CANCELLATION No C 44 663 (INVALIDITY)

 

SIA Buschmann Tools, Mālu iela 28, 1058 Riga, Latvia (applicant), represented by Law Firm Fort, 8-4 Antonijas Street, 1010 Riga, Latvia (professional representative)

 

a g a i n s t

 

Martin Mayerhofer, Innstr. 4, 6402 Hatting, Austria (EUTM proprietor), represented by Christoph Friedrich Jahn, Rothenburg 41, 48143 Münster, Germany (professional representative).

On 16/02/2021, the Cancellation Division takes the following

 

 

DECISION

 

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

 

2.	European Union trade mark No 18 012 409 is declared invalid in its entirety.

 

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

 

REASONS

 

The applicant filed a request for a declaration of invalidity against European Union trade mark No 18 012 409 (figurative mark) (the EUTM), filed on 18/01/2019 and registered on 04/06/2019. The request is directed against all the goods and services covered by the EUTM, namely the following:

Class 7: Drill presses being machines; Drilling tips for drilling machines; Power drills and bores; Drilling bits [parts of machines]; Drilling machines and parts therefor, In particular drilling machine attachments; Drilling machines [for metalworking]; Folding machines.

Class 35: Retailing and wholesaling, including via the internet, in the fields of machines and machine tools for the treatment of materials and production, drilling machines (parts of machines), drill bits for drilling machines, drilling machines and apparatus, inserts for drilling machines, drilling machines and parts therefor, in particular drilling machine attachments, drilling machines (for the treatment of materials), folding machines, machines for the processing of metal.

The application is based on the non-registered trade mark ‘Accuseamer’ used in the course of trade in Austria, Germany, the European Union and Latvia. The applicant invoked with respect to the earlier rights Article 60(1)(b) EUTMR in conjunction with Article 8(3) EUTMR requesting invalidation of the contested mark.

The applicant also claimed that the EUTM proprietor was acting in bad faith when applying for the contested mark and invoked Article 59(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

 

The applicant argues that the EUTM proprietor has acted in bad faith in registering the mark to be cancelled, as the dominant element of the contested mark is identical to the applicant´s earlier mark, the conflicting signs would be confusingly similar and would cover identical goods and services. Further, the EUTM proprietor was aware of the applicant´s mark, as the parties started their commercial collaboration in 2013 and until the beginning of 2020 the EUTM proprietor had been the main distributor of the applicant's products, including those bearing the invoked non-registered trade mark.

The applicant explains that it started using the non-registered trade mark Accuseamer with respect to goods in Class 7 in 2017 when it launched production of a drilling machine, a product that was invented by Ingus Bušmanis (the sole shareholder and board member of the applicant). The cooperation between the parties in the distribution of products manufactured by the applicant started in 2013 and continued until the beginning of 2020. In 2017, the applicant started work on the development of new products under the name Accuseamer. According to the applicant, as the EUTM proprietor was the exclusive distributor of the products manufactured by the applicant, the new products were presented to the EUTM proprietor already during their development, and after their completion, the latter was entrusted with the distribution of said products.

The applicant makes reference to a cooperation between the parties in respect of worldwide distribution of the applicant’s products since 2013 and claims that between 2017 and 2020 it sent the EUTM proprietor a total of more than 2000 products bearing the non-registered trade mark Accuseamer for further distribution.

Based on the above, the applicant draws the conclusion that in the context of the cooperation between the parties, the EUTM proprietor became acquainted with the product, its characteristics and had access to information on the market demand for the product and its reputation on the market. Therefore, the applicant is of the view that the EUTM proprietor's registration of the contested sign in its own name should be considered a breach of honest commercial and business practices.

The applicant gives as a further example of dishonest behavior on behalf of the EUTM proprietor who filed EUTM application No 18 205 703, Perfect Bender, which had been used by the applicant in its business since 2013.

The applicant argues that the EUTM proprietor´s bad faith is confirmed by the latter´s email to the applicant, stating that ´Perfect Bender and Accuseamer is a protected and Registered Trade Mark of BiegetecAT and Martin Mayerhofer with Company Headquarters in Austria. We ask you hereby politely to not use this Name, Label, Logo and Trade Mark anymore, or we have to consider legal actions”.

According to the applicant, such actions by the EUTM proprietor not only indicate its awareness of the products manufactured by the applicant under the name Accuseamer, but also the intention to compete unfairly in an attempt to ban the use of a non-registered trade mark which the applicant introduced already in 2017.

With respect to the claim under Article 60(1)(b) EUTMR in conjunction with Article 8(3) EUTMR the applicant reiterates that the collaboration between the applicant (originally Ingus Bušmanis, who would be the only board member and shareholder of the applicant) and the EUTM proprietor was launched in 2013. The applicant explains that in 2013 the EUTM proprietor (being at that point in time a representative of Stubai ZMV GmbH) visited Riga, Latvia to meet with representatives of the company TOODE. A representative of the company TOODE brought the EUTM proprietor to the workshop of Ingus Bušmanis and introduced the parties. According to the applicant, the collaboration between the parties continued from 2013 until 2020 and took the form of meetings at least three times a year in Latvia and/or in Austria, joint participation in exhibitions, regular email correspondence with sales results and sales strategy, and invoices issued by the applicant to the EUTM proprietor for products and their delivery to the latter to resell the products. Therefore, the applicant is of the view that there was no buyer-seller relationship between the parties, but a customer-agent relationship of a kind that gives rise to a fiduciary relationship. The applicant maintains that although there was no written cooperation agreement between the parties, their relationship on the date of the application for the contested EUTM was, in view of the business correspondence between them, more than that of merely buyer and seller. There was, rather, a tacit cooperation agreement that led to a fiduciary obligation on the part of the EUTM proprietor.

The applicant submitted the following evidence:

Annex 1: A photo of a drilling machine (undated) bearing the sign ‘Accuseamer’. According to the applicant, the photo is of 07/07/2017 and the machine is manufactured by the applicant.

Annex 2: Three invoices dated 05/10/2018, 15/02/2019 and 18/02/2019 issued by the applicant to the EUTM proprietor regarding the sale of 113 ‘Accuseamer’ products.

Annex 3: A string of emails dated in April 2017 between the EUTM proprietor and representatives of the applicant (inter alia, Ingus Bušmanis) with respect to different tools. The EUTM proprietor is asking about an Accu Seamer prototype and drawings to “see if we at least put a PATENT PENDING on it” and the applicant is replying that the “ACCU SEAMER will be ready the end of May”.

Annex 4: Email correspondence of 1-2/06/2017 between the parties discussing, inter alia, options for protection of the ACCU Seamer. The EUTM proprietor explains that he started the patent process for the Accu Seamer and the applicant responds that they also have meetings with patent consultants and that they could get a design patent and they would need a “patent for the name “Accu Seamer” too”. The EUTM proprietor clarifies that the patent is filed in his name and he would be sure that to “integrate INGUS BUŠMANIS as the Inventor”. Alternatively, the EUTM proprietor would write a separate contract between himself and Ingus Bušmanis “so if anything happens one of us holds the Patent”. In the applicant´s response it is stated that they would agree to the offer and that the joint patent would strengthen their cooperation which, in turn, is also accepted by the EUTM proprietor.

Annex 5: Email dated 27/03/2020 sent by the EUTM proprietor to, inter alia, Ingus Bušmanis, informing him that ´Perfect Bender and Accuseamer is a protected and Registered Trade Mark of BiegetecAT and Martin Mayerhofer with Company Headquarters in Austria. We ask you hereby politely to not use this Name, Label, Logo and Trade Mark anymore, or we have to consider legal actions”.

Annex 6: Order confirmation, invoices and payment confirmations dated in 2020 with respect to sales by the applicant to third parties of the product Falz Seamer II (Accu seamer).

Annex 7: A document entitled ‘Statistic up to 1.10.2019’ of unknown origin, referring to Accuseamer sales in 2018 and 2019 and target goal for 2019; email dated 08/12/2019 sent by the EUTM proprietor to Ingus Bušmanis referring to a presentation of the parties that made “a big impression” to potential partners and stating “[t]hey also like the opportunity to cooperate with Buschmann tools directly and I am the Link between the two companies”; a picture of an unidentified man holding documents; further document of unknown origin making references to sales (of, inter alia, Accuseamer), requests, visit to Riga; email dated 01/10/2019 sent by the EUTM proprietor to Ingus Bušmanis informing him of an order for PVC cases for Accuseamer and providing him with the current stocklist of Benders and Accuseamers and Statistic Plan.

Annex 8: An email exchange dated in April/May 2013 between Ingus Bušmanis and the EUTM proprietor (in his capacity of representative of Stubai ZMV GmbH) with subject matter “Bender”, from which it can be seen that Ingus Bušmanis sent tool samples to the EUTM proprietor/Stubai ZMV GmbH and the EUTM proprietor discusses cooperation between the parties on paper and that Ingus Bušmanis would not offer this line to a direct competitor of Stubai ZMV GmbH.

Annex 9: Email dated 02/05/2014 sent by the EUTM proprietor to Ingus Bušmanis from which it can be inferred that the cooperation with Stubai ZMV GmbH is not going as expected but that the EUTM proprietor is starting his own trading company in Austria so that they could discuss options, e.g. a joint venture business where he would be the sales representative for the applicant’s company or the applicant’s representative would become the EUTM proprietor’s supplier and the EUTM proprietor would order and only sell the applicant’s products worldwide under the “Perfect Bender Logo”. The EUTM proprietor states “You would just have to trust me or us and our Customer base. I think very positive that we can do it with some help of my contacts worldwide”.

Annex 10: Email dated 08/01/2015 sent by the EUTM proprietor to a potential client, explaining that he is the “Manager of BiegetecAT and Perfect Bender tools” and that he has been asked by Mr. Bušmanis to establish this contact and offer the tools.

Annexes 11

to 15: Emails dated 28/01/2015, 02/04/2015, 03/04/2015, 24/07/2015 and 31/05/2016 sent by the EUTM proprietor to Ingus Bušmanis discussing the development of the business collaboration (orders and payments received, potential sales agents in France and Germany, participation in trade fairs, development of marketing materials, special offers and prototypes, trade mark registration and legal protection of the logo); the EUTM proprietor states, among others, that “[n]o exclusive Contract should be extended over one Year with any partner Worldwide” and “[i]nquiries from Customer directly to Buschmann Tools will be forwarded to BiegetecAT (exception: Todde and Balex)”; the EUTM proprietor also points out the need to get trade mark protection for “PERFECT BENDER” with OHIM [sic.] asking the applicant whether it would like to own the mark as it would be the Manufacturer and mentioning “I am only the Dealer”.

The remaining submitted Annexes contain evidence already included in the evidence described above.

The EUTM proprietor did not submit observations in response.

PRELIMINARY REMARK

In its statement of grounds, the applicant occasionally requests ‘revocation’ of the contested mark. However, from the submitted cancellation form and the entirety of the applicant’s claims and observations in becomes clear that the applicant used the word ‘revocation’ as a synonym of ‘cancellation’ and it was not its intention to also bring a revocation action against the contested EUTM (which would in any event be dismissed as premature since the contested mark was registered in 2019).

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. 

Assessment of bad faith

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

Bad faith might be applicable when the parties involved have or have had any kind of relationship, such as (pre-/post-) contractual relationships, giving rise to mutual obligations and a 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).

From the evidence submitted by the applicant (in particular, the email correspondence) it becomes clear that the parties to the present proceedings have been engaged in a business relationship since 2013, with the applicant as inventor and manufacturer of tools and the EUTM proprietor as a dealer of the applicant’s tools. Moreover, although the evidence provided by the applicant with respect to the use of the invoked sign is not particularly voluminous or exhaustive, the Cancellation Division considers that the invoice dated 05/10/2018 (backed also by the invoices issued in the beginning of 2019, shortly after the filing of the contested EUTM, Annex 2) as well as the correspondence in Annex 3 are sufficient to establish that the EUTM proprietor was aware of the sign ‘Accuseamer’ and that the parties had a relationship specifically with respect to this sign.

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 signs at issue are the following:

Accuseamer
Earlier sign	Contested sign

The Cancellation Division concurs with the applicant that the contested EUTM reproduces as its dominant element the earlier sign.

Although the distinctiveness of the elements ‘Accu’ and ‘seamer’ with respect to the tools and machines in Class 7 may be rather limited (at least from the perspective of the English-speaking part of the public which would see in ‘Accu’ a reference to a rechargeable device and in ‘seamer’ a reference to the purpose of the device), in this case the particular structure of the contested EUTM needs to be taken into account. The dominant element ‘ACCU SEAMER’ in the contested sign is followed by the elements ‘made by biegetec.at’ which, despite their smaller typeface, are not negligible and will not be overlooked and will, moreover, be perceived as a reference to the business name or company name of the proprietor of the contested mark. Thus, on account of the juxtaposition of these elements in the contested sign, the relevant public will perceive the dominant element, despite its lower degree of inherent distinctiveness, as an independent sub-brand.

Therefore, the conflicting signs are visually, aurally and also conceptually (at least for a part of the public) similar to at least an average degree.

Moreover, it is acknowledged that the goods covered by the conflicting signs at least partly overlap and that the contested services in Class 35 are also related to such goods.

Intention to misappropriate the rights of a contractual partner (duty of fair play)

As explained above, there is bad faith 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). 

The essential question is, therefore, 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).

Secondly, if a duty of fair play exists, it must be established whether or not the EUTM proprietor’s actions constitute a breach of a duty of fair play, thereby having been made in bad faith.

In the present case, both questions are to be answered in the affirmative.

The Cancellation Division is of the view that although there was no written cooperation agreement between the parties, the evidence on file, considered in its entirety, leads to the conclusion that the parties appeared to be business partners which would imply a general duty of trust and loyalty. There is no doubt that the relationship between the parties dates back to 2013 and that a close type of commercial cooperation agreement existed between the parties. This becomes clear from the email exchanges where commercial strategies, marketing materials, participations in fair trades, stocks and orders, etc. are discussed. Moreover, the parties were collaborating in the development and marketing of products and the applicant was referring clients to the EUTM proprietor with a view to sales and offers of the applicant´s tools (Annexes 10 - 15).

Moreover, the evidence demonstrates that the EUTM proprietor considered himself a dealer/distributor of the applicant´s tools, the applicant being the ‘inventor’ and ‘manufacturer’ (Annexes 5 and 15).

With respect to the particular signs in question, account is to be taken not only of the context of the commercial cooperation between the parties imposing on them the duty of fair play in relation to the legitimate interests and expectations of the other party but also of the concrete correspondence and arrangements with respect to the protection of the sign ‘Accuseamer’. It can be clearly inferred from Annexes 3 and 4 that the parties were jointly considering options for obtaining protection for ‘Accuseamer’ (by means of applying for a patent, design and/or a trade mark).

Based on the above, the Cancellation Division considers that the EUTM proprietor clearly was - at the time of filing the EUTM - under a fiduciary obligation of trust and loyalty as regards the interests of the cancellation applicant to the extent that for the latter it was fair to expect the EUTM proprietor not to file an EUTM application independently without giving the invalidity applicant prior information and sufficient time to take action.

In addition to the above and with respect to the EUTM proprietor’s intentions, the Cancellation Division finds that the EUTM proprietor’s cease and desist email to Mr Ingus Bušmanis (Annex 5) is a clear indication of the EUTM proprietor’s aim to impede the applicant’s presence on the market.

Consequently, in filing and registering the contested trade mark, the EUTM proprietor has effectively put a potential obstacle in front of the applicant in its business activities on the European Union market.

Where the Cancellation Division finds that the objective circumstances of the case may lead to the rebuttal of the presumption of good faith, it is for the EUTM proprietor to provide plausible explanations on the objectives and commercial logic pursued by the application for registration of that mark (23/05/2019, T-3/18 & T-4/18, ANN TAYLOR / ANNTAYLOR et al., EU:T:2019:357, § 36-37). In the present case, the EUTM proprietor did not submit any observations and has not provided arguments or evidence that would allow the Cancellation Division to reach a different conclusion. The EUTM proprietor could have provided an explanation of the above events that could have justified its actions, but it failed to do so. The EUTM proprietor provided no reasons for the filing of the EUTM that would appear legitimate.

On the basis of the presented arguments and evidence, the Cancellation Division finds that the EUTM proprietor was acting in bad faith when registering the 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.

 

Since the application is fully successful on the grounds of Article 59(1)(b) EUTMR, there is no need to further examine the other ground of the application, namely Article 60(1)(b) EUTMR in conjunction with Article 8(3) EUTMR .

COSTS

 

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

 

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

 

According to Article 109(7) EUTMR and Article 18(1)(c)(ii) EUTMIR, the costs to be paid to the 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

 

Michaela SIMANDLOVA

Denitza STOYANOVA-VALCHANOVA

Vanessa PAGE HOLLAND

 

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.