CANCELLATION No 24 442 C (INVALIDITY)

Inner Mongolia Yili Industrial Group Co., Ltd., No. 1 Jinshan Road, Jinshan Development Zone, Hohhot, People’s Republic of China (applicant), represented by Gilbey Legal, 43, Boulevard Haussmann, 75009 Paris, France (professional representative)

a g a i n s t

Wen Li, 30 Lakeside Avenue, London SE28 8RU, United Kingdom (EUTM proprietor), represented by Trademark Eagle Limited, Unit 4, Valley Court Offices, Lower Road, Croydon, Hertfordshire SG8 0HF, United Kingdom (professional representative).

On 14/02/2020, the Cancellation Division takes the following

DECISION

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

2. European Union trade mark No 13 714 316 is declared invalid in its entirety.

3. The EUTM proprietor bears the costs, fixed at EUR 1 080.

REASONS

On 02/07/2018, the applicant filed an application for a declaration of invalidity against European Union trade mark No 13 714 316 (figurative mark) (the EUTM) filed on 05/02/2015 and registered on 16/02/2018. The request is directed against all the goods covered by the EUTM listed here below. The applicant invoked Article 59(1)(b) EUTMR.

Class 29 Milk; milk products; dairy products; milk beverages; cream; condensed milk; protein milk; milk ferments for culinary purposes; milk shakes; dried milk; curd; whey; yoghurt; dairy desserts; preserved, frozen, dried and cooked fruits and vegetables; jellies, jams, compotes; preserved and dried meat, fish, poultry and game.

Class 30 Coffee, tea, cocoa and artificial coffee; confectionery; chocolate and cocoa based beverages; coffee-based beverages; tea-based beverages; frozen confectionery; chilled desserts; dried pasta; dried sauce in powdered form; rice; tapioca and sago; flour and preparations made from cereals; bread, pastry; edible ices; sugar, honey, treacle; yeast, baking-powder; salt; mustard; vinegar, sauces (condiments); spices.

Class 32 Mineral and aerated waters and other non-alcoholic beverages; fruit beverages and fruit juices; syrups and other preparations for making beverages.

SUMMARY OF THE PARTIES’ ARGUMENTS AND EVIDENCE

The applicant claims that the evidence attached to its observations and listed underneath clearly shows that its company is the No°1 milk and dairy products company in China and Asia and that its trade marks Yili and are among the most best known brands in China. As a result, they are necessarily known to Chinese residents and to Chinese persons who have lived in China or travel to China. It also claims that in 2009, Mr Wen Li was still of Chinese nationality, that he subsequently became a United Kingdom resident, before finally acquiring British nationality between 2010 and 2016. This, in turn, leads to a strong presumption that Mr Wen Li would be familiar with the leading Chinese brand for dairy products, in both China and throughout Asia. The applicant owns several marks amongst them being the following:

Kind of mark	No	Mark	Classes	Filed on
EUTM	14 666 697		29, 35, 42	13/10/2015
EUTM	17 045 691	Yili	5, 29, 30, 32	28/07/2017
EUTM	13 826 541		5, 29, 30, 32	13/03/2015
EUTM	17 798 919		5, 29, 30, 32	12/02/2018
IR designating EU	1 097 761		5, 29, 30, 32	06/06/2011

The four abovementioned EUTMs were opposed by Mr Li on the basis of the contested mark. The contested mark combines, within the same mark, the YILI trade mark used as its house mark in the Latin alphabet by Inner Mongolia YILI Industrial Group Co, Ltd , the Chinese character name used by this company as a house mark in stylized form and the Chinese character trade name of the company . Furthermore, the contested mark is registered for dairy products and other food and beverages, but it is not used for such goods. There is no commercial logic or trajectory underlying the EUTM registration.

The applicant submitted the following evidence:

1. Brief Introduction of Yili Group, being (a) the No 1 ranking dairy products enterprise in China and Asia, and ranked in the top 8 enterprises in that field on a global level in 2016; (b) sponsor of 2008 Beijing Olympic Games and participant in 2010 Shanghai World Expo and in 2015 Milan Expo. According to 2014 Rabobank Global Dairy Top 20, in 2013, “Yili” (as it is called the company), was ranked 10 out of 20 with an operating turnover of 5.7 billion Euro, and appears to have an operating turnover in 2015 of 8.2 billion Euros; in general the company is referred to as YILI and the logo of this company or the mark that appears on the products as such is . In some instances the mark appears also as in the following award achieved in 2007 for the best new dairy drink “Yili Dairy”:

2. Introduction to YILI providing more details on the company, its international activities and presence, its growth, brand penetration, objectives etc.;

3. Oceania Dairy’s Parent company Yili Group eye catching Annual report dated 28/04/2018 from www.odt.co.nz; it contains an article (indicated as sponsored content) from a New Zealand online publication highlighting the performance and international ambitions of Yili Group as set out in its 2017 annual report and referring to the selection of the company as the exclusive official dairy partner of the 2022 Winter Olympics and Paralympic games and the only food partner in both Beijing Summer Olympics (2008) and Winter Olympics (2022); it is also specified that the mark YILI was ranked No 8 in the world according to the Rabobank’s Global Dairy Rank ahead of any other Asian dairy Company;

4. Excerpts from several reports of BrandZ “Most valuable Chinese Brands” dated 2011 to 2018; BrandZ, a market study organization, lists the Chinese trade mark ,transliterated as Yili, as the 19^th most valuable Chinese brand in 2018, 18^th in 2016, 17^th in 2015, 15^th in 2014, 21^st in 2013 and 22^nd in 2012 and 23^rd in 2011 and as the 1^st in the food and dairy field from 2012 to 2018; the below printouts are extracted from the 2014, 2015 and 2018 reports:

5. Article “Yili Industrial Group” on www.academicpositions.eu/emplover/vili-industrial-group showing academic employment opportunities and presenting Yili Group and its involvement in the academic field around the world;

6. Extract from an Australian website containing an article dated 16/06/2010 “Two Chinese dairy producers enter the world’s top 20” and mentioning Yili as one of the two;

7. “The Dairy Site Global Dairy Top 20 of 12/07/2010" reports on Yili's entry, in 2010, and ranked 17 into the top 20 dairy producers in the world;

8. “Global Dairy Top 20 2015” Rabobank showing Yili as raking 10^th globally in 2015 in the top 20 global dairy producers;

9. “Global Dairy Top 20 2016” Rabobank showing Yili as ranking 8^th globally in 2016 in the top 20 global dairy producers;

10. “Global Dairy Top 20 2017” Rabobank showing Yili as ranking 8^th globally in 2017 in the top 20 global dairy producers;

11. Article from www.foodvallev.nl describing the Food Valley knowledge intensive agri-food ecosystem;

12. Witness statement of Dr R.J Bino 08/06/2017: Witness statement of the Managing Director Agrotechnology & Food Sciences Group, Wageningen University and Research, the Netherlands witnessing the existence of the Yili European Innovation center on the campus of Wageningen University and Research and the projects assigned to Yili;

13. Food Valley NL membership: Witness statement by Roger van Hoesel, Director of Food Valley, certifying Yili Innovation Center Europe BV’s membership of Food Valley since March 2015;

14. Yili Innovation Center Europe BV company register excerpts and an establishment sign attesting to the existence of Yili Innovation Center Europe BV, as well as accounts information;

15. Extract from the Food Valley Society's website www.foodvallevsociety.com presenting its member Yili Innovation Center Europe BV and Yili Chinese logo;

16. Sample of press articles relating to the Yili Innovation Center Europe BV Centre in the Netherlands dated as from beginning of 2014.

17. (1) Global Times Dutch interview dated 17/09/2015 with Friesland Campina’s CEO who refers to his company's partnership and projects with Yili dairy giant CEO; (2) press article from www.italiangoodnews.com dated 23/08/2014 describing the partnership between Sterilgarda (Italian company for juices) and the applicant and stating that “thanks to the partnership agreement signed by Sterilgarda and Yili, the milk of the Italian company will be sold on the Chinese market with the Yili brand” and news release downloaded from the www.sterilgarda.it website; (3) CD Rom containing a video with the signing ceremony between the two companies;

18. Articles dated in 2012 (e.g. from WPP.com, businessisider.com, Reuters) relating to Yili’s 2012 London Olympics advertising campaign on 400 London’s busses; they refer to the fact that the Yili’s Chinese logo and photos of selected Chinese individuals caught the eyes of many people on the streets of London, that the advertisements for Inner Mongolian brand Yili’s milk on the London busses baffled the Londoners, that Yili milk products aren’t actually for sale in London and the campaign is designed to show “the attention that people across China are paying to their health”;

19. Registration invoices for the participation in trade fairs and conferences on the dairy industry around Europe (e.g. the Netherlands and UK) between 2014 and 2018; press articles and photos from Milano Expo 2015; CD Rom containing a video about Milano Expo;

20. Company details for the applicant’s subsidiaries outside China, Oceana Dairy Limited in New Zealand, Hong Kong Jingang Trade Holding Co. Limited in Hong Kong and Green Asia Food Indonesia PT in Indonesia;

21. Yili closes deal with DFA – press articles dated as from 2014 relating to two USA ventures the applicant has: with US dairy corporation DFA (Dairy Farmers of America) for a dairy production plant on the US territory and with US No1 organic yogurt company, Stonyfield Farm starting 2017;

22. Li Can Int’l Investment Company Limited (the EUTM proprietor business) comprising the certificate of incorporation n° 7015073 and its Director details (showing that Mr Li’s nationality in 2009 was Chinese), as well as a Companies House extract;

23. Change of Particulars for the Director Mr Wen Li from a Chinese nationality to an UK resident in 2010;

24. Companies house entries dated no earlier than 06/04/2016 regarding Li Can Int’l Investment Company Officers, describing Mr Li as of British nationality;

25. Companies house entries regarding Mr Li as director of Li Can Int’l Investment Company Ltd and Lican Int’l Investment Co., LTD. describing Mr Li as of British nationality;

26. Investigation dated 30/05/2018 made by CERBERUSIP titled Mr Wen Li trap purchase providing support for the presumption that Mr Wen Li still entertains regular business contacts with mainland China. A magnet product was purchased on eBay from a shop operated by Mr Li under the name leowe50. This investigation suggests that Mr Wen Li's activities, at least in the real estate field, target clients from mainland China travelling to, or moving to, London, and that he is fluent in Chinese.

27. Investigation Brand Intelligence Limited of 01/04/2016 showing no trade mark use by Mr Wen Li or his companies for the contested mark. The investigation concluded that Mr Wen Li has been present in the UK since at least 2003, that he has no link with Yili Group and that he has no identifiable trading activities, other than possibly through the eBay store http://stores.ebav.co.uk/leowe40.

28. Second Investigation of Mr Wen Li dated 12/04/2018. The investigation revealed that the primary trading activity of Mr Wen Li is the online retail of imported magnets, plumbing parts and other low cost hardware products through eBay. No activities, past or present, in the dairy products field or in related fields, were located. Mr Wen Li appeared to be of Chinese origin rather than being English-born Chinese, and he is involved with the local Chinese business Community in South-East London. No evidence was found of any use of the contested mark .

The applicant claims that it is clear that none of these eBay stores operated by Mr Li Wen sold dairy products or milk, or food and beverages more generally. The only activity found is a small activity involving the sale of magnets and plumbing parts through eBay stores. Mr Wen Li operates no physical stores. The "seller company" Lican Inti Investment Co, Ltd has a small share capital, apparently no employees, negligible turnover to the extent declared, and all addresses correspond to residential properties.

No information was found linking Mr Wen Li (or his alias Mr Owen Lee), with the milk or dairy products trade or, indeed, with the food and beverages trade in general; extensive research and investigation reveals no indication that the application by Mr Wen Li for registration of to cover goods in Classes 29, 30 and 32 reflects a bona fide commercial objective or trajectory in the fields of goods covered by the contested mark.

The EUTM proprietor reply contained, in main, the following statements:

• The applicant tried to manufacture evidence of bad faith by conducting investigations about the commercial activity, but also about his private life and all the conclusions of such investigations are based purely on assumptions, nothing indicating a dishonest intention from the proprietor at the moment of filing of the contested EUTM.

• There is nothing that suggests that the EUTM proprietor knew about the invalidity applicant and, in fact, the evidence adduced by the latter (the report in exhibit 27) states that the EUTM proprietor has no link with the applicant’s Group and that he has no identifiable trading activities other than possible through eBay stores whereas, the second report states, that no activities past or present in the dairy products field or in related field were located.

• The EUTM proprietor’s Chinese nationality at some point is no indication that he knew or had reasons to know about the invalidity applicant. The EUTM proprietor claimed that “even when the EUTM proprietor would have lived in China at some point at a young age or had milk for breakfast each day, does not necessarily prove that he knew about the invalidity applicant or its activities” and that “Chinese people do not necessarily drink milk therefore, if follows suit that knowledge about dairy products manufactures is also low.”

• Not one of the EUTM proprietor’s different activities was in the dairy business but he has experience in the food industry owing a restaurant between 2008 and 2009.

• The evidence submitted by the applicant does not demonstrate the reputation of the applicant’s company worldwide and not even in China.

• The EUTM proprietor came up with the name ‘YILI’, because of the meaning of the two Chinese characters: ‘伊’, (in English ‘YI’), meaning ‘beginning of a new era’ and ‘利’, (in English ‘LI’), meaning ‘smooth and profitable’.

Evidence submitted by the EUTM proprietor:

1. Printout from www.statista.com about the consumption of fluid milk per capita worldwide showing also the milk consumption in China.

2. Photo of the restaurant Chow Time previously owned by the EUTM proprietor.

3. Decision rendered by EUIPO’s Board of Appeal upholding the Opposition decision in case B 2 531 468 in which no likelihood of confusion was found between the applicant’s earlier EUTM and IR designating the EU and the contested EUTM.

The applicant replied to the proprietor’s arguments, reiterated its previous arguments and filed a second set of evidence listed underneath. It denied any inappropriate breach of the EUTM proprietor’s privacy; since he as private person is the owner of the EUTM and as the test for bad faith is subjective, the investigation had as object the professional and commercial activities of the proprietor under his personal name. Furthermore, it is denied that the applicant criticized the change of the proprietor’s nationality or that it made merely assumptions as regards the proprietor’s knowledge about the leading brands of dairy products in China. The applicant considers that the information provided by these investigations created strong presumptions and not merely assumptions.

Second set of evidence sent by the applicant:

29 Information document from the British Embassy in Beijing, the UK Intellectual Property Office and the UK Department of Trade and Investment setting out conditions subject to which a mark can be registered as a well-known trade mark in China. It states inter alia that a large volume of information in support of an application is required to be produced, continuing at the date of the application, and dating back at least 5 years, including awards, financial information, market share data from official associations, advertising. It is added that “a presence in several first or second tier cities alone is not normally enough”;

30. Certificate of well-known trade mark status issued in October 2007 by the Trademark Office of the State Administration for Industry and Commerce of the PRC, to Inner Mongolia YILI Industrial Group Co, Ltd, for the trade mark YILI in Chinese characters

.

30. A certificate issued by the Committee of Inner Mongolia Autonomous Region of the Communist Party of China dated as far back as January 2000. The translation into English reads:

30. A certificate, with translation, issued by the Trademark Office of the State Administration of Industry and Commerce (SAIC) of the PRC in 1999, notifying recognition of (YILI in the same Chinese characters as in the contested registration) belonging to Inner Mongolia YILI Industrial Group Co, Ltd as a well-known registered trade mark for cold drinks:

30. The ruling dated 13/09/2007 (and its translation into English) of the Trademark Review and Adjudication Board of The State Administration for Industry and Commerce. This recites the well-known status of the Chinese YILI brand, its history from 1994 to 2007, the nationwide coverage of the activity and sales, the honors awarded to the brand, and the estimated value of the brand. It adds ‘the series of YILI trademarks were awarded as top 10 dairy products influential brand and received the Chinese brand of the year award’;

34-36 Extracts dated 2018 from: (a) www.marketing91.com Top Dairy Companies – Best Dairy Brands In The World placing Yili China on the 8^th position praising the high quality of Yili products, (b) www.dairyreporter.com Brand Finance reveals top 5 dairy brands placing the brand Yili on the 3^rd position and a Brand Finance study dated 2018 stating that “Dairy is one of the strongest performing sectors in the food industry, registering an average 13% brand value growth year by year. Within this sector, the Chinese market is the most dynamic in the world, set to overtake the US as YILI has risen from eighth place last year to third, following 43% growth, to 6.2 billion USD brand value. The brand is dominant in China but has clear potential for expansion to non-dairy categories or internationally, Brand Finance said. Although Yili is ahead of Danone in terms of brand potential, the French giant is still a more valuable brand”. The applicant’s rank in the global dairy industry has risen from 10^th in 2014, 8^th in 2017, to 3^rd in 2018.

37 Transcript of a phone call conversation between a public notary and the EUTM proprietor regarding a real estate offer posted in Chinese by the proprietor. The outcome shows that the EUTM proprietor is fully conversant in Chinese language and his activities lead him to deal with members of the Mainland China public.

The EUTM proprietor replied to the applicant’s arguments accusing it of bad faith and of blocking him from enjoying a right validly obtained in good faith. He reiterated his previous arguments and especially his lack of knowledge as regards the applicant and its business, lack of reputation of the applicant, the fact that the applicant did not protect the Latin word YILI in China for dairy products.

He claimed that if the invalidity applicant had the intention to register or use the trade mark YILI and to extend its operations to Europe, there was no reason to file a trade mark application for YEALE instead of YILI. The EUTM proprietor considered that ironically, at the time the invalidity applicant only based the opposition on the earlier right YEALE but did not base this on bad faith and only on the YEALE trade mark.

He attached as additional evidence the following:

Annex 1 - letter dated 02/10/2017 from an accountants and auditors firm to the EUTM proprietor containing an estimate of fees for the planned self-employed business ‘YILI Yoghurt’.

Annex 2 - list of trade marks owned by the applicant in China to prove that none of their trade marks protect YILI in Latin characters for dairy products.

Although the adversarial part of the proceedings was closed the applicant requested a new round of observations in order to have the opportunity to reply to the EUTM proprietor’s arguments and evidence. Such request was accepted by the Office and both parties had the opportunity to address the other party’s observations and arguments. In main the parties reiterated their previous arguments and addressed each paragraph of the adversary’s observations. Furthermore, the applicant filed additional evidence consisting of:

Annex 1 details of the applicant’s international trade mark registrations all for figurative trade marks composed of Chinese characters and dating from 2000 onwards;

Annexes 2, 3 a list with 90 national trade marks owned by the applicant, amongst them figurative trade marks containing the word YILI or the Chinese characters. The applicant submitted a selection of certificates of registration of Hong Kong trade marks for YILI filed in 2003 for goods in Classes 29 and 30, EU trade mark registration filed din 2017 for the Chinese characters and Brazilian, New Zealand, Russia, Australia, Japan and United Arab Emirates registrations;

Annex 4 extracts regarding other trade marks belonging to the applicant from other national registers or private databases.

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

General principles

Article 59(1)(b) EUTMR provides that a European Union trade mark will be declared invalid where the applicant was acting in bad faith when it filed the application for the trade mark.

There is no precise legal definition of the term ‘bad faith’, which is open to various interpretations. Bad faith is a subjective state based on the applicant’s intentions when filing a European Union trade mark. As a general rule, intentions on their own are not subject to legal consequences. For a finding of bad faith there must be, first, some action by the EUTM proprietor which clearly reflects a dishonest intention and, second, an objective standard against which such action can be measured and subsequently qualified as constituting bad faith. There is bad faith when the conduct of the applicant for a European Union trade mark departs from accepted principles of ethical behaviour or honest commercial and business practices, which can be identified by assessing the objective facts of each case against the standards (Opinion of Advocate General Sharpston of 12/03/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 60).

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

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

Outline of the relevant facts

Reference is made to the facts and evidence set out above in the ‘Summary of the Parties’ Arguments and Evidence’ section.

Assessment of bad faith

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

These are precisely the circumstances on which the applicant seeks to rely in the present proceedings.

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

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

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

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

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

The above mentioned 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 and 21/03/2012, T‑227/09, FS, EU:T:2012:138, § 36).

Assessment of bad faith

Despite the EUTM proprietor’s rejection, the Cancellation Division finds that the invalidity applicant has demonstrated beyond dispute that its company, widely known under the short form of Yili, is the leading producer of dairy products in China and holds, at least since 2011 (and, therefore, before the filing date of the EUTM), a position in the top 23 most valuable Chinese brands (see especially documents sent by the applicant under Nos 3-4 and listed above).

The EUTM proprietor argued that the applicant used as mark, if any, the logo (which is indeed seen on the products as such) in China and used this trade mark together with as basis for its unsuccessful opposition against the contested EUTM. He further argued that there is no trace of use of the Latin transliteration YILI anywhere. However, in this respect the Cancellation Division considers that there is sufficient information originating from independent sources which attests not only Yili’s success and fame in the food industry but also the fact that, for many years before the filing date of the EUTM, the applicant was identified not only with the Chinese characters alone but also together with the Latin word YILI as a comprehensive brand, and such unitary brand was considered to be one of the top 23^rd most valuable Chinese trade marks as seen in the printouts from document under No 4 listed above and the leader in the dairy industry. Whether or not YILI was used in all the occasions just as the Latin transliteration of (namely for ease of reference for the public that has no knowledge of the Chinese alphabet) is not an issue, since these two brands are clearly linked by the international media and the specialized brand equity database BrandZ and understood as being a unitary brand.

Taking the above factors into account, indeed the desire to obtain protection for YILI and in Europe corresponds to a natural commercial logic or trajectory on the part of the applicant.

On the other hand, it is difficult for the Cancellation Division to understand the commercial logic or trajectory to be inferred from the EUTM proprietor’s activities at the date of filing of the EUTM. There is no commercial logic which could support and justify a decision to have chosen and registered as a trade mark with protection in the whole EU for a home-made yoghurt business in London of the denomination YILI together with a rather standard version of the Chinese characters considered for years as well-known brand(s) of the applicant.

Furthermore, the other striking fact of registering the contested EUTM in the same food industry as the applicant (particularly the dairy products field), justified by the EUTM proprietor’s alleged “very good homemade yoghurts” cannot be accepted as merely a coincidence.

Therefore, the Cancellation Division considers that there is no conceptual reason, linked to naming or linguistic practices in the relevant field, or to the nature of the goods themselves, to explain why the EUTM proprietor, a former Chinese national would have chosen to combine and protect at the EU level a distinctive name such as YILI and virtually the same Chinese characters as well as the company and business name of a leader in the field.

In this context, the Cancellation Division fails to see which could have been the commercial logic on the part of the EUTM proprietor when applying for the contested mark other than a deliberate intention to create an association with the famous trade name of the applicant and thus to piggyback off of its attractive force and/or to even prevent the applicant from pursuing its business on the EU market.

This conclusion is supported by the explanations provided by the EUTM proprietor himself. As justification as to why out of all the names he could have chosen to register as a trade mark (including his own name), he happened to combine precisely the well-known sign used as part of the company name of a leading manufacturer in the field and the Chinese characters used as the latter’s house mark, the proprietor essentially said that he came up with the name ‘YILI’, because of the meaning of the two Chinese characters: ‘伊’, (in English ‘YI’), meaning ‘beginning of a new era’ and ‘利’, (in English ‘LI’), meaning ‘smooth and profitable’. However, the applicant stated (and the EUTM proprietor did not deny) that the Chinese characters at issue can be transliterated in many other ways, so again the coincidence in the transliteration seems at least odd. Nevertheless, the Cancellation Division notes that the EUTM proprietor’s justification does reflect one very debated fact, namely that Mr Li has at least basic knowledge of Chinese.

Furthermore, whether or not the EUTM proprietor came or not from China as a young adult and had or must have had in this way knowledge about the applicant’s business and brands becomes pretty much irrelevant fronting, on one hand, the well-known character of the applicant’s company and brands and their presence on the UK territory before the filing date of the EUTM (as reflected in the media and by the London busses campaign 2012) and, on the other hand, the above conclusion that the EUTM proprietor had not only the Chinese nationality but also at least basic knowledge of Chinese.

On a side note, the Cancellation Division does not consider appropriate to decide on the dispute between the parties on whether or not the EUTM proprietor’s private life was invaded by the applicant’s investigations. If the EUTM proprietor was disturbed by such investigations he should resort to the national authorities competent to decide on such matters.

The EUTM proprietor extensively argued that the applicant was not present on the EU market and has not used its name YILI in any of the EU Member states. For the sake of clarity, it is not a necessary condition for the finding of bad faith that the cancellation applicant actually possessed concrete enforceable rights in the European Union prior to the filing of the contested application. It is sufficient that the applicant has a legitimate right to a sign which in this case is the fact that its company name’s most important denomination is identical to the contested mark and that its products are put on the market under this particular denomination. Furthermore, the evidence shows that the term YILI as well as the Chinese characters were used by the applicant for years (to such an extent that they became well known at least in China) before the EUTM proprietor filed for the EUTM registration. Moreover, they were also present in the Netherlands where the “Yili Research and Development Centre” was located and the UK (the campaign for 2012 Olympic games on the public busses), before the filing date of the EUTM. The EUTM proprietor argued that none of the photos submitted by the applicant in order to prove that its brand was visible on the London buses show the mark YILI in Latin characters and that any reasonable consumer will see the characters as just a fanciful logo with no meaning whatsoever. Although this is true when we consider the relevant public that does not speak or understands Chinese it is, as shown above, true for the EUTM proprietor who clearly knew to transliterate in Latin the respective characters. Furthermore, from the articles submitted as attachment 18 and showing the 2012 campaign for the Olympic games in London, it appears that the respective advertisements on the London busses were actually not ignored by the Londoners because they were meaningless; quite to the contrary, the media refers to this campaign as striking and, therefore it can be assumed that the information from the press linking the respective advertisements including the mark to the applicant YILI reached the interested London public, being it formed of Chinese speakers or not.

Therefore, it is the opinion of the Cancellation Division that the facts and evidence submitted in the case at hand allow for the presumption that the EUTM proprietor must also have known that the invalidity applicant had been using the well known sign and its Latin transliteration YILI as a house mark to identify the commercial origin of, at least, some of its goods, and/or as a business identifier, prior to February 2015, the filing date of the EUTM.

However, the fact that the EUTM proprietor knew or must have known of the invalidity applicant’s use of the sign is not sufficient, in itself, for a finding of bad faith (11/06/2009, C‑529/07, Lindt Goldhase, EU:C:2009:361, § 40). In order to determine whether there was bad faith, the central element to be considered is the EUTM proprietor’s intention at the time of filing. This is a subjective factor which has to be determined by reference to the objective circumstances of the case. As mentioned by the Advocate General Sharpston, ‘bad faith relates to a subjective motivation on the part of the trade mark applicant – a dishonest intention or other ‘sinister motive’ – which will none the less normally be established by reference to objective criteria; it involves conduct which 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 such standards’ (Opinion of the Advocate General, 12/03/2009, C-529/07 (Lindt Goldhase, EU:C:2009:361, § 60).

As mentioned above the contested EUTM is the figurative mark , registered for foodstuffs and drinks in Classes 29, 30 and 32, some of which are identical to the goods marketed by the applicant. It cannot be disputed that the EUTM identically reproduces the same Chinese characters protected by the applicant’s figurative mark (despite the stylisation of the latter) and the applicant’s business identifier YILI and which appear to be exclusively associated with the applicant.

Bad faith relates to a subjective motivation on the part of the trade mark proprietor— a dishonest intention— which will none the less normally be established by reference to objective criteria; it involves conduct which 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 such standards (12/03/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 60).

Taking all the above into account, the Cancellation Division concludes that there is sufficient evidence that the EUTM proprietor used his registration of for no other purpose other than that of seeking to block access to protection and, potentially, to use, by the applicant of its YILI and marks in the EU.

The EUTM proprietor defence also contains the following arguments which are considered unfounded for the reasons stated underneath:

• if the invalidity applicant had the intention to register or use the trade mark YILI and to extend its operations to Europe, there was no reason to file a trade mark application for YEALE instead of YILI. It is reminded that if the EUTM proprietor knows about the applicant’s rights (and there are indications that the EUTM proprietor should have been exposed at least in the UK if not previously in China to the applicant’s trade marks or business/trade name), even though they were not yet registered in Europe, and if it becomes apparent, for example, that the EUTM proprietor filed the contested EUTM not to use it, but only to prevent a third party from entering the market, it may be an indication of bad faith (11/06/2009, C-529/07, Lindt Goldhase, EU:C:2009:361, § 46-47). Such are the indications in the present case as explained above.

• The applicant chose to oppose (unsuccessfully) the EUTM with the trade mark and the purely figurative sign and did not claim at that stage the bad faith, prolonging in this way the assault towards the EUTM proprietor’s business and obstructing him to use his trade mark. As correctly observed by the applicant, at the opposition stage the bad faith claim could not be invoked as this is not a ground for opposition but for invalidation (therefore the applicant had no choice but to wait for the registration of the mark in order to invoke the bad faith of Mr Li). Furthermore, the basis of the opposition were the trade marks protected by the applicant in the EU as it could not invoke other trade marks protected or used outside this territory (the Chinese trade marks for example). Furthermore, the conditions of Article 8(3) EUTMR would not have been applicable in the present case.

Conclusion

In the light of the above, the Cancellation Division concludes that the application is totally successful and the European Union trade mark should be declared invalid for all the contested goods.

COSTS

According to Article 109(1) EUTMR, the losing party in cancellation proceedings must bear the fees and costs incurred by the other party.

Since the EUTM proprietor is the losing party, he must bear the cancellation fee as well as the costs incurred by the applicant in the course of these proceedings.

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

The Cancellation Division

Oana-Alina STURZA

Ioana MOISESCU

Birgit FILTENBORG

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.