V2 | Decision 506/2016-4
Date Published: Sep 28, 2017
THE BOARDS OF APPEAL
DECISION of the Fourth Board of Appeal of 9 December 2016
In Case R 506/2016-4
VMR Products, LLC 3050 Biscayne Blvd., 8th Floor Miami Florida 33137 United States of America Appellant / Cancellation applicant
represented by HGF Limited, 8th Floor, 140 London Wall, London EC2Y 5DN, United Kingdom
v
V2H ApS C/o V2 Tobacco A/S, Georg Jensens Vej 7 DK-8600 Silkeborg Denmark Respondent / EUTM Proprietor
represented by Njord Law Firm Advokatpartnerselskab, Pilestræde 58, DK-1112 Copenhagen K, Denmark
APPEAL relating to Cancellation Proceedings No 8548 C (European Union trade mark No 8 512 345)
THE FOURTH BOARD OF APPEAL
composed of D. Schennen (Chairman), L. Marijnissen (Rapporteur) and S. Martin (Member)
Registrar: H. Dijkema
gives the following
Language of the case: English
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Decision
Summary of the facts 1 On 27 August 2009, V2H ApS (‘EUTM proprietor’) applied for the word mark
V2
as a European Union trade mark which was registered on 8 March 2010 for the following goods:
Class 34 – Tobacco; smokers’ articles; matches.
2 On 18 October 2013, an application for a declaration of invalidity of a European Union trade mark was filed by VMR Products, LLC (‘the cancellation applicant’) based on Article 52(1)(b) EUTMR, arguing that the applicant was acting in bad faith when filing the application.
3 The declaration for invalidity was directed against all the goods of the contested European Union trade mark.
4 In support of its claim, the cancellation applicant argued that:
a) The EUTM proprietor’s interest is confined to the sale of ‘snus’ (a variant of snuff) in Sweden and ‘chewing tobacco’ in other EU Member States. As regards the sale of ‘snus’, it argues that this is banned from the EU apart from in Sweden. The proprietor acted in bad faith in filing a EUTM for a product which can only be sold in one Member State; b) The contested goods in Class 34 extend beyond those in which the EUTM proprietor had an interest, i.e. ‘snus’ and ‘chewing tobacco’. Therefore, the EUTM proprietor tried to block the cancellation applicant from trading in the EU, rather than having a legitimate business desire to market and sell all the contested goods throughout the EU; c) Application and use of the contested mark are in potential breach of the UK Tobacco Advertising and Promotion (Brandsharing) Regulations 2004 of which Article 3 states ‘the use by a person in connection with any non- tobacco product or service of any feature which is the same as, or is so similar as to be likely to be mistaken for, any feature which is connected with a tobacco product is prohibited if the purpose or effect of that use is to promote a tobacco product in the United Kingdom’.
5 By decision of 9 February 2016, the Cancellation Division rejected the application for declaration of invalidity in its entirety and ordered the cancellation applicant to bear the costs.
6 It reasoned that the EUTM proprietor’s bad faith in applying for the contested mark was not demonstrated by the cancellation applicant.
7 As regards the arguments raised by the cancellation applicant referred to above in paragraph 4 under a) and b), it reasoned that these were just based on supposition. The contested mark was registered for various goods and there was no reason to assume that there was no intention to use the mark for these goods during the five- year period following registration. When the five-year period elapses, proof of use
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may be requested. Until that point is reached, the proprietor is entitled to retain its registration.
8 As regards the cancellation applicant’s bad faith argument as referred to above in paragraph 4 under c), the Cancellation Division reasoned that it was not equipped or authorised by law to interpret what amounts to a breach of advertising law in a Member State. Anyhow, it was not willing to remove the contested mark from the register on the hypothetical basis that the EUTM proprietor might use the mark in advertisements that potentially breach UK advertising laws.
Submissions and arguments of the parties
9 On 16 March 2016, the cancellation applicant filed a notice of appeal, followed by a statement of grounds on 9 June 2016. It requests that the Board annul the contested decision and declare the contested mark invalid.
10 It repeated its arguments referred to in paragraph 4 under a) and b) above. It emphasises that the EUTM proprietor never had any genuine commercial interest in the sale of all the products classifiable in Class 34 but only in the sale of ‘snus’ (in Sweden only) and ‘chewing tobacco’.
11 The cancellation applicant informs that on 12 March 2015, it started revocation proceedings for non-use of the contested mark before the Office and that in response to these proceedings, the EUTM proprietor only filed evidence of use of the marks ‘V2Tobacco’ and ‘V2’ in relation to ‘snus’ and ‘chewing tobacco’. In seeking protection of a registration without any genuine intention of selling any products other than ‘snus’ or ‘chewing tobacco’, which products are not smoked, the EUTM proprietor knew or must have been known at the time of making the application, that it was acting in bad faith insofar as the application covered ‘smokers’ articles; matches’.
12 Furthermore, it submits a copy of a decision and a translation thereof in English from the Swedish Court of Appeal dated 29 April 2016 in Case 6767-15 in the non- use revocation action against the EUTM proprietor’s Swedish registration No 383 783 for the mark ‘V2’. In that decision the Swedish Court of Appeal found that the evidence filed by the registered proprietor did not show use of the mark ‘V2’ in the form registered, or in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered. It argues that from this it follows that the EUTM proprietor never had the intention to use the mark as registered and that, thus, it was acting in bad faith.
13 It further emphasises that the nature of the contested mark is another factor relevant for determining the cancellation applicant’s bad faith. It argues that it is to be inferred that the mark ‘V2’ was chosen in bad faith as it is conceptually linked to forms of tobacco consumption by smoking as the shape that is formed by a smoker’s fingers when smoking is a ‘V’ shape while the tobacco products sold by the EUTM proprietor must be placed in the mouth where the nicotine is absorbed.
14 In reply, the EUTM proprietor requests that the Board dismiss the appeal and order the cancellation applicant to bear the costs.
15 As regards the applicant’s arguments referred to in paragraph 4 above under a)
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and b), it endorses the reasoning of the Cancellation Division and emphasises that there is no requirement that an applicant may only file for a narrow range of products that can be marketed. The claim that the mark was filed in bad faith because ‘portion snus’ is banned throughout the EU, except for Sweden, is without relevance, also because the proprietor sells ‘chewing tobacco’ which is legal in other Member States.
16 It further argues that in the revocation proceedings pending before the Office based on non-use, no decision has been taken yet and that in any case these proceedings are not relevant for the bad faith allegation.
17 As regards the Swedish decision referred to, it argues that this decision is not final either as the EUTM proprietor has sought for a further appeal. Anyhow, this case concerns a Swedish trade mark, and is in any case not relevant to the bad faith allegation.
18 Last, it argues that it does not understand how the nature of the mark can prove bad faith as argued by the cancellation applicant.
19 It concludes its reply with the remark that the only purpose of this and the three other cancellation requests filed by the cancellation applicant (R577/2016-4, R575/2016-4 and R576/2016-4) is to delay the proceedings before the European Union trade mark Court in Denmark initiated by the EUTM proprietor against the cancellation applicant based on its European Union trade marks as contested in these four cancellation proceedings before the Office. The Danish court has stayed the proceedings and enjoined use by the cancellation applicant for the duration of the stay.
Reasons
20 The appeal is not well founded. The cancellation request shall be rejected on the grounds of Article 52(1)(b) EUTMR as it has not been proven that the EUTM proprietor was acting in bad faith when it filed the application for the contested mark.
21 As observed by Advocate General Sharpston (opinion of 11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 36), the concept of bad faith referred to in Article 52(1)(b) EUTMR is not defined, delimited or even described in any way in the legislation. However, the Court of Justice provided some guidance as to how to interpret this concept in its judgment in the same case, as did the General Court in several cases (judgments of 01/02/2012, T-291/09, Pollo Tropical chicken on the grill, EU:T:2012:39; 14/02/2012, T-33/11, Bigab, EU:T:2012:77; and 13/12/2012, T- 136/11, Pelikan, EU:T:2012:689). In its preliminary ruling of 27/06/2013, C-320/12, Malaysia Dairy, EU:C:2013:435, the Court of Justice declared that the concept of bad faith is an autonomous concept of European Union law, which must be given a uniform interpretation in the European Union.
22 One way to describe bad faith is a ‘conduct which departs from accepted principles of ethical behaviour or honest commercial and business practices’ (opinion of Advocate General Sharpston of 11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 60; similar decision of 01/04/2009, R 529/2008-4, FS (fig.), § 14).
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23 Good faith is presumed until proof to the contrary is adduced and mere speculations are insufficient to establish bad faith. The cancellation applicant needs to prove that there was bad faith on the part of the EUTM proprietor at the time of filing the EUTM, for example that the EUTM proprietor has had the sign registered with no intention of using it, its sole objective being to prevent a third party from entering the market (judgment of 13/12/2012, T-136/11, Pelikan, EU:T:2012:689, §§ 48, 56, 57).
24 In order to ascertain whether the owner had been acting in bad faith at the time of filing the application, an overall assessment must be made in which all the relevant factors of the individual case must be taken into account. In the case at hand, none of the factors raised by the cancellation applicant, alone or in combination, prove that this was the case.
25 Different from the other three cancellation proceedings (R577/2016-4, R575/2016-4 and R576/2016-4), in this case the cancellation applicant does not claim any prior rights. The question whether the EUTM proprietor knew or must have known about the use of an identical or confusingly similar sign by a third party for identical or similar products or services is therefore irrelevant here.
26 Moreover, it has not been proven by the cancellation applicant that there was any dishonest intention on the part of the EUTM proprietor at the time of filing the contested mark. All the arguments raised by the EUTMR proprietor in this respect fail.
27 As indicated in paragraph 4 above under a) and b) and further elaborated in the statement of grounds of appeal, the cancellation applicant argues that the EUTM proprietor acted in bad faith by registering the contested mark for a broader range of goods in Class 34 than those for which the mark was actually used, namely for ‘chewing tobacco’ and ‘snus’ (the latter only in Sweden and allegedly banned by an EU directive from sale in the rest of the EU).
28 No bad faith can be seen in this behaviour which was perfectly legal and without any dishonest intentions. Bad faith cannot be found on the basis of the length of the list of goods and services set out in the application for registration (judgment of 07/06/2011, T-507/08, 16PF, EU:T:2011:253, § 88). As a rule, it is legit- imate for an undertaking to seek registration of a mark not only for the categories of goods and services that it markets at the time of filing the application but also for other categories of goods and services that it intends to market in the future. (judg- ment of 14/02/2012, T-33/11, ‘Bigab, EU:T:2012:77, § 25; judgment of 07/06/2011, T-507/08, 16PF, EU:T:2011:253, § 88).
29 The revocation proceedings against the contested mark on the grounds of non- use the cancellation applicant referred to are still pending before the Cancellation Di- vision under No 10565. They were filed against all goods except ‘chewing tobacco’. These proceedings concern a separate ground for cancellation with its own specific conditions to be fulfilled in order to succeed. The fact that such proceedings were initiated by the cancellation applicant after the contested mark had been registered for five years has no bearing at all on the question whether or not the applicant was acting in bad faith at the time of application of the contested mark which concerns a completely different ground of cancellation with a completely different set of condi- tions to be fulfilled.
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30 The same applies to the revocation proceedings initiated in Sweden. Apart from the fact that this concerns a Swedish decision against a Swedish mark by which the Board is not bound (and which is anyhow apparently not final yet), it cannot be seen how the possible revocation of this Swedish mark may be relevant to the allegation that EUTM proprietor was acting in bad faith at the time of filing the contested mark.
31 The argument indicated in paragraph 4 under c) above, was no longer raised by the cancellation applicant in the appeal proceedings. It apparently realised that the argument that the use of the contested mark may be in potential breach of the UK Tobacco Advertising and Promotion (Brandsharing) Regulations 2004 is a com- pletely irrelevant factor, alike the other ones raised, for establishing bad faith in the case at hand. Apart from the fact that this is all hypothetical and speculative, obvi- ously, national tobacco regulations are not a ground for invalidity under the EUTMR.
32 The bad faith argument referred to by the cancellation applicant at the appeal stage, namely that the mark ‘V2’ which is conceptually linked to forms of tobacco consumption by smoking – because this happens between two fingers – is actually used for the tobacco products which are not smoked but rather consumed in the mouth, fails too. The Board does not understand this argument. It cannot be seen how it could be relevant for the EUTM proprietor’s bad faith when it filed its applic- ation. In this respect it should also be noted that Article 52(1)(a) EUTMR was not invoked as a ground of cancellation.
33 To conclude, the cancellation applicant failed to prove that the EUTM proprietor was acting in bad faith when it filed the application for the contested mark. The can- cellation request on the grounds of Article 52(1)(b) EUTMR shall be rejected.
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Costs
34 Since the cancellation applicant (appellant) is the losing party within the mean- ing of Article 85(1) CTMR, it must bear the costs incurred by the EUTM proprietor (respondent) in the appeal proceedings. The Cancellation Division correctly decided that the appellant shall bear the costs of the cancellation proceedings.
Fixing of costs
35 Pursuant to Article 85(6) CTMR in conjunction with Rule 94(7)(d)(vi) and 94(7) (d)(iv) CTMIR, the Board of Appeal fixes the amount of the fees and costs to be paid by the appellant to the respondent at EUR 550 for the representation costs in the ap- peal proceedings and EUR 450 for the representation costs in the cancellation pro- ceedings, in total EUR 1 000.
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Order
On these grounds,
THE BOARD
hereby:
1. Dismisses the appeal; 2. Orders the appellant to pay the costs incurred by the respondent in the
appeal proceedings; 3. Fixes the total amount of costs to be paid by the appellant to the respondent for the cancellation and appeal proceedings at EUR 1 000.
Signed
D. Schennen
Signed
L. Marijnissen
Signed
S. Martin
Registrar:
Signed
H.Dijkema
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