KEMUTEC | Decision 2656398 - Kason Kek-Gardner Limited v. Process Components Limited

Date Published: Oct 1, 2017

OPPOSITION No B 2 656 398

Kason Kek-Gardner Limited, Springwood Way, Macclesfield, Cheshire SK10 2ND, United Kingdom (opponent), represented by HGF Limited, 4th Floor, Merchant Exchange, 17-19 Whitworth Street West, Manchester M1 5WG, United Kingdom (professional representative)

a g a i n s t

Process Components Limited, Graphic House, Bank Street, Macclesfield, Cheshire SK11 7AR, United Kingdom (applicant), represented by Squire Patton Boggs (UK), LLP, 7 Devonshire Square, London EC2M 4YH, United Kingdom (professional representative).

On 06/06/2017, the Opposition Division takes the following

DECISION:

1.        Opposition No B 2 656 398 is rejected in its entirety.

2.        The opponent bears the costs, fixed at EUR 300.

REASONS:

The opponent filed an opposition against all the goods and services of European Union trade mark application No 14 565 022 ‘KEMUTEC’, namely the goods and services in Classes 7, 9 and 37. The opposition is based on a non-registered trade mark, ‘KEMUTEC’, used in the course of trade in the United Kingdom. The opponent invoked Articles 8(4) and 8(3) EUTMR.

NON-REGISTERED MARK OR ANOTHER SIGN USED IN THE COURSE OF TRADE – ARTICLE 8(4) EUTMR

The opposition is based on the non-registered mark ‘KEMUTEC’ used in the United Kingdom for machines and machine tools; machines for the processing of materials; flour mills; grinding mills [for chemical processing]; mills [machines]; industrial food mixers [machines]; mixers [machines]; sifters; grinding mills [for chemical processing]; machines for use in the processing of foodstuffs [nor cooking or refrigerating]; powder processing machines; laboratory mixers; flour sifters; retail, wholesale, online retail services, installation, repair, and maintenance of all of the aforesaid.

According to Article 8(4) EUTMR, upon opposition by the proprietor of a non-registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for will not be registered where and to the extent that, pursuant to the Union legislation or the law of the Member State governing that sign:

(a)        rights to that sign were acquired prior to the date of application for registration of the European Union trade mark, or the date of the priority claimed for the application for registration of the European Union trade mark;

(b)        that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.

Therefore, the grounds of refusal of Article 8(4) EUTMR are subject to the following requirements:

• the earlier sign must have been used in the course of trade of more than local significance prior to the filing of the contested trade mark;

• pursuant to the law governing it, prior to the filing of the contested trade mark, the opponent acquired rights to the sign on which the opposition is based, including the right to prohibit the use of a subsequent trade mark;

• the conditions under which the use of a subsequent trade mark may be prohibited are fulfilled in respect of the contested trade mark.

These conditions are cumulative. Therefore, where a sign does not satisfy one of those conditions, the opposition based on a non-registered trade mark or other signs used in the course of trade within the meaning of Article 8(4) EUTMR cannot succeed.

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

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

It must be recalled that the object of the condition laid down in Article 8(4) EUTMR relating to use in the course of trade of a sign of more than mere local significance is to limit conflicts between signs by preventing an earlier right which is not sufficiently definite — that is to say, important and significant in the course of trade — from preventing registration of a new European Union trade mark. A right of opposition of that kind must be reserved to signs with a real and actual presence on their relevant market. To be capable of preventing registration of a new sign, the sign relied on in opposition must actually be used in a sufficiently significant manner in the course of trade and its geographical extent must not be merely local, which implies, where the territory in which that sign is protected may be regarded as other than local, that the sign must be used in a substantial part of that territory. In order to ascertain whether that is the case, account must be taken of the duration and intensity of the use of the sign as a distinctive element for its addressees, namely purchasers and consumers as well as suppliers and competitors. In that regard, the use made of the sign in advertising and commercial correspondence is of particular relevance. In addition, the condition relating to use in the course of trade must be assessed separately for each of the territories in which the right relied on in support of the opposition is protected. Finally, use of the sign in the course of trade must be shown to have occurred before the date of the application for registration of the European Union trade mark (29/03/2011, C-96/09 P, Bud, EU:C:2011:189, § 157, 159, 160, 163 and 166).

In the present case, the contested trade mark was filed on 17/09/2015. Therefore, the opponent was required to prove that the sign on which the opposition is based was used in the course of trade of more than local significance in the United Kingdom prior to that date. The evidence must also show that the opponent’s sign has been used in the course of trade for machines and machine tools; machines for the processing of materials; flour mills; grinding mills [for chemical processing]; mills [machines]; industrial food mixers [machines]; mixers [machines]; sifters; grinding mills [for chemical processing]; machines for use in the processing of foodstuffs [nor cooking or refrigerating]; powder processing machines; laboratory mixers; flour sifters; retail, wholesale, online retail services, installation, repair, and maintenance of all of the aforesaid.

On 24/08/2016, the opponent filed the following evidence:

Appendix A

• A witness statement in the name of Mr George Tunnicliffe, Director of Kason Kek-Gardner Limited (opponent), signed on 24/08/2016. The statement is in support of the evidence submitted to substantiate the opposition. It states that the non-registered trade mark ‘KEMUTEC’ has been used in relation to the opponent’s business and it also describes its relationship with the applicant. According to the statement, the mark ‘KEMUTEC’ was owned by a third party, Kemutec Powder Technologies Limited. In mid-2009, this third party made a sale agreement with the opponent and another one with the applicant.

• Exhibit GT1:

• Sale agreement between Kemutec Powder Technologies Limited (third party) and Frame Exchange Limited (former name of the opponent), and its administrators, including Mr George Tunnicliffe, dated 10/07/2009. The sale assets are defined as the business name (‘KEMUTEC’), the commercial information, the contracts, the equipment, the goodwill, the intellectual propriety and the work in progress. The agreement does not explicitly mention the non-registered trade mark in question as such (only as a business name).
• An extract from Companies House at www.beta.companieshouse.gov.uk with information about the opponent, Kason Kek-Gardner Limited, including information about the nature of its business and its previous company names (Frame Exchange Limited and Kek-Gardner Limited).

• Exhibit GT2: a brochure of the company named Key-Garner Limited (another of the former company names of the opponent), which was launched following the acquisition of exclusive rights to supply the complete unit machine range of mills, sifters, mixers and blenders previously supplied by Kemutec Powder Technologies Ltd (third party). An extract from EuroBulkSystems (September/October 2009) reports on the formation of the opponent’s company to supply a new range of goods (‘acquired exclusive right to supply the complete unit machine range of mulls, sifters, mixer and blenders previously supplied by Kemutec Powder technologies Ltd’). At the bottom, it is mentioned that the opponent’s company is located in the UK. The Opposition Division notes that the opponent is portrayed as a supplier and not as the manufacturer of the goods in question.

• Exhibit GT3:

• A copy of the Directors’ report and financial statements of Kemutec Powder Technologies Limited (third party) for the year ended 31/03/2007, in which it is stated that the principal activity of this company was the manufacture of equipment for powder handling and processing, and the design and supply of bulk handling systems. According to this report, Kemutec Powder Technologies Limited designed and manufactured size reduction, blending, mixing and processing equipment for use exclusively in ‘powder processing’. The markets in which these goods were sold were predominantly the food, pharmaceutical and specialist chemical sectors. In the Director’s report for the year ended 31/03/2007, Mr George Tunnicliffe is mentioned as one of Kemutec Powder Technologies Limited’s directors.
• A copy of an independent auditor’s report to the members of Kemutec Powder Technologies Limited (third party) which states that the information given in the Directors’ report is consistent with the financial statements for the year ended 31/03/2007. This report concerns a third party.
• Profit and loss account for the year ended 31/03/2007 and the balance sheet as at 31/03/2007, the cash flow statement for the year ended 31/03/2007 and notes accompanying the financial statements for the year ended 31/03/2007 as regards Kemutec Powder Technologies Limited (third party). These documents concern a third party.

• Exhibit GT4:

• Undated Kemutec brochures entitled ‘KEK’ application data sheet, for centrifugal sifters (located in the United Kingdom), distributed by Kemutec Powder Technologies (third party). The business name is included at the bottom of each brochure.
• Listing of brochure in pdf with dates between 2005 and 2007. The folders are mainly entitled ‘KEK’ or ‘Gardner’ combined with the names of specific goods. One folder is named ‘Kemutec Corporate’, dated 16/05/2006, and leads to perceive the sign as a business name.

• Exhibit GT5:

• Photographs of an exhibition stand where the signs ‘KEMUTEC’ and ‘www.kemutec.com’ appear.
• An extract from thirdword.nl.
• An article extracted from highbeam.com (dated 01/05/2001) describing the Kemutec Group as having ‘solids processing machines from its KEK and Gardner product ranges, together with flow control products form the Mucon Division’.
• An extract from forum.bulk-online.com about the participation of the Kemutec Group at the PPMA exhibition 2003 (dated 28/05/2003), describing the extensive range of processing machinery provided by the Kemutec Group (such as ‘KEK Air Classifier Mill’ and ‘KEK centrifugal sifter’). A copy of the PPMA agenda is included and this indicates the participation of the Kemutec Group Ltd.

• Exhibit GT6:

• Copies of programmes relating to exhibitions: a programme dating from 1998 related to the PPMA exhibition; a programme dating from 1999 related to the SHAPA exhibition, demonstrating the participation of the Kemutec Group Ltd; and a programme dating from 2002 in which the Kemutec Group Ltd is mentioned as a participant. All these exhibitions were held in the UK. According to the witness, Mr George Tunnicliffe gave presentations at these exhibitions on behalf of Kemutec Powder Technologies Limited (third party).
• Extracts from Google: graphics and tables taken from Google AdWords between 2011 and 2016; a printout dated 23/08/2016 showing the results of a Google search for the word ‘KEMUTEC’.

• Exhibit GT8: an extract of the US distributorship agreement between the opponent and the Kemutec Group Inc. (an undated and unsigned agreement). According to the witness statement, this agreement has never been signed and the opponent has continued to trade with the Kemutec Group Inc. on the basis of a gentlemen’s agreement.

• Exhibit GT9: copies of email correspondence between the company RELCO and the Kemutec Group Inc., with the subject ‘KEMUTEC 340 CONEMILL’, dated 2011. ‘Kemutec Group Inc’ appears at the bottom of the emails as a signature. A despatch note from Kek-garnder Ltd (the opponent) is also included, which mentions ‘delivered on behalf of Kemutec Gp INC, and Relco USA’.

• Exhibit GT10: invoices (between 2009 and 2015) from Process Components Ltd (the applicant) to the opponent relating to royalties in relation to a licence agreement between both parties. This evidence is submitted to prove the relationship between the parties.

• Exhibit GT11: a copy of the notice to terminate the licence agreement, dated 02/10/2015, from Process Components Ltd (applicant) to the opponent. This document is intended to prove the relationship between the parties.

• Exhibit GT12: a witness statement from Mr Anthony Goodwin, employed by a third company (Kemutec Powder Technologies Limited) and now the managing director of the applicant, dated 16/05/2016. He stated that the applicant and the opponent operated in the field of powder processing and handling technology, which involves, inter alia, kibblers, grinding and milling machines, and sifting or mixing machines, and he set out some examples of ‘KEK’ branded machines and ‘Gardner’ branded machines. He gave his understanding of the relationship between the third company (Kemutec Powder Technologies Limited), on the one hand, and the opponent and the applicant, respectively, on the other, as well as of the relationship between the opponent and the applicant. He explained which assets the applicant wanted to acquire in the Process Components Ltd sale agreement and which assets the applicant did not want to acquire, in particular the use of the name ‘Kemutec’ in the UK/Europe. Moreover, he gave a summary of the position in relation to each brand name, particularly in relation to ‘Kemutec’ in paragraph 203. He stated that ‘KGL (the opponent) did take a specific assignment of the name Kemutec as owned by KPL (Kemutec Powder Technologies Limited) as at that date …. Certainly, KGL has never used the name Kemutec in the course of trade …. I think that I would summarise the position by saying that “Kemutec” swiftly disappeared as a name in the UK and Europe, but continued to be known and used in the USA’.

• Exhibit GT13: copies of email correspondence between the opponent and Kemutec related to the contracts in Poland and the invoices (including UK VAT) thereof However, the document does not give any information on the relationship between them.

Appendix B/C

• An extract from a book including information in relation to passing off.

Assessment of the evidence

The Opposition Division would like to start by recalling that ‘the purpose of a company, trade or shop name is not, of itself, to distinguish goods or services … the purpose of a company name is to identify a company, whereas the purpose of a trade name or a shop name is to designate a business which is being carried on. Accordingly, where the use of a company name, trade name or shop name is limited to identifying a company or designating a business which is being carried on, such use cannot be considered “in relation to goods or services” within the meaning of Article 5(1) of the directive’, i.e. it cannot be considered to be use as a trade mark (11/09/2007, C-17/06, Céline, EU:C:2007:497; 13/05/2009, T-183/08, Jello Schuhpark II, EU:T:2009:156).

A trade sign is of more than mere local significance in the relevant territory when its impact is not confined to a small part of that territory, as is generally the case with a town or a province (24/03/2009, T-318/06 - T-321/06, General Optica, EU:T:2009:77, § 41). The sign must be used in a substantial part of the territory of protection (29/03/2011, C-96/09 P, Bud, EU:C:2011:189, § 159).

Whether or not a trade sign is of more than mere local significance may be established by demonstrating the existence of a network of economically active branches throughout the relevant territory, but also more simply, for example, by producing invoices issued outside the region in which the proprietor has its principal place of business, press cuttings showing the degree of recognition on the part of the public of the sign relied on or by establishing that there are references to the business establishment in travel guides (24/03/2009, T-318/06 - T-321/06, General Optica, EU:T:2009:77, § 43).

As far as the witness statement from a director of the opponent’s company is concerned, Rule 22(4) EUTMIR expressly mentions written statements referred to in Article 78(1)(f) EUTMR as admissible means of proof of use. Article 78(1)(f) EUTMR cites means of giving evidence, amongst which are sworn or affirmed written statements or other statements that have a similar effect according to the law of the State in which they have been drawn up. Therefore, it has to be evaluated whether or not the statement submitted constitutes a statement within the sense of Article 78(1)(f) EUTMR. Only in cases where the statements have not been sworn or affirmed it is necessary to consider the rules of law of the national jurisdiction as to the effects of a written statement (07/06/2005, T-303/03, Salvita, EU:T:2005:200, § 40, recently confirmed in 09/12/2014, T-278/12, PROFLEX, EU:T:2014:1045, § 49). In cases of doubt as to whether a statement has been sworn or affirmed, it is up to the opponent to submit evidence in this regard. Failing this, the statement will not be considered a statement within the sense of Article 78(1)(f) EUTMR. Statements coming from the sphere of the owner of the earlier mark (drawn up by the interested parties themselves or their employees) are generally given less weight than independent evidence. This is because the perception of the party involved in the dispute may be more or less affected by personal interests in the matter (11/01/2011, R 0490/2010-4, BOTODERM, § 34; 27/10/2009, B 1 086 240; and 31/08/2010, B 1 568 610).

The final outcome depends on the overall assessment of the evidence in each individual case. In general, further material is necessary for establishing evidence of use, since such statements have to be considered as having less probative value than physical evidence (labels, packaging, etc.) or evidence originating from independent sources. Therefore, the probative strength of the further material submitted is very important. An assessment should be made of whether the content of the affidavit is sufficiently supported by the further material (or vice versa). The fact that the national office concerned may adopt a certain practice in assessing such kind of evidence of use does not mean that it is applicable in the proceedings concerning European Union trade marks (07/06/2005, T-303/03, Salvita, EU:T:2005:200, § 41 et seq.).

In the present case, the documents (exhibits GT 3, 4, 5 and 6) that could be considered to show some use of the sign ‘KEMUTEC’ are all dated prior to 2009. Moreover, the documents state that the sign ‘KEMUTEC’ used to be connected with the business names ‘Kemutec Powder Technologies Limited’ and ‘Kemutec Group Ltd’. Indeed, these combinations are used as explicit company names or at the bottom of pages or emails. As a result, it cannot be stated with certainty, from looking at this evidence, that even then the sign (or part of it) was being used as a non-registered trade mark and not just as a business name of the third company.

The remaining documents filed do not provide the Opposition Division with sufficient information concerning the commercial volume, the duration, and the frequency of use. There is no evidence of the amount of products actually sold. The documents in exhibits GT1 and 2 prove only the preparation of marketing in relation to ‘KEMUTEC’. However, these documents show only information on the possible background of the business, not the use of the trade mark.

Since the opponent acquired exclusive rights to the sign, no use of the sign for goods and services has been proved. Indeed, the existence of the poll from Google AdWords showing the number of visitors cannot be directly connected with use of the trade mark ‘KEMUTEC’. Therefore, these documents cannot be regarded as decisive evidence.

Consequently, the opponent’s witness statement is not underpinned by decisive parts that show that the mark was used in the relevant period and in the United Kingdom. Moreover, the additional witness statement made by an employee of a third company mentions the use of the name ‘KEMUTEC’ only in the USA and not in the UK.

The documents submitted by the opponent do not show clearly and unambiguously that the non-registered trade mark ‘KEMUTEC’ was used in the course of trade of mere than local significance in the UK. They are convincing neither piecemeal nor in their entirety.

Considering all the above, the Opposition Division concludes that the evidence submitted by the opponent is insufficient to prove that the earlier sign was used in the course of trade of more than local significance in connection with the goods and services on which the opposition was based before the relevant date and in the relevant territory. In particular, the evidence does not show use of the sign as a trade mark and, consequently, the opponent has not provided sufficient indications concerning the nature of the use of the earlier mark.

As one of the necessary requirements of Article 8(4) EUTMR is not met, the opposition must be rejected as unfounded.

UNAUTHORISED FILING BY AN AGENT OR REPRESENTATIVE OF THE TRADE MARK OWNER – ARTICLE 8(3) EUTMR

According to Article 8(3) EUTMR, upon opposition by the proprietor of the trade mark, a trade mark will not be registered where an agent or representative of the proprietor of the trade mark applies for registration thereof in his own name without the proprietor’s consent, unless the agent or representative justifies his action. Therefore, the grounds for refusal of Article 8(3) EUTMR are subject to the following requirements:

• the opponent must be the owner of the mark applied for;
• the applicant has to be an agent or representative of the owner of the mark
• the application is filed in the agent’s name;
• the application is filed without the owner’s consent;
• the agent or representative fails to justify its action;
• the signs are identical or only differ in elements which do not substantially affect their distinctiveness;
• the goods and services are identical or equivalent in commercial terms.

The above conditions are cumulative and the absence of one of them would cause the opposition based on the grounds of Article 8(3) EUTMR to fail.

In the present case, the opponent claims that there was a commercial relationship between the opponent and the applicant. However, the opponent also expressly admits in its observations that the licence agreement did not relate to the non-registered mark ‘KEMUTEC’, of which it claims to be the owner. In these circumstances, the opponent’s claim under Article 8(3) EUTMR cannot succeed, since this provision clearly refers to cases where the agent has applied to register the same trade mark (or a similar one) as the one that is the object of the agent or representative relationship.

In other words, even if it is true, as the opponent argues, that the existence of a commercial agreement between the parties (the terms of which, according to the opponent, are currently under dispute before the UK courts) could in principle impose on the licensee a duty of fair play, the fact that, in the words of the opponent, this licence agreement ‘did not relate to the trade mark KEMUTEC at issue’ means that there was no specific duty of fair play with regard to the contested application (see, by analogy, 29/02/2008, R 633/2007-2, § 41).

The opponent also argues that the applicant is the ultimate owner of a US company (Kemutek Group Inc.) that, after selling its assets in the UK to the opponent, continued to export some goods to the United Kingdom under an implied licence or ‘gentlemen’s agreement’. There is, however, no sufficient evidence supporting this assertion (i.e. exhibits GT8 and GT9), such as royalty payments from the US company to the opponent or commercial correspondence regarding these sales between the parties.

In the absence of sufficient evidence of the existence of an agency relationship related to the contested mark, as required by Article 8(3) EUTMR, whether the business relationship between the parties, considered as a whole, did actually give rise to more general duties of fair play or not is a question that cannot be examined in the context of opposition proceedings but could eventually be argued under the more general invalidity ground of Article 52(1)(b) EUTMR.

It therefore has to be concluded that the opponent has failed to prove one of the requirements under Article 8(3) EUTMR, namely that the applicant is or was an agent or representative of the opponent in relation to the specific mark at issue.

Consequently, the opposition should also be rejected as unfounded on the ground of Article 8(3) EUTMR and thus it is rejected in its entirety.

COSTS

According to Article 85(1) EUTMR, the losing party in opposition proceedings must bear the fees and costs incurred by the other party.

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

According to Rule 94(3) and Rule 94(7)(d)(ii) EUTMIR, the costs to be paid to the applicant are the costs of representation which are to be fixed on the basis of the maximum rate set therein.

The Opposition Division

Carmen SÁNCHEZ PALOMARES

Julie GOUTARD

José Antonio GARRIDO OTAOLA

According to Article 59 EUTMR, any party adversely affected by this decision has a right to appeal against this decision. According to Article 60 EUTMR, notice of appeal must be filed in writing at the Office within two months of the date of notification of this decision. It must be filed in the language of the proceedings in which the decision subject to appeal was taken. Furthermore, a written statement of the grounds of appeal must be filed within four months of the same date. The notice of appeal will be deemed to be filed only when the appeal fee of EUR 720 has been paid.

The amount determined in the fixation of the costs may only be reviewed by a decision of the Opposition Division on request. According to Rule 94(4) EUTMIR, such a request must be filed within one month from the date of notification of this fixation of costs and will be deemed to be filed only when the review fee of EUR 100 (Annex I A(33) EUTMR) has been paid.