MANUFACTURE PRIM 1949 | Decision 0010419

Date Published: Oct 1, 2017

CANCELLATION No 10 419 C (INVALIDITY)

Hana Jareš Procházková and Antonín Jareš, Na Dyrince 1, 16000 Praha, Czech Republic (applicants), represented by Kyjovský, Blažek & Kolegové, Poštovská 8 c Pasáž Alfa, 60200 Brno, Czech Republic (professional representative)

a g a i n s t

ELTON hodinářská, a.s., Náchodská 2105, 54901 Nové Mesto nad Metují, Czech Republic (EUTM proprietor), represented by Tomáš Matoušek, Dukelská 15, 50002 Hradec Králové, Czech Republic (professional representative).

On 07/04/2017, the Cancellation Division takes the following

DECISION

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

2.        The applicants bear the costs, fixed at EUR 450.

REASONS

The applicants filed an application for a declaration of invalidity against all the goods and services (Classes 9, 14 and 35) of European Union trade mark No 3 531 662 . The application is based on an earlier Czech copyright. The applicants invoked Article 53(2)(c) EUTMR.

SUMMARY OF THE PARTIES’ ARGUMENTS

The applicants argue that the contested EUTM contains, as the dominant element, the verbal element ‘PRIM’, which was in fact created by graphic designer and typographer Mr. Jiři Rathouský between 1965 and 1969. The verbal and graphical representation of the word  is registered as the author’s work with registration No. 140594 in the Registry of the subjects of protection by the Czech Authors Copyright Protection Association (OOAS). The fact that Mr. Rathouský is the author of the verbal and graphical representation  is, furthermore, confirmed by the expert opinion of Doc. Mgr. Štorm.

The applicants claim to be the only heirs of the deceased Mr. Rathouský, which they claim is confirmed by rulings of the Municipal Court Prague 6.

According to Article 106(1) of Act No. 121/2000 Coll. (Copyright Act), this act shall govern the legal relations established as of the date on which this act comes into force. Legal relations in effect hitherto, and the rights and obligations arising from such legal relations, as well as the rights arising from liability for breach of contracts concluded before the date on which this act came into force shall be governed by the provisions in force before that date. It follows that the legal relations arising from the work created by Mr. Rathouský are governed by the provisions of Act No. 35/1965 Coll. (Copyright Act), which was in force at the time.

According to Article 12(1) of Act No. 35/1965 Coll., the author shall have the right

• on protection of his authorship, especially the right to the inviolability of his work, and where the work is used by any other person, such use may not be executed in a way that detracts from the value of the work;
• to dispose with the work, especially to decide about its publication and to grant consent to use it;
• to remuneration for creative work.

According to Article 14(1) of Act No. 35/1965 Coll., if it is not permitted directly by law, the author’s work may only be used with the author’s consent. The author shall grant authorisation to any other person to use the work on a contractual basis.

According to Article 29(1) of Act No. 35/1965 Coll., the copyright transfers on heirs. Provisions of this Act concerning the author shall also apply to his heirs, unless the nature of the provisions implies otherwise.

According to the applicants, the author of the work did not grant authorisation to exercise the copyright to any other person, neither did the applicants grant the EUTM proprietor authorisation to use the work. Only the company MPM- QUALITY v.o.s. is entitled to use the work, on the basis of an exclusive license agreement dated 25/06/2014.

It follows, so the applicants conclude, that the EUTM proprietor is violating the author’s rights.

Therefore, the applicants request that the EUTM be declared invalid.

In support of their observations, the applicants filed the following evidence:

• Verbal and graphical representations of the words ‘PRIM’ and ‘ELTON’.
• Expert opinion of Doc. Mgr. Štorm, dated 12/08/2014, on ELTON and PRIM logotypes, and its translation into English. Doc. Mgr. Štorm, upon being presented with drafts of PRIM and ELTON logotypes by the applicants, concludes that they match the period of 1960s and 1970s, when Mr. Rathouský designed, amongst others, the fonts Barell, Alphapipe, Metron, and a logotype for Hotel Continental. In his opinion, the general impression of the morphology and proportions of these logotypes fit the context of Mr. Rathousky’s artistic expression and, therefore, Mr. Rathousky is the author of these logotypes.
• Ruling of the Municipal Court Prague 6 of 19/03/2004, 26 D 1372/2003, and its translation into English, by which the Court confirms that the entire assets belonging to the inheritance of Mr. Jiři Rathouský were gained by his surviving wife, Mrs. Dora Nováková, these assets being the rights in the property of the author Mr. Jiři Rathouský.
• Ruling of the Municipal Court Prague 6 of 14/10/2010, 26 D 835/2009, and its translation into English, by which the Court approves the agreement on the settlement of the inheritance, according to which JUDr. Hana Jareš Procházková and Mr. Antonín Jareš inherit one half each of the absolute copyrights of Mr. Jiři Rathouský, maintained with the company GESTOR, The Union for the Protection of Authorship.
• Extract from the Registry of the subjects of protection of the Authors Copyright Protection Association.
• License agreement dated 25/06/2014 between the applicants and MPM-QUALITY v.o.s., and its translation into English, on the use of several works by Mr. Rathouský. The document specifically refers to the logo and verbal and graphical representation of the word ‘ELTON’.
• Declaration of copyright heirs dated 25/06/2014, and its translation into English, in which the applicants declare to be the only heirs of, inter alia, the copyright to the verbal and graphical representation of the word ‘PRIM’, allow for MPM-QUALITY v.o.s. to continue to be the proprietor of Czech trademark No 165 917, disagree on invalidity proceedings against that trademark, and give permission to the use of certain logos by the proprietor of the Czech trademark.
• Article 106(1) of Act No. 121/2000 Coll. and its translation into English.
• Article 12(1), Article 14(1) and Article 29(1) of Act No. 35/1965 Coll. and its translation into English.

The EUTM proprietor contests that the graphical representation of the word ‘PRIM’, as contained in the EUTM, was created by Mr. Rathouský. Neither is he the author of the logo ‘PRIM’. It claims that this logo has been used since 1969 exclusively by ELTON, a national enterprise that has been transformed several times and privatised in 1992, the EUTM proprietor being the legal successor.

Because of the discrepancy between the registered owner of Czech trademark No 165 917 and the enterprise which has actually used the PRIM logo in trade, several court and administrative procedures were undertaken, according to the EUTM proprietor. By decision of 2014, the Czech Intellectual Property Office (IPO) declared the trademark invalid with effect ex tunc, against which an appeal was filed, which was rejected by the decision of the President of 17/10/2014. The EUTM proprietor is of the opinion that this decision is of major importance to the present proceedings, because it resolves both the question of authorship and the question of legal succession to the rights of the national enterprise ELTON.

The EUTM proprietor claims that the PRIM logo was created in 1969 by Mr. Josef Žid, a former employee of the national enterprise ELTON. Therefore, all legal rights to the work belong to the employer. The EUTM proprietor owns the original drawing dated 11/07/1969, signed by Mr. Žid, as well as the original technical standard PN01 dated 23/09/1969, issued by the national enterprise ELTON, which shows the logo and prescribes its measures when used in documentation. Moreover, both Mr. Žid and his manager Mr. Jaroslav Řehoř were heard in the court hearing of 09/11/2009 as witnesses, and they both confirmed that the logo was created by Mr. Žid as an employee of the national enterprise ELTON.

The EUTM proprietor further puts forward that the inheritance rulings submitted cannot be construed as evidence in favour of the applicants, since they do not prove the authorship or declare that the inheritance comprises the draft logotypes.

As regards the applicants’ claim that the PRIM logo has been registered as the work of Mr. Rathouský at the Czech association OOAS, the EUTM proprietor states that such registration is only formal. The OOAS does not examine authorship. In fact, as the legal successor of the national enterprise ELTON, the EUTM proprietor has also registered the author’s work, the PRIM logo, at the OOAS. Therefore, such registration is no proof of authorship. Moreover, the EUTM proprietor considers the registration by the applicants an act of bad faith, as it took place after the decision of the President of the IPO had been issued.

The EUTM proprietor concludes that it has the right to use the logo at issue and, therefore, does not need any consent of the applicants in this regard. Use of the EUTM does not violate any rights.

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

• Decision of the President of IPO of 17/10/2014, and its translation into English.
• Prototype drawing of 11/07/1969 of the PRIM logo, supposedly signed by Mr. Josef Žid, and its translation into English.
• Technical standard PN01, and its translation into English.
• Report on witness hearings of 09/11/2009, Mr. Josef Žid and Mr. Jaroslav Řehoř, and their translations into English.
• OOAS registration form, showing the registration of the PRIM logo by the EUTM proprietor.
• Photographs of wrist watches.
• Catalogue ‘Manufacture PRIM 1949’.

The applicants contest the statements made by the EUTM proprietor with regard to the authorship of the logo at issue. They refer to a meeting held on 18/12/1968, where the use of the PRIM trademark was discussed in relation to the requirements of the Nové Město nad Metují plant for awarding business independency. The plant required permission to use the new graphical version of the trademark for this purpose, in order to differentiate between the products. Several new graphic designs by Mr. Rathouský were presented (according to the applicants, the ones submitted as evidence in the present proceedings). It was concluded at the meeting that use of the PRIM trademark would only be permitted on the basis of a contract or license agreement between the two companies. CHRONOTECHNA agreed to the proposals submitted, but use of the new version of the trademark should only be permitted on the basis of a recommendation of the Art Board of the Ministry of Industry and Commerce. The applicants find it impossible that Mr. Josef Žid could have created a logo on 11/07/1969 that had in fact already existed before that date.

Furthermore, the applicants refer to the expert opinion of Mr. Mgr. Ing. Ivo Binder, dated 26/03/2015, in which it is concluded that Mr. Rathouský is the author of the PRIM logo.

The applicants point to the fact that they have filed an appeal against the decision of the President of IPO with the Municipal Court of Prague, file No 9A 374/2014, still pending decision. Although the evidence filed in the context of the national proceedings may not have been convincing, the evidence filed with regard to the present proceedings prove that Mr. Rathouský is the author of the PRIM logo.

The applicants point out that they have never been party to any of the national proceedings referred to by the EUTM proprietor. Therefore, they could not submit their evidence, which was not available at the beginning of these proceedings.

In support of their observations, the applicants filed the following evidence:

• ‘Minutes of the Meeting’ of 18/12/1968, and their translation into English. It is stated that several draft versions of the new graphic design created by the artist Jiři Rathouský were submitted to the representatives of the company.
• Expert opinion No 082/2015 of 26/03/2015 of Mr. Mgr. Ing. Ivo Binder, and its translation into English, according to which the PRIM logo is composed of a typeface close to the typeface of Gothic Barel, the authorised typeface of Mr. Rathouský. It is further concluded from the fact that the company standard PN01 of 23/09/1969 refers to an inscription elaborated graphically by an external artist, that the author of the logo cannot have been an employee of the company at the time. Taking into account what has been stated in the ‘Minutes of the Meeting’ of 18/12/1968 on the submission of drafts created by the artist Jiři Rathouský, and having examined samples of Mr. Rathouský’s work, Mr. Mgr. Ing. Ivo Binder concludes that the author of the PRIM logo is Mr. Rathouský.

The EUTM proprietor doubts the trustworthiness of the ‘Minutes of the Meeting’. It points out, in this regard, that the President of IPO denied the revision of the decision of 17/10/2014, because this document appears to lack authenticity for the following reasons: it is not signed by any representative of any of the parties to the meeting, and it does not contain the confirmation of correctness by way of the formula ‘for correctness of copy’, which documents from that era otherwise bear. Moreover, the text does not contain the contemporary circumstances of the time in which the document is supposed to have been drawn up. It is stated that ‘Films containing the designs shall be sent for examination to the Art Board of the Ministry of Industry and Commerce by the end of the year’. However, in 1968 no such Ministry existed in Czechoslovakia. There was a Ministry of Heavy Industry, and from 08/01/1969, the Ministry of Industry and the Ministry of Commerce, while the Ministry of Industry and Commerce was established only in 1992. The President, therefore, evaluated the document as ‘highly untrustworthy’ and stated that the probative value of such evidence is null.

In addition to this, the document does not contain any indication as to the graphical execution of the PRIM logos allegedly created by Mr. Rathouský. Therefore, even if a meeting took place, and even if graphical designs by Mr. Rathouský were submitted, it remains unclear what they looked like.

Furthermore, the EUTM proprietor also doubts the trustworthiness of the evidence by which the applicants intend to prove that Mr. Rathouský created variations of the PRIM logo, because it consists of photo negatives and positives only, without any indications as to when and how they were created. No original design has been submitted. Moreover, it is doubtful if these films form part of Mr. Rathouský’s heritage, since they are not included in the Court’s inheritance rulings.

According to the EUTM proprietor, the fact that Mr. Rathouský was not the author of the PRIM logo is also confirmed by a notary decree of 18/11/2015, containing a declaration of Mr. Josef Žid and Mr. Jaroslav Řehoř, who were employees of the national enterprise ELTON and worked in the factory in 1969, that Mr. Rathouský did not take any part in the creation and design of the PRIM logo. What is more, Mr. Rathouský or his wife, and later heir, never claimed any rights to the PRIM logo themselves.

The EUTM proprietor further points out that, with regard to the expert opinion submitted, which it claims is faulty, Mr. Ivo Binder is an expert in the field of economics and, moreover, not an independent expert, since he was paid by MPM-QUALITY. The scope of his entitlement does not include the right to assess authorship, and the assessment does not contain any mention of the contradiction with regard to the authorship of the logo, or any substantiation of why Mr. Žid could not be the author. Moreover, it is impossible to authorise an expert to assess the authorship of a given work, because this exclusive competence lies with the national authorities. Therefore, this piece of evidence cannot be used as proof.

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

• Decision of the President of IPO of 29/07/2015, O-53821/D15022796/2015/ÚPV, and its translation into English.
• Notarial decree No NZ 526/2015, and its translation into English.
• Decision of the Municipal Court in Prague of 16/01/2015, 9A 374/2014, and its translation into English.

The applicants contest the arguments of the EUTM proprietor.

They refer to a letter of 08/11/1968, signed by a Mr. Martínek, by which the enterprise ELTON allegedly asked Mrs. Dora Nováková for help with the design of their watches. This document appears to be considered by the applicants to constitute one of many small pieces proving that the author of the PRIM logo is Mr. Rathouský.

The applicants further claim that the notarial deed submitted by the EUTM proprietor is untruthful and irrelevant to the present proceedings, since it only contains the affirmations of two employees of the ELTON enterprise that Mr. Rathouský did not participate in the elaboration of the design of the PRIM logo into the enterprise norm PN01, that they did not know this person, etc.  However, the enterprise norm ON01 itself states that the composition of this standard is based on a sign created by an external designer, which the applicants believe, could only have been Mr. Rathouský.

In support of their observations, the applicants filed the following evidence:

• Letter dated 08/11/1968, signed by Mr. Martínek, and its translation into English. It is stated that ‘we produce in large series the wristwatches PRIM in our company’, and would welcome if the addressee helped with the artistic side of the wristwatches. The letter does not expressly mention the enterprise ELTON.

The EUTM proprietor contests the arguments of the applicants and points out that, since the national enterprise was only founded on 01/01/1969, Mr. Martínek could not have acted as an employee or representative of that enterprise. Moreover, the letter is not addressed to Mr. Rathouský, and it does not mention him or the creation of any logos. Therefore, the EUTM proprietor contests the authenticity of this letter.

The applicants contest the arguments of the EUTM proprietor. The latter did not submit any expert opinion which might disprove the verdict of the expert Mr. Ivo Binder. Moreover, the EUTM proprietor did not submit any evidence showing that the PRIM logo has been created before 18/12/1968 (the date of the Minutes of the Meeting).

The applicants further refer to the decision of the Cancellation Division of 31/01/2017, No 11 062 C, by which the EUTM has been partially revoked. For reasons of procedural economy, they suggest to suspend the present proceedings until that decision will have become final.

In support of their observations, the applicants filed the following evidence:

• Affidavit of Mr. Ivo Binder of 19/12/2016, and its translation into English. Mr. Binder insists on the correctness of his expert’s opinion No 082/15 of 26/03/2015.

SUSPENSION OF THE PROCEEDINGS

The Cancellation Division takes note of the applicants’ suggestion to suspend the present proceedings, for reasons of procedural economy, until the decision in revocation proceedings No 11 062 C against the same trade mark has become final.

However, given that the present decision rejects the application for a declaration of invalidity, its outcome will have no bearing on revocation proceedings No 11 062 C or vice versa. Consequently, the Cancellation Division does not consider it necessary to suspend the present proceedings.

EARLIER COPYRIGHT — ARTICLE 53(2)(c) EUTMR

According to Article 53(2)(c) EUTMR, a European Union trade mark will be declared invalid on application to the Office where the use of such trade mark may be prohibited pursuant to another earlier right under the EU legislation or national law governing its protection, and in particular copyright.

Pursuant to Rule 37(b)(iii) EUTMIR, the application for a declaration of invalidity must contain particulars of the right on which the application is based and particulars showing that the applicant is the proprietor of an earlier right as referred to in Article 53(2) EUTMR or that it is entitled under the applicable national law to claim that right.

Taking into account the applicants’ observations, the Cancellation Division would like to emphasise that the burden of proof, in this regard, lies with the applicants. It is not for the EUTM proprietor to demonstrate that the applicants are not the proprietors of the earlier right or that they are not entitled to claim that right.

In invalidity proceedings based on relative grounds there is no time limit for the substantiation of the earlier rights, and the proof of the existence, validity and scope of protection of all the earlier rights and the evidence proving the applicant’s entitlement to them have to be filed together with the application.

However, the absence of a time limit for the substantiation of the earlier rights means that at any subsequent stage of the proceedings (before the closure of the adversarial part) the applicant can remedy, on its own motion, any deficiency as regards substantiation.

It follows that all the evidence filed in the course of the proceedings is to be taken into account in order to assess the substantiation of the earlier Czech copyright.

Having examined the evidence filed, as listed above in the applicants’ arguments, the Cancellation Division concludes that it is not sufficient to substantiate the earlier Czech copyright, because it does not show that the applicants are the proprietors of that right or that they are entitled to claim that right.

While, according to the evidence provided, the applicants are the heirs of the copyrights of Mr. Jiři Rathouský, neither the ruling of the Municipal Court Prague 6 of 19/03/2004, 26 D 1372/2003, nor the ruling of the Municipal Court Prague 6 of 14/10/2010, 26 D 835/2009 state what these ‘absolute copyrights’ comprise, or that the logo at issue forms part of these copyrights.

In fact, the evidence, taken as a whole, does not allow the Cancellation Division to conclude that Mr. Jiři Rathouský was the author of said logo.

The circumstance that the applicants are in the possession of photographic film showing, amongst others, the logo , does not establish any copyright to that logo. Even if the applicants inherited this material from Mr. Jiři Rathouský, it does not bear any signature or other inscription that would allow for the conclusion that Mr. Rathouský was not only in possession of the photographic film but also the author of its contents.

With regard to the ‘Minutes of the Meeting’ of 18/12/1968, the Cancellation Division notes that the document is not signed. However, the question whether the document is authentic or not can be disregarded. It only mentions that several draft versions of a new graphic design created by Mr. Jiři Rathouský were submitted to the representatives of the company. It does, however, not contain any reproduction of those drafts, or any information as to whether any of them was eventually used – and if so, which. Therefore, no link can be established on the basis of this document between the logo at issue and Mr. Rathouský.  

The letter dated 08/11/1968, by which an alleged representative of the national enterprise ELTON asked Mrs. Dora Nováková to design watches for the company cannot account for the question of authorship of the logo at issue in any way, regardless of whether she was Mr. Rathouský’s wife at the time or not. The letter does not make any reference to the logo.

As regards the extract from the Registry of the subjects of protection of the Authors Copyright Protection Association, the applicants have not provided the Cancellation Division with any information as to whether any verification of authorship is conducted before registration. According to the EUTM proprietor, no such assessment is carried out, and the registration is merely formal. The applicants have not furnished any evidence to the contrary.

With regard to the license agreement dated 25/06/2014 between the applicants and MPM-QUALITY v.o.s., and the ‘Declaration of Copyright Heirs’ dated 25/06/2014, they do not prove any copyright. They were drawn up by the applicants, who declare to be the heirs of, inter alia, the copyright to the verbal and graphical representation of the words ‘ELTON’ and ‘PRIM’, respectively, and allow MPM-QUALITY v.o.s. to use several of these works. The license agreement does not even make reference to the PRIM logo. It only mentions logos and verbal and graphical representations of the word ‘ELTON’. According to the ‘Declaration of Copyright Heirs’, the fact that Mr. Rathouský was the author of the verbal and graphical representation of the word ‘PRIM’ shall be proven by several cellophane sheets containing the original work. However, in the present proceedings, the applicants did not file any cellophane sheets that would prove that Mr. Rathouský was the author of the PRIM logo.

The expert opinions have been commissioned by the applicants’ licensee, which means that they do not derive from independent sources. In any case, they are opinions and cannot, therefore, be considered evidence proving without any doubt the authorship of the PRIM logo.  

It follows from the above that, while the applicants may be the heirs of the copyrights of Mr. Jiři Rathouský, they have not demonstrated that they are the proprietors of the earlier Czech copyright on which the application is based, or that they are entitled under the applicable national law to claim that right.

Therefore, the request for declaration of invalidity must be rejected as unfounded.

COSTS

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

Since the applicants are the losing party, they must bear the costs incurred by the EUTM proprietor in the course of these proceedings.

According to Rule 94(3) and Rule 94(7)(d)(iv) 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

José Antonio GARRIDO OTAOLA

Natascha GALPERIN

Michaela SIMANDLOVA

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 Cancellation 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 shall be deemed to be filed only when the review fee of EUR 100 (Annex I A(33) EUTMR) has been paid.