CANCELLATION No 12 750 C (INVALIDITY)

Shandong Lede Machinery Co., Ltd., No. 3998, West Waihuan N. Road, Weicheng District, Weifang City, Shandong Province, People’s Republic of China (applicant), represented by Arcade & Asociados, c/ Isabel Colbrand, 6 – 5^a planta, 28050 Madrid, Spain (professional representative)

a g a i n s t

Jinan Meide Casting Co. Ltd., No. 3 Nanmen Road, Pingyin, Jinan, Shandong, People’s Republic of China (EUTM proprietor), represented by D'Agostini Organizzazione S.L., San Telmo, 7, 03002 Alicante, Spain (professional representative).

On 07/12/2016, the Cancellation Division takes the following

DECISION

1. The application for a declaration of invalidity is rejected in its entirety.

2. The applicant bears the costs, fixed at EUR 450.

REASONS

The applicant filed an application for a declaration of invalidity against all the goods of European Union trade mark No 9 947 714 ‘ ’ (filed on 20/04/2011 and registered on 31/08/2011), namely all goods in Class 6. The application is based on a well-known trade mark ‘LEDE’ and on a non-registered trade mark ‘LEDE’. The applicant invoked Article 53(1)(a) EUTMR in conjunction with Article 8(2)(c) and 8(1)(a) and (b) EUTMR, Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR and Article 52(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant argues that its non-registered marks are highly similar to the contested mark and the goods for which the applicant’s marks are used are identical or very similar to the contested goods. Consequently, there is a likelihood of confusion between the marks. The applicant has been using the marks extensively in Europe since 2006, and, thus, the condition of use set by Article 8(4) EUTMR is satisfied. The applicant refers to the judgment of the General Court in case T-303/08 (09/12/2010, T‑303/08, Golden Elephant Brand, EU:T:2010:505) and argues that the contested mark causes misrepresentation and the applicant’s goodwill is likely to be damaged. Finally, the applicant claims that the contested mark was filed in bad faith because the EUTM proprietor must have known about the applicant’s mark since both companies belong to the same commercial sector and market the same goods.

To support its statements, the applicant submits the following documents:

• Business license of the applicant and its translation into English.

• A statement made by the applicant, stating that the applicant has been selling LEDE brand products including grooved couplings, fittings and valves used in the fire sprinkler system in the EU since 2006.

• A statement made by Tubtec Soluções Técnicas para Canalizações S.A. certifying that the company used ‘LEDE’ products in construction projects in Europe since 2009 (the letter includes four examples of those projects, all in Portugal).

• A statement made by Riegos Iberia Egaber S.A. certifying that the company used ‘LEDE’ products in construction projects in Europe (the letter includes six examples of those projects, all in France and Spain).

• A statement made by Profit Europe NV (domiciled in Belgium), certifying that the company have purchased grooved couplings and fittings under the brand ‘LEDE’ since 2009 from the applicant and that those products were used and sold from 2008 in Europe.

• Pictures of goods labelled with the mark ‘LEDE’ (metal fittings).

• Receipts of payments to Weifang Lede Machinery dated between 2008 and 2010.

• Invoices, packing list and bills of lading for clients in Belgium, Portugal, Germany, Spain, Italy, Denmark and Luxembourg regarding substantial quantities of ‘ductile iron grooved fittings’, dated in 2009 and 2010.

• Registration certificate regarding the applicant’s Chinese trade marks and .

The EUTM proprietor did not submit any observations.

LIKELIHOOD OF CONFUSION

Article 53(1)(a) EUTMR in conjunction with Article 8(1) and 8(2)(c) EUTMR – well-known character of the earlier mark

The applicant claims that the mark ´LEDE´ is well known in Belgium, Denmark, Germany, Spain, Italy, Luxembourg and Portugal for goods in Class 6.

According to Article 8(2)(c) EUTMR, for the purpose of paragraph 1, ‘earlier trade marks’ means:

‘trade marks which, on the date of application for registration of the European Union trade mark, or, where appropriate, of the priority claimed in respect of the application for registration of the European Union trade mark, are well known in a Member State, in the sense in which the words “well known” are used in Article 6bis of the Paris Convention.’

According to Article 6bis of the Paris Convention, ‘…the countries of the Union undertake, ex officio if their legislation so permits, or at the request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered by the competent authority of the country of registration or use to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods. These provisions shall also apply when the essential part of the mark constitutes a reproduction of any such well-known mark or an imitation liable to create confusion therewith.’

Therefore, in order for Article 8(2)(c) EUTMR (in conjunction with Articles 8(1)(a) and (b) EUTMR) to be applicable, two conditions must be fulfilled:

(1) It has to be established that the earlier mark was well known in the relevant territory on the date when the contested mark was filed.

(2) That because of the identity or similarity between the contested mark and the earlier well-known mark, as well as between the goods and services covered by the marks, there exists a likelihood of confusion on the part of the public in the relevant territory.

In the WIPO recommendations, the assessment of well-known marks is principally based on the following quantitative considerations:

• the degree of knowledge or recognition of the mark in the relevant sector of the public;

• the duration, extent and geographical area of any use of the mark;

• the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods and/or services to which the mark applies;

• the duration and geographical area of any registrations, and/or any applications for registration, of the mark, to the extent that they reflect use or recognition of the mark;

• the record of successful enforcement of rights in the mark, in particular the extent to which the mark has been recognised as well known by competent authorities;

• the value associated with the mark.

In the present case, the contested trade mark was filed on 20/04/2011. Therefore, the applicant was required to prove that the non-registered mark on which the application is based was well known before that date in at least one of the Member States mentioned above.

The evidence submitted by the applicant in support of the application was listed above.

Whilst the documents may demonstrate some use of the mark in several Member States of the EU, they do not give any indication of the level of recognition of the mark among the public. The statements from three European companies demonstrate that these companies used products labelled with the mark but do not give any information as to the knowledge of the mark among the relevant public. The documents (invoices, packing lists and bills of lading) demonstrating concrete export cases of goods to the European countries do not show volumes of sales significant to the point that a well-known character of the contested mark could be proven. Admittedly, the individual documents show sales of a rather significant amount of the goods. On the other hand, the goods (metal fittings) are small and inexpensive products and for each country there are merely several sales documented, moreover not covering an extended period of time but all from 2009 or 2010.

Overall, the documents taken in their entirety show some use of the mark in several EU countries. However, in order to prove that the mark is well-known within the meaning of Article 8(2)(c) EUTMR, it is not sufficient to prove some use of the mark in the relevant territory but it is necessary to demonstrate that there is a certain level of recognition of the mark among at least a substantial part of the relevant public. In the present case, in the absence of any indications as to the level of knowledge of the mark among the public in the relevant territories, the demonstrated extent of use is, as such, insufficient for a conclusion to be drawn that the mark was well-known in any EU country at the time of filing of the contested mark.

Since the well-known character of the earlier mark was not demonstrated, the applicant failed to substantiate its earlier right and the application must be rejected insofar as it was based on Article 53(1)(a) EUTMR in conjunction with Article 8(1)(a) and (b) EUTMR.

NON‑REGISTERED MARK OR ANOTHER SIGN USED IN THE COURSE OF TRADE (ARTICLE 8(4) EUTMR)

Pursuant to Article 53(1)(c) EUTMR a European Union trade mark shall, on request to the Office, be declared invalid where there is an earlier right as referred to in Article 8(4) EUTMR and the conditions set out in that paragraph are fulfilled.

According to Article 8(4) EUTMR, upon opposition by the proprietor of a non‑registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for shall not be registered where and to the extent that, pursuant to the EU legislation or the law of the Member State governing that sign:

(a) rights to that sign were acquired prior to the date of application for registration of the European Union trade mark, or the date of the priority claimed for the application for registration of the European Union trade mark;

(b) that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.

Therefore, the grounds of refusal of Article 8(4) EUTMR are subject to the following requirements:

• the earlier sign must have been used in the course of trade of more than local significance;

• pursuant to the law governing it, prior to the filing of the contested trade mark, the opponent acquired rights to the sign on which the opposition is based, including the right to prohibit the use of a subsequent trade mark;

• the conditions under which the use of a subsequent trade mark may be prohibited are fulfilled in respect of the contested trade mark.

These conditions are cumulative. Therefore, where a sign does not satisfy one of those conditions, the application for declaration of invalidity based on a non‑registered trade mark or other signs used in the course of trade within the meaning of Article 8(4) EUTMR cannot succeed.

The applicant claims that it owns a non-registered mark ‘LEDE’ used in the course of trade in Belgium, Denmark, Germany, Spain, Italy, Luxembourg, Portugal and the European Union for goods in Class 6.

Law governing the sign

According to Article 76(1) EUTMR, in proceedings before it the Office shall examine the facts of its own motion; however, in proceedings relating to relative grounds for refusal of registration, the Office shall be restricted in this examination to the facts, evidence and arguments provided by the parties and the relief sought.

Therefore, the onus is on the applicant to submit all the information necessary for the decision, including identifying the applicable law and providing all the necessary information for its sound application. The applicant thus must provide evidence of the use of the sign on which the application is based in the Member States where the use of the sign is claimed. Moreover, according to case-law, it is up to the applicant ‘to provide the Office not only with particulars showing that he satisfies the necessary conditions, in accordance with the national law of which he is seeking application … but also particulars establishing the content of that law’ (05/07/2011, C‑263/09 P, Elio Fiorucci, EU:C:2011:452, §  50).

As stated above, the onus to provide the necessary information about the applicable national law is on the applicant. The evidence to be submitted must allow the Cancellation Division to safely determine that a particular right is provided for under the law in question as well as the conditions for acquisition of that right. The evidence must further clarify whether the holder of the right is entitled to prohibit the use of a subsequent trade mark as well as the conditions under which the right may prevail and be enforced vis‑à‑vis a subsequent trade mark.

The applicant did not submit any information whatsoever about the national law of any of the Member States in which it claims to own the non-registered right. In its observations it makes reference to ‘misrepresentation’, ‘goodwill’ and the ‘Golden Elephant Brand’ judgment (09/12/2010, T‑303/08, Golden Elephant Brand, EU:T:2010:505). The judgment, as well as the terminology used by the applicant, refers to the law of the United Kingdom. However, the applicant did not claim that it owned a non-registered mark in the UK. Even if the applicant’s claim of non-registered mark ‘used in the EU’ was to be interpreted as including the UK, it is noted that none of the documents filed by the applicant (as listed above) indicates that the mark was used in the UK at all.

In the total absence of any information as regards the applicable national law of the countries for which there are at least some indications of use of the mark, the application has to be rejected insofar as it is based on Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR.

BAD FAITH – ARTICLE 52(1)(b) EUTMR

General principles

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

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

• Identity/confusing similarity of the signs,

• EUTM proprietor’s knowledge of the use of an identical or confusingly similar sign,

• dishonest intention on the part of the EUTM proprietor,

• degree of legal protection enjoyed by both signs.

The applicant did not provide any evidence indicating that the EUTM proprietor knew about the applicant’s mark at the time of filing of the application of the contested mark. It limits itself to a claim that since the EUTM proprietor is a competitor of the applicant and due to the long standing use of the applicant’s mark in China as well as in the EU, the EUTM proprietor must have known about the applicant’s mark. Although it is possible in some specific cases to only assume the knowledge of the EUTM proprietor, the present case is not such a case. The applicant did not prove that its mark had a reputation in Europe at the time of filing to such an extent that it would be possible to assume the EUTM proprietor’s knowledge of it. It did not prove any use of the mark in China, so its claim about the longstanding use of the applicant’s mark in China, the country of origin of both parties, is completely unsupported.

In addition, the mere knowledge by the EUTM proprietor of the applicant’s mark would not be sufficient to conclude bad faith. The applicant has to show some type of dishonest intention on the part of the EUTM proprietor at the time of filing of the mark. In the present case, the applicant does not even present any argument related to the dishonest intention of the EUTM proprietor, let alone any evidence that could serve as an indication of such an intention. There was no relationship between the parties that could give rise to a specific fair play obligation on the part of the EUTM proprietor towards the applicant, no contact between the parties and no indication that the EUTM proprietor tried to block the applicant from the market.

The burden of proof is on the applicant. The applicant failed to show any relationship between the two parties or any other indication that the EUTM proprietor knew about the applicant’s mark. It also failed to back up with any serious evidence its assertion that it is reasonable to assume the EUTM proprietor’s knowledge of the mark. Since there is no proof that the EUTM proprietor knew about the applicant’s mark or that the EUTM proprietor’s intention at the time of filing for the mark was not honest, it cannot be concluded that it filed the application for the contested mark in bad faith.

As the bad faith of the EUTM proprietor at the time of filing of the contested mark was not shown, the application for a declaration of invalidity must be rejected also insofar as it is based on the ground of Article 52(1)(b) EUTMR.

COSTS

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

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

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

The Cancellation Division

María Belén IBARRA DE DIEGO

Michaela SIMANDLOVA

Carmen SÁNCHEZ PALOMARES

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

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