of the Second Board of Appeal
of 10 March 2021
In case R 1216/2020-2
349, chemin Elie
Sutton QC, Ontario JOE 2K0
Burnaby, British Columbia V5J 2W4
349, chemin Elie
3, plan de la croix
Cancellation Applicants / Appellants
represented by William Woll, 13, rue Jean-Jacques Rousseau, 75001 Paris, France
Pod Rovnicami 67
EUTM Proprietor / Defendant
represented by Marks & US, Marcas Y Patentes, Ibañez de Bilbao 26, 8º dcha, 48009 Bilbao (Vizcaya), Spain
The Second Board of Appeal
composed of S. Stürmann (Chairperson), H. Salmi (Rapporteur) and C. Negro (Member)
Registrar: H. Dijkema
gives the following
for, after a limitation, the following list of goods:
Class 18 - Leather and imitations of leather, and goods made of these materials and not included in other classes; Animal skins, hides; Trunks and travelling bags; Umbrellas and parasols; Walking sticks;
Class 24 - Bed covers; Table covers;
Class 25 - Clothing, footwear, headgear.
The EUTM proprietor claimed the colour black.
The application was published on 4 November 2014 and the mark was registered on 31 October 2014.
The cancellation applicants’ arguments are summarised as follows:
Nehera is their grandfather’s name who founded the company ‘NEHERA’ in the 1930s. It was a very famous brand in the Czech Republic selling clothes and accessories. On 1 January 1946, the company was 100 % nationalised by the government of President Benes. During the communist period, the brand was not used but remained famous throughout the country.
In 2016, Natacha Sehnal discovered that the name ‘NEHERA’ was being used by the EUTM proprietor without authorisation. She contacted the latter who answered that he had been trying to find somebody from the Nehera family in 2013 and 2014 but had not been successful (Annex 2). Therefore, Mr Zdút knew that the name was that of a famous brand and that some descendants could have rights over the name. Consequently, there is bad faith because Mr Zdút misled the public by suggesting that his brand ‘NEHERA’ is the continuator of the brand created by Jan Nehera, moreover, the former had no authorisation and knew that he should have this to use the brand.
In support of their observations, the cancellation applicants filed the following evidence:
Annex 1: printout from Wikipedia with information on Jan Nehera;
Annex 2: copy of emails sent in 2016 between Natacha Sehnal and the EUTM proprietor who replied to Natacha Sehnal stating: ‘In fact I am thrilled with the fact that somebody from the family of Jan Nehera is contacting us. Especially because we had been trying to find somebody down in 2013 and 2014 and we had not been successful.’;
Annex 3: copy of a certificate of marriage registration of Ms Filiz Brinnier which indicates that she is the daughter of Ms Libuse Nehera.
The EUTM proprietor responded with the following:
The cancellation applicants do not have a right over the name ‘NEHERA’, even if it is their surname. They have failed to demonstrate the creation of the trade mark and the additional four cumulative requirements needed to declare that the trade mark was applied for in bad faith, including the dishonest intention of the EUTM proprietor at the time of filing.
He has not acted in bad faith since the earlier mark ‘NEHERA’ did not exist when he filed the application. In fact, the mark ceased to exist (if it really had existed, something which the cancellation applicants have not been able to prove either) in 1946. The cancellation applicants did not file any evidence that shows that he acted in bad faith. His only intention at the time of filing the mark ‘NEHERA’ was as confirmed in the email sent to Ms Sehnal, as a tribute to, and a reminder of, the golden era of the textile industry in pre‑World War II Czechoslovakia.
The cancellation applicants replied with the following:
As shown by the exchange of emails, the EUTM proprietor was clearly aware that he was using an extremely famous trade mark confiscated by the communist regime. The Czech Industrial Property Office sent proof that the company NEHERA had protected at least two ‘NEHERA’ marks in 1936 (Annex 4), and therefore the ‘NEHERA’ brand existed. According to the cancellation applicants, the Czech Industrial Property Office only keeps records of the most significant trade marks in Czech history, which proves that ‘NEHERA’ was famous enough to be preserved by the national archives. The cancellation applicants further claimed that the EUTM proprietor worked for the company OZETA which itself claimed to be inspired by Jan Nehera’s work, as shown in a catalogue produced in 2000 (Annex 5).
The following documents were filed:
Annex 4: a letter from the Industrial Property Office of the Czech Republic dated 1 October 2019 with patents Nos 6413 and 6414 delivered in 1936 for the company NEHERA (in Czech and English).
In reply the EUTM proprietor argued the following:
The mark ‘NEHERA’ was famous in 1939, but no longer is. However, even though the mark is still famous, it is no longer in use or registered, and therefore he has every right to file an application for any mark he may find suitable, unless he is copying an existing trade mark or an existing right. Indeed, he was already the owner of an earlier Czech Republic trade mark for ‘NEHERA’ (figurative) protected for goods and services in Classes 3, 24, 25, 35 and 43, filed on 24 November 2006, which expired on 24 November 2016. It shows that he has already enjoyed the rights in the Czech Republic to a trade mark incorporating the element ‘NEHERA’.
In support of his argument, the following evidence was submitted:
Exhibit 1: an extract of the registration of the previous Czech ‘NEHERA’ mark, owned by Mr Zdút, in Czech and accompanied by its translation into English;
Exhibit 2: an extract of the registration certificate of another Czech trade mark ‘NEHERA’ filed in 1992 in the name of a different company, which, according to the EUTM proprietor, shows that anyone was permitted to file a mark under the name ‘NEHERA’. It is written in Czech and accompanied by its translation into English;
Exhibit 3: printouts from the internet with general information about trade marks.
By decision of 22 April 2020 (‘the contested decision’), the Cancellation Division rejected the application for a declaration of invalidity. It gave, in particular, the following grounds for its decision:
The mere fact that the EUTM proprietor may have had some knowledge about the ‘NEHERA’ brand is not sufficient as regards reaching a conclusion concerning bad faith.
Firstly, the cancellation applicants have not submitted any evidence to show that at the time of filing the contested mark, the trade mark ‘NEHERA’ was used or registered. Indeed, the cancellation applicants have not proved that the mark ‘NEHERA’ existed at the moment when the application for the registration of the contested mark was filed, that they have a right over the mark or that they have been using the trade mark ‘NEHERA’ in relation to any goods or services. They have only claimed to be descendants of Jan Nehera, who, according to the evidence submitted, was a textile entrepreneur who owned a network of more than 130 retail shops. The evidence submitted, namely the certificate provided by the Czech Industrial Property Office, only proves the registration in 1936 of two marks in the name of the company NEHERA, one of those being the word mark ‘NEHERA’. However, there is no evidence that these marks are still registered or used, and that the cancellation applicants have a right over these marks.
The cancellation applicants claimed that the EUTM proprietor’s intention when filling the contested mark was to mislead the public by suggesting that his brand ‘NEHERA’ is the continuator of the brand created by Jan Nehera.
The cancellation applicants’ arguments rely on mere speculation in finding that the EUTM proprietor’s intention had been to take undue advantage of their grandfather’s renown in order to obtain certain financial advantages. They submitted no evidence that can prove that the EUTM proprietor’s intention in filing the contested mark was dishonest. A presumption cannot be established that knowledge of a person’s renown is sufficient to ascertain bad faith on the part of the EUTM proprietor as regards the registration of a trade mark bearing the same name. Moreover, the cancellation applicants did not file any evidence that proves that the trade mark ‘NEHERA’ or Jan Nehera himself enjoyed a continued reputation or renown at the moment when the application for registration of the contested mark was filed.
Consequently, there is no clear indication that leads to the conclusion that the EUTM proprietor had a dishonest intention at the time of filing the contested trade mark.
On 15 June 2020, the cancellation applicants filed an appeal against the contested decision, requesting that the decision be entirely set aside. The statement of grounds of the appeal was received on 6 August 2020.
In its response received on 30 September 2020, the EUTM proprietor requested that the appeal be dismissed.
The arguments raised in the statement of grounds by the cancellation applicants may be summarised as follows:
The former arguments demonstrating the EUTM proprietor bad faith are reiterated. It is clear that the EUTM proprietor knew about the existence of Jan Nehera. He proudly explained on his website that he was using models from Jan Nehera’s company. Those models were removed from his website when he realised that they could be detrimental due to the ongoing proceedings.
The calligraphy used for EUTM No 11 794 112 is very similar to the one protected by Jan Nehera (Exhibit 3).
The EUTM proprietor worked for OZETA, the company that took over NEHERA with the help of the communist state apparatus. This company was already claiming to continue the work of Jan NEHERA as shown in a catalogue drawn up in the year 2000 (Exhibit 8).
This false link of ‘inheritance’ is still shamelessly asserted on numerous internet pages (Exibits 9 to 15). Therefore the EUTM proprietor misled the public by making them believe that his trade mark was registered as a continuation of the original ‘NEHERA’ trade mark. He also defrauded the rights of the descendants and legitimate successors of Jan Nehera by not obtaining their authorisation.
The analysis carried out in the contested decision is insufficient and incompatible with the European Union Courts’ case-law.
The contested decision stated that the cancellation applicants had not demonstrated that the mark ‘NEHERA’ is still in use or protected and that the relevant public would assume that both trade marks are related. These conditions are not required by the Court of Justice. In fact the second condition is fulfilled otherwise why would the EUTM proprietor have chosen the name ‘NEHERA’ to the letter.
The arguments raised in reply to the appeal by the EUTM proprietor may be summarised as follows:
The EUTM proprietor did not act in bad faith since the mark ‘NEHERA’ stopped existing in 1946. He has spent a lot of money and time in order to protect the mark ‘NEHERA’ from the beginning. This is a sign that he has acted honestly at all times, without hidden moves. He has acted openly since 2013, the date when he filed his first European ‘NEHERA’ mark.
The cancellation applicants have failed to demonstrate the history and creation of the trade mark and that they had any registered rights in any territory in relation to the trade mark.
The cancellation applicants have not fulfilled the cumulative requirements needed to declare that the trade mark was applied for in bad faith and they have continuously failed to do so.
The EUTM proprietor was aware that the company ‘NEHERA’ existed in the Czech Republic before the World War II. However, rights on trade marks are not forever, and they have to be looked after and registered, otherwise other parties are free to use those names.
The appeal complies with Articles 66, 67 and Article 68(1) EUTMR. It is admissible.
Pursuant to Article 59(1)(b) EUTMR, a European Union trade mark must be declared invalid on application to the Office where the EUTM proprietor was acting in bad faith when it filed the application for the trade mark.
It is for the cancellation applicant who intends to rely on that ground to establish the circumstances which allow for the conclusion that the holder of a European Union trade mark was acting in bad faith at the time of filing the application for its registration (14/02/2012, T‑33/11, Bigab, EU:T:2012:77, § 17; 21/03/2012, T‑227/09, FS, EU:T:2012:138, § 32).
The concept is not defined, delimited or even described in any way in the legislation (Opinion of the Advocate General of 12/03/2009, C‑529/07, Lindt Goldhase EU:C:2009:148, § 35‑36). In her conclusions, the Advocate General’s view is that bad faith appears as an inherent defect in the application and involves conduct which departs from accepted principles of ethical behaviour or honest commercial and business practices (Opinion of the Advocate General of 12/03/2009, C‑529/07, Lindt Goldhase EU:C:2009:148, § 41, 60).
In order to determine whether there was bad faith, consideration must be given to the applicant’s intention at the time when he files the application for registration. It must be observed in that regard that the applicant’s intention at the relevant time is a subjective factor which must be determined by reference to the objective circumstances of the particular case (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 41‑42).
According to the case-law, in order to determine whether an applicant for registration is acting in bad faith within the meaning of Article 59(1)(b) EUTMR, it is appropriate to take into consideration all the relevant factors specific to the particular case which obtained at the time of filing the application for registration of the sign as an EU trade mark, in particular: (i) the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product or service capable of being confused with the sign for which registration is sought; (ii) the applicant’s intention to prevent that third party from continuing to use such a sign; and (iii) the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 53; 29/11/2018, T‑683/17, Khadi Ayurveda / KHADI et al., EU:T:2018:860, § 63).
However, it is apparent from the wording used in the ‘Lindt Goldhase’ judgment that the factors set out therein are only examples drawn from a number of perspectives which can be taken into account in order to decide whether the EUTM proprietor was acting in bad faith at the time of filing the application for the trade mark (14/02/2012, T‑33/11, Bigab, EU:T:2012:77, § 20; 13/12/2012, T‑136/11, Pelikan, EU:T:2012:689, § 26). Therefore, the fact that in the case at hand the cancellation applicants have not submitted any evidence to show that at the time of filing the contested mark the trade mark ‘NEHERA’ was used or registered and that the cancellation applicants have a right over these marks is not a decisive factor. In accordance with Article 63(1)(a) EUTMR, an application for a declaration that the trade mark is invalid may be submitted to the Office where Article 59 EUTMR applies by any natural or legal person.
In the context of the overall analysis undertaken pursuant to Article 59(1)(b) EUTMR, account may also be taken of the origin of the word or the sign which forms the mark at issue and of the earlier use of that word or sign in business as a mark, in particular by competing undertakings, and of the commercial logic underlying the filing of the application for registration of that word or that sign as an EUTM (08/05/2014, T‑327/12, Simca, EU:T:2014:289, § 39).
The cancellation applicants filed evidence of the bad faith claimed before the Cancellation Division within the set time limit therefor. Furthermore, they filed further evidence for the first time before the Board.
Pursuant to Article 95(2) EUTMR, the Office may disregard facts or evidence which are not submitted in due time by the parties concerned. That provision grants the Board discretion to decide, while giving reasons for its decision, whether or not to take into account facts and evidence submitted out of time (13/03/2007, C-29/05 P, Arcol, EU:C:2007:162, § 43).
It results from the wording of Article 95(2) EUTMR, as a general rule and unless otherwise specified, that the submission of facts and evidence by the parties remains possible after the expiry of the time limits to which such submission is subject under the provisions of EUTMR and that the Office is in no way prohibited from taking account of facts and evidence which are submitted or produced late. In stating that the latter ‘may’, in such a case, decide to disregard facts and evidence, Article 95(2) EUTMR grants the Office a wide discretion to decide, while giving reasons for its decision in that regard, whether or not to take such information into account (13/03/2007, C-29/05 P, Arcol, EU:C:2007:162, § 42, 43). This discretion applies to all types of proceedings before the Office including opposition proceedings and revocation or invalidity proceedings (21/11/2013, T‑524/12, RECARO, EU:T:2013:604, § 60).
While exercising its discretion, pursuant to Article 95(2) EUTMR, according to Article 27(4) EUTMDR, the Board should consider, inter alia, the following criteria with respect to evidence submitted before it:
Whether the new evidence is prima facie likely to be genuinely relevant to the outcome of the proceedings;
Whether said evidence has not been produced in due time for valid reasons, in particular where they are merely supplementing relevant facts and evidence which had already been submitted in due time, or are filed to contest findings made or examined by the first instance of its own motion in the decision subject to appeal.
As to the evidence submitted before the Board, prima facie it would appear that this belated evidence could strengthen and clarify the bad faith claim as made before the Cancellation Division. Furthermore, the further evidence submitted before the Board is due to the result of the contested decision. Moreover, the belated filing of evidence does not constitute an abuse of the time limits on the part of the cancellation applicants. Finally, the Board notes that the declaration of invalidity of a registered mark is at stake here. Bearing in mind the foregoing, the Board sees no reason not to take into account the supplementary evidence submitted before it (see paragraph 12 above). Whether or not on assessment the documents submitted before the Board can serve their alleged purpose does not affect the admissibility issue here.
The EUTM’ proprietor’s intention is a subjective factor that has to be determined by reference to objective circumstances (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 42).
In the present case, the EUTM proprietor has obtained the registration of the trade mark. As to the background, it is undisputed that Jan Nehera founded the company ‘NEHERA’ in the 1930s. ‘NEHERA’ was a famous brand in the Czech Republic selling clothes and accessories as shown e.g. a booklet of the company OZETA for its 60th anniversary (in Czech, English and German) (Annex 5). As shown by the certificates, an identical mark to the one in the case at hand was registered in 1936 in the name of the Nehera company, but it has lapsed. On 1 January 1946, the company was 100 % nationalised by the government of President Benes.
It is also undisputed and corroborated by the evidence submitted by the cancellation applicants that the EUTM proprietor, at the time of filing, was aware that the trade mark ‘NEHERA’ was an old and well-known brand for clothes and accessories in the Czech Republic in the 1930s.
The EUTM proprietor obtained registration of the trade mark in the Czech Republic for goods and services in Classes 3, 24, 25, 35 and 43, on 24 November 2006; this mark expired on 24 November 2016. He obtained the registration of the EUTM (the subject of the present proceedings) in 2013 in Classes 18, 24 and 25.
The question of whether the applicant for registration is acting in bad faith, for the purposes of Article 59(1)(b) EUTMR, must be addressed by means of an overall assessment in which account is taken of all the relevant factors in the particular case. First, one of those factors is the origin of the word or sign forming the mark at issue and the earlier use of that word or sign in business as a mark, in particular by competing undertakings, that is to say, with regard to the present case, the circumstances which are not in dispute and which show that there has been genuine use — or, at the very least, ‘historical’ use — of the identical mark , which took place before the EUTM proprietor made use of that sign (08/05/2014, T‑327/12, Simca, EU:T:2014:289, § 60; 09/07/2015, R 879/2013-2, HISPANO SUIZA, § 37).
The various pieces of evidence provided by the cancellation applicants before the Board (Exhibits 9-15) show the EUTM proprietor’s websites and his company and magazine articles in which the company and the articles make direct references to the career and fame of Jan Nehera and the fame of the brand stating, inter alia:
‘NEHERA is an independent Slovak brand that revived the heritage of the famous Czechoslovak brand that flourished in the 1930s and made history worldwide in the integration of design, production, and retail. The artisanal tradition of the Czechoslovak textile industry goes back to the first ready-to-wear factory established in 1868, mainland Europe in Prostejov, the hometown of Jan NEHERA’ (Exhibit 9);
‘Originally a pioneer fashion label flourishing in the 1930s, NEHERA was relaunched in 2014 during SS15 Paris Fashion Week…’ (Exhibit 10);
‘Founded by Czechoslovakian entrepreneur Jan Nehera in the 1930s, the house of Nehera spawned over 130 retail stores throughout Europe before WWII brought the garment empire to an abrupt stop. Some seventy years later Prague native and marketing specialist Ladislav Zdut acquired Nehera with the vision of relaunching it as a luxury brand.’ (Exhibit 11);
‘Ladislav Zdut, who acquired rights for the NEHERA brand in 1998, convinced Samuel to become a creative director and revive the history of NEHERA, which established by Jan Neher at the end of XIX century.’ (Exhibit 12);
‘The latest label to exemplify this fresh, sensual minimalism dates back some 80 years. The Czechoslovakian businessman Jan Nehera first revolutionised ready-to-wear in the 1930s by developing a vertically integrated clothing brand sold by more than 130 retailers across three continents. World War Two halted production and in the 1990s Ladislav Zdut – an expert in marketing and brand management – acquired the company name, appointing Samuel Drira as its first ever creative director in 2014.’ (Exhibit 14); and
‘The storyline of Nehera dates back into the 1930s when the brand was originally founded by a visionary businessman Jan Nehera in Czechoslovakia, and in that time, the brand had more than 130 retail stores in Europe, the United States and Africa. At that time, Nehera offered clothes for women, men, children, fashion magazines from Paris, clothing repair and even ironing. The Nehera brand was resurrected in 2014 and today proudly re-employs the timeless heritage of the Slovak and Czech tailor studies and factories originally founded by Jan Nehera himself.’ (Exhibit 15).
In his arguments, the EUTM proprietor is insistent that it is not possible to prohibit the registration of a trade mark that is identical or similar to the lapsed trade mark. However, it should be recalled that the application of Article 59(1)(b) EUTMR does not amount to simply examining the conflict between two trade marks, but involves investigating the intentions of the proprietor of the contested trade mark. Furthermore, the fact that Jan Nehera had to close down his business does not deprive his trade mark of historic value.
There can be no doubt that the EUTM proprietor was fully aware of the ‘Nehera’ marks’ fame in the fashion world in what are now the Czech and Slovak Republics and other countries as well, when he took the decision to adopt the ‘NEHERA’ trade marks and to include the reference to their history and their original owner as a celebrity on his website. All the aforesaid allows for the observation that the mark at issue still enjoyed, at the very least, a certain surviving reputation, which explains, moreover, his interest in that mark in the circumstances of the present case, and his intention to save it, or revive it, for future generations (by analogy, 08/05/2014, T‑327/12, Simca, EU:T:2014:289, § 49; 21/12/2015, R 3028/2014-5, PEDRO MORAGO (fig.), § 25; 09/07/2015, R 879/2013-2, HISPANO SUIZA, § 35).
The Board finds that the only feasible explanation as to why the EUTM proprietor chose the mark is that it was the EUTM proprietor’s intention, when selecting the trade mark, to take advantage of the former designer and businessman’s fame. That conclusion is confirmed by the exhibits mentioned above in paragraph 32, which indicate that the EUTM proprietor attempted to associate himself with the famous original mark (21/12/2015, R 3028/2014-5, PEDRO MORAGO (fig.), § 27).
Bad faith can take many forms. It does not necessarily imply any degree of moral turpitude. An EUTM applicant can act in bad faith within the meaning of Article 59(1)(b) EUTMR even though it believes that it is morally and legally entitled to act as it has done (09/07/2015, R 879/2013-2, HISPANO SUIZA, § 25; 04/06/2009, R 916/2004-1, Gerson, § 53).
In light of all the foregoing, it must be held that it can be inferred from the particular circumstances of the present case that the real purpose of the EUTM proprietor’s application for the registration of the EUTM was to ‘free-ride’ on the reputation of the historic marks and to take advantage of that reputation (08/05/2014, T‑327/12, Simca, EU:T:2014:289, § 56; 21/12/2015, R 028/2014-5, PEDRO MORAGO (fig.), § 29; 09/07/2015, R 879/2013-2, HISPANO SUIZA, § 36).
Further, it was precisely the fact that the earlier mark had not been used for a long time that can be construed as the reason that encouraged the EUTM proprietor, who was aware of that fact, to file an application for a mark in order to use it to his own advantage (by analogy 08/05/2014, T‑327/12, Simca, EU:T:2014:289, § 61; 09/07/2015, R 879/2013-2, HISPANO SUIZA, § 38).
Taking all of the above into account, the Board concludes that the EUTM proprietor acted in bad faith when he filed the application. It follows from the above that the appeal must be upheld, the invalidity ground pursuant to Article 59(1)(b) EUTMR invoked by the cancellation applicants upheld and EUTM No 11 794 112 declared invalid for all the goods that it covers.
Pursuant to Article 109(1) EUTMR and Article 18 EUTMIR, the EUTM proprietor, as the losing party, must bear the cancellation applicants costs of the cancellation and appeal proceedings.
As to the appeal proceedings, these consist of the appeal fee of EUR 720 and the cancellation applicants’ costs of professional representation of EUR 550.
As to the cancellation proceedings, the EUTM proprietor must reimburse the cancellation fee of EUR 630 and the cancellation applicants’ cost of professional representation of EUR 450. The total amount is fixed at EUR 2 350.
On those grounds,
10/03/2021, R 1216/2020-2, nehera (fig.)