Decision

of the Fifth Board of Appeal

of 29 September 2015

In Case R 2586/2014-5

Excellent Brands JMI Ltd. Oberneuhofstrasse 1 CH-6340 Baar Switzerland

Applicant/Appellant

represented by Mitsche · Prantl · Jungnickel · Majer · Horak, Mahlerstraße 13, AT‑1010 Wien, Austria

v

Marcas Costa Brava, S.L. Pol. Ind. Bosc de Can Cuca, Sector 2, Parc. 12 ES-17410 Sils (Girona) Spain

Opponent/Respondent

represented by Manresa Industrial Property, Roger de Llúria, 113, 4ª, ES‑08037 Barcelona, Spain

APPEAL relating to Opposition Proceedings No B 2 190 323 (Community trade mark registration No 11 407 021)

The FIFTH Board of Appeal

composed of G. Humphreys (Chairperson), A. Szanyi Felkl (Rapporteur) and A. Pohlmann (Member)

Registrar: H. Dijkema

gives the following

Decision

Summary of the facts

1. On 7 December 2012, Excellent Brands JMI Ltd. (‘the applicant’) sought to register the figurative mark in red and white colours

for goods and services in Classes 21, 30 and 35. The application was published on 22 February 2013.

2. On 22 May 2013, Marcas Costa Brava, S.L. (‘the opponent’) filed a notice of opposition against the CTM application based on the earlier CTM registration No 2 423 705 for the black and white figurative mark

filed on 24 October 2001 and registered on 4 June 2003 for goods in Class 30. The opposition was directed against all the goods in Class 30.

2. The signs and goods in conflict were as follows:

CTM applied for	Earlier CTM
Contested goods	Opposition based on the following goods
Class 30 – Coffee; Flavoured coffee; Ice beverages with a coffee base; Decaffeinated coffee; Extracts of coffee for use as flavours in beverages; Coffee based fillings; Freeze-dried coffee; Ground coffee beans; Ground coffee; Roasted coffee beans; Beverages made of coffee; Coffee-based beverages; Coffee essences; Coffee, roasted, powdered, granulated, or in drinks; Coffee in whole-bean form; Coffee in brewed form; Coffee in ground form; Coffee flavorings [flavourings]; Coffee beans; Coffee mixtures; Aerated beverages with coffee base; Artificial coffee; Instant coffee; Coffee-based beverage containing milk; Chocolate coffee; Beverages consisting principally of coffee; Prepared coffee and coffee-based beverages; Sugar.	Class 30 – Coffee, sugar and infusions.

2. The grounds of the opposition were those laid down in Article 8(1)(b) CTMR. The applicant argued that the marks are similar and goods are identical.

2. The applicant requested that the opponent submit proof of use of its earlier mark. On 4 February 2014 the opponent submitted documents as evidence of use.

2. On 27 August 2014 the Opposition Division took a decision which upheld the opposition for all the contested goods and ordered the applicant to bear the costs. The Opposition Division reasoned essentially as follows:

• As regards the proof of use, the opponent was required to prove that the CTM on which the opposition is based was put to genuine use in the European Union during the period of 22 February 2008 to 21 February 2013, for ‘coffee, sugar and infusions’ in Class 30.

• The place of use is Spain, therefore the evidence relates to the relevant territory. All the dated evidence falls within the relevant period. Some undated pieces of evidence are also submitted, like catalogues, advertising posters and photographs. The documents filed, in particular the invoices and the affidavits including the total invoicing from the years 2009-2013, provide the Opposition Division with sufficient information concerning the commercial volume, the territorial scope, the duration, and the frequency of use. There is evidence that goods have been sold under the earlier trade mark during almost the entire relevant period for significant amounts. The evidence shows use of a figurative mark with a slightly rounder typeface than in the registered mark. The words are placed within an oval frame, but without the ribbons that exist in the registered mark. However, these ribbons are merely decorative and the differences in the figurative mark as shown in the evidence do not alter the distinctive character of the mark. The Opposition Division considered that the evidence shows use of the sign as registered, for ‘coffee, sugar and infusions’ in Class 30, in accordance with of Article 15(1), second subparagraph, point (a) CTMR.

• The contested goods were found identical to the earlier goods, with the exception of ‘artificial coffee’ which was found highly similar to ‘coffee’.

• The goods are directed at the general public. The average consumer of the category of products concerned is deemed to be reasonably well informed and reasonably observant and circumspect. The attention level of the general public is deemed to be average.

• The earlier sign is endowed with an average degree of distinctiveness and the signs are visually, aurally and conceptually similar. The signs coincide in the verbal elements ‘CREM’ and ‘CAF(F)É’ present in both signs, although in inverted order.

• The differences between the signs are not capable to counterbalance their similar features and because of the identity /high similarity of the goods there is a likelihood of confusion, at least on the part of the Swedish and Lithuanian speaking public.

Submissions and arguments of the parties

2. On 6 October 2014 the applicant filed a notice of appeal against the contested decision followed on 23 December 2014 by a statement of grounds.

2. The applicant requests that the Board annul the contested decision, reject the opposition in its entirety and allow the CTM applied for to proceed to registration. Its main arguments can be summarised as follows:

• In general, proof of use of the earlier CTM cannot be accepted. The statements made in the affidavits are vague, without detailed precise information, and may just as well refer to another trademark of the opponent, ‘IDEAL COFFEE by CAFÉ CREM’, CTM No 11 329 844.

• The invoices do not show under which label the coffee products were distributed. The acronym ‘CC’, according to the opponent (page 5 of document dated 3 February 2014), and does not stand for ‘CAFÉ CREM’.

• Evidence concerning sugar and infusions was submitted under different trade marks.

• The labels in the catalogues and promotional material show a different trade mark of the opponent, CTM No 12 244 471 - - which is a later mark than the contested CTM, and different from the earlier CTM.

• The earlier CTM on which the opposition is based only appear on the very old photographs (doc. 32 and 33). The sign used is the modern one, CTM No 12 244 471, its distinctive, decorative elements are all different from the one serving as basis of the present proceedings. The descriptive words ‘café crem’ do not dominate the earlier sign, therefore the mark was not used as registered. The altered use of the mark is not acceptable for the purpose of establishing genuine use.

• It is unacceptable that the contested decision did not discuss the extent of use at all, especially the limited territorial extent of use. A recent judgment of the ECJ, C-149/11, established a new legal position in this respect, according to which genuine use of a CTM in a single Member State can no longer automatically be seen as sufficient.

• The EU coffee market is huge and expanding. The evidence only claims use in Spain. The affidavits are all signed in Catalan. There is very little evidence of promotional activity and no evidence of any use outside Spain.

• As regards the comparison of the signs the Opposition division erred in determining the distinctive/dominant elements of the signs, the distinctiveness of the earlier sign per se, and as a result, the level of similarity between the signs. Similarity cannot be established on the sole basis that two very frequently used and purely descriptive words café/caffé and crem appear in both, otherwise very different figurative marks.

2. The opponent filed its observations on 20 March 2015, in which it requests that the Board confirm the contested decision. Its main arguments support the conclusions drawn by the Opposition Division and can be summarised as follows:

• The later CTM - - which appears in the evidence is only a slight variation of the earlier CTM in terms of colour and design.

• All the affidavits refer to CTM No 2 423 705. The invoices also refer both to tea and sugar products.

• As regards the territorial extent of use the opponent finds it acceptable that the use of the CTM in the present case is limited to the territory of Spain. The applicant’s examples, STARBUCKS and NESPRESSO are trademarks of big multinational companies and the opponent cannot compete with them. Coffee is a global product with countless competitors in which it is difficult to gain a significant market share.

• Furthermore, the structure of the retail market is Spain (also in Italy and Greece) is different where more coffee is destined for out-of-home consumption (cafeterias, bars, restaurants) than in other countries where in-home consumption generally account for 70%-80% of the overall market.

Reasons

2. The appeal complies with Articles 58, 59 and 60 CTMR and Rule 48 CTMIR. It is, therefore, admissible. It is also well-founded, for the reasons set out below.

On the proof of use

2. Pursuant to Rule 22(3) CTMIR, the indications and evidence for furnishing proof of use shall consist of indications concerning the place, time, extent and nature of use of the earlier trade mark for the goods and services in respect of which it is registered and on which the opposition is based.

2. In order to assess whether a trade mark has been put to genuine use in a particular case, an overall assessment of the documents in the file must be carried out, taking account of all the relevant factors in the case. In such an assessment, regard must be had to all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark is real, particularly whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark (19.12.2012, C-149/11, ‘Leno’, EU:C:2012:816, § 29; 27.01.2004, C-259/02, ‘Laboratoire de la mer’, EU:C:2004:50, § 27; 11.03.2003, C-40/01, ‘Minimax’, EU:C:2003:145, § 37).

2. Rule 22(3) CTMIR does not state that each item of evidence must necessarily give information about all four elements to which proof of genuine use must relate, namely the place, time, nature and extent of use. Thus, items of evidence taken together may establish the necessary facts, even though each of those items of evidence, taken individually, would be insufficient to constitute proof of the accuracy of those facts (16.11.2011, T-308/06, ‘Buffalo Milke’, EU:T:2011:675, § 61; 24.05.2012, T-152/11, ‘Mad’, EU:T:2012:263, § 33, 34).

2. Nevertheless, genuine use must be proven by solid and objective evidence of effective and sufficient use of the trade mark on the market concerned, and cannot be supposed on the basis of probabilities (12.12.2002, T-39/01, ‘Hiwatt’, EU:T:2002:316, § 37). Use of the Community trade mark must be such so as to create a commercial exploitation of the mark which is real, and must seek to maintain or create a share on the market for the goods or services protected by the mark in the European Union (see 19.12.2012, C-149/11, ‘Leno’, EU:C:2012:816, § 29; and 11.03.2003, C-40/01, ‘Minimax’, EU:C:2003:145, § 38).

2. As to the extent of use of the earlier trade mark, account must be taken, in particular, of the commercial volume of the overall use, as well as of the length of the period during which the mark was used and the frequency of use (08/07/2004, T‑203/02, Vitafruit, EU:T:2004:225, § 41, and 08/07/2004, T‑334/01, Hipoviton, EU:T:2004:223, § 35).

2. In the present case the opponent had to prove use of its earlier CTM registration during the period between 22 February 2008 and 21 February 2013, for ‘coffee, sugar and infusions’ in Class 30.

2. The evidence submitted consists of the following documents:

• Eighteen invoices in total, mentioning the earlier sign ‘CAFÉ CREM’, among others, such as ‘IDEAL COFFE’, ‘HOSTELERIA’, ‘AZUCAR EUROESTRELLAS’, ‘EDULCORANTE EUROESTRELLA’, ‘NESCAFE SOLUBLE’ and others.

• Seven affidavits from the opponent’s business partners. Each affidavit states that the relevant company has distributed products bearing the earlier trade mark since 2001 and the total invoicing, from the years 2009-2013, for the products bearing the ‘CAFÉ CREM’ brand. The amounts vary from EUR 20 000 to EUR 340 000 depending on the year and the company.

• One advertising leaflet displaying the opponent´s trade mark, . It is mentioned at the bottom that the offer is valid until 30 April 2013.

• Pages from the GRUPO VIVO catalogue, undated, showing the opponent’s products, including coffee, where the products show the CTM and another trade mark ‘IDEAL COFFEE’.

• Copy of an eight-page catalogue of products, undated, showing coffee products, bearing the mark, sugar, sweetener and promotional paper articles, also bearing the script ‘café crem’. There are some infusions, bearing a different figurative mark, , ‘instant infusions by Café Crem’.

• Two advertising leaflets featuring the CTM , on coffee products and promotional coffee articles, undated.

• A copy of an undated, but noticeably old, blurred photograph, where coffee bags are shown on a shelf, some of them with the CTM as registered.

• A copy of an old photograph with a small company van, bearing the old CTM, definitely before 2002, since the prices shown on the leaflet are all in Spanish pesetas exclusively (use had to be shown between 22 February 2008 and 21 February 2013).

2. The evidence shown all relates to Spain, exclusively. Spain is indeed a Member State within the European Union, therefore it relates to the relevant territory as stated in the contested decision. However, as raised by the applicant, also before the Opposition Division, the preliminary ruling of the European Court of Justice in the ‘Leno Merken’ case (19.12.2012, C‑149/11, Leno, EU:C:2012:816) has brought about a new legal position on the proof of use of Community trade marks, where genuine of a CTM in a single Member State is no longer automatically sufficient. This argument was ignored by the Opposition Division entirely.

2. In the appeal proceedings, both the applicant and the opponent reiterate the above argument, expressly referring to the case-law of the Court of Justice, in C‑149/11, Leno, EU:C:2012:816, § 50, where the Court expressly stated that:

‘[W]hilst there is admittedly some justification for thinking that a Community trade mark should – because it enjoys more extensive territorial protection than a national trade mark – be used in a larger area than the territory of a single Member State in order for the use to be regarded as ‘genuine use’, it cannot be ruled out that, in certain circumstances, the market for the goods or services for which a Community trade mark has been registered is in fact restricted to the territory of a single Member State. In such a case, use of the Community trade mark on that territory might satisfy the conditions both for genuine use of a Community trade mark and for genuine use of a national trade mark’.

2. The Opposition Division merely stated that the evidence, in particular the invoices and the affidavits, provided sufficient information concerning the commercial volume, the territorial scope (Spain), the duration and the frequency of use.

2. It is clear that the contested decision followed the route of previous Office practice, where genuine use of a CTM in one Member State automatically equalled use in the European Union. However, the market for the relevant goods in question must be taken into account before such a decision can be reached.

2. The main group of goods in the present case is undisputedly coffee. The greatest part of the evidence focuses on this product. Even without the applicant’s references to statistics, it is a well-known fact that the coffee market in the European Union is huge. The opponent does not deny this, and submits that it is a modest company when compared to the applicant’s examples, Starbucks and Nespresso, which are both global brands belonging to multinational companies. The Board also accepts that it would be unfair and unrealistic to demand a similarly high level of CTM use from a national company, but draws the opponent’s attention to paragraph 54 of the aforementioned ‘Leno Merken’ judgment, where it is noted that it is reasonable to expect that a Community trade mark should be used in a larger area than a national mark, albeit not necessary that the mark should be used in an extensive geographic area for use to be deemed genuine.

2. It is also a fact that the earlier CTM was only used in Spain within the relevant period, more specifically in the regions of Barcelona and Tarragona. To justify national use the opponent claims that (1) the expectations of taste vary from country to country, therefore it is not easy for a modest company to adapt to the expectations of consumers in other countries, also (2) in Spain a significant amount of coffee consumption is destined for out-of-home consumption (cafeterias, bars, restaurants) compared to other Member States, where in-home consumption generally accounts for 70% to 80% of the overall coffee market.

2. The Board cannot accept these arguments. The study called ‘Coffee Guide’, to which the opponent refers, shows that in the southern European Member States, Spain, Greece and Italy, where eating out is part of their traditions, more coffee is consumed in cafeterias and similar establishments than at home. This high level of out-of-home consumption is, on the one hand due to national traditions, but on the other hand, also due to coffee consumption of those tens of millions of tourists who visit these countries regularly and whose visit is both expected and welcomed by the local providers of food and drink. Tourists consume coffee almost exclusively out-of-home. A coffee trader in Spain, therefore, even if it aims solely at the national market, will certainly take into account tourists’ consumption and their expectations about taste as well. Also, the quality of coffee, which is generally held to be very good in Spain, does not depend on whether it is consumed at home or in a restaurant. If there is a difference, then the quality expectations of cafeteria owners and restaurant managers are even higher than that of the general public who define home consumption. It follows, that contrary to the opponent’s arguments there is no real reason for a presumed successful Spanish coffee trader, in possession of Community trade marks, to remain within national borders for more than a decade (the CTM has been registered since 2003).

2. Therefore, the opponent’s arguments, aimed at convincing the Board that coffee is a special product, concerning which use of the Community trade mark in Spain alone might satisfy the conditions for genuine use of a Community trade mark, fail.

2. Moreover, the Board notes that use of the earlier CTM within the territory of Spain is also modest in its extent (both territorially and quantitatively), considering the extensive coffee and sugar market in Spain, even if the Board could validly accept the affidavits and the sums contained therein.

2. However, in this regard it must be noted that the affidavits submitted by the opponent all use the same standardised form of words, are in the same format and are not corroborated by independently sourced documents such as audited statistical tables, annual reports or the like. They were all drafted for this event and just state exact sums which are not even broken down to the main product categories (coffee, sugar and tea) the opponent must refer to. The applicant was right to question their credibility, since the invoices, submitted as corroborating documents, indeed add various groups of products which do not necessarily wear the ‘caffé crem’ trade mark (see under paragraph 16, above, first indent).

2. The applicant was also right to question the nature or form of use in which the earlier CTM appears in the evidence. The sign used is clearly not the same as the sign registered (a light, traditional, richly ornamented sign versus a dark, modern, minimalistic design), however, the question of whether it is an acceptable variety of the opposing sign can be left open for now, since there are other substantial problems with the evidence which cannot be overlooked.

2. Concerning the most important issue, the extent of use, it must be pointed out that there is no solid and objective evidence here that would allow the Board to make a straight assessment and draw the same consequence as the Opposition Division.

2. The first question that cannot be answered without doubts concerns the exact group of products sold under the earlier figurative mark . The ‘Café Crem’ catalogue in this respect could be helpful, however it is undated and might a be recent one. Allowing, that it reflects the use of the CTM also in the earlier, relevant period, it shows mainly caffee products and small packs of sugar and sweeteners bearing the mark, but also includes teas and infusions bearing another mark (Instant Infusions). As it can be observed, already this product catalogue, just like the affidavits, bundles products which do not bear the figurative mark, on which the opposition is based.

2. The invoices also bundle many different products. Sample invoice Nr. 8, for example only shows two ‘café crem’ product types among ten, in the amount of €2.637 from the total of €9.842; invoice Nr. 10 contains twenty-one items, €10.782 in total, containing five items mentioned as ‘café crem’, worth only €800. Furthermore, some products, according to the catalogue, do not even bear the trade mark, but they can very well appear as ‘café crem’ products on the invoices, like the tea and infusion products.

2. The affidavits, as already mentioned, only contain one global sum for each year, generously stating that it is the total of ‘café crem’ products distributed. These sums are also not broken down to product categories, and there is no proof that they only contain the actual ‘café crem’ products, instead of representing a grand total of bundled invoices between the companies, samples of which were submitted and assessed above. The applicant’s comments on the credibility of the affidavits, as regards the extent of use, therefore cannot be dismissed as unfounded. The Board, in fact, concludes that there is little to back the statements contained in the affidavits and the information provided by the opponent is contradictory. As already noted, the evidence must be solid, objective and cannot be supposed on the basis of probabilities. In any proof of use case the opponent is in the position to gather and provide its best evidence, and the Board is entitled to be sceptical of assertions of use that could, or should, have been convincingly demonstrated and yet the material actually provided is unsatisfactory. The opponent in this matter knew of the shortcomings in its evidence following the applicant’s comments – the criticisms of its initial offering being very specific. No additional or supplementing evidence was submitted during the appeal proceedings (see to that effect 05/06/2014, T‑495/12, T‑496/12 & T‑497/12, Dracula Bite, EU:T:2014:423, § 42).

2. Having regard to the relevant and extensive European coffee, tea and sugar markets, the use of the earlier CTM, which is already limited to the north-eastern part of Spain, is also small and uncertain in terms of quantity of coffee, even more modest and also uncertain as regards sugar, and practically non-existent as regards tea and infusion products. On the whole, in the Board’s view, the evidence is inconsistent and does not properly substantiate the extent of use.

2. Finally, promotional and advertising materials are also missing, which could have demonstrated that, at least, the Spanish public was/is familiar with the opponent’s goods sold under its CTM. A single leaflet dated within the relevant period does not satisfy the Board in this respect.

2. Therefore, the Opposition Division incorrectly considered that the evidence submitted by the opponent was sufficient to prove genuine use of the earlier CTM, concerning the extent of use in the European Union with respect to ‘coffee, sugar’ and ‘infusions’. Consequently, the evidence submitted does not satisfy the requirements of genuine use as set out under Article 42(2) CTMR and Rule 22 CTMIR.

2. It follows that the contested decision must be annulled and the opposition rejected in its entirety, pursuant to Article 42(2) CTMR.

Costs

2. Since the opponent is the losing party in both the opposition and appeal proceedings, it must bear the costs and fees incurred by the applicant, pursuant to Article 85(1) and 85(6) CTMR.

Fixing of costs

2. The opponent must, therefore, bear the applicant’s representation costs in both the appeal and the opposition proceedings of EUR 850, in total, and must also reimburse the applicant the appeal fee of EUR 800.

Order

On those grounds,

THE BOARD

hereby:

1. Annuls the contested decision;

2. Rejects the opposition in its entirety;

3. Orders the opponent to bear the applicant’s costs and fees for the opposition and appeal proceedings in the amount of EUR 1 650.

Signed G. Humphreys

Signed A. Szanyi Felkl

Signed A. Pohlmann

Registrar: Signed H.Dijkema