CANCELLATION No 23 324 C (INVALIDITY)

Shenzhen Sijiyoumei Industrial Co., Ltd., A Seat No. 2105-2106, Sunhope eMetro, Futian area, Shenzhen city, Guangdong province, People’s Republic of China (applicant), represented by Gulde & Partner Patent- und Rechtsanwaltskanzlei mbB, Wallstr. 58/59, 10179 Berlin, Germany (professional representative)

a g a i n s t

Share Marketing-Trading-Logistik GmbH, Mondscheinweg 9, 8072 Fernitz-Mellach, Austria (EUTM proprietor), represented by Gassauer-Fleissner Rechtsanwälte GmbH, Wollzeile 3/Lugeck 6, 1010 Vienna, Austria (professional representative).

On 17/10/2019, the Cancellation Division takes the following

DECISION

1. The application for a declaration of invalidity is rejected in its entirety.

2. The applicant bears the costs, fixed at EUR 450.

REASONS

The applicant filed an application for a declaration of invalidity against European Union trade mark No 17 612 912 ‘Share’ (word mark) (the EUTM). The request is directed against all the goods covered by the EUTM, namely preserved plums in Class 29 and fresh plums in Class 31. The applicant invoked Article 59(1)(b) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicant explains that it is a Chinese company, founded in 2014, and that it has been processing, distributing and offering for sale dried fruit and fermented fruit, in particular dried green plums in China since 2015, prior to the filing of the contested mark on 18/12/2017.

In April 2017, the applicant and Ms Yasmin Shirley Stuffer-Hong got into a business relationship. According to the applicant, it negotiated and came to an agreement with Ms Stuffer-Hong that she should be responsible for the sale of the applicant’s dried plums under the trade mark ‘Share’ in the European Union and Switzerland. On 19/06/2017, Ms Stuffer-Hong founded the Chinese company Su Zhou Yinfei and the latter company and the applicant signed an agreement, on 21/07/2017, according to which Su Zhou Yinfei was supposed to act as an official partner of the applicant in the European Union and Switzerland.

On 21/04/2017, Ms Stuffer-Hong founded the Austrian company which is the proprietor in these proceedings. The company Su Zhou Yinfei orally terminated the agreement with the applicant, after which the new company started purchasing goods from another Chinese company and distributing them with a different partner. Simultaneously the owner submitted trade mark applications consisting of the verbal element ‘Share’, a descriptive indication (the date of the filing of the present contested mark is 18/12/2017) and initiated a lawsuit in Austria against the applicant’s new distributor in the EU, the company Innocom GmbH.

The applicant argues that, although it owns no registered mark, it uses the sign „SHARE“ extensively in connection with dried fruits/plums in China and in the United States of America. Furthermore, it owns a registered design filed on 24/11/2015 which shows on the packaging of the dried plums the sign „SHARE“. It adds that the signs in dispute are identical.

The proprietor of the challenged trade mark has known about the use of the confusingly similar sign ‘SHARE’ by the applicant for identical goods before the challenged trade mark was submitted as there was a business relationship between the parties.

Given the use of the sign by the applicant and its partners in China and in several countries including European Union Member States, the prior contractual relationship between the parties and the actions taken by the EUTM proprietor, the EUTM proprietor acted in bad faith at the time of filing the contested EUTM.

In support of its allegations the applicant files the following documents:

• Attachment 0: a copy of a receipt, dated 09/06/2015, relating to the product .

• Attachment 1: a document showing the VAT tax return for the period 2015-2017. The verbal element ‘SHARE’ does not appear in this document.

• Attachment 2: an overview of the awards obtained by the goods sold under the mark ‘SHARE’ and corresponding translations. The source of the documents is unknown and they are mostly not dated.

• Attachment 3: printouts, dated 01/06/2018, of the website http://shareplum.fi/, which, according to the applicant, belongs to a distributor that sells the applicant’s ‘Share’ plums in Finland.

• Attachment 4: photographs of the packaging as used by the applicant in China and screenshots from the applicant’s Chinese website.

• Attachment 5: registration certificate and a translation of the Chinese design No 201530476870.1, registered on 06/04/2016, for Locarno Class 09.03 (boxes, cases, containers, [preserve] tins or cans).

• Attachment 6: extract of the Chinese Trade Register and a translation in relation to Chinese company Su Zhou Yinfei, the company with which the applicant did business, where Ms Stuffer-Hong was the only stakeholder. The establishment’s date of this company is 19/06/2017.

• Attachment 7: a purchase order, and an agreement signed on 21/07/2017, the agreement’s translation reads as follows.

2. Rights and obligations of both parties (note: Party B: applicant; Party A: Su Zhou Yinfei)

• Party B is the sole holder of the trade mark and design patent for the processed products, Party A only has the right to properly use the trade marks, specific signs and design patents of the processed products. Party A shall not claim any rights or make any fake statements on the rounds of entrustment.

• Party A shall make a commitment to sale the processed products in the European Union and Switzerland, and is only processed on behalf of Party B. Party A is not allowed to entrust the third party to handle the product of Sui bian guo without the written consent from Party B.

• Party A shall not require Party B to stop production for any reason once Party B receive the notice of entering production from Party A, otherwise Party B shall have the right to deduct expenses according to the completed products.

The following sentence has been added to the text by the applicant: ‘Sui bian guo’ is the phonetic transcription of the Chinese characters for the word ‘Share’.

• Attachment 8: a Chinese Value Added Tax receipt, which is issued and stamped by the seller of goods and supervised by the tax bureau. According to the applicant, this receipt demonstrates that the applicant sold the goods under the mark ‘Share’ to Ms Stuffer-Hong’s company Su Zhou Yinfei on 10/04/2017. As mentioned above, the first agreement between the parties was signed on 21/07/2017.

• Attachment 9: extract from the Austrian Trade Register for the Austrian company Share Marketing-Trading-Logistik GMbH (last entry on 11/05/2017), founded by Ms Stuffer-Hong, the only shareholder and managing director of the company.

• Attachment 10: screenshots of the website https://www.share-original.com/, operated by the EUTM proprietor, Share Marketing-Trading-Logistik GmbH, that offers the goods under the mark ‘Share plum’ in the European Union.

• Attachment 11: screenshots from the webpage of the company Innocom GmbH, https://www.sharepflaume.at, the applicant’s new distributor in Europe.

• Attachment 12: a copy of some parts of the lawsuit submitted on 03/05/2018 by the EUTM proprietor against the company Innocom GmbH in which the company is requested to cease and desist from using the trade marks that contain the sign ‘Share’.

The EUTM owner contends that it was not acting in bad faith when filing its trade mark application with the following arguments:

1. The applicant is a mere wholesaler and not a manufacturer, and has not marketed its products outside China, nor under the mark ‘Share’. However, the Chinese design ‘Share’ does not prohibit the use or registration of the trade marks ‘Share’.

2. The applicant owns the trade mark ‘Sui bian guo’ (‘casual fruit’) but not the trade marks ‘Share’ in the European Union or elsewhere. The word ‘share’ is not perceived as a trade mark on the Chinese market.

3. The provisions of the agreement between the applicant and the company Su Zhou Yinfei (owned by Ms Stuffer-Hong who is the sole shareholder) do not provide for any prohibition against the filing of the contested marks in the European Union. To the contrary, the applicant even clarified vis-à-vis the EUTM owner that the trade mark share-original (fig.) would belong to the EUTM owner and actively supported the use of this trade mark as well as domain by the EUTM owner. Furthermore, this agreement only refers to goods under the mark ‘Sui bian guo’, and does not mention any goods under the mark ‘Share’.

4. The EUTM owner has established a successful business based on the trade mark ‘Share’ in Germany, Austria and other countries of the European Union and is thus using its trade marks in order to pursue legitimate commercial practices. It did not merely register the trade marks ‘Share’ marks to block them from others, offer them for sale or conduct any other acts not in line with honest commercial practices.

5. The applicant tolerated and even supported that a trade mark ‘Share’ is registered on behalf of the EUTM owner. This was also the case in relation to the EUTM owner’s domain ‘share-original.com’, that was printed on the packages sold to the EUTM owner by the applicant. The only time the applicant ever used the mark ‘Share Plum’ on an invoice was because the EUTM owner instructed it to do so. Therefore, it demonstrates that the EUTM owner could trust at the date of filing that the applicant did not desire to establish the mark ‘Share’ in the EU itself and confirms that the EUTM owner did not act in bad faith.

6. Neither the applicant nor any third party had established non-registered trade mark rights to the sign ‘Share’ which deserved any legal protection prior to the filing of the EUTM owner. It was the EUTM owner who brought the product (dried fermented green plum with herbs) into the EU via Austria and made this product (an old Chinese product which has not been invented by the applicant) popular with the first European customers. Neither the product nor the trade mark ‘Share’ were known to Europeans before.

7. The applicant had made no efforts to market the product in Europe. The applicant was instead focused on the huge Chinese market and the sharing economy business model based on sales via WeChat. Only now that this business model has become more regulated in China, in particular taxes charged are respectively enforced, this business model is becoming less attractive for the applicant although it is still very lucrative. The applicant has therefore started to look for other markets, such as the EU, where the EUTM owner has meanwhile established the mark ‘Share’ for dried fermented plums.

8. As for the applicant claiming that the EUTM owner would prevent any third party from offering ‘Share plums’ in the EU and thus the mark ‘Share plum’ being generic in the EU, this is not the case, as everyone is free to sell fermented green plums under a different name without a need to use the EUTM owner’s trade marks. There are plenty of alternatives for the applicant to market its goods under the mark ‘Sui bian guo’ in the European Union without using the EUTM owner’s trade marks. A possible desire to use the Chinese packaging design is not a legally valid argument to suddenly claim rights to an EU trade mark that has been rightfully registered on behalf of the EU trade mark owner. Moreover, in order to have a marketable product for the EU, the packaging design would have to be redesigned for regulatory reasons.

The EUTM proprietor files attachments A to M:

• Attachments B, C and D: English translations of attachments 0, 1 and 2 originally submitted by the applicant resubmitted by the EUTM proprietor with a view to proving that the English translations submitted by the applicant are erroneous.

• Attachment E: excerpts from the website www.sijiyoumei.com as well as a translation from Chinese from the BING tool submitted by the EUTM proprietor with a view to proving that the translations submitted by the applicant are incorrect.

• Attachment F: excerpts from archive.org submitted by the EUTM proprietor with a view to proving that none of the English texts the applicant refers to were in the webpage www.sijiyoumei.com at the dates the applicant mentions.

• Attachment G: an excerpt of EUTM No 16 528 697 . According to the EUTM proprietor this mark, together with EUTM No 17 206 012 (attachment H) are the only two European Union trade marks owned by the applicant.

• Attachment I: a translation of the verbal elements of this latter mark. It demonstrates the word ‘encourage’ rather than the word ‘share’.

• Attachment J: the ‘Supplementary Agreement’ to the agreement submitted by the applicant. In particular, Article I of the agreement provides, reads as follows.

Article I:

The ‘trade mark’ in Paragraph 1, Article II of the Contract of Commissioned Product Processing, ‘Party B [ie the Applicant] is the sole trade mark holder and product design patent right assignee of the product commissioned for processing’ does not include the registered trade mark provided by Party A [the EUTM owner] on its own ( ), and Party A [the EUTM owner] owns this trade mark. Without written consent of Party A, [the EUTM owner] Party B [the Applicant] may not use this trade mark on other products or authorize other parties to use this trade mark …

• Attachment K: an image of the packaging of a product sold by the applicant to the EUTM owner in 2017, which contained the word ‘Share’ with the symbol ® (and also the owner’s domain name www.share-original), which proves that the applicant knew about the registration and even supported the use of the trade mark ‘Share’ by the owner within the EU.

• Attachment L: examples of the use of the word ‘Share’ on Chinese products and press articles about what the EUTM proprietor calls the booming Chinese ‘sharing economy’.

• Attachment M: invoices issued by the applicant where the verbal element ‘SHARE’ does not appear, and excerpts from a WeChat conversation between Ms Stuffer-Hong and Ms Xiao Qing (applicant’s secretary) held on 07/03/2017 and 08/03/2017. This attachment also contains an invoice that, according to the EUTM proprietor, was issued upon instructions by the EUTM owner. According to the EUTM proprietor, the parties had a previous oral conversation, and then Ms Stuffer-Hong instructed Ms Xiao Qing that the mark ‘Share Plum’ and the Harmonized System Code (HS Code) for customs classification of the product was to be printed on the invoice. According to the EUTM proprietor, the applicant sent an image of a draft invoice the next day where the requested additional information was added in handwriting and the invoice No 18875742 as originally issued by the applicant, which did not yet contain the words ‘Share plum’, was amended according to the instructions of the EUTM proprietor. It was from this time on that the invoices were issued as shown in attachment 8 above. The EUTM proprietor insists that this was done upon instructions from Ms Stuffer-Hong and not at the applicant’s initiative.

In essence, the EUTM proprietor contests the use of the sign ‘SHARE’ in China and the European Union questioning the validity of the documents and translations submitted by the applicant with the argument that the word ‘SHARE’ does not appear in them or that the original Chinese terms have been incorrectly translated. Moreover, it points out that the agreement had a supplementary agreement over which the applicant has kept silent and which confirms that the applicant agreed for the sole rights for the mark ‘ShareORIGINAL®(fig.)’ to be vested with the EUTM owner. There is no bad faith in its actions, as it was only trying to protect its commercial interests when registering the contested marks ‘SHARE’.

The applicant replies with the following arguments:

It is not relevant for the case whether the applicant is a retailer or both a retailer and a manufacturer, and it is not decisive for the question of bad faith whether the applicant has offered products outside China. It is a fact that the EUTM owner respectively Ms Stuffer-Hong knew that the applicant had the intention to sell dried plums in the European Union and in Switzerland. Furthermore, it is immaterial whether the applicant used ‘Share’ as a trade mark before. The applicant owns a registered design in China which was submitted on 24/11/2015 and registered on 06/04/2016 — long before the EUTM owner and Ms Stuffer-Hong entered into a business relationship.

The product of ‘Sui bian guo’ is called ‘share plum’ in most countries of the European Union. This can be seen on the website of many distributors, for example in attachment 3. It is not possible to just translate any Chinese word literally, but this is how it is actually translated and used abroad. As can be seen from the applicant’s design registration (attachment 4), the designation has been used exactly this way for a long time. The packaging covers the word ‘Share’ in English. Therefore, it is not relevant how the Chinese signs have to be translated.

The EUTM owner submitted an agreement which the applicant and Ms Stuffer-Hongs former company Su Zhou Yinfei allegedly concluded. With respect to that document, the agreement never entered into force. The applicant never received a stamped and duly signed copy of the ‘Supplemental Agreement’, which was submitted as attachment J from the EUTM owner. The reason is that the EUTM owner never sent a copy to the applicant. Accordingly, the EUTM owner did not provide a certificate that can prove that the stamped and duly signed copy was sent to the applicant by courier (e.g. a courier number) or by email (e.g. an email evidence). The parties of the agreement — Su Zhou Yinfei and the applicant — started negotiating more than one year ago and until now they have never come to a final agreement. The applicant did not intentionally hide the ‘Supplemental Agreement’ but did not provide it because it never entered into force. According to the agreement which has entered into force (attachment 7) the applicant is the sole holder of trade mark and design rights. The design includes the verbal element ‘Share’.

With respect to the translation of Article VII of the ‘Supplemental Agreement’, the translation provided by the EUTM owner, stating that ‘The Supplemental Agreement is made in duplicate with Party A and Party B each holding one copy. Both copies have the equal legal effect and shall go into effect as of the day of “execution” by both parties’ is incorrect, as the Chinese term does not mean ‘execution’, it means ‘signed and sealed’. It is obvious that the agreement was not signed by the parties, which means that it has not entered into force. Moreover, Su Zhou Yinfei/Ms Stuffer-Hong stamped the agreement only recently after the beginning of the invalidity procedures. The parties negotiated and agreed on the Article I of the supplemental agreement contract because both parties belonged to the cooperative relationship at the time. In addition, at that time, the trade mark ‘share-original’ of the EUTM owner was used only on the products that Su Zhou Yinfei/Ms Stuffer-Hong had bought from the applicant. The applicant did not know then that the EUTM owner had submitted the application for the trade mark in bad faith at the same time. The applicant only learned that the EUTM owner was acting in bad faith later, when the EUTM owner warned and sued the applicant’s distributors in Austria and prohibited them the use of the word ‘Share’.

The applicant’s agreement to Article I of the supplemental agreement was based on the cooperation between the applicant and Su Zhou Yinfei/Ms Stuffer-Hong and the following agreement of the contract signed on 21/07/2017:

Second, Rights and obligations of both parties 2. Party A shall make a commitment to sale the processed products in the European Union and Switzerland, and is only processed on behalf of Party B. Party A is not allowed to entrust the third party to handle the product of Sui bian guo without the written consent from Party B.

The ‘Supplemental Agreement’ which the EUTM owner provided contains the following provision:

V. After the Supplemental Agreement goes into effect, it becomes an inseparable part of the original Contract of Commissioned Product Processing and has the equal legal effect as the original Contract. In case of discrepancies in the terms, the Supplemental Agreement shall prevail.

While negotiating on the supplemental agreement with the applicant, Su Zhou Yinfei/Ms Stuffer-Hong came to an agreement with a different supplier and violated the contractual agreement. The supplemental agreement was never agreed on because Su Zhou Yinfei violated the contract and Ms Stuffer-Hong founded the new company Share Marketing-Trading-Logistik GmbH in Austria and came to an agreement with a new Chinese supplier (Huizhou Tongfu Kang Biological Technology Co., Ltd.).

The applicant then comments on the EUTM owner’s statement that the word ‘Share’ is omnipresent on Chinese products and on the Chinese market and that it simply alludes to the term ‘share economy’. It states that it is correct that the term ‘share economy’ also exists in China, but the product of ‘Sui bian guo’, though distributed in China via ‘WeChat’, the Chinese Version of WhatsApp, is food. Therefore, it can only be sold and cannot be loaned. It is obvious that the way of selling the product of ‘Sui bian guo’ in China has nothing to do with ‘share economy’.

To sum up, the EUTM proprietor acted in bad faith at the time of filing the contested EUTM and therefore it requests that the contested trade mark be declared invalid in its totality.

In its final submissions, the EUTM proprietor argues that the applicant has not provided any evidence in its first round of observations to rebut the proprietor’s contentions. The proprietor files attachment N with a copy from www.sijiyoumei.com with an image of the applicant’s current packaging design.

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 (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 60).

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

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

Assessment of bad faith

One situation which may give rise to bad faith is when the EUTM proprietor intends through registration to lay its hands on the trade mark of a third party with whom it had contractual or pre-contractual relations or any kind of relationship where good faith applies and which imposes on the EUTM proprietor the 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).

In this respect, the Court of Justice of the European Union (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 48 and 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).

Having examined the evidence on file, the Cancellation Division considers that it is insufficient for granting a declaration of invalidity based on bad faith. The applicant has not proven that the EUTM proprietor, when filing the application for the contested EUTM, was acting in bad faith.

In the first place, the documentation on file hardly demonstrates any use on the part of the applicant (let alone long-standing) of the sign ‘Share’. The evidence submitted by the applicant with a view to showing prior use is limited to a receipt dated in 2015, an overview of awards (attachment 2), website printouts, the packaging design registration, the agreement with the Chinese company owned by Ms Stuffer-Hong and the VAT receipt (attachment 8).

However, in relation to the evidence, the EUTM proprietor disputes the use of the sign in China and in the European Union on the basis of the word ‘SHARE’ not being present in the documents submitted by the applicant, or these documents having been wrongly translated. Moreover, the EUTM proprietor submits several pieces of evidence to corroborate its arguments. In particular, attachments B and C, which are new translations submitted by the proprietor for attachments 0 and 2 of the applicant (a copy of a receipt and an overview of awards obtained by the party, respectively) point out that either the word ‘SHARE’ does not appear in the original documents at all, or that, when it does, it reflects as ‘Sui bian guo’, which means ‘casual fruit’ as seen in the Google translation provided in attachment A. Together with these translations, the proprietor submitted attachment D, consisting of a ‘Certificate of Accuracy’ signed by the translator who drafted attachments B and C. Moreover, the proprietor submitted a new translation of the contents of the documents found in attachment 4 submitted by the applicant (attachment E of the proprietor), where the term is retranslated as ‘Sui bian guo’, which means, according to attachment A, ‘casual fruit’/‘easy fruit’ or ‘leisure fruit’. In this respect, account is to be taken of the fact that in response to the EUTM proprietor’s arguments and evidence the applicant merely replies that the word ‘Sui bian guo’ would be the phonetic translation of the word ‘SHARE’. It would not be relevant how the Chinese sign has to be translated given that the product of ‘Sui bian guo’ is called ‘share plum’ in most countries of the European Union as witnessed by websites of many distributors. Moreover, it is the word ‘SHARE’ that appears on the design for its packaging.

The first allegation (the phonetic transliteration) has not been supported by any proof, and as for the second, the applicant refers to attachment 3, which merely demonstrates some printouts of a mere webpage, dated much later and cannot serve to undermine the applicant’s allegations prior to that point. Therefore, this cannot be considered a valid proof of the applicant’s allegations.

Moreover, the fact that ‘SHARE’ appears in the packaging protected by the applicant’s design does not add any valuable information in support of its allegations given that, as the EUTM proprietor rightly points out, the ownership of a design in China cannot, in itself, lead to the cancellation of an EUTM registration on the grounds of Article 59(1)(b) EUTMR. Moreover, the Cancellation Division concurs with the EUTM proprietor when it points out that even if the element ‘SHARE’ appears on a registered design for packaging, this does not demonstrate any use of the sign ‘Share’ in relation to plums (be it in China or elsewhere).

As seen from the analysis above, the evidence submitted by the applicant is insufficient to demonstrate prior use. The applicant failed to submit strong and solid evidence demonstrating that it used an identical or a similar mark for identical/similar goods in China or anywhere else in the world. Even if it is assumed that some prior use existed, the Cancellation Division cannot determine, on the basis of the evidence filed, the duration, frequency and the commercial volume of such use. The applicant failed to submit any convincing financial information such as annual reports, turnover, revenue figures, contractors or quantities sold. The only document submitted by the applicant in this respect is attachment 1, VAT tax return. However, this document does not contain any breakdown for goods, brands, etc. that would allow the Cancellation Division to draw a conclusion as to the use on the part of the applicant of the sign ‘SHARE’.

The above conclusion is not called into question by the applicant’s arguments and evidence concerning the contractual relationship between the applicant and Ms Stuffer-Hong. As already explained above, the applicant failed to prove that the agreement submitted as attachment 7 actually contains reference to the sign ‘Share’. Moreover, the evidence simply demonstrates a short cooperation between the parties in 2017 and it is not disputed that the relationship terminated after a few months. No further evidence is available in relation to the exact relationship between the parties and, more importantly, whether such relationship concerned the contested sign.

In addition, in the Cancellation Division’s view, the EUTM proprietor’s arguments and evidence with regard to the supplementary agreement and the explanations as to the reasons why the sign ‘Share’ is included in the VAT receipt in attachment 8 need to be given due consideration. In this respect, the Cancellation Division takes note that the applicant disagrees on how part of this latter document should be translated, and that it never came into force as the applicant did not sign it.

In relation to the agreement, it is immaterial whether its supplementary part ever came into force, as what matters is that a) the text provided by the applicant refers to the ‘Sui bian guo’ product and the word ‘SHARE’ does not appear anywhere and b), in connection with the aforementioned, that the part of the agreement that has been proved to have been in force does not contain any clause with the limitation of ownership of the trade mark ‘SHARE’.

It is also of utmost importance for the assessment that in its observations, dated 20/12/2018, the applicant only disputes the signing and entering into force of the supplementary agreement but at the same time admits that the parties ‘negotiated and agreed’ on Article I of the supplementary agreement.

As for the invoice seen in attachment 8, the EUTM proprietor concedes that it is the only document submitted by the applicant where the word actually appears, but explains that it did not appear in the invoices when the EUTM proprietor purchased products from the applicant. It was only at the insistence of the former that a) the expression ‘Share Plum’ and b) the Harmonized System Code (HS Code) were included for customs classification of the product. In support of these allegations the EUTM proprietor submitted in attachment M the invoices originally issued by the applicant, excerpts from the WeChat conversation between the parties and an invoice issued upon instructions from the EUTM owner where the word ‘SHARE’ appears for the first time upon instructions from the owner, as mentioned above. The applicant did not refer to this issue nor provided any explanation about it. Consequently, this is the only document on file that refers to the word ‘SHARE’, a fact that in itself does not speak in favour of the applicant having exclusive rights on the term.

It remains necessary to assess the applicant’s claims for the dishonest intentions of the EUTM proprietor. The applicant claims that when filing the contested mark the EUTM proprietor knew of the applicant’s prior trade mark/domain name and that the EUTM proprietor acted dishonestly in filing the trade mark and is trying to prevent the applicant from using the sign within the EU market. The applicant failed to demonstrate prior use with solid and convincing evidence. Moreover, the fact that there was prior knowledge is insufficient in itself for a finding of bad faith. In order to determine whether there was bad faith, the intentions of the EUTM proprietor at the time of filing must be taken into account.

The applicant grounds the dishonest intention on the part of the EUTM proprietor saying that Ms Stuffer-Hong terminated their agreement orally, founded the Austrian company Share Marketing-Trading-Logistik GmbH and agreed with different Chinese suppliers on the purchase of identical products. Moreover, almost simultaneously she submitted several trade mark applications consisting of the element ‘Share’ and a descriptive indication such as ‘plum’, ‘fruit’, ‘original’ etc. Furthermore, Ms Stuffer-Hong as Managing Director of the EUTM proprietor submitted a Civil Court Action for the EUTM proprietor in May 2018 against the company that now distributes the applicant’s products in Austria (Innocom GmbH), with the goal to prevent any third party including the applicant from offering ‘Share plums’ in the European Union. Attachment 9 contains an extract from the Austrian Trade Register in relation to the company Share Marketing-Trading-Logistik GmbH, attachment 10 contains screenshots of the website where the company offers its products, attachment 11 contains screenshots of the website of the company which now distributes the applicant’s products and attachment 12 contains parts of the arguments submitted by the applicant in the lawsuit.

The proprietor replies that neither the applicant nor any third party had established non-registered trade mark rights to the sign ‘Share’ deserving any legal protection prior to the filing of the EUTM owner. In fact, it was the EUTM owner who brought the product into the European Union via Austria and made it popular with European customers. Moreover, the applicant had not made any efforts to market the product in Europe; instead, it was focused on the huge Chinese market. It was only when this business model became more regulated in China and therefore less attractive that the applicant started looking for other markets, such as the European Union, where the EUTM owner has meanwhile established the mark ‘Share’ for dried fermented plums. It seems , in light of the EUTM owner’s efforts and success, the applicant is suddenly attempting to take over the EUTM owner’s European brand and business with the help of the present application. Moreover, according to the EUTM proprietor, the verbal element ‘Share plum’ is not generic in Europe and, if it has become known in the meantime it is thanks to the owner.

Having assessed the arguments and evidence submitted by the parties, the Cancellation Division finds the explanations of the EUTM proprietor as regards its business intentions and the chronology of events leading up to the filing of the contested mark no less convincing than the applicant’s contentions as to the EUTM proprietor’s dishonest intention.

The presence of commercial logic for the filing of the EUTM and the indications that the EUTM owner intended to use the sign as a trade mark, indicate that there was no dishonest intention.

The applicant’s arguments with respect to the lawsuit initiated against the applicant’s distributor in Austria cannot succeed either. The fact that, after successfully registering the EUTM at issue, the EUTM owner serves formal notice on other parties to cease using a similar sign in their commercial relations is not in itself an indication of bad faith, as such a request falls within the scope of the rights attaching to the registration of an EUTM (Article 9 EUTMR) (14/02/2012, T‑33/11, Bigab, EU:T:2012:77, § 33). Consequently, failing other factors, the filing of a lawsuit against the new Austrian distributor of the applicant’s is immaterial.

Article 95(1) EUTMR, second sentence, explicitly states that in invalidity proceedings pursuant to Article 59 EUTMR, the Office will limit its examination to the grounds and arguments submitted by the parties. The applicant has merely proved the existence of a past direct commercial relationship between the parties but this is, in itself, not enough to prove a dishonest intention in the counterpart. As seen above, the applicant has not submitted any proof rebutting the owner’s arguments nor properly convinced the Cancellation Division that the proprietor was not just simply trying to protect its legitimate commercial interests.

At this point, it is the applicant who has to prove bad faith. If the evidence raises doubts on the assessment of bad faith, the uncertainty has to be resolved in the benefit of the EUTM proprietor, as in the European Union trade mark system, good faith is presumed until proof to the contrary is adduced (13/12/2012, T‑136/11, Pelikan, EU:T:2012:689, § 57).

As illustrated above, the applicant failed to put forward sufficient facts and evidence that would allow for a positive finding of bad faith. The documents submitted are inconclusive in demonstrating a dishonest intention on the part of the EUTM proprietor in applying to register the contested EUTM.

Conclusion

In the light of the above, the Cancellation Division concludes that the application should be rejected.

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 applicant is the losing party, it must bear the costs incurred by the EUTM proprietor in the course of these proceedings.

According to Article 109(7) EUTMR and Article 18(1)(c)(ii) EUTMIR, the costs to be paid to the EUTM proprietor are the representation costs, which are to be fixed on the basis of the maximum rate set therein.

The Cancellation Division

Denitza STOYANOVA-VALCHANOVA

María Belén IBARRA DE DIEGO

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.