CANCELLATION No 33 304 C (INVALIDITY)
Eurobank Ergasias S.A., 8, Othonos street, 10557 Athens, Greece, Piraeus Bank S.A., 4 Amerikis Street, 105 64 Athens, Greece and National Bank Of Greece S.A., 86 Aeolou st., 102 32 Athens, Greece (applicants), represented by Pierrina Koriatopoulou, Akadimias 16, 106 71 Athens, Greece (professional representative)
a g a i n s t
Neratax Ltd, Στρατη Μυριβηλη 5, 2046 Λευκωσια, Στροβολοσ, Cyprus (EUTM proprietor), represented by Law Firm Thanos Masoulas & Partners, Sina 11, 106-80 Athens, Greece (professional representative).
1. The application for a declaration of invalidity is upheld.
2. European Union trade mark No 12 549 821 is declared invalid in its entirety.
3. The EUTM proprietor bears the costs, fixed at EUR 1 080.
On 21/02/2019, the applicants filed a request for a declaration of invalidity against European Union trade mark No 12 549 821 ‘MORFAT’ (word mark), filed on 30/01/2014 and registered on 12/06/2014 (the EUTM). The request is directed against all the goods and services covered by the EUTM, namely: Meat, fish, poultry and game; meat extracts; preserved, frozen, dried and cooked fruits and vegetables; jellies, jams, compotes; eggs; milk and milk products; edible oils and fats in Class 29, Coffee, tea, cocoa and artificial coffee; rice; tapioca and sago; flour and preparations made from cereals; bread, pastry and confectionery; ices; sugar, honey, treacle; yeast, baking-powder; salt; mustard; vinegar, sauces (condiments); spices; ice in Class 30 and The bringing together for the benefit of others of meat, fish, poultry and game, meat extracts, preserved, frozen, dried and cooked fruits and vegetables, jellies, jams, compotes, eggs, milk and milk products, edible oils and fats, coffee, tea, cocoa and artificial coffee, rice, tapioca and sago, flour and preparations made from cereals, bread, pastry and confectionery, ices, sugar, honey, treacle, yeast, baking-powder, salt, mustard, vinegar, sauces (condiments), spices, ice (excluding the transport thereof), enabling customers to conveniently view and purchase those goods in Class 35.
The applicants invoked Article 59(1)(b) EUTMR.
SUMMARY OF THE PARTIES’ ARGUMENTS, PROCEDURAL ASPECTS AND EVIDENCE
The applicants argue that when filing for the contested EUTM, the EUTM proprietor acted in a fictitious, misleading and abusive manner, as an interposed legal person of the applicants’ debtor, the Greek company KRENTIN S.A., in order to achieve the fraudulent ‘rescue’ of KRENTIN’s identical late national trade mark from bankruptcy and thus to ensure the continuation of the monopoly on the aforementioned distinctive feature, through the European trade mark and against the legitimate interest of KRENTIN’s creditors. Such an action is, in the applicants’ view, in contradiction with the accepted moral principles of commercial behaviour, fair trade practices and the general public interest within the EU and affects the free and fair competition.
The applicants give detailed information on the background of the registration of the contested EUTM and events subsequent thereto, as well as on their entitlement to file the present application:
The company KRENTIN ELLAS Viomichaniki Emporiki Etairia Eidon Artopoiias – Zacharoplastikis kai Mageirikis Anonimi Etairia, under the distinctive name ‘KRENTIN ELLAS SA’ (hereinafter ‘KRENTIN’), with registered seat in Greece, serves the interests of the D. Bergeletos family and to that end it has become the proprietor of a multitude of Greek national trade marks, the validity of which has been renewed invariably every ten years.
Some of these marks acquired a great reputation in Greece and attained particular recognition on the Greek market, such as: (i) the trade mark D 73 637 ‘MORFAT’ (since 13/12/1978, for goods in Classes 29 and 30 and renewed until 13/12/2018), (ii) the trade mark D 115 166 ‘MORFAT CREAMY’ (since 09/04/1992, for goods in Classes 29 and 30 and renewed until 09/04/2022), (iii) the trade mark D 87 006 ‘PERLA’ (since 09/03/1984, for goods in Classes 29 and 30 and renewed until 09/03/2024) and (iv) the trade mark D 62 437 ‘ELLO’ (since 11/07/1974, for goods in Class 29, which expired on 11/07/2014). Moreover, the marks mentioned under (i) and (ii) were followed by a series of national trade marks which included the word ‘MORFAT’ (eight such trade marks are listed in the observations).
KRENTIN has also registered (since 27/10/1986) the mark ‘MORFAT’ in Cyprus, for goods in Classes 29 and 30 (applications numbers 27 759 and 27 760, renewed until 27/10/2021).
The group of companies belonging to the D. Bergeletos family also includes the Greek company D.T. BERGELETOS KAI AFOI Viomichaniki Emporiki Touristiki Anonimi Etairia, having the same seat and a similar object of activity to those of KRENTIN (hereinafter ‘D.T. Bergeletos’). D.T. Bergeletos also owns Greek national trade marks, which became reputed, such as: (i) the trade mark D 65 771 ‘PEA’ (since 17/01/1977 for goods in Class 30), (ii) the trade mark D 65 770 ‘ΑΛΚΥΩΝ’ (since 21/11/1975, for goods in Class 30), (iii) the trade mark D 67 432 ‘PERLA’ (since 08/07/1976 for goods in Class 30) and (iv) the trade mark D 172 013 ‘GLAROS’ (since 23/01/2004, for goods in Class 29).
Also, Mr D.T. Bergeletos, as an individual, appears to be the proprietor of the trade mark D 33 838 ‘ERMOL’ (since 15/05/1963, for goods in Class 29).
KRENTIN and other companies from the Bergeletos Group faced for some time difficulties regarding liquidity and the carrying out of their obligations. In particular, KRENTIN has significant lending obligations (several thousands of millions of Euros) towards a number of four lender banks (inter alia, the applicants) arising from a series of credit agreements entered into starting with December 1995 (as regards Eurobank Ergasias S.A.), June 2001 (as regards Piraeus Bank S.A.) and respectively May 1969 (as regards The National Bank of Greece S.A.).
On 23/06/2017, KRENTIN filed the application no 7006/3445/2017 before the Multimember Court of First Instance of Piraeus requesting to be declared bankrupt due to its failure to fulfil its overdue financial obligations.
The hearing of said application was cancelled since the lender banks (inter alia, the applicants), by application no 10581/5230 of 09/10/2017 requested the Single-member Court of First Instance of Piraeus to submit KRENTIN to an extraordinary procedure of special administration. The aim of such procedure was the expedient sale of the company’s assets by a special administrator appointed by the court in order for the bankruptcy to be avoided. Such application was upheld by the decision no 1883 of 19/04/2018 of the Single-member Court of First Instance of Piraeus (hereinafter the ‘Decision’) and KRENTIN entered into a regime of special administration.
On 15/05/2013, the EUTM proprietor was incorporated in Cyprus. Since the Cypriot law does not provide for publicity with regards to the deed of incorporation of a legal entity or the transfer of shares, the individuals who founded the company or who currently own the shares do not emerge from the available official data kept at the Cypriot Department of Registrar of Companies.
During 2014 and 2015, the EUTM proprietor filed a number of nine EUTMs, related to the Greek trade marks owned either by KRENTIN (the ones under (i) to (vi) below) or to D.T. Bergeletos’s (the ones under (vii) to (ix) below): (i) the contested EUTM; (ii) EUTM No 14 715 726 (filed on 22/10/2015 and registered on 11/03/2016 for goods and services in Classes 29, 30 and 38); (iii) EUTM No 12 551 446 ‘PERLA’ (filed on 31/01/2014 and registered on 02/11/2014 for goods in Class 30); (iv) EUTM No 12 549 499 ‘ELLO’ (filed on 30/01/2014 and registered on 19/07/2014 for goods and services in Classes 29 and 35); (v) EUTM No 14 722 243 (filed on 22/10/2015 and registered on 10/03/2016 for goods and services in Classes 29 and 38), emerged from a combination of KRENTIN’s mark ‘ELLO’ and the non-distinctive word ‘Creamy’; (vi) EUTM No 14 715 783 (filed on 22/10/2015 and registered on 16/03/2016 for goods and services in Classes 29 and 38), emerged from the combination of KRENTIN’s mark ‘ELLO’ and the ‘ERMOL’ mark owned by Mr D.T. Bergeletos, who also registered it as EUTM (No 11 915 568 ‘ERMOL’ filed on 20/06/2013 and registered on 22/01/2014 for goods and services in Classes 29, 30 and 35); (vii) EUTM No 12 551 354 ‘REA’ (filed on 31/01/2014 and registered on 12/06/2014 for goods in Class 30); (viii) EUTM No 12 551 545 ‘GLAROS’ (filed on 31/01/2014 and registered on 12/06/2014 for goods and services in Classes 29, 30 and 35) and (ix) EUTM No 12 551 289 ‘ALKYON’ (filed on 31/01/2014 and registered on 13/06/2014 for goods and services in Classes 29, 30 and 35).
Over the course of the following years, the EUTM proprietor granted several licenses regarding the above nine EUTMs to KRENTIN, to D.T. Bergeletos, to the Cypriot company ARILAST LTD. and/or to the Cypriot company ZOEPOL LTD (the last two companies having their legal seat located at the same address as the EUTM proprietor).
Two months before 26/06/2017 (when KRENTIN applied to the Court to be declared bankrupt) and despite the fact that its national marks had been renewed for another decade, said company started to surrender its most famous Greek national trade marks. On 11/04/2017, KRENTIN surrendered the trade mark D 73 637 ‘MORFAT’, on 19/04/2017 the trade mark D 115 166 ‘MORFAT CREAMY’ and on 21/04/2017 the trade mark D 67 432 ‘PERLA’. In April the same year, a series of other eight ‘MORFAT’ Greek national marks were surrendered. The national trade mark D 62 437 ‘ELLO’ (due to expire on 11/07/2014) was not renewed, while the two Cyprus ‘MORFAT’ marks were also surrendered on 30/08/2017.
On 14/06/2018, the EUTM proprietor also waived the protection of four EUTMs (No 12 551 289 ‘ALKYON’, EUTM No 12 551 354 ‘REA’, EUTM No 12 551 545 ‘GLAROS’ and EUTM No 12 551 446 ‘PERLA’). On the same day and even before the recordal of the surrenders in EUIPO’s Register (which took place on 17/06/2018), a new Cypriot company (CACHERO LIMITED) applies for the registration of four identical EUTMs (No 17 918 193 ‘ALKYON’, No 17 918 168 ‘REA’, No 17 918 198 ‘GLAROS’ and No 17 918 169 ‘PERLA’).
The applicants further show that by filing EUTMs identical to KRENTIN’s (and D.T. Bergeletos’s) Greek reputed marks, the EUTM proprietor was seeking to create the false impression that the new trade marks belong to a different legal entity so that KRENTIN’s creditors would not be able to satisfy their claims. However, KRENTIN, through the licensees granted by the EUTM proprietor, continues, in effect, to monopolise the marks, getting ‘the protection, fame and competitive advantage granted by the completely identical European trade marks’. Moreover, in order to cover up the issue of fictitiousness, KRENTIN’s license was cancelled, in order for another non-exclusive license to be granted to the affiliated company D.T. Bergeletos, which in turn was replaced by a new license to the (also) intermediary company ZOEPOL LTD.
Finally, the applicants explain that there is no clear evidence as regards the connection between KRENTIN, D.T. Bergeletos and the interposed legal person (i.e. the EUTM proprietor) because Cyprus’s legal system does not provide for a procedure to identify the individuals participating in a company. However, there are strong indications pointing to and evidencing such connection, as follows: (i) if the EUTM proprietor acted in good faith, it should have searched EUIPO’s database before filing for the EUTMs (inter alia, the contested one); such a search would have revealed the existence of valid and completely identical trade marks in the name of KRENTIN and/or D.T. Bergeletos; (ii) neither KRENTIN nor D.T. Bergeletos filed oppositions or cancellations against the EUTMs, but they became licensees for the marks; later those licenses were cancelled and new licenses were granted to KRENTIN and D.T. Bergeletos, through the interposed companies ARILAST and ZOEPOL; (iii) the use of the EUTMs by the licensees (KRENTIN and D.T. Bergeletos) is identical to the use of the expropriated Greek marks, since they were used to distinguish the same products; (iv) the EUTM proprietor does not own any other EUTMs, except for the ones in question, all of which formerly belonged to KRENTIN and/or D.T. Bergeletos; (v) all the companies involved (the EUTM proprietor, KRENTIN, D.T. Bergeletos, CACHERO LIMITED) and Mr D.T. Bergeletos are represented by the same Greek law firm; moreover, in all license agreements this law firm represents both parties (licensors and licensees); (vi) all the license agreements (even those concluded between Cypriot companies) are governed by the Greek law and the competent courts for solving disputes are the ones in Piraeus, Greece and (vii) the EUTM proprietor has no real exercise of a business (as shown by its financial details); moreover, said company has a capital amounting to EUR 2,000.00 and proceeded to file nine EUTM applications the costs of which exceeds EUR 9,000.00 and licenses/cancellations thereof (whose costs also surpass its capital).
Together with the invalidity application and in support of their observations, the applicants filed a copy of the Decision (document in Greek only). On 20/03/2019, the applicants resubmitted the Decision as well as an English translation thereof. The applicants’ statement of grounds also makes reference to KRENTIN’s application no 7006/3445/2017, allegedly attached to the invalidity application as ‘doc 1’, however, no such document has been made available by the applicants.
In its observations in reply of 30/07/2019, the EUTM proprietor vehemently contests the invalidity application and the applicants’ claims, which it deems ‘totally untrue, based on fictional and non-existent facts and defamatory’. The applicants’ argument that the contested EUTM was a mark belonging at the beginning to the Greek company CREDIN HELLAS S.A. (hereinafter ‘CREDIN’) is entirely wrong, since CREDIN had (starting with 1968) only a user’s license agreement and was paying royalties for the use of the marks.
The proprietor then provides detailed information on how CREDIN came into being and on its rights over the Greek national marks, which can be summarised as follows:
In 1968, the Danish company FABRIKEN CREDIN V/SCHOU-FONDET (hereinafter ‘FABRIKEN CREDIN’) came to Greece to establish a factory for the production of pastry products under its own trade marks and partnered with members of the Bertzeletos family in order to set up the company CREDIN (initially called CREDIN HELLAS LTD and, since 12/08/1999 when it was converted into Société Anonyme, CREDIN HELLAS S.A.).
On 16/09/1968, FABRIKEN CREDIN entered into a private agreement with CREDIN pursuant to which, inter alia, the names under which the products are sold shall remain the property of the Danish company and CREDIN was authorised to apply in its own name for the registration of the Danish company’s trade marks at the Danish company’s cost by making the explicit statement that all such trade marks would belong to the Danish company and not to CREDIN. A royalty of 6% of the total sales would be payable by CREDIN. The agreement was initially valid for ten years and has been subsequently renewed, initially for a further term of twenty years and ever since, tacitly.
Following a series of changes in the structure of the foreign shareholder, on 12/12/2014 the former transferred its shares held in CREDIN to Greek shareholders.
After said transfer of shares (and given that by explicit agreement the Greek national marks did not belong to CREDIN, but to CREDIN A/S), whenever those marks were due for renewal, CREDIN, their proprietor ‘of record’ did not have the authority to renew them, this being the right and responsibility of the rightful owner of the marks, who would also bear the costs. Nonetheless, the word ‘CREDIN’ is still in the company’s name, ‘thanks to opponents diligence, although belonging to CREDIN A/S’.
Moreover, CREDIN has been verbally notified by the creditor banks (in particular Eurobank and Alpha Bank) that its main competitor in Greece has made an offer of EUR ten million to two banks in order to acquire the trade marks, if and when they would come to the bank’s possession. Therefore, in the proprietor’s view, the present invalidity application is the continuation of those efforts. It is further shown that ‘the very existence of the trade mark and other rights would be at stake, and that the licensee and the shareholders of CREDIN would be held responsible, in case such trade mark and other rights would come to third parties’.
From the filing of the Greek marks (on CREDIN A/S’s order and behalf) and until their cancellation, CREDIN has been regularly and unfailingly paying royalties for their use. However, from a certain point onwards CREDIN has been unable to honour its payment obligations which led to the termination of its relationship with CREDIN A/S.
On account of CREDIN’s failure to pay royalties (‘due to troubles with the opponent banks’), by letter of 25/10/2017, CREDIN A/S, ‘the true and never doubted proprietor of the trade marks’ gave notice to CREDIN of definitive and irrevocable termination of license as regards the use of its marks by CREDIN, effective 25/11/2017.
On 25/11/2017, CREDIN A/S notified CREDIN that the license of CREDIN HELLAS to use the ‘Credin brand’ is hereby terminated and it will be henceforth illegal for CREDIN HELLAS and its successors and they will have no right whatsoever to use the CREDIN brand or the know-how that is covered by the license agreement whatsoever.
It is also shown that the banks had no rights over the trade marks and ‘that disconnecting the marks from their licensed used by CREDIN would not amount to a breach of contract as regards the contracts with the banks’. The proprietor refers to Article 16.2(g) of the current account credit contract of 18/06/2001 between CREDIN and Bank of Piraeus (‘[The Creditor] [sic] shall not sell or transfer for any reason whatsoever any of his basic pieces of property, or lease his business in whole or in part, or license his property under any legal form to third parties, without the prior consent of the bank in writing’) and concludes that said clause had nothing to do with the trade marks or the know-how of the goods marketed by CREDIN, since the trade marks ‘were never in the ownership of CREDIN but belonged to third parties, namely CREDIN A/S to whom CREDIN regularly paid the agreed royalties.
The EUTM proprietor then contends that, following the deletion of the national marks from the Greek Trade marks Registry, the basic trade marks, among which, the contested EUTM, were legally registered in the proprietor’s name. Further information is provided on the licenses granted by the EUTM proprietor to CREDIN (terminated by means of CREDIN A/S’s verbal notice of 25/11/2017) and to respectively Dem. Th. Bertzeletos & Afoi Viomichaniki, Emporiki, Touristiki Anonymi Etairia (terminated as said company never produced goods bearing the marks, inter alia, the contested EUTM). Finally, in March 2018 the proprietor granted a license to ZOEPOL LTD., for inter alia, the contested EUTM, company which has been manufacturing and selling products since September 2018 and has already paid royalties.
As a last point and in reply to the applicants’ claims on the proprietor’s representatives, information is provided on the respective law firm (inter alia, number of active powers of attorney, number of trade marks ‘represented’, qualifications of the company’s partners etc) and it is explained that ‘with such an expertise, it’s no wonder why said legal counsels are very sought after and why so many clients wish to engage their services’.
In support of its observations, the EUTM proprietor filed the following evidence (in English, except for the translation into Greek of the letter of 18/04/1988):
Agreement of 16/09/1968 between FABRIKEN CREDIN and CREDIN LTD. The EUTM proprietor informs that the document was concluded in English and then legally and officially translated into Greek by the Ministry of Foreign Affairs on 06/08/1980, thus acquiring a fixed and official date.
Letter of 18/04/1988 stating that PALSGAARD INDUSTRI A/S is the successor in title of FABRIKEN CREDIN. The same enclosure contains a document in Greek which appears to be the official translation of said letter issued by the Translation Office – Athens of the Ministry of Foreign Affairs/Hellenic Republic.
Letter of 03/02/2003 from CREDIN A/S and PALSGAARD A/S to CREDIN.
Document of 26/06/2013 from CREDIN A/S to Mr Theodores Bertzeletos mentioning a license agreement and the fees to be paid by CREDIN for each of the fiscal years 2010 to 2013. The document also refers to ‘payment conditions’ for the fiscal year 2013 and forward and lists several amounts to be paid by CREDIN until January 2017. The document is signed and stamped by CREDIN A/S and by CREDIN, represented by Mr T. Bertzeletos (on 02/07/2013).
Three invoices issued by Palsgaard A/S on 13/12/2002, 22/06/2004 and 14/06/2005 and addressed to CREDIN in connection with royalties year 1998, royalties year 2000 and royalties year 2003 respectively. Each invoice is accompanied by a transaction confirmation from Alpha Bank (dated 18/12/2002, 30/06/2004 and 27/07/2005). In addition, there is a letter of 19/12/2002 from CREDIN (represented by Dimitris Bertzeletos) to Palsgaard Industri A/S confirming the settlement of the invoice of 13/12/2002.
In their counter-reply of 16/10/2019, the applicants address each argument put forward by the other party and argue, in the main, that the proprietor’s claims are ‘legally unsubstantiated and logically irrational’. In particular, it is shown that the filing of trade marks in the name of the Greek company along with a simultaneous declaration made to the Danish company that these belong to the latter constitutes a fictitious declaration of intent and is absolutely invalid, since it is not legally possible to file a trade mark in the name of A with the simultaneous declaration made by A towards the real beneficiary B and/or the Trade marks Department that the trade mark belong to B. The applicants further dispute the proprietor’s argument on the payment of royalties for the use of the trade marks and point out that as is apparent from the 1968 agreement, those fees were paid to the Danish company in consideration of the provision of technical support, know-how and the use of inventions.
The proprietor’s reference to the loan agreement with Piraeus Bank S.A. is completely irrelevant for the present proceedings, since the applicants filed the invalidity application on absolute grounds and they do not need to show a particular, personal interest to submit such application. The applicants did not file the application in their capacity as creditors of KRENTIN but on the legal basis of protecting the interests of the consumer, the market and healthy competition in the European area. The EUTM proprietor, an interposed person of KRENTIN, continues to hold, in an abusive and deceiving manner, the monopoly over the contested mark to the benefit of the real proprietor, KRENTIN. Meanwhile, the marks, being an asset of the real beneficiary and debtor, KRENTIN, should be included in the objects of sale along with the remaining assets of KRENTIN and be lawfully transferred to the interested entrepreneurs in the framework of the proper functioning of competition in the EU market.
The applicants further challenge the proprietor’s version of events and submit, among other things, that the latter failed to explain why in March 2016 it granted an exclusive license to KRENTIN (to use, inter alia, the contested EUTM) while this company was still the owner of the identical national trade mark in Greece. The proprietor also failed to submit any evidence of the alleged letter of 25/10/2017 by means of which the Danish company would have terminated the private agreement of 1968. In addition, there is no explanation as to how the EUTM proprietor took cognisance of the facts and documents it invoked and filed in the present proceedings. More specifically, the delivering of KRENTIN’s corporate documents proves that there is a direct dependence between the EUTM proprietor and KRENTIN.
The applicants further submitted an extract from the Greek Trade mark Registry in respect of the Greek trade mark No D 73 637 ‘MORFAT’ (in Greek and English translation). The document shows, inter alia, that: (i) the mark was applied for on 13/12/1978 by CREDIN (DENMARK) ELLAS EPE and registered on 18/08/1980, (ii) the owner changed its legal form under the corporate name KRENTIN ELLAS VIOMICHANIKI EMPORIKI ETAIRIA EIDON ARTOPOIIAS – ZACHAROPLASTIKIS KAI MAGEIRIKIS A.E., with distinctive title ‘KRENTIN HELLAS A.E., (iii) the mark was successively renewed (‘for the new decade as of 13/12/2008’) and (iv) the mark was surrendered on 11/04/2017.
The EUTM proprietor replied on 30/10/2019 and 31/10/2019. It confirms receipt of the applicants’ submissions and points out an inconsistency in said documents, namely that the applicants referred to the wrong number of the cancellation proceedings (33 322 instead of 33 304). On 25/11/2019, the applicants clarified that the indication of the number of other cancellation proceedings is the result of a clerical error and asked the Office to replace the first page of their previous submissions with the correct one. On 14/01/2020, the Office informed both parties that the EUTM proprietor did not file observations within its given time limit and that the adversarial part of the proceedings is closed.
It is noted however that on 20/12/2019 the EUTM proprietor filed, in parallel cancellation proceedings (C 33 324 against EUTM No 14 715 783 ), observations in reply and additional evidence related also to the present invalidity proceedings. Having in view that the parties are involved in several other parallel cancellation proceedings on the same grounds and that these arguments and evidence are essentially highly similar if not identical to the proprietor’s arguments and evidence submitted in at least four other cases (and which have been duly communicated to the applicants), the Cancellation Division decides to take these arguments and evidence into consideration in its further assessment of the present application. This is the best light in which the EUTM proprietor’s case can be examined and which will be without prejudice to the applicants.
The proprietor clarified that its company (incorporated in Cyprus in August 2014, having as registered and ultimate owner ‘a top executive in a large German conglomerate’) ‘is engaged in the business of trade mark registrations and exploitation in consideration of royalties’. It is further explained that in October 2015 a search in EUIPO’s database revealed that the designation ‘MORFAT’ for goods and services in Classes 29, 30 and 35 was available for registration with EUIPO and therefore, in January 2014 the proprietor applied for registration in its own name. At all times and in the present as well, there is no relationship of any type with CREDIN. It was CREDIN who contacted the EUTM proprietor and requested the grant of a license across the EU, at the same time informing the proprietor that CREDIN was not the proprietor in Greece, but ‘licensors in consideration of royalties’ and ‘they were still seeking a pan-European reach’. CREDIN realised that it would be ‘pointless’ to oppose the EUTM proprietor since in any case the latter would have been able to convert the EUTM into national marks in all the other countries. Therefore, CREDIN ‘acted in a correct and sound manner’ and thus acquired a ‘strong pan-European license for the trade mark’, rather than just the national license.
The proprietor further contends that CREDIN ‘who was not the proprietor but only the licensed user’ allowed the Greek marks to lapse and respectively waived the protection of those in force ‘in order to prevent them from coming by mistake [as a result of ignorance of their actual status, i.e. of the fact that they were not owned by CREDIN HELLAS who was only their licensed user] under the scope of authority of the bankruptcy trustee or the special administrator’. It is also shown that the Greek mark No 73 637 ‘MORFAT’ was lapsed due to non-renewal on 12/09/2018, prior to the application for a declaration of invalidity.
Additional arguments are put forward and evidence is filed to support the proprietor’s previous arguments as to the fact that the amounts paid by CREDIN represent royalties for trade mark use.
Lastly, the proprietor argues in emphatic language that the applicants are in fact acting in bad faith and details a series of circumstances that would, in its view, support such a conclusion. First, the applicants, through the special administrator they had appointed under court judgement, attempted to apply for the registration of the mark ‘MORFAT’ as a national mark in Greece. Such application was refused since the special administrator is not authorised to increase the property of the undertaking in liquidation but only to liquidate its existing property. The applicants ‘insisted’ and filed electronically for the said mark, application which was initially accepted (‘due to a manifest oversight’) and then revoked. Secondly, the applicants convened the creditors group and sold five e-filed pending trade mark applications (including ‘MORFAT’, now No N 253 949) to the company AKTINA S.A. ‘for a derisory amount’. Moreover, on 08/10/2019 CREDIN informed the EUTM proprietor that the special administrator communicated a petition before the Single-Member Court of Piraeus for the acceptance and declaration of the company AKTINA S.A. as buyer of the entirety of the trade marks (even the CREDIN national marks No 147 258 and No 147 260) despite the applicants’ long knowledge that all CREDIN’s marks are owned by the Danish owners.
The observations were accompanied by the following evidence (either in English or in Greek with English translation):
Agreement of 14/05/1980 between FABRIKEN CREDIN and CREDIN (DENMARK) Hellas Ltd. The document makes explicit reference to ‘the existing royalties’ agreement concerning the use from CREDIN (DENMARK) HELLAS Ltd of the production methods, marks and services provided by CREDIN v/SCHOU-FONDET’.
Three documents (dated 18/09/1980, 08/03/1984 and 28/07/1992) from Greek ministries related to the approval by the respective authority of the payment by CREDIN (DENMARK) HELLAS Ltd. of royalties to the Danish Firm FABRIKEN CREDIN/ PALSGAARD INDUSTRI A/S. There is no explicit reference to any of the Greek marks concerned.
Invoice no 2758 of 30/11/1993 issued by Palsgaard Industri A/S and addressed to Credin Hellas Ltd. for payment for royalties for the year 1991.
Letter of 25/11/2017 from CREDIN A/S to Credin Hellas in connection with ‘the right to use the brand CREDIN/payment situation’. The document states in essence that Credin Hellas’s right to use the brand CREDIN is terminated and that it would be illegal for said company or successors to use the brand ‘Credin’ or the know-how related to the license agreement. The letter further includes the text sent to Credin on 25/10/2017 (referring to the license agreement between the parties, the payment by Credin Hellas of royalties for ‘the use of our trade mark and know how’ and a deadline for the latter company to pay its outstanding amounts under the sanction of termination of its right to use the brand ‘Credin’).
Extract from TMView containing the particulars of the Greek trade mark No D 73 637 ‘MORFAT’ (filed on 13/12/1978 for goods in Classes 29 and 30, with an expiry date on 13/11/2018 and surrendered on 11/04/2017).
Decision no 3913 of 03/07/2019 issued by the Ministry of Economy and Development of the Hellenic Republic and revoking as ‘inadvertently issued’ the decision no 3745 of 28/06/2019 for accepting the national trade mark application no N 253 949 for the word mark ‘MORFAT’, filed on 23/02/2019 for goods in Classes 29 and 30 by the company CREDIN HELLAS VIOMICHANIKI EMPORIKI ETAIRIA EIDON ARTOPOIIAS – ZACHAROPLASTIKIS KAI MAGEIRIKIS A.E. represented by Evdokia Papandreou (document in Greek and English translation).
Extracts from the Petition filed before the Single-Member Court of First Instance of Piraeus by Evdokia Alex. Papandreou, acting as the special administrator of CREDIN (document in Greek and English translation).
In their submissions of 16/10/2019, the applicants requested the joinder of the present proceedings with five other cancellation proceedings initiated by the applicants ‘on account of the connection between them, for the purposes of procedural economy and in order to avoid contradictory decisions’. The Cancellation Division deems that the requirements of Article 18(1) EUTMDR are not met in the present case, since the five cases referred to by the applicants relate to different EUTMs. Moreover, in one of them there is also a distinct EUTM proprietor. Therefore, the applicants’ request is set aside.
Article 59(1)(b) EUTMR provides that a European Union trade mark will be declared invalid where the applicant was acting in bad faith when it filed the application for the trade mark.
There is no precise legal definition of the term ‘bad faith’, which is open to various interpretations. Bad faith is a subjective state based on the applicant’s intentions when filing a European Union trade mark. As a general rule, intentions on their own are not subject to legal consequences. For a finding of bad faith there must be, first, some action by the EUTM proprietor which clearly reflects a dishonest intention and, second, an objective standard against which such action can be measured and subsequently qualified as constituting bad faith. There is bad faith when the conduct of the applicant for a European Union trade mark departs from accepted principles of ethical behaviour or honest commercial and business practices, which can be identified by assessing the objective facts of each case against the standards (Opinion of Advocate General Sharpston of 12/03/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 60).
Thus, Article 59(1)(b) EUTMR meets the general interest objective of preventing trade mark registrations that are abusive or contrary to honest commercial and business practices (03/06/2010, Internetportal und Marketing, C‑569/08, EU:C:2010:311, § 36 and 37). Such registrations are contrary to the principle that the application of EU law cannot be extended to cover abusive practices on the part of a trader which do not make it possible to attain the objective of the legislation in question (14/12/2000, Emsland-Stärke, C‑110/99, EU:C:2000:695, § 51 and 52, and 07/07/2016, LUCEO, T‑82/14, EU:T:2016:396, § 52).
In that regard, if, insofar as it characterises the applicant's intention at the time of filing the application for registration of an EU trade mark, the concept of bad faith, within the meaning of Article 59(1)(b) EUTMR, constitutes a subjective element, it must be determined in the light of the objective circumstances of the case (11/06/2009, Lindt Goldhase, C‑529/07, EU:C:2009:361, § 42).
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).
It is for the applicant for a declaration of invalidity who intends to rely on Article 59(1)(b) EUTMR to establish the circumstances which make it possible to conclude that an application for registration of a European Union trade mark was filed in bad faith, the good faith of the applicant being presumed until proven otherwise (08/03/2017, Formata, T‑23/16, EU:T:2017:149, § 45).
This being so, where EUIPO finds that the objective circumstances of the particular case relied on by the applicant for a declaration of invalidity may lead to the rebuttal of the presumption of good faith applying to the application for registration of the mark at issue, it is for the proprietor thereof to provide plausible explanations on the objectives and commercial logic pursued by the application for registration of that mark (23/05/2019, Ann Taylor, T-3/18, ECLI:EU:T:2019:357, § 36).
The owner of the trade mark is best placed to provide EUIPO with information on his intentions at the time of applying for registration of that mark and in order to provide it with evidence capable of convincing it that, in spite of the existence of objective circumstances suggesting dishonest intentions, those intentions were legitimate (09/11/2016, Representation of a pattern of wavy, crisscrossing lines, T‑579/14, EU:T:2016:650, § 136, and 05/05/2017, VENMO, T‑132/16, EU:T:2017:316, § 51 to 59).
Assessment of bad faith
The applicants essentially allege that at the moment of applying for the contested EUTM, the proprietor acted as a straw man for the applicants’ debtor, the Greek company KRENTIN/CREDIN, with a view to fraudulently ‘rescue’ the latter’s identical late national trade mark from bankruptcy against the legitimate interest of KRENTIN/CREDIN’s creditors.
Primarily, it is noted that bad faith can take many forms. It does not necessarily imply any degree of moral turpitude. A European Union trade mark 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 (04/06/2009, R 916/2004‑1, Gerson, § 53).
In order to determine whether a trade mark applicant is acting in bad faith, it is necessary, inter alia, to examine whether he intends to use the mark applied for. In that context, it should be noted that the essential function of a trade mark is to ensure that the consumer or end-user can identify the origin of the product or service concerned by allowing him to distinguish that product or service from those of different origin, without any confusion (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 45).
Moreover, 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 contested sign and its use since its creation, the commercial logic underlying the filing of the application for registration of that sign as a European Union trade mark, and the chronology of events leading up to that filing (14/02/2012, T‑33/11, Bigab, EU:T:2012:77, § 21 to 23).
It is in the light of the above principles that the applicants’ claims must be examined. The essential question the Cancellation Division is, therefore, called to answer is whether the EUTM proprietor was a bona fide applicant for the contested EUTM and acted independently of KRENTIN/CREDIN or whether it was in league with the latter company with the aim of ultimately defrauding the applicants.
It has been established by the arguments and evidence on file that the company KRENTIN/CREDIN failed to fulfil its payments obligations towards, inter alia, the applicants and it has been placed (following a request of October 2017 granted in April 2018) under special administration. Such a regime is essentially a liquidation procedure aimed at the sale via a public tender of the enterprise’s assets (see the Decision).
On the other hand, the contested EUTM has been applied for in January 2014 and registered in June 2014 by a Cypriot company. At that time (see extracts from the Greek Register, given by the applicants and from TMView, filed by the proprietor) KRENTIN/CREDIN owned a trade mark portfolio that included, inter alia, the Greek trade mark No D 73 637 ‘MORFAT’, covering goods in Classes 29 and 30. The Greek mark was filed on 13/12/1978 and duly renewed until 13/12/2018. It is evident that the contested EUTM is identical to the Greek mark and that it covers goods in the same Classes 29 and 30 and related retail services in Class 35.
By an agreement of 10/03/2016, the contested EUTM has been exclusively licensed to KRENTIN/CREDIN (see the parties’ observations and EUIPO’s records). The license has been recorded in EUIPO’s Register on 29/03/2016.
On 10/04/2017, the EUTM proprietor and KRENTIN/CREDIN filed a request before EUIPO to have the license cancelled (recorded in the Register on 13/04/2017).
One day later, on 11/04/2017, KRENTIN/CREDIN surrendered the Greek national mark.
In May the same year, the contested EUTM was licensed to D.T. Bergeletos/Dem. Th. Bertzeletos (non-exclusive license recorded in EUIPO’s Register on 18/05/2017). The following year, another non-exclusive license has been recorded in EUIPO’s Register (17/05/2018), for the benefit of the Cypriot company ZOEPOL LTD, having its registered seat at the same address as the EUTM proprietor.
The EUTM proprietor contended that it has no relationship whatsoever with KRENTIN/CREDIN. The proprietor is engaged in the business of trade mark registration and exploitation in consideration of royalties. It performed independently ‘the search prescribed by the law’, found the specific trade mark available for registration with EUIPO and proceeded with its registration. It was KRENTIN/CREDIN who contacted the proprietor with a view to obtain a license, since the company was seeking a ‘pan-European reach’.
The Cancellation Division agrees that nothing precludes an undertaking from exercising an activity as trade mark agent. To that extent and in the context of such an activity, it can be said that nothing barred the EUTM proprietor from filing applications for registration of marks which it did not intend to use itself, but to exploit through licenses to third parties. It is also possible that two entities come up with an identical trade mark independently from one another. Just as it could also be conceivable that after 38 years of owning a national mark in Greece, KRENTIN/CREDIN suddenly realised in 2016 that it wants a ‘pan-European reach’.
Nevertheless, the probability of all these events happening together as a product of chance is extremely low. It is highly unlikely that the EUTM proprietor happened to conduct ‘independently’ an ‘availability search’ precisely for a sign which had been registered at national level 36 years before, by a pure coincidence. On a side note, the proprietor’s reference to the October 2015 search is most likely the result of an inconsistency, since normally such researches are carried out prior to filing a trade mark and not one year and some months after the mark was filed and also registered. It is also very improbable for such search not to have revealed the existence of the prior registered Greek national mark. Also, there appears to be no realistic justification for KRENTIN/CREDIN’s unexpected interest in a ‘pan-European reach’ precisely at a time when said company was facing severe business difficulties (i.e. a general and permanent state of failure to fulfil its overdue payment obligations, negative company funds for two fiscal years, the company’s ceasing of operations - see the Decision). Moreover, there seems to be, in any case, little commercial logic for a very long standing owner of a national registered mark to become the exclusive licensee at EU level for an identical mark, one year later to have such license cancelled and then surrender its national mark.
The proprietor contends that KRENTIN/CREDIN’s license was terminated ‘by means of CREDIN A/S verbal notice of 25/11/2017’. If that were true, then it is not understandable why the cancellation of said license was actually requested before EUIPO in April 2017, which is seven months prior to the alleged termination of the license by CREDIN A/S. In addition, there is little reasonable explanation for the further licenses granted by the proprietor to D.T. Bergeletos/Dem. Th. Bertzeletos and to ZOEPOL LTD respectively. It appears at least curious that after the termination of KRENTIN/CREDIN’s license, the contested EUTM was licensed first to an affiliated company (see documents from the EUTM proprietor which show Mr D.T. Bergeletos/Bertzeletos as representative of KRENTIN/CREDIN) and then to a company seated at the same address as the EUTM proprietor. In this respect, the proprietor claimed that the subsequent license to D.T. Bergeletos/Dem. Th. Bertzeletos was cancelled since said company did not manufacture products under the mark and it is only the final licensee, ZOEPOL LTD, that has been manufacturing and selling products since September 2018 and has already paid royalties. If ZOEPOL LTD indeed marketed products under the contested EUTM and ‘already paid royalties’, then it should not have been difficult for the EUTM proprietor to make available documents attesting to such facts. Moreover, as is apparent from EUIPO’s records, the contested EUTM is currently licensed to both companies.
One must also not lose sight of the fact that the filing of the contested EUTM was not a singular event. In addition to this mark and practically in similar circumstances, the EUTM proprietor filed and registered as EUTMs eight other signs, identical or highly similar to Greek national trade marks owned by KRENTIN/CREDIN and/or D.T. Bergeletos/Dem. Th. Bertzeletos. Following the same pattern, the marks were then licensed (to KRENTIN/CREDIN, D.T. Bergeletos/Dem. Th. Bertzeletos and/or to other companies) while the corresponding Greek national marks owned by KRENTIN/CREDIN were being surrendered or allowed to lapse. Moreover, four of these EUTMs were surrendered and on the very same day re-applied by another Cypriot company, having its registered seat at the same address as the EUTM proprietor.
In this context, it is virtually impossible for the EUTM proprietor to have acted independently of the applicants’ debtor and for all these facts to have just occurred by a mere coincidence. It must also be noted that not only the filing strategy practiced by the EUTM proprietor is incompatible with the objectives pursued by the EUTMR, but that it is not unlike the cases of ‘abuse of law’, which are characterised by circumstances in which, first, despite formal observance of the conditions laid down by European Union rules, the purpose of those rules has not been achieved, and, secondly, there exists an intention to obtain an advantage from those rules by creating artificially the conditions laid down for obtaining it (07/07/2016, LUCEO, T‑82/14, EU:T:2016:396, § 52 and the case law cited therein).
The EUTM proprietor went to great lengths to argue that KRENTIN/CREDIN was not the owner of the Greek marks, but only their ‘licensed user’. KRENTIN/CREDIN has been paying royalties for the use of the marks and had a duty to protect ‘the foreign marks’. KRENTIN/CREDIN allowed to lapse the marks reaching the ten-year protection period and waived the protection of those still active, since it wanted to prevent them from coming ‘by mistake [as a result of ignorance of their actual status, i.e. of the fact that they were not owned by CREDIN who was only their licensed user] under the scope of authority of the bankruptcy trustee or the special administrator’. As KRENTIN/CREDIN was only a licensed user, such actions would not contravene the provisions of Article 16.2(g) of the credit contract of 18/06/2001 with Bank of Piraeus. The filing of the marks in the name of KRENTIN/CREDIN was done under the approval and on the instructions of the Danish company, who paid the registration and renewal fees. The Danish company and its Norwegian successor (by reasons of their frequent visits to Greece and the documents ascertaining the due payment of royalties for the marks over decades) were ‘fully cognizant of the fact that the trade marks had indeed been filed in the name of the Greek company and consented to it in practice as well’. KRENTIN/CREDIN surrendered the registration of the Greek ‘MORFAT’ mark when the proprietors withdrew their stake in CREDIN HELLAS and consequent to the latter’s failure to pay royalties. By the verbal warning of 25/10/2017 and the letter of 25/11/2017, the Danish owners terminated the agreement of 1968 and KRENTIN/CREDIN was forbidden from using all the trade marks licensed to them. The Greek mark ‘MORFAT’ lapsed due to non-renewal on 12/09/2018. The proprietor concluded that ‘following their deletion from the Greek Trade mark Registry, the basic trademarks, among which is the European Trademark ‘MORFAT’ were legally registered in our name’.
To such self-contradictory arguments the Cancellation Division notes the followings. Firstly, it cannot be seriously claimed that KRENTIN/CREDIN was a licensed user of the ‘MORFAT’ Greek mark and not its registered proprietor, when documents filed by both parties attest to KRENTIN/CREDIN’s ownership of the mark (see extracts from the Greek register, given by the applicants and from TMView, filed by the proprietor). Moreover, if (in the proprietor’s own words) the Danish company and its Norwegian successor consented to the registration of the mark in KRENTIN/CREDIN’s name, then obviously the latter was not a licensee of the former companies but the owner of the mark.
Secondly, it cannot be argued that the Greek mark was not renewed and therefore lapsed on 12/09/2018, when it is clear from the documents filed by the applicants and the EUTM proprietor that KRENTIN/CREDIN surrendered the mark almost one year and half before (i.e. on 11/04/2017).
Thirdly, it is not disputed that KRENTIN/CREDIN had a business relationship/business cooperation agreement with FABRIKEN CREDIN (and subsequently with its successors in title) and that it has been paying royalties to these companies. Such a fact is, in itself and in the absence of further conclusive evidence, clearly insufficient to support a conclusion that KRENTIN/CREDIN was a licensee of the Greek mark at issue. The agreement of 16/09/1968 generally states that the names under which the products are sold remain to CREDIN of Denmark property and the CREDIN of Denmark decides on their protection in registration and is engaged to support the expenses incurred. There is no explicit reference in this document to the ‘MORFAT’ trade mark (or to any of the other Greek marks for that matter). The same is valid as regards the other documents made available by the EUTM proprietor, which contain only general mentions of licenses and royalties (a license agreement, royalties/fees, royalties agreement concerning the use from CREDIN (DENMARK) HELLAS of the production methods, marks and service provided by CREDIN v/SCHOU-FONDET, compensation for the licensing of technical methods and trade mark for the manufacture in Greece of raw materials for the bread-making and pastry-making industry, payment of royalties for the use in Greece of intellectual property owned by the foreign firm FABRIKKEN CREDIN V/SCHOU FONDET, exclusive license of the intellectual property of the foreign firm FABRIKKEN CREDIN V/SCHOU FONDET and more specifically trade mark, patent, designs, industrial methods and formulas and technical advice for the manufacture at CREDIN (DENMARK) HELLAS plant of raw materials and intermediary products for the bread-making and pastry making-industry, exclusive license in the intellectual property owned by the Danish Firm PALSGAARD INDUSTRI A/S to the Greek company CREDIN (DENMARK) HELLAS, more specifically use of the foreign firm’s technical specifications, advice and trade marks for the purpose of domestic production of raw materials for the bread-making and pastry making industry, compensation to the foreign firm PALSGAARD INDUSTRI A/S on net sales of the product ‘PAN UP SUPER’). More importantly, there is nothing on file to back-up the proprietor’s assertion and interpretation of the 1968 agreement in that KRENTIN/CREDIN ‘was authorised upon its formation to apply in its own name for the registration of the Danish company’s trade marks […] by making the explicit statement that all such trade marks would belong to the Danish company’.
Fourthly, the letter sent by CREDIN A/S to KRENTIN/CREDIN on 25/11/2017 expressly and repeatedly refers to the latter’s right to use the brand ‘Credin’ and not the ‘MORFAT’ or any other of the concerned Greek marks. It is difficult to believe that the foreign counterparty would not have acted with the required diligence and would have just ‘omitted’ to mention all other ‘licensed’ rights when giving notice of termination of their agreement with KRENTIN/CREDIN. In this context, the proprietor’s argumentation attempting to ‘justify’ the surrender of the Greek mark by KRENTIN/CREDIN does not really hold water. In fact, such actions (‘wanted to prevent them from coming ‘by mistake [as a result of ignorance of their actual status, i.e. of the fact that they were not owned by CREDIN who was only their licensed user] under the scope of authority of the bankruptcy trustee or the special administrator’) appear to rather support the applicants’ claims in that they paint the picture of a deliberate conduct on the part of KRENTIN/CREDIN who, albeit under contractual obligations (see contract with Piraeus invoked by the proprietor) surrendered, inter alia, the Greek mark and thus voluntarily and knowingly diminished its assets.
Lastly, it is difficult to decipher what the proprietor intended by claiming that the contested EUTM was legally registered in its name once the basic trade mark was deleted from the Greek Register, particularly when such argument is viewed in the light of the other passionate claims put forward on the lawful manner in which the EUTM was filed or the impeccable manner in which the proprietor has conducted itself. It is also not readily clear what the proprietor had in mind when referring to the date of surrender of the Greek mark as being the date when the proprietors withdrew their stake in CREDIN HELLAS. More specifically, it is not clear if its intention was to mean the date when the foreign company transferred its shares held into KRENTIN/CREDIN (which was 12/12/2014) or the date when the CREDIN A/S actually terminated their cooperation with KRENTIN/CREDIN (25/11/2017). Either way this just adds to the other inconsistencies and contradictions in the proprietor’s explanations. In this regard it suffices to note that neither of these two dates corresponds to the reality, given that the Greek mark was actually surrendered on 11/04/2017 (as the proprietor itself underlines in its observations).
It is true that there is no evidence of a direct connection between the EUTM proprietor on the one hand and KRENTIN/CREDIN and/or D.T. Bergeletos/Dem. Th. Bertzeletos, on the other. The applicants emphasised their inability to make available such proof because Cyprus’s legal system does not provide for a procedure to identify the individuals participating in a company. Albeit Article 14 of Directive (EU) 2017/1132 of the European Parliament and of the Council of 14/06/2017 relating to certain aspects of company law, as subsequently amended and supplemented, require Member States of the EU to take measure to ensure compulsory disclosure by companies of at least certain documents and particulars (inter alia, the instrument of constitution and the statues of a company and the persons authorised to represent a company), the Cancellation Division does not exclude ab initio, that evidence on the shareholders of the EUTM proprietor may not have been available. One possible explanation for this is the fact that Cyprus used to have strict privacy laws on account of its former status as a tax heaven, laws which allowed for, among other things, concealed ownership identities.
Furthermore, it is not unexpected that such link and/or evidence to prove it may not be readily obvious or available. It is the nature of bad faith situations that the protagonists seek to conceal their business machinations and any possible relationship between the person whose rights might be jeopardized and the beneficiary. The public policy objective of the legislator would, consequently, largely be at risk if the Office accepted such applications.
In the present case, as thoroughly explained above, the identity of the signs, the timing and circumstances of filing the EUTM, the subsequent events (in particular, the exclusive license to KRENTIN/CREDIN, followed by its cancellation and then the surrender of the corresponding national mark), the granting of other licenses, the lack of any evidence as to the actual use of the mark by the proprietor or by any of its licensees topped with the filing and subsequent registration of eight other EUTMs (following essentially the same pattern) make it impossible to reach other conclusion than that these facts and events were not purely accidental.
Article 59(1)(b) EUTMR refers to the bad faith of the ‘applicant’ at the time of filing in order to make sure that the blemished trade mark would not lose its stigma through subsequent assignments. Such trade marks would, therefore, at any time and in anyone’s hands, be subject to a declaration of invalidity. Since the stigma addressed by Article 59(1)(b) EUTMR lies in the bad faith of the person initiating and controlling such an application, Article 59(1)(b) EUTMR, therefore, does not refer to the ‘applicant’ as a term of procedural law, but more broadly to any person who principally pursues and directs the application. This may well be any person instructing a nominee to act in his (the nominee’s) own name, but who, according to an arrangement between the parties, merely serves the interests of the former (13/12/2004, R 582/2003‑4, EAST SIDE MARIO’S, § 17 - 18).
Demonstrating bad faith implies proving that at the time of filing the EUTM proprietor was aware that it was causing harm to the invalidity applicant and that this harm was a consequence of its reproachable conduct from a moral or commercial view (21/04/2010, R 219/2009‑1, GRUPPO SALINI / SALINI, § 66).
The Cancellation Division finds it very difficult to see which could have been the commercial logic on the part of the EUTM proprietor when applying for the contested mark other than being a stand-in for the applicants’ debtor in an asset protection scheme and with the intention of effectively putting an obstacle to KRENTIN/CREDIN’s creditors in recuperating their debts.
In the circumstances and in view of the facts and evidence submitted by the applicants, the burden of proof has effectively shifted from the applicants to the proprietor in the sense that the latter should have been able to safely explain and demonstrate the reasons for such a situation.
The EUTM proprietor’s defence largely rests on the fact that KRENTIN/CREDIN was not the proprietor of the Greek marks but their ‘licensed user’ and that when filing for the contested EUTM the proprietor acted completely independent from this company and ‘in an absolutely lawful’ manner. The Cancellation Division has already detailed above why such arguments cannot prosper. On a side note, the Cancellation Division also wonders why the proprietor chose not to make available any evidence on its company, such as for example on its shareholding structure, which could have served to support the proprietor’s claims that no connection exists with KRENTIN/CREDIN and thus to rebut the applicants’ assertions.
The EUTM proprietor also insists on the fact that when the invalidity application was filed, the ‘MORFAT’ Greek mark ‘had long been deleted from the register’. This fact is irrelevant. The crucial point in time for assessing the conduct of the EUTM proprietor is at the filing date of the contested EUTM and not at the date of the application for a declaration of invalidity. And, as detailed above, the Greek trade mark was duly protected in Greece when the EUTM application was filed.
In a similar vein, the proprietor’s detailed arguments on the bad faith of the applicants, resulting, in its view, from events related to the ‘illegal’ increase of KRENTIN/CREDIN’s assets by the filing of national trade mark applications and/or the sale of KRENTIN/CREDIN’s assets to a certain company have little bearing (if any) on the present case. Admittedly, the proprietor filed a document which shows that the Greek Office revoked in July 2019 a decision related to the Greek trade mark application No N 253 949 (applied on 23/02/2019 for goods in Classes 29 and 30), as being ‘inadvertently issued’. Nevertheless, such document is not particularly conclusive all the more so in the light of the further arguments of the proprietor, who first shows that such mark was rejected only to contend in the following paragraph of its observations that the applicants sold five e-filed pending trade mark applications, including the one in question. As for the sale of KRENTIN/CREDIN’s assets to a certain company, it is not for the Cancellation Division to assess how the liquidation procedure was carried out under the relevant national law. For the sake of completeness, it is nonetheless noted that there is nothing in the extracts from the Petition that could support the proprietor’s claims. As is apparent from this document, the sale of KRENTIN/CREDIN’s assets to a certain company was due to the fact that it was only that particular undertaking who submitted an offer in response to the corresponding public auctions that were held for selling the assets of KRENTIN/CREDIN.
Aside from the above, the EUTM proprietor provided no explanations or true reasons that would constitute legitimate expectations for filing the mark and would dispel the Cancellation Division’s doubts. In fact, the arguments of the proprietor could also be interpreted as 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 (04/06/2009, R 916/2004‑1, Gerson, § 53).
‘There is no simple, decisive test for establishing whether a trade mark application was submitted in bad faith’ (see Opinion of the Advocate General above cited, § 75). In the present case, in an overall assessment of all the facts and evidence, the Cancellation Division considers that it was sufficiently shown that the filing (and subsequent registration) of the contested EUTM was part of an unlawful strategy to ‘rescue’, inter alia, the national Greek trade mark ‘MORFAT’ from the assets of KRENTIN/CREDIN in fraudam creditoris. When filing the contested EUTM, the EUTM proprietor colluded with the applicants’ debtor with the sole aim of creating the impression that the ‘MORFAT’ trade mark is owned by a different entity. By such conduct, the proprietor contributed to the diminishing of KRENTIN/CREDIN’s assets and effectively put an obstacle to the applicants in having their monetary claims satisfied. Such an intention can never be considered compatible with accepted standards of honest or ethical conduct or in pursuit of a legitimate objective. Moreover the EUTM proprietor did not advance any arguments and has not submitted any evidence that would allow the Cancellation Division to reach a different conclusion.
Therefore, it must be found that the EUTM proprietor was acting in bad faith.
In the light of the above, the Cancellation Division concludes that the application is totally successful and the contested EUTM should be declared invalid for all the contested goods and services.
According to Article 109(1) EUTMR, the losing party in cancellation proceedings must bear the fees and costs incurred by the other party.
Since the EUTM proprietor is the losing party, it must bear the cancellation fee as well as the costs incurred by the applicants in the course of these proceedings.
According to Article 109(1) and (7) EUTMR and Article 18(1)(c)(ii) EUTMIR, the costs to be paid to the applicants are the cancellation fee and the representation costs, which are to be fixed on the basis of the maximum rate set therein.
The Cancellation Division
According to Article 67 EUTMR, any party adversely affected by this decision has a right to appeal against this decision. According to Article 68 EUTMR, notice of appeal must be filed in writing at the Office within two months of the date of notification of this decision. It must be filed in the language of the proceedings in which the decision subject to appeal was taken. Furthermore, a written statement of the grounds of appeal must be filed within four months of the same date. The notice of appeal will be deemed to be filed only when the appeal fee of EUR 720 has been paid.