CANCELLATION No 19 891 C (INVALIDITY)

Przedsiębiorstwo Drobiarskie Grzegorz Wyrębski, Wróblew 26, 98-285 Wróblew, Poland (applicant), represented by Polservice Patent And Trademark Attorneys Office, Bluszczańska 73, 00-712 Warsaw, Poland (professional representative)

a g a i n s t

Anna Gagatek-Woźniak , Poultry Foods, Ignacego Paderewskiego 35, 98 300 Wieluń, Poland, Artur Woźniak, Ignacego Paderewskiego 35, 98-300 Wieluń, Poland and Jolanta Piesik D&J Food, ul. Kardynała Stefana Wyszyńskiego 21 B lok. 4, 98-300 Wieluń, Poland (EUTM proprietors), represented by Poraj Kancelaria Prawno-Patentowa Sp. Z O.O., ul. Słowackiego 31/33, lok.1, 60-824 Poznań, Poland (professional representative).

On 16/04/2020, the Cancellation Division takes the following

DECISION

1. The application for a declaration of invalidity is upheld.

2. European Union trade mark No 13 068 861 is declared invalid in its entirety.

3. The EUTM proprietors bearthe costs, fixed at EUR 1 080.

REASONS

The applicant filed an application for a declaration of invalidity against European Union trade mark No 13 068 861 for the figurative sign as shown below:

The request is directed against all the goods and services covered by the EUTM, namely:

Class 29: Poultry; Poultry, not live; Frozen meat; Meat, preserved.

Class 40: Freezing of foods; Freezing of foods.

The applicant invoked Article 59(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The case for the applicant

The applicant claims that the District Court in Warsaw, XXII Department of European Union Trademarks and Industrial Designs, proceedings in the case of XXII GwZT 45/15 for a counterclaim in the matter of invalidation of the EUTM 13 071 378 and EUTM 13 068 861 ‘RED BRAND CHICKEN’ (the contested EUTM) on the basis of Article 128(7) EUTMR obliged the applicant to submit the present invalidity application before the EUIPO. It argues that the parties were in cooperation in the period prior to the filing of the EUTM and that the proprietor’s behaviour in filing the EUTM is contrary to decency and fair trade practice. The applicant claims that the proprietors deliberately and contrary to an agreement between the parties to form a joint venture to produce and market brine-injected chicken breast fillets under the brand ‘RED BRAND CHICKEN 3D’ applied in bad faith for the sign. Moreover, the applicant claims that the filing of the EUTM was done without the applicant’s knowledge or consent and it claims that it co-authored the contested sign, introduced it into trade and consolidated its position particularly on the English market.

The applicant provides details of its business, namely that it operates an advanced poultry slaughter and disjointing plant and manufactures raw poultry products which are Halal certified in Poland which has implemented HACCP system and BRC standard allowing it to trade in the EU. It began cooperating with the proprietors in April 2012 when it was represented by the applicant’s son who was the Commercial Director of the applicant’s company and conducted talks with one of the proprietors, Artur Woźniak who was then acting on behalf of another of the proprietors, Anna Gagatek-Woźniak from Poultry Foods. The applicant claims that the talks between the parties were related to an agency agreement in which Anna Gagatek-Woźniak would be agent for the applicant in order to sell the applicant’s fresh poultry products and for which Artur Woźniak was paid a commission by the applicant. Artur Woźniak was offered employment at the applicant’s company but refused the offer as at the time he was a seller of meat additives as a representative of the company Vaessen-Schoemaker, a brine manufacturer. The applicant states that the reason it offered the employment to Mr Woźniak was to put in order the financial matters between the parties.

The applicant states that on 02/11/2013, on the applicant’s commission, Anna Gagatek- Woźniak was to supervise poultry manufacture as marinated meat and she received a monthly remuneration from the applicant for this service. Moreover, the applicant states that during the cooperation Jolanta Piesik from D&J Foods, also a proprietor of the EUTM, was involved in the cooperation through Anna Gagatek-Woźniak. The applicant claims that the cooperation between the parties was terminated on 31/07/2014 by mutual consent but that prior to that Artur Woźniak acting on behalf of Anna Gagatek-Woźniak, was constantly present at the applicant’s company and had access to all the information relating to the manufacturing process of injected frozen poultry fillets. The applicant contends that in October 2012 the cooperating parties started implementing Artur Woźniak’s proposal to manufacture injected filets and that from the beginning Mr Woźniak treated the applicant as his business partner and was interested in working as an agent in the exclusive sales of the applicant’s products on the English market. For this purpose Mr Woźniak presented a draft of a sales agency contract to the applicant.

The applicant argues that, except for the idea to start manufacturing such filets at the applicant’s company, Mr Woźniak did not present any details relating to the technology to use to implement the idea or have any technical knowledge to allow him to start manufacturing frozen chicken filets with high brine injection and his knowledge was insufficient to start production independently. The applicant contends that Mr Woźniak’s knowledge was limited to non-technical information, that such a product was made by a Dutch company using the brine manufacturer Vaessen-Schoemaker and he contacted them to gain information about the brine to be used and became a representative for Vaessen-Shoemaker from whom the applicant purchased the brine. The brine used in the ‘RED BRAND CHICKEN’ was based on a specific brine for which the applicant had exclusive rights to purchase and which was developed on the applicant’s orders. Moreover, it was only after repeated testing that the applicant managed to improve the process of manufacturing the frozen fillets with the use of the brine purchased from Vaessen-Shoemaker. The applicant puts forward that Mr Woźniak did not present a list of prospective customers to whom the product was to be sold or delivered, nor did he suggest a possible market name for the product. As the applicant did not have adequate technical facilities, process line or transporters to start production the applicant declared that it would only be interested in producing the fillets under the applicant’s own brand as it would have to invest significant financial outlays before launching the production. When the cooperation began the applicant only had one injecting machine which was insufficient. Therefore, it purchased dedicated machines in order to produce the filets.

In October 2012 the applicant’s son and Mr Woźniak started working on the product marketing to be used on the new product with early designs including the letters ‘G’ and ‘GW’ in the name, like ‘G brand’, ‘WG Brand’ or ‘W Brand’ which represented an abbreviation of the applicant’s company name. Finally, the applicant decided that a brand without Polish-sounding words would sell better to foreign buyers and abandoned the letter marks. The applicant states that the inspiration for creating the product name ‘RED BRAND’ came from the markings which Vriesekoop Poultry used for their product which was an injected chicken filet. When the filets were produced a batch of the goods were sold to Jolanta Piesik (one of the proprietor’s at D&J Food) in a white package with a label bearing the name ‘RED BRAND’. The first batches did not come out as well as the applicant had hoped and these batches were sold to Jolanta Piesik. The applicant did not want to market the goods marked with ‘RED BRAND’ at that time as it did not want the shortcomings in taste would evoke negative associations to prospective clients in foreign markets.

It claims that from the beginning the applicant’s son was actively participating in the creation of the graphical form of packaging and the word element ‘RED BRAND’. Łukasz Szrymski was commissioned to design the logo and he reported directly to Mr Woźniak who then communicated the information to the applicant’s son who sent suggestions back to the designer via Mr Woźniak. Moreover, it claims that it was the applicant, via his son, who approved their final form and who ordered the production of the packaging, which were boxes marked with ‘RED BRAND’ by the company Smart Packaging Solutions, which were recommended by Mr Woźniak (representing Anna Gagatek- Woźniak) to the applicant. The applicant claims that throughout the cooperation from March 2013 to March 2014 the applicant’s son singlehandedly made decisions concerning the graphical markings of the boxes and the appearance thereof and who approved their final form and from December 2013 the boxes were marked ‘RED BRAND’. The first boxes marked ‘RED BRAND’ were delivered to the applicant on 12/04/2013 and which reproduced the ‘RED BRAND 3D’ branding. When the cooperation finished in 2014 the production of the boxes was changed to the company Van Del Velde N.V. who received the punching dies from Smart Packaging Solutions. The applicant states that in 2013 the parties agreed on the division of sales markets for the injected frozen chicken filets marked with the sign ‘RED BRAND’ and the applicant was to sell on the English market and Jolanta Piesik on the Irish market.

The applicant claims that Mr Woźniak informed him that he had difficulties dealing with Marcin Mozerys, an employee of Jolanta Piesik and then stated that it was necessary to contact Kühne & Heitz Holland B.V. who from 2013 to May 2014 then purchased ‘RED BRAND’ goods from the applicant and sold them to customers in England and later also to Ireland. The applicant states that throughout the period of cooperation that Jolanta Piesik only purchased 4,200kg of filets marked ‘RED BRAND’ while the applicant sold around 500 tons of the product to other companies under ‘RED BRAND’. The applicant submits copies of emails to prove the cooperation between the parties and a draft contract for exclusive sales by Jolanta Piesik for D&J Food of the applicant’s poultry products in Ireland. The applicant on the other hand was selling the products in England through the agency of Kühne & Heitz Holland B.V. and then through the company Kappers Foods B.V. and the decision to sell through these entities was taken singlehandedly by the applicant as an independent business and only it received profits from this, and in particular, Jolanta Piesik from D&J Food did not receive any profit for the sale of these ‘RED BRAND’ goods as it was one of the applicant’s customers only.

The applicant states that on 10/07/2014 the proprietors filed for the EUTM before EUIPO. On 31/07/2014 Mr Woźniak and the applicant terminated their service agreement by mutual consent. On 12/09/2014 the applicant received a demand from the proprietors attorney to discontinue the violation of provisions of the law against unfair competition and the law of copyright and neighbouring rights. It was at this point that the applicant claims that it became aware of the filing of the EUTM and copyrights for the sign.

The applicant outlines the relevant law on bad faith and puts forward how it applies to the present application. It states that it is clear that the parties were in cooperation and that the product was not an innovative idea of Mr Woźniak as the product had existed in Western European markets for over 20 years. Moreover, the applicant claims that it assumed the highest risk in this joint venture as it had to buy the machinery and that it was thanks to his know-how and hard work that this brand was successfully introduced onto the market. The applicant’s son, who works for the applicant, was directly involved in the developing of the branding and made free and unrestricted decisions at every stage of production of the product. It further states that at no point did it receive any verbal or written instructions from the proprietors in relation to the production of the products. Therefore, the applicant claims that the actions of Anna Gagatek-Woźniak, acting through Mr Woźniak, were exceptionally disloyal and blameworthy as she was commissioned by the applicant to supervise the production process of marinated poultry for which she received a monthly salary. The applicant argues that the filing of the EUTM by the proprietors was done without any agreement with the applicant. It further states that the use of the contested mark by the applicant never provoked any objections by the proprietors.

It argues that Mr Woźniak, acting on behalf of Anna Gagatek-Woźniak, did not present any concept or details relating to the production process, but merely brought the idea of starting production at the applicant’s business and up until the end of the cooperation on 31/07/2014, Mr Woźniak was constantly present at the applicant’s business and had access to all the information relating to the manufacturing process while it was Mr Woźniak who was responsible for the brine used and gave trainings concerning use of the brine to employees of the applicant. The applicant claims that it had great confidence in Mr Woźniak and because of that their cooperation was based on friendly relations and that Mr Woźniak participated in meetings with Kappers Food on 14/01/2014 with the applicant in which the subject of the meeting was the applicant’s consent for the exclusive sale of goods marked with ‘RED BRAND’ for the years 2014-2015. Therefore, it claims that Mr Woźniak knew perfectly well what financial terms were settled and what the applicant’s profit would be and he did not question the applicant’s right to use the ‘RED BRAND 3D’. It argues that it was from this situation that Mr Woźniak along with Marcin Mozerys, acting for Jolanta Piesik D&J Food, obtained the necessary information to start their independent production on their own and apply for the EUTM after sufficient marketing of the brand had already taken place thanks to the efforts of the applicant who had at that point sold around 1000 tons of goods under the ‘BLUE BRAND’ and ‘RED BRAND’ in England and Ireland. Therefore, the applicant claims that this behaviour is contrary to decency and fair business practice as it was intended to eliminate the applicant from the English market and deprive him of customers and of selling further goods under the sign. The applicant considers that, during the entire period of cooperation, it had the right to freely use the sign ‘RED BRAND 3D’ and it still considers itself the owner. Moreover, it contends that this contested sign ‘RED BRAND CHICKEN 3D’ is deceptively similar the sign it used ‘RED BRAND 3D’ as the goods and services are identical and the word ‘CHICKEN’ is descriptive so it cannot distinguish the signs. The applicant only became aware of the EUTM when it was summoned to the District Court in Warsaw on 10/06/2016 and the proprietors had not informed him that they owned copyrights to the sign and it claims that at the time of filing the proprietors did not hold the author’s economic rights to the sign. Therefore, the EUTM was filed in bad faith.

In reply to the EUTM proprietor the applicant points out that there are inconsistencies in the proprietors’ evidence, the attachments are not numbered and some do not correspond to their description. Moreover, it complains that the CD attached was broken although later it having inspected the CD it acknowledged that it merely contained a copy of the evidence already submitted and in its possession. It denies that the evidence submitted in the present case is the same as that submitted in the prior opposition proceedings between the parties and therefore requests that this evidence of the proprietors be disregarded. The applicant contests the arguments of the proprietors and insists that many of the claims are not backed up by concrete proof. Moreover, it states that the projects of packaging carried out by Tomasz Grudziadz did not concern the EUTM but a different mark. The applicant insists that the emails between the parties mutually created the brand and submits further evidence in this regard. It points out that the transfer of copyright to Anna Gagatek-Woźniak was surprising as she was not involved in the process of creating the trade mark. The applicant claims that many of the arguments of the proprietors fall outside the scope of the present proceedings or are irrelevant, while other statements are contradicted by the evidence already submitted by the applicant. The applicant argues that Jolanta Piesik could sell exclusively on the Irish market according to the cooperation rules in place between the parties. It states that the emails between Marcin Mozerys and the applicant show that there was no commission contract between the parties as the applicant was not a contractor who only worked for the proprietors but that it was a decision maker and the holder of the product that allowed the proprietor to sell it on the specified market. Moreover, it states that it was Marcin Mozerys who sought to conclude with the applicant the exclusive sales agreement of products produced by the applicant and that this was known by Artur Woźniak. The parties cooperated completely with a common aim, to create and sell a new product on the market and the applicant was represented by his son in these matters. Moreover, in January 2013 Kühne & Heintz came directly to the applicant and not the proprietors to cooperate with him and not them. The applicant claims that it was through his efforts that it achieved the new clients Kappers Foods with which it began to cooperate from January 2014. The applicant claims that the actions of the proprietors were done to exclude the applicant from the market and they were done in bad faith.

In support of its observations, the applicant filed the following evidence:

• Enclosure 1: Electronic minutes from the District Court in Warsaw on 15/01/2018 examining the case of counterclaim by the applicant against the proprietors.

• Enclosure 2: The testimony of Łukasz Wyrębski in electronic minutes from the District Court in Warsaw on 15/12/2016 in the case of the counterclaim by the applicant against the proprietors.

• Enclosures 3 and 4: Email correspondence dated 24/10/2012 and 25/10/2012 between the applicant’s son and employees of Poultry Foods.

• Enclosure 5: An agreement to render services dated 02/11/2013, signed by the applicant and one of the proprietors, Anna Gagatek- Woźniakof Poultry Foods.

• Enclosures 6-9 and 13: Email correspondence dated 23/10/2012, 29/10/2012, 09/11/2012, 11/04/2012 and 26/11/2012 between the applicant’s son and Artur Woźniak.

• Enclosure 10: Letter dated 24/10/2014 from the Managing Director of Vassen-Schoemaker B.V. to the applicant’s son.

• Enclosure 11: Statement of 13/07/2016 from the Managing Director of Vaessen-Schoemaker B.V. to the applicant’s son.

• Enclosures 12, 13 and 14: Email dated 26/11/2012 between the applicant’s son and Artur Woźniak and email correspondence dated 23/10/2012, 24/10/2012 and 25/10/2012 between the applicant’s son and Artur Woźniak.

• Enclosures 15-20: Invoice for purchase of injecting machines dated 10/09/2012, 25/05/2013, 29/12/2014, 11/07/2013, 05/08/2013 and 23/05/2013.

• Enclosures 21-25: Emails dated 26/11/2012, 06/11/2012, 07/11/2012 and 26/11/2012 between the applicant’s son and Artur Woźniak.

• Enclosure 26: Printout of internet extracts from www.viresekoop.com showing an image of the packaging used by that enterprise for marketing injected frozen fillets.

• Enclosures 27-30: Emails dated 28/12/2012, 23/10/2012, 29/10/2012 and 12/11/2012 between the applicant’s son and Artur Woźniak.

• Enclosure 31: Email dated 20/11/2012 between the applicant’s son and Artur Woźniak in which they discuss the design of the logo.

• Enclosures 32, 34-35: Emails dated 28/12/2012, 20/11/2012 and 17/12/2012 between the applicant’s son and Artur Woźniak.

• Enclosure 33: Email dated 21/12/2012 between the Matt Barrett, a customer of the applicant and the applicant’s son.

• Enclosure 36: Statement by SMART Packaging Solutions with a sworn translation.

• Enclosures 37-38: Emails dated 01/03/2013, 04/03/2013 and 05/03/2013 between an employee of the packaging manufacturer SMART Packaging Solutions the applicant’s son.

• Enclosures 39-41: Emails dated 26/09/2013 and 30/01/2013 between the applicant’s son and Artur Woźniak.

• Enclosure 42: Minutes of the meeting of 14/01/2014 between the applicant’s son and Maurits Dekkers in which it details the exclusive right to sell the injected fillet marked by the word and graphics ‘RED BRAND’ in 2014 and 2015 by Kappers foods together with the sales statement for 2014.

• Enclosures 43-44, 49 and 51: Emails dated 22/05/2013, 04/12/2013, 13/05/2013 and 21/05/2013 between the applicant’s son and Marcin Mozerys. The email in Enclosure 49 contains an attachment which contains a draft ‘Exclusivity Sales Agreement’ in which the applicant provides the exclusive sales of its goods to Jolanta Piesik and Marcin Mozerys to sell in Ireland (both north and south) and this email is dated 13/05/2013.

• Enclosures 45: Emails dated 24/06/2013 and 15/09/2014 between the applicant’s son and Artur Woźniak.

• Enclosures 46-47: VAT invoices dated 29/11/2013 and 07/03/2014.

• Enclosure 48: Breakdown of the sales figures of ‘RED BRAND’ fillets in the period from January 2013 to September 2014.

• Enclosure 50.1-50.16: Copies of 16 VAT invoices dated between 25/11/2013 and 17/04/2014.

• Enclosures 52-54: Emails dated 26/10/2013, 30/10/2013 and 06/09/2013 between the applicant’s son and Kunhe & Heitz Holland B.V..

• Enclosures 55.1-55.7: Invoices dated between 14/02/2014-08/08/2014.

Evidence submitted on 07/06/2019:

• Annex 1: A picture of a damaged CD.

• Annexes 2-11 Copies of emails dated 23/10/2012, 06/11/2012, 21/12/2012, 09/11/2012, 11/09/2012, 24/06/2013, 19/12/2013, 24/05/2013 and 02/10/2013 between the email addresses info@poultryfoods.pl and dvr@wyrebski.com.pl.

• Annexes 12-13: Emails dated 04/12/2013 and 22/01/2014 sent between the email addresses biuro@difood.pl and dyr@wyrebski.com.pl.

• Annexes 14-15: Emails dated 13/05/2013 and 14/05/2013 sent between the email addresses biuro@difood.pl, lukasz@wyrebski.com.pl and dyr@wyrebski.com.pl.

• Annex 16: Email dated 10/01/2013 sent between the email addresses jaapk@knh.nl and dyr@wyrebski.com.pl.

• Annex 17: Email dated 26/10/2013 sent between the email addresses LaurenceJ@knh.nl and dyr@wyrebski.com.pl.

• Annex 18: Extract from the Polish Court transcript of the witness of Marcin Krupka in Warsaw on 15/12/2016.

• Annex 19: Email dated 15/09/2014 sent between the email addresses info@poultryfoods.pl and wyrebski@wyrebski.com.pl.

The case for the EUTM proprietor

The EUTM proprietors argue that the language of proceedings should change to Polish as both parties are Polish citizens and that if it is not it would cause a burden to them as all of the evidence is in Polish. They argue that the applicant submitted partial excerpts from the Court proceedings in Poland and that this distorts the testimonies of the parties and if the language is not changed to Polish then the proprietors would have to submit translations of the entirety of those proceedings. As such, it claims that the obligation to translate all of this material is disproportionate and unreasonable for both parties.

The EUTM proprietors also argue that the applicant has failed to prove bad faith and that the application for a declaration of invalidity is unsubstantiated. They contest the arguments and evidence submitted by the applicant and deny any bad faith on their part. The proprietors state that it is only partially true that they co-operated with the applicant and they deny that the filing of the EUTM was done against previously made arrangements with the applicant. They also deny that the applicant co-authored the contested EUTM and argue that this has been confirmed by the Court proceedings in Warsaw. They point to previous opposition proceedings which the applicant initiated against them and which were based on unregistered and well-known trade marks and how the Opposition Division rejected the opposition. The proprietors point to said decision and argue that it states that there was no evidence submitted that could justify the opposition and that most of the evidence did not even reference ‘RED BRAND’ and that there was no earlier non-registered trade mark and the evidence came from the interested party, the applicant itself. The proprietors claim that the evidence submitted in the present application is for the most part the same as that submitted in the opposition proceedings. However, instead of statements from the applicant it submitted the court records. As such, the proprietors claim that the evidence is not sufficient to prove bad faith. The proprietors argue that the applicant has altered its observations from the opposition proceedings as previously it didn’t even know the name of the logo designer and now it mentions him by name. Moreover, the proprietors claim that much later the applicant filed a Community design for the sign and quoted a Ms Anna Oleksik as a designer, it later waived this right during invalidity proceedings. Now the applicant states that the relevant designer is Mr Szrymski.

The proprietors claim that all of the applicant’s arguments and information are untrue and inconsistent except that until August 2014 the applicant was producing frozen fillets with injection for, and on commission from, D&J FOOD and packed them in the boxes according to the design of the proprietors and their design Mr Szrymski. They deny that the applicant had any rights to the design or that he participated in the creation of said design. They claim that the opponent’s arguments differ from those in the opposition and are inconsistent. The proprietors state that the applicant pleaded bad faith in the opposition proceedings but the Office could not take them into account. Also, the Office rejected the evidence of use submitted and held that they didn’t show that the sign was well-known or even that an unregistered sign existed. Therefore, as the applicant does not own an earlier sign there can be no bad faith on the part of the proprietors, and moreover, the applicant has not pleaded any earlier right now. The proprietors put forward that any statements in the present application by the applicant that it promoted the mark would be dismissed as the Office in the opposition proceedings settled the matter by confirming there were no evidence of sales in the UK and Ireland and that the applicant did not have any rights to ‘RED BRAND CHICKEN’. The proprietors claim to be the priority holders of the contested brand since first established in April 2012 and used on the market since at least November 2012 and who took first steps to register the sign in October 2013.

The proprietors also argued that they have held copyrights to the design of the EUTM since 2012 and which are the subject of the contested EUTM and a Polish trade mark registration No 275 633. Furthermore, they say that Łukasz Szrymski is the designer of the 3D logo. The proprietors state that the applicant was only allowed to use the mark temporarily and with conditions and that the applicant has been using the sign without the proprietors’ consent and this is what caused the withdrawal of the acceptance of the proprietors in September 2014.

The proprietors contest the applicant’s arguments on bad faith. They claim that the applicant did not produce or sell fillets with injection abroad, especially frozen ones, prior to Artur Woźniak entering the applicant’s business. Moreover, they claim that the applicant did not have proper knowledge about the manufacturing technique, necessary preparations, sources of ingredients, market and its demands, as well as consumers and appropriate marketing tools. The proprietors claim that the applicant started production of fillets with injections, including frozen ones, only as it was commissioned by the proprietors to produce them and that the proprietors supported it with knowledge and offered it agency in the sale. They argue that they had the base of customers which bought the products of the applicant, but that the applicant never sold its products on its own, but only through the agency of the proprietors. Moreover, the proprietors point out that the applicant in its arguments mentions that the cooperating began with the proposal of Artur Woźniak to produce injected fillets.

The proprietors deny that the applicant promoted the ‘RED BRAND CHICKEN’ mark in Poland or abroad as this mark belongs to the proprietors and that it was the proprietors themselves that promoted the brand on the foreign markets and that developed the trade mark. They claim that one of the emails submitted by the applicant dated in May 2013 shows that the applicant recognises that Marcin Mozerys had been building the customer base for 8 months under the sign, at least since October 2012. They claim that the applicant never questioned the rights of the proprietors during the cooperation period and was aware that the brand had been invented by the proprietors and that the 3D design was created by Łukasz Szrymski. They say that it was after the cooperation ended that the applicant applied for the designs in the name of a designer who did not create the logo and which were subsequently withdrawn during the invalidity proceedings. The proprietors claim that since at least 12/09/2014 the applicant has been using the sign illegally and entered into the Irish and UK markets which the proprietors had developed and in which they were present. Furthermore, they claim that the applicant was involved in price undercutting which caused the proprietors to lose the favour of Kappers Food BV and numerous other strategic clients. The proprietors argue that although ‘Wyrębski appears on the labels of the goods they are in a secondary position to denote the scope of cooperation.

The proprietors deny that the applicant co-authored the contested sign and state that the evidence supports their opinion. They contend that the applicant has stated that the mark was created by Łukasz Szrymski which is compatible with the proprietors’ assertion and shows that the applicant did not co-author the sign. They say that there were no arrangements between the parties concerning ‘RED BRAND CHICKEN’ and that the proprietors did not need the applicant’s consent to file the EUTM as the applicant had no rights to the sign. Moreover, they state that they were not under any obligation to inform the applicant of their intention to file as they developed it on their own and used it on the market. They state that the main evidence submitted by the applicant is the testimony of Łukasz Szrymski made before the Court in Poland and that this was taken out of context in relation to correspondence between the parties concerning the cooperation in the matter of production of the injected fillets. The proprietors state that the applicant’s claim that it had been interested in the production of frozen injected fillets under its own mark is untrustworthy as it did not take any steps to create and protect its own trade mark. They deny that the cooperation between the applicant and Artur Woźniak are important and state that the applicant was aware of the proprietors’ experience and commercial success and that is why it wanted to cooperate with them, contrary to the arguments of the applicant. Furthermore, the proprietors state that their cooperation with the applicant was due to the close distance between the factory and the residence of Artur Woźniak. They put into doubt statements made by the applicant and put forward that the applicant would be unable to proceed without their knowledge and customers. The proprietors claim that they had customers abroad prior to cooperating with the applicant. They state that the applicant should have used another sign after ending the cooperation and now they have filed both civil and criminal proceedings against it.

The proprietors claim that some of the applicant’s evidence refers to different marks which are irrelevant in the present case and the proposition on packaging was never in fact sent. It was Artur Woźniak who sent the design of the logo to the applicant and who therefore owns it and the applicant’s son did not design or participate in the design and the evidence submitted by the applicant shows this. Therefore, the applicant has no rights to the sign. They claim that they were the ones to first use the sign and this created a right for them to apply for the sign and the applicant could only use the sign with their consent. They state that on 20/11/2012 Marcin Mozerys, acting on behalf of the proprietor Jolanta Piesik, sent the final designs of the packages to the first receiver, Brendan Doherty from the company Mountviewfoods Ltd, whereas on 30/11/2012 Łukasz Szrymski placed the marks on the Anne Gagatek-Woźniak website www.crownfoods.eu for advertising purposes. As such, they claim that the ‘RED BRAND 3D’ was created as of 09/11/2012 which was prior to Artur Woźniak sending the project to the applicant’s son. Moreover, they state that Jolanta Piesik sold the first fillet in the packaging with the ‘RED BRAND 3D’ sign on 16/11/2012 which was prior to the date claimed by the applicant after it received the packaging on 12/04/2013. They argue that this shows that the applicant only cooperated with them and with their consent and was aware that it had no rights to the brand.

The proprietors go through the concept of bad faith as laid out by the courts. They highlight in particular that the mere use by a third party of an unregistered trade mark does not prevent an identical or similar trade mark from being registered for identical or similar goods or services. The proprietors also speak of a German decision but omit to provide the case number or details of the judgment and state that the Court in that case said that cancellation due to bad faith cannot happen if the scope of the protection is not national but limited to only the local area of the entrepreneur’s activity. The proprietors repeat their previous assertions in particular that the applicant did not create or develop the logo and is not the owner of the sign, that it did not create, promote or build a foreign customer network and that the proprietors merely allowed it to use the sign on consent until the cooperation ended. The proprietors are the owners of the earlier non-registered sign which they then decided to register. They own trade marks and copyrights to the sign and the applicant does not hold any rights to the sign. Therefore, there was no bad faith on the part of the proprietors in filing the EUTM. They also contest the applicant’s evidence and claim that much of it is irrelevant or immaterial to this application.

In response to the applicant’s arguments the proprietors again insist that many of the arguments and some of the new evidence is irrelevant or unreliable. They insist that the applicant has failed to substantiate its case and contest the evidence and arguments submitted. Furthermore, they confirm and develop their previous arguments. They deny that the applicant has proven that there was any other cooperation other than the commission by the proprietors to produce the fillet. The proprietors state that the criminal proceedings are ongoing in Poland against the applicant’s son and the authorities have issued a decision on presenting charges to him due to unauthorised use of the brand to which he does not have rights. They claim that an indictment is always presented following an extensive investigation and evidentiary proceedings and after hearing the parties and witnesses and they did not believe that the applicant’s son created or co-created the contested sign. Therefore, they claim this shows that the applicant did not create the brand. The proprietors claim that on 12/09/2014 it was the applicant who had unlawfully entered the Irish and UK markets which had been developed by the proprietors and who has caused the proprietors to lose customers due to its price cutting efforts. They assert that the emails from the applicant’s attorney’s mailbox could have been manipulated and are therefore, unreliable and also contest the relevance of these emails as most do not mention the contested sign or are irrelevant. Therefore, the proprietors deny any bad faith and request the application to be rejected.

In support of its observations, the EUTM proprietor filed the following evidence:

• Annex 1: Pictures of ‘BLUE BRAND’ and ‘RED BRAND’ boxes.

• Annex 2: Copy of the decision of the Opposition Division of 21/12/2015, B 2 428 400.

• Annex 3: Email correspondence with attachments dated 06/04/2012 between Anna Gagatek-Woźniak and graphic designer Tomasz Grudziądz.

• Annex 4: Statement made by Mr Tomasz Grudziądz dated 30/05/2015.

• Annex 5: Statement made by the proprietors patent attorney.

• Annex 6: Invoice dated 16/11/2012 with a translation into English.

• Annex 7: Copyright transfer agreement dated 20/11/2012 from Łukasz Szrymski to Anna Gagatek-Woźniak in which he transferred the copyright to the signs ‘BLUE BRAND’ and ‘RED BRAND’.

• Annex 8: Copyright transfer agreement dated 22/12/2015.

• Annex 9: The testimony of Łukasz Szrymski made before the Court in Poland on 15/12/2016 in which he states that he never prepared any projects for the applicant but was commissioned by Artur Woźniak. Their first contact was May 2012 and the cooperation began in Autumn 2012. He only discussed the brand with Artur Woźniak and later with Marcin Mozerys. He also states that later on he designed a similar logo for packages for Artur Woźniak and that the copyrights to the logos were transferred by agreement.

• Annex 10: The Statement of Łukasz Szrymski dated 20/02/2015 as well as a printout of a screenshot.

• Annex 11: The testimony of Łukasz Szrymski made before the Court in Poland on 15/12/2016.

• Annex 12: Email correspondence dated 12/09/2014 between Marcin Mozerys and Łukasz Wyrębski.

• Annex 13: EUIPO eSearch database printouts for the design 002571703-0001/0002.

• Annex 14: Email correspondence with attachments of 24/05/2013 between Marcin Mozerys and an employee of one of its customers.

• Annex 15: Photograph of the advertisement from a customers shop in Dublin with the image of a ‘BLUE BRAND’ product produced by the applicant after the termination of cooperation with the proprietors.

• Annex 16: Photograph of the package label with the specification including the frosting date of 09/05/2015 and with the applicant’s identification number.

• Annex 17: Table concerning the history of the placing of ‘RED BRAND’ sign on the market with labelled evidence.

• Annex 18: Table concerning the establishment of the ‘RED BRAND’ sign with labelled evidence.

• Annex 19: Statement of Adros Group Sp. zo.o Sp. k dated 03/06/2015.

• Annexes 20-23: Email correspondence dated 08/01/2013, 15/01/2013, 21/01/2013 and 18/02/2013.

• Annex 24: Lawsuit filed by the proprietors against the applicant for violating their rights and also a translation of the demand.

• Annex 25: Email correspondence with attachments dated 06/04/2012 between Anan Gagatek- Woźniak and graphic designer Tomasz Grudziądz.

• Annex 26: The statement of Brendan Doherty of 15/05/2015.

• Annex 27: The certificate of domain name registration dated 09/11/2012.

• Annexes 28-29 and 31: Email correspondence between Marcin Mozerys and Artur Woźniak dated 11/11/2012, between Artur Woźniak and Łukasz Szrymski on 10/11/2012, and between Artur Woźniak and of Łukasz Wyrębski on 12/11/2012.

• Annex 30: VAT invoice dated 16/11/2012 for the sale of a chicken fillet under the sign.

• Annex 32: The testimony of Tomasz Pruski of 15/01/2015 made before the Court in Poland.

• Annex 33: The testimony of Marcin Krupka of 15/12/2015 made before the Court in Poland.

Evidence presented on 12/11/2019:

• The decision on presenting charges together with its translation to English and the indictment together with its translation to English

Preliminary remarks

Language of proceedings

The parties on 15/06/2018 jointly requested that the language of proceedings be changed to Polish as they were both Polish citizens and most of the evidence was in Polish. However, the Office rejected this request and informed that the parties should have informed the Office before the expiry of the two month period following the receipt by the EUTM proprietors of the communication referred to in Article 17(1), that a different language of proceedings has been agreed pursuant to Article 146(8) of Regulation (EU) 2017/1001. As the parties had not made the request in the above mentioned time period the request had to be rejected. The parties submitted further requests for this decision to be overturned and to allow the language of the proceedings to change to Polish. However, as stipulated in the above cited provisions there is a specific time frame in which the parties may request a change of language and neither party requested during that specified time. Therefore, this request must be rejected and the language of proceedings remains as English.

Damaged evidence

The applicant informed the Office that part of the evidence of the EUTM proprietor, namely, the CD was broken on arrival. However, this evidence was re-sent to the applicant who informed the Office that it had received and reviewed the new copy and that it merely contained a copy of the evidence already on file. Therefore, the applicant has had access to this evidence and has been allowed the opportunity to comment on same.

Claims of criminal conduct

The proprietors in their observations assert that some of the evidence submitted by the applicant which consists of emails from the applicant’s attorney’s mailbox could have been manipulated and are therefore, unreliable. This is a very serious accusation for which no proof has been submitted to back up the claim. The Office relies on the good faith of the parties in the proceedings and there are no indications that this evidence has been tampered with and therefore, this argument must be set aside.

The proprietors also argue that the criminal proceedings are ongoing in Poland against the applicant’s son and the authorities have issued a decision on presenting charges to him due to unauthorised use of the brand to which he does not have rights. They claim that an indictment is always presented following an extensive investigation and evidentiary proceedings and after hearing the parties and witnesses and they did not believe that the applicant’s son created or co-created the contested sign. Therefore, they claim this shows that the applicant did not create the brand.

The fact that the Polish authorities have decided to indict the applicant’s son does not prove his guilt in any manner. Moreover, the Cancellation Division is not bound by any decision of the national courts but must make an independent decision on the evidence presented before it. The Cancellation Division notes that no final decision has been taken in the criminal proceedings and the presumption of innocence needs to be preserved. Therefore, the conclusions drawn by the proprietors in this regards must be set aside.

ABSOLUTE GROUNDS FOR INVALIDITY – ARTICLE 59(1)(b) EUTMR

General principles

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).

Whether an EUTM proprietor acted in bad faith when filing a trade mark application must be the subject of an overall assessment, taking into account all the factors relevant to the particular case (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 37).

The burden of proof of the existence of bad faith lies with the invalidity applicant; good faith is presumed until the opposite is proven.

Outline of the relevant facts

The parties cooperated in business between 2012 and 2014 and created an injected chicken fillet to be sold abroad. The parties disagree as to who the holder of the right is and who created the brand. The applicant asserts that the proprietors acted in bad faith by filing the EUTM and the proprietors allege that the applicant had no right to use the brand without their consent and was acting illegally in continuing to use the brand after the ending of their cooperation. The remaining extensive arguments of the parties are laid out in detail at the beginning of the present decision.

Assessment of bad faith

One situation which may give rise to bad faith is when a commercial entity has obtained some degree of legal protection by virtue of the use of a sign on the market, which a competitor subsequently registers with the intention of competing unfairly with the original user of the sign.

In such instances, the Court of Justice of the European Union (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 48, 53) has stated that the following factors in particular should be taken into consideration:

1. the fact that the EUTM proprietor knows or must know that a third party is using an identical or similar sign for an identical or similar product capable of being confused with the contested EUTM;

2. the applicant’s intention of preventing that third party from continuing to use such a sign;

3. the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought; and

4. whether the EUTM proprietor in filing the contested EUTM was in pursuit of a legitimate objective.

The abovementioned are only examples drawn from a number of factors which can be taken into account in order to determine whether or not the applicant was acting in bad faith when filing the application; account may also be taken of other factors (14/02/2012, T‑33/11, Bigab, EU:T:2012:77, § 20-21; 21/03/2012, T‑227/09, FS, EU:T:2012:138, § 36).

Bad faith might be applicable when the parties involved have or have had any kind of relationship, such as (pre-/post-) contractual relationships, giving rise to mutual obligations and a duty of fair play in relation to the legitimate interests and expectations of the other party (13/11/2007, R 336/2007‑2, CLAIRE FISHER / CLAIRE FISHER, § 24).

The overall assessment of bad faith must bear in mind the general principle that the ownership of a European Union trade mark is acquired by registration and not by prior adoption by way of its actual use. Particularly when the invalidity applicant is claiming rights to a sign which is identical or similar to the contested EUTM, it is important to remember that Article 59(1)(b) EUTMR moderates the ‘first-to-file’ principle, according to which a sign may be registered as an EUTM only in so far as this is not precluded by an earlier mark with effect either in the European Union or in a Member State. Without prejudice to the possible application of Article 8(4) EUTMR, the mere use of a non-registered mark does not prevent an identical or similar mark from being registered as an EUTM for identical or similar goods or services (14/02/2012, T‑33/11, Bigab, EU:T:2012:77, § 16-17; 21/03/2012, T‑227/09, FS, EU:T:2012:138, § 31-32).

Both parties openly admit to having worked in cooperation on producing a (frozen) injected chicken fillet to be sold to foreign markets between 2012 and 2014. Therefore, from the evidence and arguments submitted by both parties it is clear that the parties were in a contractual relationship. The applicant has submitted a copy of a ‘Service agreement’ contract in Exhibit 5 which was signed by the applicant (called the customer) and Anna Gagatek-Woźniak (co-proprietor and called the contractor) on 02/11/2013 which states that ‘The subject of this Agreement is supervision by the Contractor of the process of poultry meat in the form of: Marinated Meat’. Moreover, it further states that the contractor, Ms Gagatek-Woźniak, would have to report to the applicant (the customer) on performance, offer directions and advice on improving the meat and notify it of all new regulations that would affect the production process. This agreement further specifies that the contractor (co-proprietor) would be remunerated for her activities on a monthly basis. The agreement was for an indefinite period with an opt-out clause.

In Exhibit 6 there is an email with the subject ‘The new agreement ready to be edited in the Word form’ dated 23/10/2012 sent from info@poultryfoods.pl (the company of Ms Gagatek-Woźniak) co-proprietor to the applicant’s son. The attached document is entitled ‘Sales Agency Agreement No’ and which contains a draft agency agreement in which Anna Gagatek-Woźniak is named as the agent of the applicant. Section 1 of this agreement is as follows:

It can be seen here that the Agent (Ms Gagatek-Woźniak of Poultry Foods) and Jolanta Piesik of D&J Food are both given an exclusive right to sell chicken products to the Irish market.

The next section of the agreement states the following:

From this it can be seen that the agent (Ms Gagatek-Woźniak of Poultry Foods) would negotiate ‘on behalf of’ and receive payments for the products from the customers ‘in the name and on behalf of’ ‘Wryębski’ (the applicant). It goes on to say that in their activity, the Agent shall be obliged to act with loyalty, due diligence and in good faith and with care about the interests of Wryębski and comply with instructions received from it. This agency agreement is only a draft and has not been signed. However, the Cancellation Division notes that this agreement was sent by one of the proprietors (Ms Gagatek-Woźniak from Poultry Foods) to the applicant and therefore, this shows her intentions in their working agreement. Moreover, when coupled with the previously mentioned service agreement between the applicant and Ms Gagatek-Woźniak, it appears that it was in fact the applicant who was in charge of making decisions and the activities carried out by Ms Gagatek-Woźniak were that of an agent. This is confirmed by the draft agency agreement in which Jolanta Piesik (co-proprietor) is also mentioned as being provided an exclusive right by the applicant to sell on the Irish market. Moreover, the third proprietor ‘Artur Woźniak’ represented Anna Gagatek-Woźniak but also worked for a brine company from which the brine was used in the goods sold under the contested sign. The evidence further shows that this brine was developed and changed on the instructions of the applicant.

Both sides submit voluminous arguments and observations which contradict each other’s position. Moreover, both parties have submitted voluminous evidence in support of their observations. Much of the evidence is irrelevant for the present purposes. In particular, the proprietors make extensive arguments in relation to who created the design and who held the prior rights to the copyright of the logo. They have submitted extensive evidence to back up this position and the applicant has submitted further evidence and arguments to show that it was involved (through its legal representative) in the design and creation of the brand. This point is irrelevant to determine whether bad faith occurred in the filing of the EUTM. The reason being that the sign was created in order to indicate the commercial origin of the goods being sold by the applicant through its agents (the proprietors). Moreover, it would appear from the evidence submitted that both the applicant (through its legal representative) and the proprietors (through their designer and perhaps their own creative ideas also) conceived and then developed the sign. However, what is important is that the sign was created for this joint venture or cooperation between the parties in which the applicant held a position of authority while the proprietors were agents of the applicant.

The proprietors argue that the applicant was only the agent of the proprietors but did not submit any evidence which could substantiate this argument. In fact, most of the evidence would point to the fact that it was the applicant who was the principal and the proprietors who were the agents.

The evidence contains an invoice that shows that Jolanta Piesik from D&J FOODS sold goods on 16/11/2012 under ‘BLUE BRAND’ and ‘GOLD BRAND’ to the company ‘Mountview Foods Ltd’ in Ireland and the proprietors claim that this shows use prior to the involvement of the applicant. Firstly, it is noted that this invoice does not show sales under the ‘RED BRAND’ sign but other signs. Moreover, the email sent by Poultry Foods to the applicant’s son, who was also the applicant’s legal representative, contained the draft agency agreement mentioned above and it clearly lays out that Ms Gagatek-Woźniak was the agent and that she, and Jolanta Piesik and a third party had only an exclusive right to sell goods in Ireland. This email was sent on 23/10/2012 and would show that the parties were already negotiating their agency agreement with the applicant prior to that date. Therefore, this invoice does not prove that Jolanta Piesik was using the sign prior to co-operating with the applicant.

Normally, what is important to determine when defining the owner of a sign is who made the first filing. However, the exception to this rule occurs in cases where it can be established that the filing has been made in bad faith. The Service contract between the parties and the draft agency agreement sent from one of the proprietors emails to the applicant both show that the parties were in cooperation. The excerpts of witness statements before the Court in Poland, the emails and most of the evidence submitted by both parties clearly point to a co-operation between the parties and in fact, the contracts would show that the proprietors were merely agents of the applicant and not vice versa as claimed by the proprietors. Indeed this is also confirmed by the evidence that the applicant was involved in developing the brine to be used in the fillets, that the applicant’s opinion on the design was requested, that ideas were presented to the applicant for its comments, that the applicant spoke independently to the brine company and to the companies in the UK to develop, sell and market goods. Furthermore, the applicant invested in machines to produce the goods. The arguments about the particular knowledge, know-how or capabilities of the applicant or the proprietors prior to co-operating are not particularly relevant either. What is important is that all of the parties co-operated and brought their own specific knowledge, know-how and capabilities into the joint venture. The fact that the draft agency agreement was not signed does not take away from the fact that it was one of the proprietors (Ms Gagatek-Woźniak through Artur Woźniak) that sent that agreement to the applicant and therefore showed the state of play between the parties in 2012 and their intentions to be the agent of the applicant and this is confirmed by the later service agreement signed in 2013, prior to the filing of the EUTM. Therefore, there was a clear contractual relationship between the parties and which lasted up until 2014.

The proprietors claim that on 12/09/2014 it was the applicant who had unlawfully entered the Irish and UK markets which had been developed by the proprietors and who has caused the proprietors to lose customers due to its price cutting efforts. However, again, the evidence examined above would show that it was the applicant’s goods that were bearing the ‘RED BRAND’ sign and the proprietors were provided exclusive rights to sell these goods of the applicant bearing the sign through an agency agreement to Ireland. This agreement could be terminated at any time by either of the parties and both parties agree that the co-operation terminated on 31/07/2014. Therefore, according to the agreement entered into by both parties, the proprietors would no longer have exclusive agency rights to sell goods bearing the applicant’s sign in Ireland after that date. This would allow the applicant to sell its own goods bearing the ‘RED BRAND’ sign in Ireland, the UK or anywhere else as the co-operation had ended. Therefore, this argument of the proprietors must be rejected.

Prior to the formal ending of the cooperation the proprietors filed the EUTM. The proprietors also argue that they own a prior Community design for the 3D packaging design. However, again the ownership of this design, or any copyrights they claim do not prove that they acted in good faith by filing the contested sign or that they had a right to file, nor does it provide them a basis on which to contest any rights to the sign on the part of the applicant.

Moreover, the proprietors also point to the previous opposition proceedings between the parties and claim that the Cancellation Division must arrive at the same decision as the Opposition Division as the evidence submitted is the same. Firstly, the Cancellation Division is not bound by the previous decision of the Opposition Division and each decision must be decided on its own merits. Moreover, it is noted that the evidence submitted in the previous case is not entirely the same as that presented in the present application. Furthermore, the object of both cases is different. In the opposition proceedings the present applicant had to prove the existence of earlier non-registered rights under Article 8(4) EUTMR and the standard and requirements for that are different than what is to be proven in an application for invalidity as based on bad faith under Article 59(1)(b) EUTMR. The Cancellation Division has indeed taken into consideration what was submitted in relation to the decision of the Opposition Division but these findings do not affect the decision of the Cancellation Division in the present proceedings for the above mentioned reasons. Therefore, this argument of the proprietors must be set aside.

Consequently, from the evidence it is clear that there were contractual relations between the parties, whether they were written in a contract or carried out due to an informal agreement, the parties were doing business together and therefore, a fiduciary duty of trust existed between them. The ‘RED BRAND’, ‘RED BRAND CHICKEN’ and ‘RED BRAND CHICKEN 3D’ signs were all being used in the context of this cooperation and it appears that both the proprietors and the applicant and designers were, to differing extents, involved in the creation and design of these logos. Some of the evidence refers to different signs like ‘RED BRAND’, ‘RED BRAND CHICKEN’ and ‘RED BRAND CHICKEN 3D’. The EUTM as registered is the 3D sign as depicted below:

However, it is noted that the additional word ‘CHICKEN’ on some of the evidence is clearly descriptive of the goods and therefore, its use does not alter the distinctive character of the sign. The fact that the invoices or other documents refer to ‘RED BRAND’ or ‘RED BRAND CHICKEN’ or ‘RED BRAND CHICKEN 3D’ is not unusual as the sign itself merely represents the packaging of the goods which contains a figurative representation of the term ‘RED BRAND CHICKEN’ and a figurative element which could possibly be the crest of a cockerel which again would point to the type of product being sold and be descriptive. The colourings on the packaging are merely decorative and the colour red used enforces the meaning behind the word ‘RED’ which is distinctive for chicken. It is normal for figurative or 3D signs to be referred to in documents by their verbal element and as such the evidence submitted makes reference to the sign, while other evidence shows the sign in its 3D form. Therefore, the fact that the initial sign may have been ‘RED BRAND’ without the chicken or the figurative or 3D elements does not result in the signs being distinguished. The additional elements in the EUTM are merely descriptive of the goods or are decorative and as such do not distinguish the sign from the original sign ‘RED BRAND’. Moreover, the applicant has shown through its evidence that it was involved in the creation of the packaging and the development of the logo also. Therefore, the proprietors registered a sign which was at least similar (if not identical) visually, phonetically and conceptually to the sign used on the applicant’s goods which the proprietors were selling abroad prior to the filing of the EUTM. Therefore, clearly there is at least similarity between the signs.

The contested goods are the following:

Class 29: Poultry; Poultry, not live; Frozen meat; Meat, preserved.

Class 40: Freezing of foods; Freezing of foods.

The evidence has shown that the applicant was producing and selling chicken and frozen chicken and the brine used in the chicken produces a preserved meat. Therefore, at least some of the goods in Class 29 as used by the applicant are identical to the goods for which the EUTM is registered. There is no evidence that the applicant was selling live poultry or other types of meat, nor that it was freezing foods for third parties. The fact that the applicant froze its own meat does not show that it offered these services to other companies and as such does not prove that he provided the services in Class 40. However, when bad faith of the EUTM owner is established, the whole EUTM is declared invalid, even for goods and services that are unrelated to those protected by the invalidity applicant’s mark so the fact that some of the goods and services are dissimilar would not prevent a finding of bad faith.

The EUTM proprietors filed the contested mark on 09/07/2014 with a priority date of 29/05/2014. The cooperation between the parties terminated by mutual consent on 31/07/2014. On 14/09/2014 the applicant received a demand from the proprietors to discontinue violating the provision of the Law against Unfair Competition and the Law on Copyright and Neighbouring Rights. The proprietors also have initiated criminal proceedings against the applicant for using the ‘RED BRAND’ sign after the cooperation ended between the parties and also contested the filing of a design of the sign by the applicant before the EUIPO. This evidences that the proprietors were clearly trying to prohibit the applicant from protecting its rights to the sign in the EU or continuing to use its sign in the EU. In this regard the proprietors argue that they created the sign and that the applicant was only their agent and therefore had no right to continue using the sign. However, as detailed above, the evidence would point to the fact that it was in fact the applicant who was the principal and the proprietors were only the agents and the right to use the sign which appeared on the applicant’s goods ended for the proprietors when the cooperation ended. The proprietors had only been selling the applicant’s goods on an exclusive agreement which later ended by mutual consent.

Therefore, the fact that the proprietors managed to file a Community design and the contested EUTM without the knowledge of the applicant and during the time of cooperation in which they were agent to the applicant does not mean that they had valid rights to the sign.

However, the applicant is the owner of the earlier sign and the proprietors are merely his agent in Ireland. The right to register a sign lies with the owner of the sign and not the agent unless there is an express agreement in this regard, which is not the case at hand. The applicant was selling its goods independently in the UK and through its agents in Ireland at least from November 2012 and which is prior to the filing of the EUTM. Moreover, the proprietors filed for the contested EUTM while the parties were still in co-operation and without the applicant’s knowledge or consent. Moreover, they tried to prevent the applicant thereafter from using the sign.

The evidence does not show that the proprietors were separately manufacturing their own goods and marketing them under their own sign independently but that they were merely acting as agent in selling the applicant’s goods. Therefore, they did not have the right to usurp the earlier sign due to the delay of the applicant in filing an EUTM. The fact that the proprietors were selling goods bearing the sign in the EU over many years did not give them a right to a sign which the EUTM proprietors knew belonged to the applicant. Also, the fact that the proprietors did not inform the applicant of the filing of the EUTM suggests that the proprietors were aware that they had not acted in good conscience and then soon after the co-operation finished and the EUTM was registered they demanded that the applicant refrain from using its sign which shows that their strategy in filing the EUTM was to prevent the applicant from entering the market. The draft Agency Agreement and the Service Agreement both had termination clauses which would mean that either party could end the agreement at any time. However, by filing the EUTM (during the co-operation period) the proprietors effectively put a barrier to the applicant entering the market and protecting its own sign.

Therefore, the Cancellation Division considers that when the proprietors filed the contested EUTM they were aware of the applicant’s earlier rights to the sign due to the business relationship between the parties, for a practically identical sign and for some identical goods and that they later used the contested EUTM to prevent the applicant from entering or continuing in the market. Consequently, the Cancellation Division holds that the proprietors filed the contested EUTM in bad faith. As previously mentioned the fact that some of the contested goods and services are dissimilar does not prevent the invalidity of the EUTM as a whole as a positive finding of bad faith at the time of filing the contested EUTM leads to the invalidity of the EUTM in its entirety (11/07/2013, T-321/10, Gruppo Salini, EU:T:2013:372, § 48).

The proprietors in their arguments go through the concept of bad faith as laid out by the courts and highlight in particular that the mere use by a third party of an unregistered trade mark does not prevent an identical or similar trade mark from being registered for identical or similar goods or services. The proprietors also speak of a German decision but omit to provide the judgement or even the case number and state that the Court in that case said that cancellation due to bad faith cannot happen if the scope of the protection is not national but limited to only the local area of the entrepreneur’s activity.

Firstly, the Cancellation Division notes that the proprietors have failed to correctly identify the German decision on which they rely, nor have they provided a copy of the decision so that the Cancellation Division could examine it. Secondly, decisions of the national courts are not binding but their contents can be taken into consideration. As the Cancellation Division cannot identify the decision nor read what the court actually decided this case cannot be taken into consideration. As regards the other judgments relied on, the Cancellation Division agrees that the mere use by a third party of an unregistered trade mark does not prevent an identical or similar trade mark from being registered for identical or similar goods or services. However, in the present case it has been demonstrated that this is not the case here as the use of the sign by the applicant was done with the knowledge of the proprietors and the agreements between the parties show that it was the applicant who held the rights to the sign while the proprietors were the agent. It was also shown that the filing of the EUTM by the proprietors was done in bad faith and as such this case can be distinguished from the scenarios in the cited case law.

Conclusion

Therefore, the application for bad faith is entirely upheld under Article 59(1)(b) EUTMR and the contested EUTM is invalidated in its entirety.

COSTS

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 proprietors are the losing party, they must bear the cancellation fee as well as the costs incurred by the applicant 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 applicant 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

Janja FELC

Nicole CLARKE

Richard BIANCHI

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.