Kaane American International Tobacco v EUIPO - Global Tobacco (GOLD MOUNT) (EU trade mark - No genuine use of the trade mark : Judgment) [2017] EUECJ T-294/16 (08 June 2017)

Judgment Background to the dispute On 21 August 2009 the applicant, Kaane American International Tobacco Co. Ltd., now Kaane American International Tobacco Company FZE, obtained, from the European Union Intellectual Property Office (EUIPO), registration under the number 007157233 of the EU figurative mark reproduced below: The goods in respect of which that mark was registered are in Class 34 of the Nice Agreement on the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, and correspond to the following description: ‘Tobacco; smokers’ articles; matches’. On 22 October 2014 the intervener, Global Tobacco FZCO, filed a request for revocation of the mark at issue in respect of all of the goods referred to in paragraph 2 above, pursuant to Article 51(1)(a) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1). It argued that the mark at issue had not been put to genuine use for a continuous five-year period. By decision of 28 July 2015, the Cancellation Division upheld that request for revocation. On 17 September 2015 the applicant filed a notice of appeal with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009, against the Cancellation Division’s decision. By decision of 8 April 2016 (‘the contested decision’), the Fourth Board of Appeal of EUIPO dismissed the appeal. First of all, the Board of Appeal stated that, as the request for revocation had been filed on 22 October 2014, the five-year period to be taken into consideration for assessment of genuine use of the mark at issue was from 22 October 2009 until 21 October 2014 (‘the relevant period’) and that the applicant’s claims that the mark at issue had been used, or could have been used, related only to ‘cigarettes’ as a subgroup of the goods for which the mark at issue was registered. Next, it took the view that the evidence adduced by the applicant did not make it possible to establish that the mark at issue had been put to genuine use in the European Union during the relevant period. Last, it found that there were no proper reasons for non-use of that mark. Forms of order sought by the parties The applicant claims that the Court should: - annul the contested decision; - declare the registration of the mark at issue valid for all of the goods covered by that mark; - order EUIPO or, in the alternative, the intervener to pay the costs of the present proceedings. EUIPO and the intervener contend that the Court should: - dismiss the action; - order the applicant to pay the costs. Law In support of its action, the applicant raises a single plea in law, alleging infringement of Article 51(1)(a) of Regulation No 207/2009. First, it challenges the Board of Appeal’s finding that proof of genuine use of the mark at issue had not been furnished. Second, it disputes the conclusion that there were no proper reasons for non-use of that mark. Proof of genuine use of the mark at issue It must be recalled that it follows from recital 10 of Regulation No 207/2009 that the legislature took the view that there is no justification for protecting an EU trade mark except where that mark is actually used. In accordance with that recital, Article 51(1)(a) of Regulation No 207/2009 provides that the rights of the proprietor of an EU trade mark are to be declared to be revoked, in particular, on application to EUIPO, if, within a continuous period of five years, the trade mark has not been put to genuine use in the European Union in connection with the goods or services in respect of which it was registered, and there are no proper reasons for non-use. According to the case-law, there is genuine use of a trade mark where the mark is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services; genuine use does not include token use for the sole purpose of preserving the rights conferred by the mark (see, by analogy, judgment of 11 March 2003, Ansul , C-40/01, EU:C:2003:145 , paragraph 43). The assessment as to whether use of the trade mark is genuine must be based on an overall assessment of all the relevant factors in the specific case, namely the facts and circumstances relevant to establishing whether the commercial use of the mark is real, particularly the practices regarded as warranted in the relevant economic sector as a means of maintaining or creating market shares for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark (judgment of 8 July 2004, Sunrider v OHIM - Espadafor Caba (VITAFRUIT) , T-203/02, EU:T:2004:225, paragraph 40; see also, by analogy, judgment of 11 March 2003, Ansul , C-40/01, EU:C:2003:145 , paragraph 43). Genuine use of a trade mark cannot be proved by means of probabilities or suppositions, but must be demonstrated by solid and objective evidence of effective and sufficient use of the trade mark on the market concerned (judgments of 12 December 2002, Kabushiki Kaisha Fernandes v OHIM - Harrison (HIWATT) , T-39/01, EU:T:2002:316, paragraph 47, and of 6 October 2004, Vitakraft-Werke Wührmann v OHIM - Krafft (VITAKRAFT) , T-356/02, EU:T:2004:292 , paragraph 28). Moreover, under point (a) of the second subparagraph of Article 15(1) of Regulation No 207/2009, use of the EU trade mark is considered to include use ‘in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered’. Examination of the alteration of the distinctive character consists in comparing the earlier mark in its registered form with the sign used for the purpose of considering whether or not that mark and that sign differ in insignificant respects and whether they may be considered to be broadly equivalent (see judgment of 15 December 2015, LTJ Diffusion v OHIM - Arthur et Aston (ARTHUR & ASTON) , T-83/14, EU:T:2015:974, paragraph 34 and the case-law cited). The mark at issue, the genuine use of which falls to be assessed, is a figurative mark which contains the expression ‘gold mount’ and a figurative element representing a mountain. The Board of Appeal took the view that the evidence of use of the mark at issue adduced by the applicant - namely (i) evidence of participation in various international tobacco industry trade fairs in different European Union cities, (ii) an invoice issued by a magazine publisher and an advertisement page, and (iii) customs documents - were not capable of establishing that the mark at issue had been put to genuine use. First, as regards the applicant’s participation in international tobacco industry trade fairs in different European Union cities, the Board of Appeal noted that that participation had been effected under the company name Kaane, which differed from the mark at issue. It also noted that the invoices issued in relation to those fairs bore the indication ‘kaane’ and that, although the expression ‘gold mount’ appeared on the three photographs which the applicant produced showing an exhibition booth, the figurative element of the mark at issue representing a mountain, which, in the Board of Appeal’s view, is a co-dominant element of that mark, appeared nowhere. Thus, according to the Board of Appeal, there was no use of the mark at issue as registered or in an acceptable variation for the purposes of point (a) of the second subparagraph of Article 15(1) of Regulation No 207/2009. The Board of Appeal also took the view that it was impossible to link the presence at an international or worldwide trade fair to the sale or even preparation for sale in the European Union, as the target public could be that of States other than those in the European Union. It added that, in any event, the applicant had admitted that sales of its products could not take place within the European Union, as its product did not comply with EU legislation, and that it was apparent from the case-law that, in those circumstances, the mere presence at a trade fair could not establish use in respect of specific goods. Last, the Board of Appeal noted that the ‘invoices’ to which the applicant referred concerned its participation in one or other trade fair and did not relate to the sale or marketing of cigarettes. Second, so far as concerns the invoice of the publisher of the magazine Tobacco Asia and the advertisement page, the Board of Appeal considered that it was obvious from the title of that magazine that it was addressed to the Asian market and that the invoice contained no reference to the mark at issue. Moreover, it found that, on the advertisement page, only the word mark GOLD MOUNT appeared, and not the mark at issue as registered. Third, as regards the customs documents, the Board of Appeal noted that there was no mention of the mark at issue on them and that the applicant had not provided any further explanation regarding the nature and background of the amounts invoiced by the customs authorities. As a preliminary, it should be pointed out that the applicant does not dispute the Board of Appeal’s assessment, summarised in paragraphs 22 and 23 above, of the invoice issued by the magazine publisher, the advertisement page and the customs documents. Its arguments relate only to the evidence of its participation in international trade fairs. The applicant submits that that evidence shows that those fairs took place during the relevant period. It also argues that the Board of Appeal did not take into account that international trade fairs with worldwide participants are held only once each year, given that their organisation requires significant investment in terms of both time and money. Thus, according to the applicant, its attendance at one trade fair per year should have been considered enough to show that it was making serious attempts to acquire a relevant position in the European Union tobacco market and that it had made important investments in order to promote its products on that market. EUIPO and the intervener dispute the applicant’s arguments. It must be held that the applicant’s arguments are ineffective. It was not due to the fact that the evidence of its participation in trade fairs did not concern the relevant period, or that they were held only once per year, or that the investments made to participate in them were insufficient, that the Board of Appeal discounted that evidence. The Board of Appeal discounted that evidence for other reasons which are not disputed by the applicant. Thus, the applicant does not dispute the fact that the mark at issue, as registered, does not appear on any of those items of evidence. Nor does it dispute the fact that the figurative element of the mark at issue representing a mountain is a jointly dominant element of that mark and thus that the mark at issue and the word mark GOLD MOUNT differ in a non-negligible element. Consequently, the applicant does not dispute the fact that the use of the expression ‘gold mount’, without the figurative element representing a mountain, is not a use of the mark at issue which is in accordance with point (a) of the second subparagraph of Article 15(1) of Regulation No 207/2009. Those reasons were sufficient to allow the Board of Appeal to conclude that the evidence relating to the applicant’s participation in trade fairs did not prove use of the mark at issue. Nor, moreover, does the applicant dispute one of the reasons given by the Board of Appeal for the sake of completeness, namely that there is no evidence that its participation in international trade fairs targeted the public in the European Union. It follows that the applicant’s arguments cannot call into question the Board of Appeal’s conclusion that evidence of genuine use of the mark at issue had not been furnished. Whether proper reasons exist for non-use of the mark at issue It should be recalled that, pursuant to Article 51(1)(a) of Regulation No 207/2009, non-use of a trade mark may be justified by proper reasons. According to the case-law, only obstacles having a sufficiently direct relationship with a trade mark making its use impossible or unreasonable, and which arise independently of the will of the proprietor of that mark, may be described as ‘proper reasons’ for non-use of that mark. It must be assessed on a case-by-case basis whether a change in the strategy of the undertaking to circumvent the obstacle under consideration would make the use of that mark unreasonable (see judgment of 17 March 2016, Naazneen Investments v OHIM , C-252/15 P, not published, EU:C:2016:178 , paragraph 96 and the case-law cited). The Board of Appeal noted that the evidence presented by the applicant, concerning the reasons for non-use of the mark at issue, was limited to several test results issued by a German laboratory relating to ‘gold mount’ cigarettes and dated 27 August 2013, 13 May 2014 and 31 October 2014. The Board of Appeal also noted that it was apparent from the test results published during the relevant period that the emissions from the applicant’s cigarettes far exceeded, at least in terms of carbon monoxide, the maximum per cigarette emission levels stipulated in Article 3 of Directive 2014/40/EU of the European Parliament and of the Council of 3 April 2014 on the approximation of the laws, regulations and administrative provisions of the Member States concerning the manufacture, presentation and sale of tobacco and related products and repealing Directive 2001/37/EC (OJ 2014 L 127, p. 1; ‘the EU legislation’). The Board of Appeal, moreover, pointed out that it was only in the results published on 31 October 2014, that is to say, after the relevant period, which had expired on 22 October 2014, that the carbon monoxide content of the applicant’s cigarettes fell below the maximum per cigarette carbon monoxide emission level. In view of the foregoing considerations, the Board of Appeal took the view, first of all, that the non-compliance of the applicant’s products with the EU legislation did not constitute a legitimate reason for non-use. According to the Board of Appeal, the quality of a product is not ‘external’ to the company and it is exclusively up to the will of the applicant to produce products which are fit for the European Union market. The Board of Appeal considered, next, that proper reasons for non-use had to cover the entire five-year use period and that it was not enough for the applicant to start relevant proceedings or efforts at the very end of that period. It also stressed that it had not been established - and that it was hardly plausible - that the applicant was unable to produce cigarettes which complied with the EU legislation over a period of five years and that every cigarette manufacturer knew that there was legislation with which those products had to comply. The Board of Appeal indicated, moreover, that there was no document at all - not even an allegation - indicating that administrative procedures seeking to obtain market authorisation had ever been started. Last, the Board of Appeal found that the reason given by the applicant was not comparable to the protracted procedures for obtaining marketing authorisation for pharmaceutical products, which were regarded as proper reasons for non-use of a trade mark. The applicant points out that the evidence adduced relating to the tests carried out on its cigarettes confirms that it behaved diligently in order to comply with the EU legislation. In addition, it submits that the contested decision is erroneous in two respects. First, the Board of Appeal considered, wrongly, that producing products which comply with the EU legislation was exclusively up to the will of the trade mark proprietor. Second, the Board of Appeal should have taken into account, by analogy, the long-lasting procedures for obtaining marketing authorisation for pharmaceutical products, which are regarded as an example of proper reasons for non-use of a trade mark. EUIPO and the intervener dispute the applicant’s arguments. It is apparent from the case-law cited in paragraph 33 above that, in order to be regarded as proper reasons, obstacles to use of a trade mark must satisfy two cumulative conditions: they must have a sufficiently direct relationship with a trade mark, making its use impossible or unreasonable, and they must arise independently of the will of the proprietor of that mark. Thus, the mere fact that an obstacle to use of a trade mark exists, such as the requirement of compliance with EU legislation in order to market the goods covered by that mark, does not suffice to justify non-use of that mark. Nor can the mere fact of having started efforts to comply with that legislation suffice to justify non-use of the mark at issue. Furthermore, according to the case-law, the concept of proper reasons refers to circumstances unconnected with the trade mark proprietor rather than to circumstances associated with his commercial difficulties. The problems associated with the manufacture of products form part of the commercial difficulties encountered by that proprietor (see, to that effect, judgment of 18 March 2015, Naazneen Investments v OHIM - Energy Brands (SMART WATER) , T-250/13, not published, EU:T:2015:160 , paragraph 66). It is for the proprietor of a trade mark to control the manufacture of the goods covered by its mark (see, to that effect, judgment of 18 March 2015, SMART WATER , T-250/13, not published, EU:T:2015:160 , paragraph 67). In the present case, the fact that a third party carried out tests on the applicant’s cigarettes does not allow the conclusion to be drawn that the manufacture of those cigarettes was independent of the applicant’s will. It was a matter for the applicant to decide when it was going to have the tests carried out and to ensure that its cigarettes were compliant with the EU legislation. The Board of Appeal therefore acted correctly in finding that the manufacture of cigarettes that complied with the EU legislation depended on the will of the proprietor of the trade mark. Last, it must be noted, as the Board of Appeal did, without being challenged on this point by the applicant, that regulatory approval processes for pharmaceutical products usually last for several years and that, once the application for registration has been filed, the applicant has no means to speed up that process. In the present case, it is apparent from the documents presented by the applicant that the German laboratory required only a few days from receipt of the applicant’s cigarettes in order to carry out tests on those cigarettes and to issue its results. The Board of Appeal thus found, rightly, that the need to comply with the EU legislation was not comparable to the protracted procedures for obtaining marketing authorisation for pharmaceutical products. It follows that the applicant’s arguments cannot call into question the Board of Appeal’s conclusion that there were no proper reasons for non-use of that trade mark. In the light of the foregoing, the single plea in law put forward by the applicant must be rejected and, consequently, the action must be dismissed in its entirety. Costs Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the forms of order sought by EUIPO and the intervener. On those grounds, THE GENERAL COURT (Fifth Chamber) hereby: 1. Dismisses the action; 2. Orders Kaane American International Tobacco Company FZE to pay the costs. Gratsias Dittrich Xuereb Delivered in open court in Luxembourg on 8 June 2017. E. Coulon D. Gratsias Registrar President * Language of the case: English. © European Union The source of this judgment is the Europa web site. The information on this site is subject to a information found here: Important legal notice . 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