CANCELLATION No 39881 C (INVALIDITY)

KF Tea USA Inc., 34-36 56th Street, Woodside, New York 11377, United States of America (applicant), represented by Klunker IP Patentanwälte PartG mbB, Destouchesstr. 68, 80796 München, Germany (professional representative)

a g a i n s t

Roten Ming International Co., Ltd., 1F., No. 201, Chaoma RD., Xitun Dist., Taichung City 40755, Taiwan (EUTM proprietor), represented by Handsome I.P. Ltd., 27-28 Monmouth Street, Bath BA1 2AP, United Kingdom (professional representative).

On 10/06/2020, the Cancellation Division takes the following

DECISION

1. The application for a declaration of invalidity is partially upheld.

2. European Union trade mark No 17 210 907 is declared invalid for some of the contested goods and services, namely:

Class 30: Beverages made of tea; Biscuits; Bread; Cocoa; Coffee; Coffee based beverages; Rice dumplings; Chinese steamed dumplings; Chinese stuffed dumplings; Ice cream; Instant noodles; Instant tea; Jasmine tea; Lime tea; Oolong tea; Pastries; Puddings for use as desserts; Rice-based snack foods; Tapioca pearls; Tea; Tea bags; Tea pods; Tea-based beverages; Tea-based beverages with fruit flavoring; Tea-based iced beverages.

Class 43: Bar and cocktail lounge services; Bar services; Café and restaurant services; Cafeteria and restaurant services; Coffee and tea bars; Coffee-house and snack-bar services; Fast-food restaurant services; Ice cream parlors; Pubs; Restaurants; Serving of food and drink/beverages; Tea bar.

3. The European Union trade mark remains registered for all the remaining goods, namely:

Class 30: Ice blocks.

4. Each party bears its own costs.

REASONS

The applicant filed an application for a declaration of invalidity against all the goods and services of European Union trade mark No 17 210 907 . The application is based on the European Union trade mark registration No 15 825 284 . The applicant invoked Article 60(1)(a) EUTMR in connection with Article 8(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant argues that there is a likelihood of confusion since the goods and services are identical and/or similar and the signs are visually and aurally highly similar and conceptually identical. It explains that their word elements KUNG FU/KONG FO which are placed at the beginning of both signs are distinctive and remembered by the relevant public. The remaining words TEA/CHA included in both signs respectively are descriptive of the services and of most of the goods involved. Consequently, they will be disregarded by the consumers.

According to the applicant, the proprietor of the earlier mark and the now contested mark use both word elements KUNG FU TEA and KONG FO CHA simultaneously and display the products side by side which bear ones or the others word elements.

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

• Decision of 29/11/2017, B 2 839 994.

• Decision of 18/10/2019, B 3 068 582.

• Decision of 06/08/2018, R221/2018-5, KUNG FU TEA TAIWAN (fig.) / KungFuTea (fig.) et al.

• An extract showing the registration details of the EUTM No 1 598 4024.

• Screenshots of Youtube and Facebook links about Kong Fo.

• A screenshot from the Collins Dictionary showing the meaning of the word CHA.

• A screenshot showing the link https://macauhub.com.mo/feature/tea-or-cha/ explaining the use of the word Cha by the Portuguese public.

• Two screenshots showing that the restaurant chain Starbucks introduced tea-based beverages like Cha Cha Latte or Chai Tea Latte.

• A screenshot from Instagram showing the sign .

The EUTM proprietor did not submit any observations in reply.

LIKELIHOOD OF CONFUSION — ARTICLE 60(1)(a) EUTMR IN CONNECTION WITH ARTICLE 8(1)(b) EUTMR

A likelihood of confusion exists if there is a risk that the public might believe that the goods or services in question, under the assumption that they bear the marks in question, come from the same undertaking or, as the case may be, from economically linked undertakings. Whether a likelihood of confusion exists depends on the appreciation in a global assessment of several factors, which are interdependent. These factors include the similarity of the signs, the similarity of the goods and services, the distinctiveness of the earlier mark, the distinctive and dominant elements of the conflicting signs and the relevant public.

1. The goods and services

The relevant factors relating to the comparison of the goods or services include, inter alia, the nature and purpose of the goods or services, the distribution channels, the sales outlets, the producers, the method of use and whether they are in competition with each other or complementary to each other.

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

Class 43: Restaurant services featuring non-alcoholic drinks, beverages, pastries, and confections.

The contested goods and services are the following:

Class 30: Beverages made of tea; Biscuits; Bread; Cocoa; Coffee; Coffee based beverages; Rice dumplings; Chinese steamed dumplings; Chinese stuffed dumplings; Ice blocks; Ice cream; Instant noodles; Instant tea; Jasmine tea; Lime tea; Oolong tea; Pastries; Puddings for use as desserts; Rice-based snack foods; Tapioca pearls; Tea; Tea bags; Tea pods; Tea-based beverages; Tea-based beverages with fruit flavoring; Tea-based iced beverages.

Class 43: Bar and cocktail lounge services; Bar services; Café and restaurant services; Cafeteria and restaurant services; Coffee and tea bars; Coffee-house and snack-bar services; Fast-food restaurant services; Ice cream parlors; Pubs; Restaurants; Serving of food and drink/beverages; Tea bar.

Contested goods in Class 30

The contested beverages made of tea; Biscuits; Bread; Cocoa; Coffee; Coffee based beverages; Rice dumplings; Chinese steamed dumplings; Chinese stuffed dumplings; Ice cream; Instant noodles; Instant tea; Jasmine tea; Lime tea; Oolong tea; Pastries; Puddings for use as desserts; Rice-based snack foods; Tapioca pearls; Tea; Tea bags; Tea pods; Tea-based beverages; Tea-based beverages with fruit flavoring; Tea-based iced beverages are, in general, various types of tea-based beverages, pastries and preparations made from cereals. The applicant’s restaurant services featuring non-alcoholic drinks, beverages, pastries and confections in Class 43 consist of the provision of this kind of food and drinks. These goods and services can have the same producer/provider and use the same distribution channels. The goods in Class 30 are complementary to gastronomic services and such goods are often necessary elements on menus in restaurants, bars and cafés. From the consumer’s point of view, these goods and services are, therefore, complementary. Numerous business models not only provide for the sale of foodstuffs produced by them as goods, but also for the provision of catering services, be it within their own business establishments or in the field of outside catering, as well as vice versa, with providers of catering services diversifying their offer with ready-to-serve meals. Therefore, these contested goods in question are similar to a low degree to the applicant’s restaurant services featuring non-alcoholic drinks, beverages, pastries and confections (see in this respect Decision of 29/11/2017, B 2 839 994 confirmed by Decision of 06/08/2018, R221/2018-5, KUNG FU TEA TAIWAN (fig.) / KungFuTea (fig.) et al.).

In its observations, the applicant referred to the Decision of 06/08/2018, R221/2018-5, KUNG FU TEA TAIWAN (fig.) / KungFuTea (fig.) et al which found similarity between the contested ice blocks and the opponent’s restaurant services featuring non-alcoholic drinks, beverages, pastries and confections. The Board of Appeal stated in paragraphs 31-32: ‘Contrary to the arguments of the Opposition Division, the Board finds that there is also a similarity between the goods under appeal and the opponent’s services (18/02/2016, T-711/13, HARRY’S BAR/PUB CASINO Harrys RESTAURANG, EU:T:2016:82, § 60; 29/10/2015, T-256/14, CREMERIA TOSCANA/La Cremeria, EU:T:2015:814, § 25). Even though the goods and services differ with regard to their natures, their intended purposes and their methods of use, the applicant’s goods are necessarily used in the serving of food and drink, with the result that those goods and the opponent’s services are complementary. Furthermore, cocoa and ice blocks may be offered for sale in places in which food and drink are served. Such goods are therefore used and offered through restaurant and café services. Those goods are consequently closely connected with those services (15/02/2011, T-213/09, Yorma’s/Norma, EU:T:2011:37, § 46; 13/04/2011, T-345/09, PUERTA DE LABASTIDA, EU:T:2011:173, § 52)’.

However, in the Cancellation Division’s view, the contested ice blocks are dissimilar to the applicant’s restaurant services featuring non-alcoholic drinks, beverages, pastries and confections in Class 43, since they have different natures and purposes, they do not have the same distribution channels and the consumers do not expect that the production of these contested goods originates from the same undertaking that provides restaurant services.

Indeed, a wide range of different foodstuffs and drinks may play a significant role in the restaurant services, but it cannot be inferred from that alone that consumers would be led to believe that the same undertaking was responsible for the production of those goods and the provision of the services aimed at serving them as a meal or for refreshment. To conclude otherwise would imply that any foodstuff or beverage that may be served at a restaurant, bar or café, etc. is complementary to services for providing food and drinks.

According to the Office practice, in certain situations foodstuffs and the restaurant services can be complementary (17/03/2015, T-611/11, Manea Spa, EU:T:2015:152, § 52; 15/02/2011, T-213/09, Yorma’s, EU:T:2011:37, § 46). Goods or services are complementary if one is indispensable or important for the use of the other in such a way that consumers may think that responsibility for the production of those goods or the provision of those services lies with the same undertaking. However, when comparing ice blocks to the restaurant services, they cannot be considered complementary. Although ice blocks are used when preparing and serving certain foodstuffs and drinks, such as cocktails, and to that extent ice blocks are essential for the provision of the services of a cocktail bar, restaurant etc., in the present comparison the connection between the goods and services is not such as to lead the consumers think that responsibility for the production of those goods and the provision of those services lies with the same undertaking. Furthermore, the relevant public is unlikely to perceive ice blocks as products that are offered at a restaurant or bar. Rather, it is perceived as an ancillary good that is only used to refresh or chill dishes or beverages. The public does not use the services of a restaurant or bar to consume ice blocks as such.

Low degree of similarity between foodstuffs and the services for the provision of food and drink can be found in exceptional circumstances. That is to say, consumers may think that responsibility does lie with the same undertaking if the market reality is that the provision of food and drinks and the manufacture of such goods are commonly offered by the same undertaking under the same trade mark (e.g. coffee in their coffee shops, ice cream in their ice cream parlours, beer in pubs). Ice blocks are not commonly produced and sold separately by the service provider of food and drink under the same trade mark, and the relevant public is aware of this.

Therefore, the Cancellation Division considers that, despite the conclusion reached in the abovementioned case before the Boards of Appeal, that cannot change the findings made above and cannot therefore change the conclusion in the present proceedings that ice blocks must be considered dissimilar to the earlier restaurant services. The mere fact that food and drinks are consumed in a restaurant is not sufficient reason to find similarity between them (09/03/2005, T-33/03, Hai, EU:T:2005:89, § 45; 20/10/2011, R 1976/2010-4, THAI SPA / SPA et al., § 24-26).

Contested services in Class 43

The contested bar and cocktail lounge services; bar services; café and restaurant services; cafeteria and restaurant services; coffee and tea bars; coffee-house and snack-bar services; fast-food restaurant services; ice cream parlors; pubs; restaurants; serving of food and drink/beverages; tea bar include, are included in the broad category of, or overlap with, the applicant’s restaurant services featuring non-alcoholic drinks, beverages, pastries and confections. Therefore, they are identical.

2. Relevant public — degree of attention

The average consumer of the category of products concerned is deemed to be reasonably well informed and reasonably observant and circumspect. It should also be borne in mind that the average consumer’s degree of attention is likely to vary according to the category of goods or services in question.

In the present case, the goods found to be similar to a low degree are directed at the public at large. The degree of attention will be on the whole average.

The services found to be identical are directed at the public at large whose level of attention will be average and at professionals with specific knowledge or expertise on the restauration services whose level of attention is average due to the fact that the services at issue are frequently required.

3. The signs

Earlier trade mark	Contested trade mark

The relevant territory is the European Union.

The global appreciation of the visual, aural or conceptual similarity of the marks in question must be based on the overall impression, bearing in mind their distinctive and dominant components (11/11/1997, C‑251/95, Sabèl, EU:C:1997:528, § 23).

The earlier mark consists of the verbal elements ‘KUNG FU TEA’ written in standard white characters and placed in three rows inside a circle with a black background. Around it, black traces are depicted. They are the dominant elements as they are the most eye-catching. On the right hand side, at the bottom of the said circle, in a smaller size, there is a black circle inside of which Asian characters are represented in white. This other circle, due to its smaller size and position, has a secondary position within the sign.

The contested mark includes the three word elements ‘KONG FO CHA’ written in standard black letters followed by the image of a Kung Fu fighter which appears on the right hand side of the sign in grey. The contested mark has no elements that could be considered more dominant (visually eye-catching) than other elements.

The element ‘KUNG FU’ included in the earlier mark refers to a widely known Chinese martial art in which people use only their bare hands and feet. Since it has no direct relation with the services in Class 43, it has an average degree of distinctive character.

The applicant argues that the words ‘KONG FO’ are equivalent to ‘KUNG FU’ since both terms are phonetical transcripts of the same Chinese name. In both versions, the name refers to an Asian martial art. In support of its claim, the applicant submits some Youtube and Facebook links.

The Cancellation Division considers that the element ‘KONG FO’, as such, is a fanciful expression, however, it cannot be denied that the majority of the relevant consumers might perceive it as an Asian expression and attribute to it the same meaning as the abovementioned element ‘KUNG FU’, as argued by the applicant. Moreover, they are elements of Chinese origin and the relevant public might not have full certainty of the exact transcription of those terms. Therefore, it is normally distinctive. This concept is reinforced by the concept of the Kung Fu fighter which evokes a Chinese content of the mark and it is normally distinctive in relation to the relevant goods and services. The mere fact that this discipline originates from China as well as some of the contested goods (e.g. Chinese steamed dumplings, Chinese stuffed dumplings and Oolong tea) is only a common factor, which does not affect the normal distinctiveness of this element.

The element ‘TEA’ included in the earlier mark is a basic English word that is understood internationally. As for the relevant services in Class 43, bearing in mind that they refer to places that normally serve tea, this element is non-distinctive.

The applicant argues that the words ‘TEA’ and ‘CHA’ included in both marks respectively are also equivalents. CHA is the (Chinese and) Portuguese word for ‘tea’, having its origin in the colonial history. However, it will be also perceived by merchants and by a large part of the general public all over the European Union. In support of its claim, the applicant submits one extract which explains the origin and use of the word ‘CHA’.

Indeed, in the Cancellation Division’s view, the word ‘CHA’ included in the contested mark means ‘tea’ in Portuguese (chá) but it will also be perceived with the same meaning by the majority of consumers in the relevant territory as it is a common word to refer to tea from a Chinese origin. Given that this word describes many of the contested goods in Class 30, namely, beverages made of tea, instant tea, jasmine tea, lime tea, oolong tea, tea, tea bags, tea pods, tea-based beverages, tea-based beverages with fruit flavouring and tea-based iced beverages, this word is non-distinctive. In addition, bearing in mind the remaining goods in Class 30, being food products that either can be made with tea (e.g. biscuits, ice cream and pastries) or consumed together (e.g. bread, rice dumplings, Chinese steamed dumplings, Chinese stuffed dumplings, instant noodles, puddings for use as desserts, rice-based snack foods and tapioca pearls), the element ‘CHA’ has a limited distinctiveness. As for the relevant services in Class 43, bearing in mind that they refer to places that normally serve tea, this element is non-distinctive.

As regards the figurative element that represents a black circle inside of which Asian characters are depicted, it would evoke an Asian content of the mark and it has an average degree of distinctive character. The black traces around the circle are merely decorative.

In this context, it has to be considered that, when signs consist of both verbal and figurative components, in principle, the verbal component of the sign usually has a stronger impact on the consumer than the figurative component. This is because the public does not tend to analyse signs and will more easily refer to the signs in question by their verbal element than by describing their figurative elements (14/07/2005, T-312/03, Selenium-Ace, EU:T:2005:289, § 37).

In the present case, the Cancellation Division finds it appropriate to focus the comparison of the signs on the part of the relevant public that will perceive the meaning of the three words ‘KONG’, ‘FO’ and CHA’ as stated above.

Visually, the signs coincide in their sequence of letters ‘K*NG F*’ which form their distinctive elements, however, they differ in their letters ‘U’ vs ‘O’, placed in the middle and at the end of both signs and in their non-distinctive or weak elements ‘TEA’ vs ‘CHA’.

The signs also differ in the image of the fighter included in the contested mark and in the circle with the Asian characters of the earlier mark as well as in the graphical representation and the arrangement of the elements within both signs. Therefore, the signs are visually similar to a low degree.

Aurally, irrespective of the different pronunciation rules in different parts of the relevant territory, the pronunciation of the signs coincides in the sound of the letters ‘k*ngf*’, however, they differ in the sound of their letters ‘u’ vs ‘o’ placed in the middle and at the end of both signs and in ‘tea’ vs ‘cha’ included in both signs respectively. It is not plausible that the relevant consumers will pronounce the Asian characters included in the circle of the earlier mark. Therefore, the signs are aurally similar to an average degree.

Conceptually, reference is made to the previous assertions concerning the semantic content conveyed by the marks. The signs will be associated with the same meaning on account of the verbal elements ‘KUNG FU TEA’ and ‘KONG FO CHA’ included in both signs. The concept of the element ‘KONG FO’ as the Chinese martial art will be reinforced by the image of the Kung Fu fighter included in the contested mark. Consequently, the signs are at least conceptually highly similar.

As the signs have been found similar in at least one aspect of the comparison, the examination of likelihood of confusion will proceed.

4. Distinctiveness of the earlier mark

The distinctiveness of the earlier mark is one of the factors to be taken into account in the global assessment of likelihood of confusion.

The applicant did not explicitly claim that its mark is particularly distinctive by virtue of intensive use or reputation.

Consequently, assessment of the distinctiveness of the earlier mark will rest on its distinctiveness per se. In the present case, the earlier trade mark as a whole has no meaning for any of the services from the perspective of the public in the relevant territory. Therefore, the distinctiveness of the earlier mark must be seen as normal, despite the presence of non‑distinctive or decorative elements in the mark as stated above in section c) of this decision.

5. Global assessment, other arguments and conclusion

The appreciation of likelihood of confusion on the part of the public depends on numerous elements and, in particular, on the recognition of the earlier mark on the market, the association which can be made with the registered mark, the degree of similarity between the marks and between the goods or services identified. It must be appreciated globally, taking into account all factors relevant to the circumstances of the case (22/06/1999, C-342/97, Lloyd Schuhfabrik, EU:C:1999:323, § 18; 11/11/1997, C-251/95, Sabèl, EU:C:1997:528, § 22).

As it has been considered above, the contested goods and services are partly identical, partly similar to a low degree and partly dissimilar. The relevant public has an average degree of attention and the earlier mark enjoys a normal distinctive character.

The signs are visually similar to a low degree because of the coincidence in the sequence of letters included in both verbal elements ‘K*NG F*’. Although the signs contain different figurative elements and aspects, they have less impact for the relevant public, as explained above. The signs are aurally similar to an average degree and conceptually at least highly similar.

It should be borne in mind that most of the relevant goods are food and beverages and they are frequently ordered in the places described in the relevant services (e.g. restaurants and bars), which are usually noisy establishments. Therefore, the phonetic similarity between the signs is particularly relevant (see judgment of 15/01/2003, T-99/01, Mystery, EU:T:2003:7, § 48, which reflects this line of reasoning). Accordingly, in such cases, it may be appropriate to attach particular importance to the phonetic similarity between the signs at issue. These considerations come into play in the finding of likelihood of confusion, as it is the case for the remaining relevant goods, since the visual aspect is low.

Likelihood of confusion covers situations where the consumer directly confuses the trade marks themselves, or where the consumer makes a connection between the conflicting signs and assumes that the goods/services covered are from the same or economically linked undertakings. It is highly conceivable that the relevant consumer will perceive the contested mark as a sub-brand, a variation of the earlier mark, configured in a different way according to the type of goods or services that it designates (23/10/2002, T-104/01, Fifties, EU:T:2002:262, § 49). Indeed, the contested mark will be perceived as a variation of the applicant’s mark.

Evaluating likelihood of confusion implies some interdependence between the relevant factors and, in particular, a similarity between the marks and between the goods or services. Therefore, a lesser degree of similarity between goods and services may be offset by a greater degree of similarity between the marks and vice versa (29/09/1998, C-39/97, Canon, EU:C:1998:442, § 17).

Considering all the above, the Cancellation Division finds that there is a likelihood of confusion on the part of the public and, therefore, the application is partly well founded on the basis of the applicant’s European Union trade mark registration No 15 825 284. As stated above in section c) of this decision, a likelihood of confusion for only part of the relevant public of the European Union is sufficient to declare the contested trade mark invalid.

Pursuant to the above, the contested trade mark must be declared invalid for the services found to be identical to those of the earlier trade mark. The application is also successful insofar as the goods that are similar to a low degree are concerned. As stated above and taking into account the interdependence principle, the similarity between the signs compensates the lesser degree of similarity of some of the contested goods.

The rest of the contested goods are dissimilar. As similarity of goods and services is a necessary condition for the application of Article 8(1) EUTMR, the application based on this article and directed against these goods cannot be successful.

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

The Cancellation Division

Ana MUÑIZ RODRIGUEZ

Carmen SÁNCHEZ PALOMARES

Michaela SIMANDLOVA

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.