees fees + EUR 46,200 costs in seminars, exhibitions, visits in Korea).

The proprietor states that it was very difficult to accept that suddenly another distributor would have the rights to sell Hankuck’s product and approach CFI’s customers. In the meeting the proprietor proposed to Hankuck to allocate a new area to the new distributor, different from coating and construction where CFI had invested so much. Unfortunately, Hankuck decided that this second distributor for the territory of Poland would have rights to buy products and deal with existing CFI’s customers. This decision created a lot of confusion on the market: before 2017 HSH Chemie and Nae Woi sold Hisol D180 (a Hankuck’s product), then CFI was appointed as solo distributor and again in 2018 there was a change after the appointment of an additional distributor, an overlapped with the existing CFI’s customers.

CFI decided not to develop the sales of Hankuck’s products, only to continue existing sales, and CFI lost parts of sales. The proprietor cites two reasons: 1. customers were confused about strange Hankuck’s behavior and switched back to former reliable producers 2. Hankuck’s additional distributor received support in pricing from Hankuck. In many instances Konimpex approached CFI’s customers. The proprietor mentions one of its main rules in business is openness, and that is why they sold products branded with their original names; unfortunately CFI’s openness and sharing of data about each project led to the handover of precious data of this company to Konimpex Chemicals.

On 25/04/2019, after a meeting of the proprietor with Mr. Mike Kim and Mr. Greg Kim, which took place in Nurnberg during the European Coating Show 2019, the proprietor sent an email proposing the transfer of trademark protection from CFI to Hankuck Latices; but no reply was ever received. At the end of April/early May 2019 the proprietor proposed to meet with Mr. Mike Kim and Mr. Greg Kim on 12 and 13/05/2019 to sign an agreement for the transfer of the trademarks, but the proposal was rejected.

As from the end of 2019 CFI did not receive any goods from Hankuck, while the second distributor was offering the applicant’s full product portfolio on the market. In 2020 the proprietor received a letter from a lawyer representing Hankuck demanding the transfer of the trademarks for free, which is not acceptable. In a letter dated 08/05/2020 the proprietor proposed to transfer the trademarks at a cost proportional to the time of protection and territory. Considering the fee CFI paid for the trademarks protection (EUR 1 200 for every one of the four marks) and the fees for a local lawyer for the procedure (around EUR 6 500), and taking into account that the protection of the marks is valid from 2017, the proprietor was ready to accept a transfer fee in the region of EUR 2 500 per mark.

The proprietor filed two documents, Annex 1 with photos from the Exhibition held in Nurnberg and Annex 2 with e-mail correspondence between the parties, part of which are copies of emails already filed by the applicant.

The applicant replies that the statement of CFI does not present new circumstances and all the evidence provided by the proprietor (with the exception of the banner image, which does not have significant meaning in this process) had already been submitted with the application.

The applicant strongly denies again having granted the proprietor permission to register the trademark “HIDIS” in its name. It admits that the initiative to obtain trademark protection occurred because of the unethical conduct of HLC’S and CFI’s competitors in the market. In order to protect HLC’s industrial property, HLC and CFI decided to initiate registration procedures. HLC took care of the registration procedures within the Korean Intellectual Property Office and the World Intellectual Property Organization, while CFI did so at the EUIPO. HLC agreed that CFI would assist HLC in registering HLC's trademarks within the European Union but never agreed to their registration in the name of CFI. For HLC it was obvious that all registrations should be made in its favour and not its distribution partner as, after all, the company had been using all of the trademarks while conducting business at least for 17 years in 45 countries. The need to protect HLC from the former HLC’s partners Nae Woi and the HSH, due to the problems in the Polish market, does not clarify why the registration only in CFI’s favour would benefit the situation. What is more, CFI’s explanation about the effort to promote and develop HLC’s products cannot justify its action; the fact that the distributor (exclusive or non-exclusive) develops the value of the owner’s trademark in the territory entrusted to him, falls within the scope of his usual duties and cannot constitute in itself and in the absence of other circumstances a justification for the appropriation of the owner’s mark by the distributor (cancellation No 4443 C of 04/10/2011, ’CELLO’).

In addition, the proprietor’s statement that the e-mails with the registration certificates indicated directly and clearly who owns the trademarks is untrue. EUIPO certificates differs a lot from WIPO and Korean Certificates. In WIPO and Korean Certificates, the inscription of the holder is clearly indicated as: name and address of the holder (WIPO), and owner of the trademark right (Korean Certificate), but EUIPO’s certificate contains a name (CFI World S.A.) and reference to the number of notification in a bulletin, for example “732”, but it does not explicitly indicate that this is the owner. For a foreign entity that has never participated in the European registration this information is not obvious. HLC’s general manager Mr. Mike Kim explained in his email correspondence of 26/04/2019 that the certificate sent on 10/08/2017 did not include clear information as to who the owner of the trademark is.

Referring to the statement made by the proprietor about the proposal to transfer the trademarks, the applicant states that, first of all, it’s not true that the email of 25/04/2019 proposing the transfer of the trademarks was left without answer. This email did not include detailed conditions regarding the transfer, which were presented orally, at the meeting that took place in Seoul, Korea in May 2019. At first HLC intended to resolve this issue amicably in a manner acceptable for both parties, but the offer was rejected by CFI. CFI set the condition that they would transfer the trademark if they became the sole distributor of the products. HLC could not accept this proposal. What is also important is that CFI seemed to condition the approval to transfer the rights on the continuation of the cooperation with HLC, attempting to force HLC to further collaboration. It should be emphasised that as a result of uncertainty concerning the rights to use of trademarks factually owned by HLC, but registered in favour of CFI, HLC sustained substantial financial losses, among other things because HLC was prevented from operating on the European market in the scope of sales and marketing policies referring to trademark HIDIS, as well as HIRESOL, HISOL and HIOUE. HLC also incurred significant costs for marketing activities in the area of other trademarks, in order to prevent clients, as far as it’s possible, from becoming disoriented about HLC’s products. It should be also indicated that all marketing activities performed by CFI were justified with its role as distributor and was generating CFI’s income due to cooperation with HLC.

In view of the foregoing, according to the applicant, CFI’s proposal to pay for the transfer of trademarks cannot be considered as a proposal on fair terms. HLC sees no grounds for paying any remuneration for the transfer of the ownership title to the trademark HIDIS, as well as HIQUE, HIRESOL and HISOL.

In its final submissions the EUTM proprietor states that they never wanted to appropriate Hankuck’s trademarks. Also, the statement that Hankuck did not understand the certificates of registration was not the fault of the trademark owner. In all correspondence regarding the registration of the trademarks and the entire procedure, nothing indicated that Hankuck might not understand the documents or had any doubt. There were also no questions about the costs of registration, and, on this basis, it can be concluded that the information in the certificates was clear and accepted.

PRELIMINARY REMARK

In the observations attached to its request for assignment the applicant asked the Office to consider the possibility of joint examination of this case together with other three applications against the same EUTM proprietor, on the same grounds. According to Article 18(1) EUTMDR where a number of applications for revocation or for a declaration of invalidity have been filed relating to the same EU trade mark, the Office may examine them in one set of proceedings. Since in this case the proceedings are against four different EUTMs, the applicant´s request was not granted.

UNAUTHORISED FILING BY AN AGENT OR REPRESENTATIVE OF THE TRADE MARK OWNER — ARTICLE 8(3) EUTMR

According to Article 60(1)(b) EUTMR, an EU trade mark shall be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings, where there is a trade mark as referred to in Article 8(3) and the conditions set out in that paragraph are fulfilled.

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 implements this provision only to the extent it gives the rightful proprietor the right to oppose applications filed without its authorisation. The other elements of Article 6septies of the PC are implemented by Articles 13, 21 and Article 60(1)(b) EUTMR. Article 60(1)(b) EUTMR gives the proprietor the right to cancel unauthorised registrations, whereas Articles 13 and 21 EUTMR enable the proprietor to prohibit the use thereof and/or to request the transfer of the registration to its own name.

It follows from the above that to succeed under Article 8(3), the applicant has to establish that it is the proprietor of an earlier ‘trade mark’ within the meaning of Article 8(3) EUTMR.

Korean trade mark registration no. 40-1272741 ‘HIDIS’

a) Scope of application of Article 8(3) EUTMR: existence of an earlier trade mark

The request for assignment is based, inter alia, on Korean trade mark registration No. 40-1272741 ‘HIDIS’.

As Article 8(2) EUTMR does not apply to cancellation actions based on Article 8(3) EUTMR, it cannot serve to define the territorial extent of protection granted by Article 8(3) EUTMR. In the absence of any other reference in Article 8(3) EUTMR to a ‘relevant territory’, it is immaterial whether the earlier trade mark rights reside in the European Union or not and, hence, a trade mark registered in Korea can also constitute the basis for a cancellation action based on Article 8(3) EUTMR.

The applicant filed a registration certificate of the Korean mark which attests to its filing date being 20/12/2016; therefore, it predates the contested mark, filed on 22/12/2016. The EUTM proprietor does not question that the applicant owns the mark.

b) Agent or representative relationship

In view of the purpose of the provisions of Article 8(3) EUTMR, which is to safeguard the legal interests of trade mark proprietors against the misappropriation of their trade marks by their commercial associates, the terms ‘agent’ and ‘representative’ should be interpreted broadly to cover all kinds of relationships based on any business arrangement (governed by written or oral contract) where one party is representing the interests of another, regardless of the nomen juris of the contractual relationship between the principal-proprietor and the EUTM applicant (13/04/2011, T‑262/09, First Defense Aerosol Pepper Projector, EU:T:2011:171, § 64).

The EUTM proprietor and the applicant both acknowledge that the proprietor was the distributor, in Europe, of the goods of the applicant, a Korean company, prior to the filing date of the EUTM application and, in particular, of dispersants ‘HIDIS’. The proprietor is a distribution company that works not only with world leaders in the field of coating and construction, but also with medium and small size chemical producers. In 2016 they became aware of the applicant’s products, specifically their portfolio of acrylic and polyurethane thickeners, and started negotiations to enter into a distribution agreement. Such negotiations and their result took the form of oral agreements whereby the EUTM proprietor publicized the marks of the applicant; later it was also agreed that, while the applicant registered the marks in Korea and WIPO, the proprietor would do the same in the European Union.

The evidence submitted proves the agent relationship between the parties and the EUTM proprietor´s website itself indicates this. In fact, the parties do not debate who the original owner of the marks is and what the nature of the relationship was. The EUTM proprietor relies on this relationship and on the mutual trust and loyalty and bases its request for remuneration on this.

Consequently, all the particulars in relation to this requirement for Article 8(3) EUTMR to be applicable have been met.

c) The signs

HIDIS	HIDIS
Earlier trade mark	Contested sign

The signs are identical.

d) The goods

The goods on which the application is based are the following:

Class 1: Dispersing agents, dispersions of plastics, dyeing assistants; oil dispersants.

The contested goods are the following:

Class 1: Chemicals and chemical additives used in industry, as well as in agriculture, horticulture and forestry; chemical compositions for use in the construction industry; chemical additives used in the construction industry, in particular chemical additives for concrete, gypsum, cement, lubricants, lacquers, screed, mortar, and paints; synthetic resins, unprocessed; plastics, unprocessed; fire extinguishing compositions; adhesives, agglutinants and adhesive substances for use in the construction industry; chemicals used in the manufacture of paper; chemical preparations for use in paper making; chemical auxiliaries for the paper industry.

Class 2: Paints; additives for paints; lacquers and varnishes; colorants; colorants, pigments and inks; mordants; raw natural resins; preservatives against rust and against deterioration of wood; undercoating for surfaces to be painted; coatings for use as primers; coatings for use on walls; metal in foil and powder form; preservatives; thinners and thickeners for coatings, dyes and inks.

Class 17: Insulation and barrier articles and materials; packing materials; flooring underlayment, sealing compounds; elastomers; insulating paints and varnishes; insulation for building purposes; insulating and sealing foams; insulating paints; sealing agents for use in the construction industry; insulating substances; fluid seals; fibres for insulating purposes.

Class 19: Building materials (non-metallic); grouting materials; asphalt, pitch and bitumen; concrete; cement; gypsum; plaster; cement mixes; bitumen based compositions; mortar for building; floors, not of metal; flooring screeds; non-metallic flooring materials; spackling compound.

The scope of application of Article 8(3) EUTMR is not limited to identical goods or services, but also extends to goods or services which can be found similar (11/11/2020, C‑809/18 P, MINERAL MAGIC, EU:C:2020:902, § 99).

With particular reference to the goods or services in conflict, it must be verified whether they display a close relationship in commercial terms such that the use of the contested mark for those goods or services would pose a serious obstacle for the original proprietor to enter the EU market or continue exploitation of its mark on that market. What counts is that the contested goods or services may be perceived by the public as being provided as a result of the agreement between the parties and that it would have been reasonable for the original proprietor to provide such goods or services in view of the scope of protection of the earlier mark.

However, a dissimilarity of the goods or services at issue precludes the application of Article 8(3) EUTMR as in such case the contested mark could not be attributed to the original proprietor.

In the case at issue the goods in Class 1 are either identical or similar to the goods on which the application is based, whereas the goods in Class 2 (aside from additives for paints; thinners and thickeners for coatings, dyes, inks), in Class 17 and in Class 19, are dissimilar. According to case-law, the raw materials subjected to a transformation process are essentially different from the finished products that incorporate, or are covered by, those raw materials, in terms of nature, aim and intended purpose (03/05/2012, T-270/10, Karra, EU:T:2012:212, § 53). Furthermore, they are not complementary on the ground that one is manufactured with the other, and raw material is in general intended for use in industry rather than for direct purchase by the final consumer. In that regard, dispersing agents, dispersions of plastics, dyeing assistants; oil dispersants used as raw or semi-finished material cannot be regarded as complementary to finished products on the ground that the raw materials are intended to be turned into finished products (09/04/2014, T-288/12, Zytel, EU:T:2014:196, § 39-43).

As for additives for paints; thinners and thickeners for coatings, dyes, inks there is a similarity between them and the goods covered by the earlier registration given that indeed all these goods can be used by the same public with the same purpose, and they might be manufactured and put on the market by the same companies, and be traded through the same channels.

From the evidence filed it becomes clear that the applicant is active in the field of coatings and construction and manufactures these goods, and the EUTM proprietor distributes them. Consequently, the goods of the EUTM proprietor that have been found identical or similar could be perceived by the public as ‘authorised’ products, the quality of which is still somehow ‘guaranteed’ by the applicant, and which it would have been reasonable for the applicant to market in view of the goods protected by the earlier mark. The goods display a close relationship in commercial terms such that the use of the contested mark for those goods would pose a serious obstacle for the original proprietor to enter the EU market or continue exploitation of its mark on that market. This is confirmed by the EUTM proprietor´s submissions in relation to the nature and size of the relevant market in Poland and the perception of the relevant customers.

e) Application without the consent of the owner of the earlier mark and absence of justification on the part of the EUTM proprietor

The applicant states that in 2016 the parties initiated a business cooperation regarding the distribution of the applicant’s products, in particular products labelled with the ‘HIDIS’ trademark, in the territory of Poland and Europe. According to the companies’ oral agreement, the EUTM proprietor would act as the applicant’s distributor in Europe. To this effect, representatives of both companies met and orally settled the rules of their cooperation. Both parties agreed that the EUTM proprietor would assist the applicant in registering HLS’s trademarks within the European Union in order to protect HLC’s industrial property.

The proprietor alleges that it applied for the trademark with the applicant’s consent and after having made arrangements with the applicant’s general manager, and not on its own motion. It adds that this agreement was valid at the time of the application of the mark and during the registration procedure, and that the applicant was duly informed in a transparent way given that it was sent the registration certificate of the mark. The applicant replies that, as they are a Korean company and had never seen a registration certificate issued by EUIPO, they missed the fact that this registration had been made in the name of the EUTM proprietor and not in its own.

The evidence sent by both parties in the form of exchange of emails indeed proves that the applicant agreed that the EUTM proprietor would register the mark in Europe. However, the proprietor has not adduced any evidence that it counted on the applicant’s permission to do so in its own name, and the explanation that it had made an important investment in the promotion of the mark is not a valid justification.

In relation to this it must be pointed out that even though the absence of the proprietor’s consent is a necessary condition for the application of Article 8(3) EUTMR, the applicant does not have to submit evidence that shows that the agent was not permitted to file the EUTM application. A mere statement that the filing was made without its consent is sufficient given that the applicant cannot be expected to prove a ‘negative’ fact, such as the absence of consent. In these cases the burden of proof is reversed and it is up to the proprietor to prove that the filing was authorised, or to give some other justification for its acts.

In view of the need to provide effective protection to the legitimate proprietor from unauthorised acts of its agents, the application of Article 8(3) EUTMR should be denied only where the proprietor’s consent is sufficiently clear, specific and unconditional (06/09/2006, T-6/05, First Defense Aerosol Pepper Projector, EU:T:2006:241, § 40). Therefore, even if the proprietor of the contested mark has expressly authorised the filing of the EUTM application, its consent cannot be considered sufficiently clear if it has not also explicitly specified that the application may be in the name of the agent.

As a justification for its refusal to transfer the mark the EUTM proprietor alleges that its company made a great investment on the promotion of the goods branded with the trade mark with, among others, the organization of technical seminars and the participation in the biggest event in the coating sector. However, in this regard account must be taken of the fact that justifications exclusively linked to a party’s economic interests, such as the need to protect its investment in setting up a local distribution network and promoting the mark in the relevant territory, cannot be considered valid for the purposes of Article 8(3) EUTMR.

Nor can a party successfully argue in its defense that it is entitled to some financial remuneration for its efforts and expenditure in building up goodwill for the mark. Even if such remuneration were well deserved or is expressly stipulated in some agreement, the EUTM proprietor cannot use the registration of the mark in its own name as a means of extracting money from the applicant or in lieu of financial compensation, but should try to settle its dispute either by way of agreement or by suing for damages.

Consequently, the requisites of lack of consent and absence of justification are also present in this case.

Conclusion

Considering all the above, the Cancellation Division finds that the conditions set out in Article 60(1)(b) are partly fulfilled and that the request of assignment is well founded under Article 8(3) EUTMR in relation to the goods found identical or similar (in Class 1, and additives for paints; thinners and thickeners for coatings, dyes, inks in Class 2). Consequently, the contested trade mark is assigned to the applicant pursuant to Article 21(2)(a) EUTMR for these goods. On the other hand, the request of assignment must be refused for the remaining goods in Classes 2, 17 and 19 given that the conditions of Article 60(1)(b) in conjunction with Article 8(3) EUTMR do not apply.

Examination of the request for assignment based on the other rights

As mentioned above, the applicant based its application on other rights, such as:

 International trade mark registration No 1451 233 designating the European Union ‘HIDIS’.

 Non-registered trade mark ‘HIDIS’. The territories mentioned in relation to this mark are Korea and the European Union.

 Well-known trade mark no. 40-1272741 ‘HIDIS’ in the European Union, Korea and Poland.

The invoked International trade mark registration No. 1451 233

The request for assignment is based on international trade mark registration No. 1 451 233 ‘HIDIS’.

To succeed under Article 8(3), the applicant has to establish that it is the proprietor of an earlier ‘trade mark’ within the meaning of Article 8(3) EUTMR.

However, the European Union was designated in International trade mark registration No. 1 451 233 on 04/01/2019 whereas the contested mark was filed on 22/12/2016. Consequently, the international registration is not earlier and the action filed under Article 60(1)(b) EUTMR in conjunction with Article 8(3) EUTMR must be rejected in as much as it is based on this right.

Non-registered trade mark HIDIS

The applicant based its request for assignment on a non-registered mark ‘HIDIS’ in Korea and the European Union.

In relation to the alleged European Union mark the Cancellation Division notes that non-registered trade marks are not harmonised at EU level and these rights are completely governed by national laws. Consequently, a European non-registered trade mark as such does not exist and it is only at Member State level that such rights can form a valid basis for invalidity under these grounds; it follows that such a right is not an eligible basis for invalidity under Article 8(3) EUTMR.

The Cancellation Division deems it necessary to point out that in case the applicant´s intention was to invoke the non-registered trade mark ‘HIDIS’ in one or more of the EU Member States, it should have specified the territory in which the earlier mark is protected (an absolute admissibility requirement provided for in Article 12(2)(a) EUTMDR with respect to the ground of Article 8(3) EUTMR). Consequently, the application based on the non-registered European trade mark is to be rejected.

In addition to the above, even if the notice of invalidity was to be interpreted in the sense that the applicant relied on a non-registered mark in each and every EU Member State and therefore deemed admissible (quod non, as explained above), as well as for the Korean non-registered trade mark, the application would not have succeeded, for the reasons set out below:

In the absence of any restriction in Article 8(3) EUTMR, and in view of the need to provide effective protection to the legitimate interests of the real proprietor, the term ‘trade marks’ should be interpreted broadly and covers not only registered trade marks, but also applications and non-registered trade marks.

According to Article 95(1) EUTMR, in proceedings before it the Office will examine the facts of its own motion; however, in proceedings relating to relative grounds for refusal of registration, the Office is restricted in this examination to the facts, evidence and arguments submitted by the parties and the relief sought. It follows that the Office cannot take into account any alleged rights for which the opponent does not submit appropriate evidence.

Consequently, non-registered trade marks are covered by the provision of Article 8(3) EUTMR provided that the law of the country of origin recognises rights of this kind. The applicant needs to, therefore, provide the Office with evidence establishing that under the relevant laws it has acquired exclusive rights for his claimed non-registered trade mark. The request for assignment was, however, not accompanied by any evidence in this regard, nor was this evidence adduced until the end of the adversarial part of the proceedings. For this reason, an assessment on whether or not the conditions under the relevant laws are fulfilled cannot be made. It follows from the above that, in relation to Article 8(3) EUTMR, the applicant has failed to establish that it has acquired exclusive rights for the invoked non-registered trade marks in the countries in question.

Well-known trade mark no. 40-1272741 ‘HIDIS’ in the European Union, Korea and Poland.

Finally, the applicant also invoked a well-known trade mark ‘HIDIS’ in the above mentioned territories. In principle, well-known marks within the meaning of Article 6bis PC also fall within the term ‘trade marks’ under 8(3) EUTMR.

The Cancellation Division notes, however, that the indicated trade mark registration number coincides with the invoked Korean trade mark registration examined above. To the extent the applicant´s claim relates to the already examined Korean trade mark registration, reference is made to the findings above.

In case the applicant´s intention was to invoke a further registered Korean trade mark or a registered Polish trade mark, no evidence with respect to the existence or scope of protection of such marks was submitted. Furthermore, there is no EUTM with the indicated number. Therefore, the applicant´s claim on that basis cannot succeed.

To the extent the applicant was referring to a non-registered well-known trade mark in the EU, Poland and Korea, the above considerations and findings with respect to the non-registered trade marks apply. Consequently, the request for assignment must also be rejected for these rights.

COSTS

According to Article 109(1) EUTMR, the losing party in cancellation proceedings must bear the fees and costs incurred by the other party. According to Article 109(3) EUTMR, where each party succeeds on some heads and fails on others, or if reasons of equity so dictate, the Cancellation Division will decide a different apportionment of costs.

Since the request is successful only for part of the contested goods, both parties have succeeded on some heads and failed on others. Consequently, each party has to bear its own costs.

The Cancellation Division

Denitza STOYANOVA-VALCHANOVA

María Belén IBARRA DE DIEGO

Pierluigi M. VILLANI

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.