CANCELLATION No 35 641 C (INVALIDITY)

Barbara Hamouda, Calle Beniarbeig 7, 03560 El Campello, Spain (applicant), represented by Bomhard IP, S.L., C/Bilbao, 1, 5º, 03001 Alicante, Spain (professional representative)

a g a i n s t

Nicky Möller, Wilhelmshöhe 7, 33102 Paderborn, Germany (EUTM proprietor), represented by Thomas Gerling, Technologiepark 11, 33100 Paderborn, Germany (professional representative).

On 06/05/2020, the Cancellation Division takes the following

DECISION

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

2. European Union trade mark No 17 788 101 is declared invalid in its entirety.

3. The EUTM proprietor bears the costs, fixed at EUR 1 080.

REASONS

The applicant filed an application for a declaration of invalidity against European Union trade mark No 17 788 101 (figurative mark) (the EUTM). The request is directed against all the goods and services covered by the EUTM, namely:

Class 1: Compost, manures, fertilizers; prepared soils; prepared soils for the germination of seeds; nutrients for plants; preparations for fortifying plants; plant nutrition preparations; growing media for plants; soil for growing; artificial plant-cultivation soil; soil amendments for horticultural use; soil conditioners for horticultural purposes; substrates used in agriculture, horticulture and forestry.

Class 16: Paper; pads [stationery]; jotters; notepads; notepaper; packaging materials; printed packaging materials of paper; printed matter; bookbinding material; photographs [printed]; catalogues; pamphlets; printed brochures; flyers; magazines [periodicals]; general feature magazines; calendars; printed calendars; books; pens; stationery; ball pens; teaching materials [except apparatus]; type [numerals and letters].

Class 31: Plants; bulbs (plant -); trees; natural plants; seedlings; seed germ for botanical purposes; flowering plants; dried plants; cuttings (plant -); grasses [plants]; sowing seeds; palm trees; raw and unprocessed grains; raw and unprocessed seeds; seeds for horticultural purposes; bulbs for horticultural purposes; agricultural and aquacultural crops, horticulture and forestry products; trunks of trees; plants, dried, for decoration; natural greenery for decoration; fresh fruits, nuts, vegetables and herbs; flowers; floral decorations [natural]; seeds, bulbs and seedlings for plant breeding; seeds for planting; conifer trees; trees and forestry products.

Class 44: Cultivation of plants; farming (crops); tree planting; agriculture services; horticulture; horticulture, gardening and landscaping; pest control services for agriculture, aquaculture, horticulture and forestry; plant nursery services; garden tree planting; advisory and consultancy services relating to the use of agricultural and horticultural fertilizers; information services relating to the use of fertilisers used in horticulture; rental of plants.

The applicant invoked Article 59(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

On 24/05/2019 the applicant filed an invalidity request and argued that the EUTM proprietor had acted in bad faith when filing the contested mark. The applicant firstly presented the chronology of the facts and explained that the applicant started to use the sign ‘MEDITPALMEN’ (word sign) in May 2016 in relation to the sales of plants and trees online via the e-commerce platform eBay and that the figurative sign was also being used by the applicant in the context of her business activities when the proprietor filed the contested EUTM. The applicant further explained that Mr Möller (the EUTM proprietor) was one of the applicant’s clients in 2016. Mr Möller became the applicant’s trade agent or sales representative from 13/11/2016 to 16/04/2018 by means of a representative agreement. The applicant stated that the proprietor was the applicant’s exclusive sales representative in a designated area in Germany, operating under the name ‘MEDITPALMEN’ according to the contract signed on 13/11/2016. The applicant further explained that the proprietor, on behalf of the applicant, was in charge of the further design and development of the sign ‘MEDITPALMEN’ as well as the development and creation of her logo , the website www.medit-palmen.com and the online shop www.medit-palmen.com/shop/. The proprietor also became the editor of the applicant’s Facebook page for ‘MEDITPALMEN’. The applicant stated that, in addition to marketing material and merchandising articles, the parties agreed on the registration of domain names and the corresponding creation of a website for the business’s commercial presence in Germany on behalf of and in the name of the applicant.

Nevertheless, between December 2016 and December 2017, Mr Möller authorised David Kaiser (the owner of the design company ‘CROWN Media & Events) to register several domain names in his own name, without informing the applicant, and these domain names are still registered in the name of David Kaiser with the registrar ‘Mesh Digital Limited’. The applicant further stated that the proprietor filed the contested EUTM on 08/02/2018, without informing the applicant and without her consent and in bad faith, during the period of validity of their commercial relationship, which ended on 16/04/2018. Moreover, as soon as the contested EUTM was registered (on 25/05/2018), the proprietor filed a blocking report, based on the ‘MEDITPALMEN’ EUTM trade mark registrations (word and figurative marks), against the applicant’s Facebook site, whereby access to the site and its entire content was deleted by Facebook on 28/05/2018. The proprietor created his own Facebook site on 31/05/2018. Furthermore, the applicant explained that the proprietor also reported the use of the applicant’s eBay account with the name ‘MEDITPALMEN’, as a consequence of which the applicant was forced to change the account name to continue with her sales activities.

The applicant argued that the facts outlined showed that the proprietor acted in bad faith when filing the contested EUTM. The applicant put forward that the contested EUTM fully incorporated the term ‘MEDITPALMEN’, used as a business identifier by the applicant since May 2016, and was identical to the figurative sign developed in the course of the business relationship between the parties and used by the applicant. At the time of filing of the contested EUTM, the sign ‘MEDITPALMEN’ was being used by the applicant (although it was not registered) in the context of her business activities (on eBay, social platforms, invoices, etc.), and as a result of the business relationship between the parties (Mr Möller was a former client and the applicant’s sales representative), the proprietor undoubtedly knew that the sign ‘MEDITPALMEN’ had been used for some time by the applicant. Furthermore, according to the applicant, the proprietor’s intention was dishonest, as he acted with the intention of preventing the applicant from filing the mark for registration or continuing to use the mark, at the same time taking advantage of the distinctiveness and high profile the sign had enjoyed in the market, especially for palm trees and olive trees, since 2016. In addition, the filing of the contested EUTM was contrary to the general obligations of trust that underlied commercial cooperation agreements and loyal business practices.

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

• Enclosure 1: excerpts from the Spanish Tax Office, dated 17/05/2016, approving the applicant’s activity (retail trade of seeds, fertilisers, flowers, plants) as an intracommunity operator as from 15/04/2016.

• Enclosure 2: excerpts from the eBay profile for ‘meditpalmen’/ (account registered since 31/05/2016) with the contact details of ‘Barbara Hamouda’, and an email from ebay.de confirming the date of creation of the eBay account ‘meditpalmen’ and its existence since 31/05/2016.

• Enclosure 3: excerpts from the eBay account ‘meditpalmen’/ run by the applicant from 31/05/2016 until the name change in June 2018. ‘Barbara Hamouda/meditpalmen’ is identified as the professional seller.

• Enclosure 4: screenshots from the Facebook page of ‘meditpalmen’/ run by the applicant (before its deletion). The posts are dated 2016.

• Enclosure 5: invoices issued by the applicant between June 2016 and October 2017 in the course of her business activity, showing the sign ‘MEDITPALMEN’ (as verbal and figurative signs as from 06/10/2017) together with the contact details of ‘Barbara Hamouda’.

• Enclosure 6: excerpts from WhatsApp conversations and partial translations into English, and annexes consisting of images and documents shared within the WhatsApp conversations from 24/06/2016 until early 2017. It can be seen from these documents that Mr Möller was one of the applicant’s clients in 2016 (Enclosure 7) before becoming a business partner of ‘meditpalmen’ (sales representative in Germany, Enclosure 8).

• Enclosure 7: invoices and transportation bills of purchases issued by the applicant and addressed to Mr Möller in June, July and September 2016. The applicant is identified as ‘MEDITPALMEN Barbara Hamouda’.

• Enclosure 8: sales representative contract between the parties signed on 13/11/2016. Mr Möller was the exclusive sales representative of ‘MEDITPALMEN’ in a designated area of Germany (Paderborn and surroundings).

• Enclosure 9: transportation bills of merchandise from Alicante (‘MEDITPALMEN/Barbara Hamouda’) to Delbrück (Germany), where Mr Möller is located, dated 2017.

• Enclosure 10: notice of termination of the contract, dated 16/04/2018, sent by the applicant’s representative to Mr Möller (in German, partly translated into English), on account of several breaches of contractual obligations and loyalty as well as the filing of the contested EUTM.

• Enclosure 11: Facebook posts by Mr Möller on the applicant’s Facebook page, dated between July and November 2017.

• Enclosure 12: invoices, issued by ‘CROWN Media & Events’ and addressed to Mr Möller, concerning the domain name registrations, the design of the logo, web services and web hosting for the domains and marketing articles (business cards, graphic design of T-shirts, etc.); subsequent invoices from Mr Möller to the applicant dated 01/02/2018 (forwarding of costs of advertisement and advertising media, for 2016 and 2017) and email correspondence in relation thereto.

• Enclosure 13: email correspondence between Mr Möller and the applicant with updates regarding the website, online shop and trade mark logo.

• Enclosure 14: document sent by Mr Möller to the applicant (summary of 29/12/2016) informing about the status of the website and the online shop.

• Enclosure 15: excerpts from ICANN WHOIS and ViewDNS.info showing registrations of the domain names <medit-palmen.com>, <medit-palms.com>, <meditpalmen.com>, <meditpalms.com> made on 15/12/2016 in the name of David Kaiser.

• Enclosure 16: excerpts from the ‘contact and legal notice sites’ of the website www.meditpalmen.com in different stages (before the filing of the contested EUTM, both Mr Möller and Mrs Hamouda were indicated as contact persons and Mr Möller was indicated as the sales representative in Germany. After the filing of the contested EUTM on 06/06/2018, and 07/01/2019, only Mr Möller’s details remained, still as sales representative in Germany).

• Enclosure 17: correspondence between the parties dated 16/02/2018, 17/02/2018 and 18/02/2018, after the applicant became aware of the ‘MEDITPALMEN’ trade mark filings (in German, partly translated to English). The proprietor confirmed that he acted on his own, considering himself entitled to do so as he was developing the brand and the logo.

• Enclosure 18: screenshot from the Facebook deletion report of the ‘meditpalmen’ page.

• Enclosure 19: screenshots of Mr Möller’s new Facebook page for ‘MeditPalmen’, created on 31/05/2018.

• Enclosure 20: excerpt of an email with an eBay report requesting a change of name of the eBay profile ‘meditpalmen’ of the applicant, dated 14/06/2018.

On 06/09/2019 the EUTM proprietor argued that he had used an eBay Kleinanzeigen account since 12/04/2015, prior to the applicant, under the name ‘Möller MeditPalmen’. Furthermore, the proprietor argued that he bought goods from ‘Barbara Hamouda’ and not from the company ‘MEDITPALMEN’ as the applicant had never used the sign ‘MEDITPALMEN’, and in any case she did not make a name for herself in the market, contrary to the proprietor having done so. The proprietor put forward that the applicant was not registered in the commercial register under ‘MEDITPALMEN’ and that she traded under different names (such as ‘palmsonline’) added to her company name ‘Barbara Hamouda’. He added that he never received the invoices mentioned by the applicant. According to the proprietor, he marketed the sign ‘MEDITPALMEN’ and operated the Facebook page himself.

The proprietor further argued that he challenged the commercial agency agreement because the applicant did not pay any commission and contacted other self-employed persons (such as Ms Theodora Roelofs Jansen) despite the existing non-competition clause. Furthermore, the proprietor argued that the costs from the company ‘Crowns Media & Event’ were borne exclusively by himself, and he secured for himself the domain names through that company. The proprietor reiterated that the sign ‘MeditPalmen’ was exclusively to be allocated to him, and he disputed the contents of the excerpts from the WhatsApp conversations submitted by the applicant in Enclosure 6 since he considered that some texts were deleted or altered. The proprietor also argued that the applicant abandoned her business on 01/03/2018 and the filing of EUTM No 17 997 628 ‘MEDITPALMEN’ on 07/12/2018 by the applicant was made in bad faith with a malicious intent. By contrast, when the proprietor filed the contested EUTM, he did not know that the applicant planned to do so (he became aware only on 10/02/2018 during a conversation with Ms Hamouda’s husband). The proprietor put forward that the applicant was engaged in reprehensible and intentionally unethical business practices such as stating the proprietor was the recipient of some invoices. Finally, the proprietor argued that the mere knowledge of the previous use of a sign as such is not sufficient to establish bad faith.

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

• Enclosure 1: undated extract from the website www.ebay-kleinanzeigen.de related to the EUTM proprietor’s eBay account ‘Möller MeditPalmen’, active since 12/04/2015.

• Enclosure 2: account details relating to payments made to ‘Barbara Hamouda’ and ‘Palmen Eden UG’.

• Enclosure 3: applicant’s deregistration of her business as from 01/03/2018, in German.

• Enclosure 4: undated screenshots from eBay (300 followers) and Instagram (4 365 followers) for ‘MeditPalmen, Herr Möller’ and an undated eBay screenshot of the applicant’s site (80 followers, accessed 1 247 times).

• Enclosure 5: letter from the proprietor’s representative to the applicant, dated 26/03/2018, to challenge the commercial agency agreement, in German with its translation into English.

• Enclosure 6: an example of one of the invoices issued by ‘Crowns Media & Event’ and addressed to the proprietor (for web service), dated 02/12/2016.

• Enclosure 7: original invoices from Mr Möller to the applicant, dated 01/02/2018 (forwarding of costs of advertisements and advertising media for 2016 and 2017).

• Enclosure 8: account details for payments made to ‘David Kaiser’.

• Enclosure 9: invoice from ‘Bodensee-Sukkulenten’, dated 09/05/2018, sent to the proprietor.

In reply, on 22/11/2019, the applicant argued that, contrary to the proprietor’s assertions, it was the applicant who came up with and started operating under the name ‘MEDITPALMEN’ via eBay in May 2016. Enclosure 1 submitted by the proprietor creates the false impression that there was an eBay account with the name ‘Möller MeditPalmen’ prior to the applicant’s use of ‘MEDITPALMEN’. The applicant explained that the proprietor may have had a previous account in ‘eBay Kleinanzeigen’ since 2015 under his name, ‘Herr Möller’ or ‘Nicky Möller’, but not under the name ‘MeditPalmen’. In fact, Mr Möller had a parallel account as a professional user, held under the name ‘Herr Möller’ since 05/03/2017, that was recently changed to the name ‘MeditPalmen Herr Möller’. The applicant added that this could only be confirmed by eBay on request of the proprietor himself due to eBay’s privacy policy, but the proprietor had failed to do so or to submit full proof of the name under which the earlier account ran. Therefore, the applicant concluded that no account was created on 12/04/2015 under the name ‘MeditPalmen Herr Möller’.

The applicant further argued that the WhatsApp conversations were exported unaltered via the WhatsApp application to prove the facts. According to the applicant, the proprietor knew, at the latest when he signed the commercial representative contract, that the applicant, operating under her personal name ‘Barbara Hamouda’, had used the sign ‘MEDITPALMEN’ as a trade name or identifier on eBay, social media, letterheads, email addresses and accounts. The Facebook page was created by the applicant at the beginning of her business activities and later the proprietor posted contents for advertising the goods under her supervision. Regarding the deregistration as a business operator, the applicant argued that it did not mean that the applicant lost the right to continue using the sign ‘MEDITPALMEN’ created by her as a private seller or in relation to another company. Finally, the applicant argued that the proprietor’s intentions were to appropriate the name and clients and all the work invested and to continue the business himself under the name ‘MEDITPALMEN’ by filing the contested EUTM in bad faith and by blocking the applicant’s Facebook and eBay accounts. The proprietor’s intentions were contrary to honest commercial and business practices.

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

• Enclosure 21: excerpts of eBay profiles, dated 17/07/2018 and 22/05/2019, showing accounts in the name of ‘Herr Möller’ and ‘MeditPalmen Herr Möller’ respectively (both active since 05/03/2017).

• Enclosure 22: current excerpt of the applicant’s eBay account ‘d*oropalmen’ after the change of name from ‘meditpalmen’ (account registered since 31/05/2016).

• Enclosure 23: email received from ebay.de confirming the history of the applicant’s account created on 31/05/2016 with the name ‘meditpalmen’ and changed on 16/06/2018 to ‘d*oropalmen’.

In his final observations, on 19/12/2019 and on 31/01/2020, the EUTM proprietor reiterated his arguments and argued that the applicant had no trade mark rights since she did not register her sign and she did not use the sign ‘meditpalmen’ as a trade mark in the course of trade, and in any case the commercial transactions were very limited and insufficient to establish trade mark rights. The proprietor further argued that the logo design was made in 2016 by David Kaiser exclusively for the proprietor, Mr Möller, as was the registration of the domain names. The proprietor reiterated that the WhatsApp record was inadmissible as it could be easily altered. The proprietor claimed that he was the first to use and register ‘MeditPalmen’ as a trade mark and that he registered the contested EUTM for fair commercial reasons.

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

• Enclosure 10: screenshot from the applicant’s eBay account ‘d*oropalmen’, dated 30/10/2019.

• Enclosure 11: screenshot from the EUTM proprietor’s private eBay account ‘Möller MeditPalmen’, active since 12/04/2015, dated 17/10/2019.

• Enclosure 12: account details relating to payments made to ‘Barbara Hamouda’ and ‘Palmen Eden UG’ (previously submitted in Enclosure 2).

• Enclosure 13: screenshot from eBay/eBay small ads relating to ‘palmsonline’, created on 09/06/2017.

• Enclosure 14: screenshot from eBay relating to the proprietor’s commercial account ‘MeditPalmen Herr Möller’, active since 05/03/2017, dated 03/11/2019.

• Enclosure 15: invoices issued by ‘Crowns Media & Event’ and addressed to the proprietor (graphic design, web service, web hosting), dated 02/12/2016, 24/02/2017, 08/03/2017 (previously submitted by the applicant in Enclosure 12).

• Enclosure 16: letter from the proprietor’s representative to the applicant, dated 26/03/2018, to challenge the commercial agency agreement, in German (already submitted as Enclosure 5).

• Enclosure 17: declaration, dated 02/12/2019, from David Kaiser, in German with no translation into English.

• Enclosure 18: declaration from Ms Theodora Roelofs Jansen, dated 08/11/2019, in German with no translation into English.

• Enclosure 19: undated declaration from Ms Hogg, in German with no translation into English. According to the EUTM proprietor, Ms Hogg is a regular customer and she bought plants from the proprietor in May 2015.

ABSOLUTE GROUNDS FOR INVALIDITY — ARTICLE 59(1)(b) EUTMR

General principles

Article 59(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 (08/03/2017, T‑23/16, Formata (fig.), EU:T:2017:149, § 45).

Outline of the relevant facts and chronology of events

• The applicant started to use the sign ‘MEDITPALMEN’ in May 2016 in relation to the sales of plants and trees online via the e-commerce platform eBay.

• Mr Möller (the EUTM proprietor) was one of the applicant’s clients in 2016.

• Mr Möller became the applicant’s exclusive sales representative in a designated area in Germany between 13/11/2016 and 16/04/2018, operating under the name ‘MEDITPALMEN’.

• During their commercial relationship, on 08/02/2018, the EUTM proprietor filed the contested EUTM .

• After the registration of the contested EUTM, on the basis of this trade mark, the EUTM proprietor blocked the applicant’s Facebook page and eBay account.

The applicant claimed bad faith from the fact that, at the time of filing of the contested mark, (i) the applicant had been using the signs ‘MEDITPALMEN’/ for almost 2 years; (ii) there was a contractual relationship between the parties; (iii) on account of his position as the applicant’s sales representative, the EUTM proprietor was aware that the identical sign ‘MEDITPALMEN’ had been used by the applicant for the sale of trees and plants; (iv) the EUTM proprietor filed the contested EUTM to prevent the applicant from continuing to use her business denomination in the course of her business activity.

Assessment of bad faith

Case-law shows three factors to be particularly relevant for a finding of bad faith.

• Identity/confusing similarity of the signs: the EUTM allegedly registered in bad faith must be identical or confusingly similar to the sign to which the invalidity applicant refers. Although the fact that marks are identical or confusingly similar is not in itself sufficient to show bad faith (01/02/2012, T‑291/09, Pollo Tropical chicken on the grill, EU:T:2012:39, § 90; 28/01/2016, T‑335/14, DoggiS, EU:T:2016:39, § 59-60), a dissimilar or not confusingly similar mark will not support a finding of bad faith.

• Knowledge of the use of an identical or confusingly similar sign: the EUTM proprietor knew or must have known about the use of an identical or confusingly similar sign by a third party for identical or similar products or services.

There is knowledge, for example, where the parties have been in a business relationship with each other and, as a result thereof, the EUTM proprietor ‘could not ignore, and was probably aware that the invalidity applicant had been using the sign for a long time’ (11/07/2013, T‑321/10, Gruppo Salini, EU:T:2013:372, § 25), when the reputation of the sign, even as a ‘historical’ trade mark, is a well-known fact (08/05/2014, T‑327/12, Simca, EU:T:2014:240, § 50), or when the identity or quasi-identity between the contested mark and the earlier signs ‘manifestly cannot be fortuitous’ (28/01/2016, T‑335/14, DoggiS, EU:T:2016:39, § 60).

• Dishonest intention on the part of the EUTM owner: this is a subjective factor that has to be determined by reference to objective circumstances (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 42).

In addition to the abovementioned, other potentially relevant factors identified in case-law and/or Office practice for assessing the existence of bad faith include the circumstances under which the contested sign was created, the use made of it since its creation, the commercial logic underlying the filing of the application for registration of that sign as an EUTM, and the chronology of events leading up to that filing (14/02/2012, T‑33/11, Bigab, EU:T:2012:77, § 21 et seq.; 08/05/2014, T‑327/12, Simca, EU:T:2014:240, § 39; 26/02/2015, T‑257/11, COLOURBLIND, EU:T:2015:115, § 68).

Furthermore, the General Court has held that, in order to assess whether there was bad faith, the EUTM proprietor’s intention at the time of filing the application for registration, which is a subjective factor that has to be determined by reference to the objective circumstances of the particular case, must also be taken into account (08/03/2017, T‑23/16, Formata (fig.), EU:T:2017:149, § 44).

This intention may be inferred from all the objective situations of conflicting interests in which the EUTM proprietor has operated (11/07/2013, T‑321/10, Gruppo Salini, EU:T:2013:372, § 28). It may, inter alia, be inferred from the EUTM proprietor’s specific actions before the filing of the contested mark, from the contractual, pre-contractual or post-contractual relationship between the parties, from the existence of reciprocal duties or obligations, including the duties of loyalty and integrity arising because of the present or past occupation of certain positions in the business relationship, etc. (12/09/2019, C‑104/18P, STYLO & KOTON (fig.), EU:C:2019:724, § 47; 11/02/2020, R 2445/2017‑G, Sandra Pabst, § 34 et seq.).

Thus, the concept of bad faith involves a subjective motivation on the part of the trade mark applicant, namely a dishonest intention or other deceitful motive. It involves conduct that departs from accepted principles of ethical behaviour or honest commercial and business practices (14/05/2019, T‑795/17, NEYMAR, EU:T:2019:329, § 23).

It is in light of the foregoing that the Cancellation Division must examine whether the EUTM proprietor acted in bad faith when filing the contested EUTM.

Identity/similarity of the signs and knowledge of the sign before the filing of the contested EUTM

Identity/similarity of the signs

Article 59(1)(b) EUTMR does not require, in principle, that the contested EUTM be identical or similar to an earlier right. However, in cases where the invalidity applicant is claiming that the intention of the EUTM proprietor was to misappropriate one or more earlier rights, such as the present one, it is difficult to envisage how a claim of bad faith may succeed if the signs at issue are not at least similar.

The contested EUTM is confusingly similar to the sign ‘MEDITPALMEN’ used by the applicant since they both reproduce the word element ‘meditpalmen’, and it is identical to the figurative sign developed on behalf of the applicant and used by the applicant in the course of her business activities.

The previous relationship between the parties and the EUTM proprietor’s awareness of the applicant’s earlier sign

The evidence submitted by the applicant demonstrates that the sign ‘MEDITPALMEN’ was used by the applicant from May 2016 for the online sale of plants and trees via the eBay platform. The sign was used on eBay, Facebook and the invoices sent to clients (Enclosures 2-5). The figurative sign was created later, in 2017, during the commercial relationship between the parties. According to the evidence on file, the logo was created by ‘Crowns Media’ for the EUTM proprietor, on behalf of the applicant.

As proved by the applicant, the EUTM proprietor was one of the applicant’s clients and some transactions were made in June, July and September 2016 (Enclosure 7 with invoices and transportation bills sent by the applicant to the EUTM proprietor).

On 13/11/2016 the parties signed a sales representative contract between ‘MEDITPALMEN’, referred to as the ‘company’, and Mr Nicky Möller, referred to as the ‘sales representative’. The contract concerned the exclusive representation of the company in the district of Paderborn and its surroundings in Germany (Enclosure 8). The existence of the commercial relationship is also shown by the correspondence between the parties and the invoices and transportation bills issued in 2017 for the goods to be delivered to Mr Möller in Delbrück. The parties terminated their commercial relationship on 16/04/2018.

In light of the foregoing, it is quite clear that the EUTM proprietor knew, at the latest when he signed the commercial representative contract, that the applicant, operating under her personal name ‘Barbara Hamouda’, had used the sign ‘MEDITPALMEN’ (although it was not registered) in the context of her business activities. As a result of the business relationship between the parties, the proprietor undoubtedly knew that the sign ‘MEDITPALMEN’, which is confusingly similar to the contested EUTM, had been used for some time.

The EUTM proprietor claimed that he was first to use the sign ‘MEDITPALMEN’ as an eBay profile name (since 12/04/2015). As pointed out by the applicant, although Enclosure 1 submitted by the EUTM proprietor shows that the eBay account ‘Möller MeditPalmen’ has been active since 12/04/2015, it does not prove that the account has not changed its name since its creation. As correctly argued by the applicant, this can only be confirmed by eBay at the request of the proprietor, but the proprietor failed to do so and therefore did not submit full proof of the name under which the earlier account ran in 2015. If the EUTM proprietor had been operating under the name ‘MEDITPALMEN’ before the commercial agreement with the applicant, it is highly unlikely that he would have tolerated the use of the name ‘MEDITPALMEN’ on the first page of the contract where it makes reference to the applicant as a contracting party. Regardless of whether or not the applicant was correctly identified in the sales representative contract, it is clear that the applicant was identified as ‘MEDITPALMEN’.

According to Enclosure 19, a client bought plants from the proprietor in May 2015 under the sign ‘MeditPalmen’. Apart from being undated, the declaration has not been corroborated by objective evidence such as invoices, and this sole document, which has very limited value, is unable to prove that the EUTM proprietor used the sign ‘MeditPalmen’ prior to the applicant.

Therefore, at the time of filing of the contested EUTM the EUTM proprietor clearly knew of the use of an identical and confusingly similar sign by the applicant.

However, knowledge of an identical or similar earlier sign for identical or similar goods or services is not sufficient in itself to support a finding of bad faith (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 40, 48-49).

Dishonest intention from the EUTM proprietor

Awareness on the part of the trade mark proprietor is insufficient in itself to establish that it acted in bad faith. It is also necessary to take into consideration the EUTM proprietor’s intention at the time of filing (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 40, 41). Although that intention is a subjective factor, it must nonetheless be determined by reference to the objective circumstances of the particular case (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 42).

One situation that may give rise to bad faith is when the EUTM proprietor intends through registration to lay its hands on the trade mark of a third party with whom it had contractual or pre-contractual relations, or any kind of relationship, where good faith applies and imposes on the EUTM proprietor the duty of fair play in relation to the legitimate interests and expectations of the other party (13/11/2007, R 336/2007‑2, CLAIRE FISHER / CLAIRE FISHER, § 24). Bad faith may apply both when the application was made in order to misuse the EUTM system or in order to misappropriate the rights of others (13/11/2007, R 336/2007‑2, CLAIRE FISHER / CLAIRE FISHER, § 20).

The essential question is whether the relationship between the parties created a close enough link to suggest that it is fair to expect the EUTM proprietor not to file an identical EUTM application independently without giving the invalidity applicant prior information and sufficient time to take action against the contested EUTM (13/12/2004, R 582/2003‑4, EAST SIDE MARIO’S, § 23).

The relationship might be sufficiently close if the parties have entered into contractual or pre-contractual negotiations that, inter alia, concern the sign in question. This relationship does not have to be specifically or exclusively related to, for example, franchise rights for the territory concerned (13/12/2004, R 582/2003‑4, EAST SIDE MARIO’S, § 23).

Furthermore, if a duty of fair play exists, it must be established whether the EUTM proprietor’s actions constitute a breach of a duty of fair play, thereby having been made in bad faith.

The EUTM proprietor claimed that, when he filed the contested EUTM, he did not know that the applicant planned to do so (he became aware of this during a conversation with Ms Hamouda’s husband on 10/02/2018), and he considered that he had a legitimate claim to the mark since the design of the EUTM, as well as the establishment of the mark in the market, was due to his hard work.

It can be clearly inferred from the evidence and the abovementioned arguments that, by virtue of the contractual relationship between the parties, there was a close relationship based on confidence, which implies that, in compliance with fair business practices, the EUTM proprietor had to consult about the issue with the applicant before applying for the contested EUTM.

Furthermore, given the existing relationship between the parties and the fact the EUTM proprietor was in charge of the trade mark development on behalf of the applicant, the work done by the EUTM proprietor does not constitute a legitimate motive for him to apply for the contested EUTM without informing the applicant and without her consent. Contrary to the EUTM proprietor’s allegations, the applicant has duly proved that the EUTM proprietor was in charge of the development of the sign ‘MEDITPALMEN’, including the development of the logo, the website, etc., on behalf of the applicant (Enclosures 12, 13 and 14). The fact that the EUTM proprietor worked hard on that development does not remove his obligations of loyalty and fair play.

The relationship between the parties created an obligation on the proprietor of a duty of fair play and loyalty towards the applicant. The latter in turn had legitimate expectations and objectives that the mark at issue would have been filed in the name of the applicant. It is considered that the proprietor did not act ethically and the registration of the contested EUTM would appear to be an act to deprive the applicant of the possibility of using her sign in trade and block the possibility of registering it later as a trade mark. By filing and registering the contested mark, the EUTM proprietor has effectively put an obstacle before the applicant and her business.

In addition, the evidence shows that after the filing of the contested EUTM, the EUTM proprietor filed a blocking report based on the contested EUTM against the applicant’s Facebook page and the page’s access and content was deleted by Facebook on 28/05/2018. Furthermore, the EUTM proprietor also reported the use of the applicant’s eBay account with the name ‘MEDITPALMEN’, and the applicant was forced to change its name. This situation confirms that at the time of filing of the contested mark the EUTM proprietor’s intention was to block the applicant from using her sign.

The ground of bad faith applies where it is apparent from relevant and consistent indicia that the proprietor of an EU trade mark filed its application for registration not with the aim of engaging fairly in competition, but with the intention of undermining the interests of third parties in a manner inconsistent with honest practices, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin (12/09/2019, C‑104/18P, STYLO & KOTON (fig.), EU:C:2019:724, § 46).

Finally, the EUTM proprietor’s argument that he was the first to file the trade mark is not relevant in itself. The concept of bad faith referred to in Article 59(1)(b) EUTMR is an autonomous concept of European Union law, and the purpose of Article 59(1)(b) EUTMR is precisely that of creating a corrective to the fundamental principle of trade mark law that the rights conferred by a trade mark belong to the person who was first to file a sign in cases where the trade mark was registered in bad faith by the proprietor.

In light of the aforementioned, the objective circumstances of the evidence and the facts presented lead to a conclusion that the EUTM proprietor was acting in bad faith when he filed the contested EUTM. Moreover, as explained above, the EUTM proprietor has not put forward valid and relevant reasons for registering the mark or any real legitimate objectives on his behalf. The EUTM proprietor’s actions constitute a breach of the duty of fair play and an attempt to usurp the applicant’s rights and to obtain an exclusive right.

Extent of the invalidity

When bad faith of the EUTM proprietor is established, the whole EUTM is declared invalid, even for goods and/or services that are unrelated to those protected by the invalidity applicant’s mark.

The General Court confirmed the Board of Appeal’s decision in the case of 21/04/2010, R 219/2009‑1, GRUPPO SALINI / SALINI and stated that a positive finding of bad faith at the time of filing the contested EUTM could only lead to the invalidity of the EUTM in its entirety (11/07/2013, T‑321/10, Gruppo Salini, EU:T:2013:372, § 48).

Although the Court did not expand on the reasons for this conclusion, it can be safely inferred that it took the view that the protection of the general interest in business and commercial matters being conducted honestly justifies invalidating an EUTM for goods/services that are dissimilar to those of the invalidity applicant, even those that do not even belong to an adjacent or neighbouring market. Therefore, it seems only logical that the invalidity, once declared, should extend to all the goods and services covered by the contested EUTM.

Conclusion

In the light of the above, the Cancellation Division concludes that the application is totally successful and the European Union trade mark should be declared invalid for all the contested goods and services.

COSTS

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

Since the EUTM proprietor is the losing party, he must bear the cancellation fee as well as the costs incurred by the applicant in the course of these proceedings.

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

The Cancellation Division

Marta Maria CHYLIŃSKA

Frédérique SULPICE

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.