CANCELLATION No 12 143 C (INVALIDITY)

Fernando María Masaveu Herrero, Marqués de Villamagna N^o. 3, Planta 12, 28001 Madrid, Spain (applicant), represented by Julio de Pablos Riba, Los Madrazo, 24 bajo Izqda, 28014 Madrid, Spain (professional representative)

a g a i n s t

Tomaso Musini, Via dell'Orso, 7, 06123 Perugia, Italy (EUTM proprietor), represented by Barzanò & Zanardo, Via Piemonte, 26, 00187 Rome, Italy (professional representative).

On 02/02/2017, 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 European Union trade mark No 11 439 205 (figurative mark) (the EUTM). The request is directed against all the goods covered by the EUTM, namely:

Class 18: Purses, haversacks, backpacks, suit cases, umbrella, beach umbrellas, parasols.

Class 24: Towels, beach towels.

Class 25: Swimwear, swimsuits, pareo, bathing suit cover-ups, beachware, dressing gowns, hats, shoes, sandals, judo suits, clogs.

The applicant invoked Article 52(1)(b) EUTMR, Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR based on a non-registered trade mark ‘XARIFA’ used in the course of trade in Belgium, Denmark, Germany, Spain, France, Italy, the Netherlands, Portugal and the United Kingdom and on Article 53(2)(a) and (b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant explains the history of the schooner named ‘XARIFA’, from its launch in 1927 until the present. The ship changed owners several times and took part in various expeditions, some of which were captured in books and films. It was also used in several movies in the fifties. In 1960 it was purchased by an Italian entrepreneur Carlo Traglio who ended up living on the ship until his death in 2008. The ship has belonged to Vibrant Shipping & Corp since 2012. The EUTM proprietor is the grandson of Carlo Traglio. According to the applicant, the EUTM proprietor, when applying for the registration of the contested mark, intended to incorporate into his business the reputation associated with the ship. The contested mark reproduces, in the applicant’s opinion, a silhouette of the schooner Xarifa. Furthermore, the applicant claims that the EUTM proprietor’s website contained references to the ship Xarifa. The applicant concludes that all the above shows that the EUTM proprietor acted in bad faith when filing the application for the registration of the mark.

Furthermore, the applicant refers to the Spanish law and the purchase contract regarding the Xarifa ship and claims that the applicant is the owner of the earlier non-registered mark ‘Xarifa’ which has been used ‘in different ways including commercial dimension’ such as the use of the ship in film production or its current use as a rental boat for tours. It concludes that the contested mark should be invalidated pursuant to Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR and also Article 53(2)(a) and (b) EUTMR.

The EUTM proprietor emphasizes that the burden of proof is on the applicant. He denies that the schooner Xarifa has a reputation and argues that the applicant did not file documents that could prove the opposite. Furthermore, it argues that a name of a boat is not, per se, a trade mark and that the applicant did not show any commercial use of the name ‘Xarifa’ that could be considered to be trade mark use. Any business activities that may have appeared on the applicant’s website www.shcoonerxafira.com, postdate the filing date of the contested mark. The EUTM proprietor argues that he did not file for the registration of the contested mark in bad faith but merely intended to pay a tribute to his grandfather, who owned the yacht for 60 years and who was an important and wealthy entrepreneur. The EUTM proprietor decided to create a business under the name ‘Xarifa’ already before the ‘draft non-binding agreement’ (submitted by the applicant as a proof of transfer of the ship) was signed, which he demonstrates by a registration of the domain name ‘xarifa.it’ in May 2012. Moreover, the goods for which the contested mark is registered are not identical or similar to the activities in relation to which the applicant seems to be claiming the use of the sign ‘Xarifa’ (rental boat for tours). The EUTM proprietor concludes that the applicant failed to demonstrate the EUTM proprietor’s bad faith. In relation to the remaining grounds, the EUTM proprietor argues that the applicant did not prove use of the sign ‘Xarifa’ in the course of trade and that the conditions of the only legal provisions provided by the applicant (Spanish law) are not fulfilled.

The applicant casts doubt on the EUTM proprietor’s affirmation that by filing for the registration of the contested mark he did not want to block the applicant from entering into the market. It points out that the EUTM proprietor opposed the applicant’s EUTM application ‘Xarifa’, thus hindering the applicant’s entry into the market.

The EUTM proprietor maintains his position and emphasizes the arguments presented previously.

NON-REGISTERED MARK OR ANOTHER SIGN USED IN THE COURSE OF TRADE (Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR)

In relation to Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR, the application is based on the non-registered trade mark ‘XARIFA’ used in the course of trade in Belgium, Denmark, Germany, Spain, France, Italy, the Netherlands, Portugal and the United Kingdom for, from what can be inferred from the observations accompanying the application form, base for the development of film production and rental boat for tours.

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 mark 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 European Union 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 prior to the filing of the contested trade mark;

• pursuant to the law governing it, prior to the filing of the contested trade mark, the applicant acquired rights to the sign on which the application 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.

Prior use in the course of trade of more than mere local significance

The condition requiring use in the course of trade is a fundamental requirement, without which the sign in question cannot enjoy any protection against the registration of a European Union trade mark, irrespective of the requirements to be met under national law in order to acquire exclusive rights.

Furthermore, such use must indicate that the sign in question is of more than mere local significance. The rationale of this provision is to restrict the number of conflicts between signs by preventing an earlier sign which is not sufficiently important or significant from challenging either the registration or the validity of a European Union trade mark.

Rights falling under Article 8(4) EUTMR may only be invoked if their use is of more than mere local significance. The proprietors of rights the use of which is of mere local significance retain their exclusive rights under the applicable national law pursuant to Article 111 EUTMR. The question whether the use of a non-registered sign is of more than mere local significance will be answered by applying a uniform European standard (18/04/2013, T‑506/11 & T‑507/11, Peek & Cloppenburg, EU:T:2013:197, § 19, 47-48).

The General Court held that the significance of a sign used to identify specific business activities must be established in relation to the identifying function of that sign. That consideration means that account must be taken, firstly, of the geographical dimension of the sign’s significance, that is to say of the territory in which it is used to identify its proprietor’s economic activity, as is apparent from a textual interpretation of Article 8(4) EUTMR. Account must be taken, secondly, of the economic dimension of the sign’s significance, which is assessed in view of the length of time for which it has fulfilled its function in the course of trade and the degree to which it has been used, of the group of addressees among which the sign in question has become known as a distinctive element, namely consumers, competitors or even suppliers, or even of the exposure given to the sign, for example, through advertising or on the internet (24/03/2009, T‑318/06 - T‑321/06, General Optica, EU:T:2009:77, § 36-37 and 30/09/2010, T‑534/08, Granuflex, EU:T:2010:417, § 19).

The signs invoked under Article 8(4) EUTMR must be in use not only at the time of filing of the contested mark but it must continue to be used at the time of filing of the invalidity request. In this regard, the Cancellation Division refers to the decision of the second Board of Appeal in case R-1822/2010-2, where the Board confirmed that ‘the requirement to show use of the sign, and thus to show its continued existence between the filing date of the contested EUTM and the filing of the invalidity request, is a matter that must be proved. Rule 19(1) and (2)(d) EUTMIR state that, where an opposition is based on Article 8(4) EUTMR, evidence of, inter alia, its ‘continued existence’ must be adduced within the period given by the Office for presenting or completing facts, evidence or arguments in support of the opposition. Failure to prove the existence, validity and scope of protection of the earlier mark or right within that period will lead to the opposition being rejected as unfounded (Rule 20(1) EUTMIR). In the Board’s opinion, these Rules apply mutatis mutandis to cancellation proceedings’.

This was confirmed by the General Court in judgment of 23/10/2013 in case T-581/11, Baby Bambolina. The Court held that the earlier right relied on in support of an opposition must still exist at the time that notice of opposition is filed. By analogy, the earlier right relied on in support of an application for a declaration of invalidity must still exist at the time that application is made. This presupposes normally that the sign in question must still be in use at the time of the filing of the notice of opposition or of the application for a declaration of invalidity. Indeed, it is precisely the use of the sign in the course of trade which is the basis of the existence of the rights to that sign (23/10/2013, T‑581/11, Baby Bambolina, EU:T:2013:553, § 26 and 27).

The evidence submitted by the applicant is the following:

• A website printout from Harvard Archives confirming that they do have a logbook for ‘Brig Capitana’ from 1939-1940.

• A copy of Panama canal tonnage certificate for the ship ‘Xarifa’ registered in Hamburg, Germany, dated 22/12/1953.

• A copy of Historical Diver from 1996 describing the life of diver Hans Hass, mentioning that in the 1950’s he owned a ship named ‘Xarifa’ and the film he made ‘Unternehmen Xarifa’ (translated as ‘Under the Caribbean’); it contains another article about Lotte Hass, Hans Hass’s wife, who went with her husband on the expeditions and was a pioneer diver.

• Posters for the movie ‘Unternehmen Xarifa’ and its English version, ‘Under the Caribbean’ and for the movies ‘Underwater’ and ‘Marino de Gibraltar’, in which the ship ‘Xarifa’ allegedly appears.

• A post stamp with an image of a ship, allegedly Xarifa.

• A copy of Historical Diver from 1997, including a mention that Lotte Hans took the journalist to see the ship Xarifa in the Monte Carlo harbour, where they were welcomed on board by the current owner, Mr. Traglio.

• A copy of a non-binding offer in relation to the acquisition of the yacht ‘Xarifa’, dated 13/09/2012, from Fernando Maria Masaveu Herrero to Compañía de Navigacion Maga, S.A., the copy of ‘draft non-binding agreement’ and the purchase agreement dated 03/10/2012, the ship sold by Compañía de Navigacion Maga, S.A. to Vibrant Shipping Corp.

• Documents attesting that Mr. Fulvio Traglio was representing Compañía de Navigacion Maga, S.A.

• Several documents describing the technical parameters of the ship Xarifa and its ownership by Compañía de Navigacion Maga, S.A., led by the Board of Directors composed of Elide Traglio, Maria Grazia Traglio and Uberto Pessina.

• Copies of internet page content of the EUTM proprietor’s pages where references to the boat ‘Xarifa’ are made and pictures of the beachwear products appear.

• Printouts from www.schoonerxarifa.com with references to the crew, description of the boat and services that are provided on it.

To sum up the above mentioned, for the successful application of this ground, the applicant would have to show use of the sign in the course of trade of more than a mere local significance in at least one of the countries mentioned above, both at the time of filing of the contested mark (19/12/2012) and at the time of filing of the invalidity request (26/11/2015).

In the present case, the evidence does not show any use of the name ‘Xarifa’ as a trade mark. The fact that someone owned a ship named ‘Xarifa’ and made a film with this name in a title does not constitute trade mark use. The name ‘Xarifa’ in the movie title could be protected by a copyright; however, the applicant did not invoke copyright in the present proceedings, and, in any case, since there is no apparent relationship between the applicant and the creators of the film, there is no proof that the applicant has any rights related to ‘Unternehmen Xarifa’. Otherwise the documents relate to the adventures of the ship Xarifa but do not show any use of that name in the course of trade at the time of filing for the registration of the contested mark, that is, that the name ‘Xarifa’ was used in relation to some goods or services to identify their commercial origin. The only documents that could show some use of the name ‘Xarifa’ in relation to goods and services are the printouts from EUTM proprietor’s website where a swimsuit collection is shown and the printouts from www.schoonerxarifa.com. However, the former would be use of the sign by the EUTM proprietor, not the applicant, and the latter is not dated. Moreover, according to the printouts from the website www.schoonerxarifa.com submitted by the EUTM proprietor, the refit of the ship to enable it to receive clients for accommodation was done in 2014 and the internet archive service ‘Wayback machine’ (printouts submitted by the EUTM proprietor) shows first activity on the website www.schoonerxarifa.com in 2014. Therefore, in the absence of any evidence to the contrary by the applicant, the website printouts from this page cannot demonstrate any use of the name ‘Xarifa’ at the time of filing of the contested mark (2012).

Considering all the above, it has to be concluded that the applicant failed to prove use in the course of trade of the non-registered mark ‘Xarifa’.

Moreover, and not less importantly, the applicant did not submit any applicable national law except English translation of several provisions from the Spanish Trade Mark Act. 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. Since the applicant did not provide the Cancellation Division with any information at all about any national law except Spanish law, the application would fail as regards this ground and all the invoked territories except Spain just for this reason alone.

As regards Spain, letting aside the issue that the applicant did not provide the original text of the Trade Mark Act but merely the translation of its several provisions into English, according to the provision referred to by the applicant (Article 6.1b) and 2.d)), a trade mark cannot be registered where there is a likelihood of confusion with an earlier mark. Such an earlier mark can be an unregistered mark provided that it is ‘notoriously known’ in Spain. In the present case, there is no indication whatsoever among the evidence submitted by the applicant that the name ‘Xarifa’ is ‘notoriously known’ in Spain. Moreover, a necessary condition for the existence of a likelihood of confusion is similarity of goods or services. In the present case, clearly the services of base for the development of film production and rental boat for tours are dissimilar to the contested goods in Classes 18, 24 and 25 as listed above, and, thus, there can be no likelihood of confusion. The applicant does not even make any argument as to why these goods and services should be considered similar.

It follows from the above that the applicant failed to prove that the earlier non-registered mark was used in the course of trade with more than mere local significance. Moreover, it did not prove that it would be entitled, according to the respective national law, to prohibit the use of a subsequent trade mark. Consequently, the application has to be rejected insofar as it is based on Article 53(1)(c) EUTMR in conjunction with Article 8(4) EUTMR.

Article 53(2)(a) and (b) EUTMR – right to a name and right to a personal portrayal

According to Article 53(2)(a) and (b) EUTMR, a European Union trade mark shall also be declared invalid on application to the Office or on the basis of a counterclaim in infringement proceedings where the use of such trade mark may be prohibited pursuant to another earlier right under the European legislation or national law governing its protection, such as a right to a name or a right to a personal portrayal.

The invalidity applicant has to provide the necessary national legislation in force and put forward a cogent line of argument as to why it would succeed under the specific national law in preventing the use of the contested mark. A mere reference to the national law will not be considered sufficient: it is not for the Office to make that argument on the applicant’s behalf (05/07/2011, C-263/09 P, Elio Fiorucci, EU:C:2011:452).

In the present case, the applicant invoked a right to a name and to a personal portrayal ‘XARIFA’ protected under the law of Spain.

Leaving aside the issue that the applicant did not provide the original text of the Spanish law but merely provided English translation of several provisions of the Trade Mark Act, the Cancellation Division notes that according to the relevant provision referred to by the applicant (article 9.1b of the Spanish Trade Mark Act) ‘the name, surname, pseudonym or any other sign through which the public in general may identify a person other than the applicant [for a trade mark] cannot be registered as trade mark without proper authorization’. This provision clearly refers to the name etc. capable of identifying a person. The name on which the application is based is a name identifying a boat. Therefore, this provision does not apply to it.

As regards the right to a personal portrayal, the word ‘XARIFA’ is clearly not a personal portrayal and, moreover, the applicant did not refer to any provision of the Spanish law according to which a trade mark use could be prohibited based on a portrayal.

Considering the above, it is clear that the applicant failed to demonstrate that use of the contested mark could be prevented, under the Spanish law, based on the invoked rights. Consequently, the application must be rejected insofar as it was based on Article 53(2)(a) and (b) EUTMR.

ARTICLE 52(1)(b) EUTMR – Bad Faith

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, 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 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 argues that the EUTM proprietor was aware of the name of the ship ‘Xarifa’ because it belonged to his grandfather. He must have been aware of the transfer of this ship to the applicant because, the previous owner from which the ship was purchased, Compañía de Navigacion Maga, S.A., was controlled by relatives of the EUTM proprietor. The applicant claims that the ship Xarifa has a worldwide renown and that the EUTM proprietor registered the name as EUTM to profit from the reputation of the ship.

It is an undisputed fact that the EUTM proprietor was aware of the existence of a ship named ‘Xarifa’ at the time of filing of the contested mark (19/12/2012). However, it was not demonstrated that this name was used in any way in the course of trade by anyone but the EUTM proprietor before the filing of the contested mark. Moreover, the EUTM proprietor submitted a document showing that the domain name ‘xarifa.it’ (the website on which the swimwear collection appears) was registered by the EUTM proprietor already on 21/05/2012, that is, before the date of the earliest document submitted by the applicant related to the transfer of the ship (the non-binding purchase offer), which is dated in September 2012. The filing for the registration of the EUTM thus could have followed a commercial logic, the EUTM proprietor making steps to legally protect the name under which it started to offer swimwear and related products.

The burden of proof is with the applicant. The mere ownership of a ship does not give the owner any inherent right to the name of the ship as a trade mark. In the absence of any convincing evidence of bad faith on the part of the EUTM proprietor, the above described circumstances cannot lead to a conclusion that the EUTM proprietor acted in bad faith when he filed for the contested mark.

The fact that the EUTM proprietor filed an opposition against the applicant’s EUTM application , filed in 2014, does not prove a dishonest intention of the EUTM proprietor. Filing of an opposition against any mark that could cause confusion with his earlier mark is a right of the EUTM proprietor and a legitimate step in order to protect his trade mark rights. The applicant claims that this proves that the intention of the EUTM proprietor was to block the applicant from entering into the market. However, the applicant did not prove that at the time of filing for the contested mark (2012), the applicant even had any intention of using the name ‘Xarifa’ as a trade mark, let alone that the EUTM proprietor knew about such an intention. As explained above, it was demonstrated that the EUTM proprietor made steps to commercially use the name ‘Xarifa’ before even any actions regarding the transfer of the ship were undertaken.

In the light of all the above, the Cancellation Division concludes that the applicant failed to prove that the EUTM proprietor acted in bad faith when filing the application for the contested EUTM and the application should be rejected also insofar as it was based on 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) EUTMIR 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

Carmen SÁNCHEZ PALOMARES

Michaela SIMANDLOVA

María Belén IBARRA DE DIEGO

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.