Evidence submitted out of time
OHIM v Kaul GmbH; Bayer AG (ECJ (Grand Chamber); C-29/05; 13.03.07)
Atlanta Richfield Co applied to register the word sign “ARCOL” as a CTM, in particular in respect of ‘chemical substances for preserving foodstuffs’.
Kaul GmbH opposed this application on the basis that there was a likelihood of confusion under Article 8(1)(b) based on its earlier CTM for “CAPOL” registered for ‘chemical preparations for keeping fresh and preserving foodstuffs namely raw materials for glazing and preserving prepared food products, in particular, confectionery.’ The opposition was rejected by the Opposition Division.
Kaul appealed to the BoA and filed a declaration from its managing director and customer list in support of its submission that the mark had highly distinctive character. The BoA held that it could not take into account this evidence as it had not been before the Opposition Division.
The CFI allowed Kaul’s appeal and held that the evidence should have been considered by the BoA. OHIM appealed to the ECJ.
The ECJ considered the wording of Article 74(2) of the Regulation, and held that although it allows OHIM to disregard facts not submitted by the parties in due time, it in no way prohibits OHIM from taking these into account.
Under Article 62 (1) of the Regulation, the BoA is called upon to carry out a new, full examination of the merits of the opposition, in terms of both law and fact. The BoA is to invite the parties, as often as necessary, to file observations on communications issued by itself and it may also order preliminary measures, among which feature the submissions of matters of fact or evidence. However, Article 59 of the Regulation, which lays down the conditions for bringing an appeal before the BoA, cannot be interpreted as starting a new time-limit for submitting facts and evidence in support of the opposition. Consequently, the CFI had erred in law in inferring that the BoA was required to take the evidence into consideration and the ECJ ruled that the contested CFI judgment should be set aside.
The ECJ further held that the BoA wrongly considered itself to be lacking any discretion as to whether to take account of the facts and evidence at issued and therefore annulled the BoA’s decision.
Genuine use and family of marks
Il Ponte Finanziaria SpA v OHIM (A.G. Sharpston for the ECJ; C-234/06 P; 29.03.07)
Marine Enterprise Projects applied to register as a CTM the word BAINBRIDGE with a device element consisting of a roll of cloth unfurling to form the sail of a boat for goods in classes 18 and 25.
Il Ponte Finanziaria (Il Ponte) opposed the application on the basis of a likelihood of confusion with its 11 earlier Italian registered trade marks, which all contained the word “bridge”. These marks fell into three groups:
- Four figurative marks containing variously the words BRIDGE, OLD BRIDGE and THE BRIDGE BASKET
- The word mark THE BRIDGE
- Six marks consisting of two 3-D marks containing the words THE BRIDGE, the word marks OVER THE BRIDGE, FOOTBRIDGE and THE BRIDGE and a figurative mark containing the words THE BRIDGE.
The Opposition Division rejected the opposition on the grounds that the earlier marks were dissimilar visually and aurally from the mark applied for.
On appeal, the BoA held that two of the groups of marks had not been put to genuine use as required by Article 43 of the Regulation and therefore could not be relied upon in the opposition. The BoA upheld the Opposition Division’s decision as to the remaining marks. Il Ponte appealed to the CFI which also dismissed the appeal.
Giving its opinion to the ECJ, the AG recommended that the ECJ should dismiss the appeal in its entirety.
Il Ponte submitted, inter alia, that the CFI had misapplied Article 43(2) and (3) of the Regulation. Following Sunrider v OHIM (Case T-203/02), the AG noted that genuine use involves more than mere token use. There can be no predetermined rule as to the extent of use required; the assessment is one of fact to be carried out on a case-by-case basis in the light of a wide range of relevant factors. The AG considered that the CFI’s application of a standard of consistent presence on the Italian market during the relevant five year period fell within the scope of the case-by-case assessment it is required to make.
The AG rejected Il Ponte’s submission that under Article 15(2)(a) evidence of use of the word mark THE BRIDGE should also be accepted as evidence of use of a figurative mark containing the word “bridge”. The AG concluded that there was no evidence of genuine use of the word mark and did not consider this ground further.
Il Ponte had tried to argue before the CFI that the registrations for the four figurative marks were defensive registrations (recognised by Italian law) designed to widen the scope of protection for the principal trade mark, THE BRIDGE. Il Ponte submitted that the CFI went beyond the scope of the dispute before it when it found that the concept of defensive registration had no place in Community trade mark law. Il Ponte further submitted that use of the principal trade mark could be of assistance to other “defensive” marks. Again, the AG found that this ground must fail; the principal mark can be of no avail unless genuine use can be established. The AG noted that the question of proof of grounds for opposition is not governed by any provision of national law which adds a rider to the rule that a national trade mark is liable to revocation if it has not been put to genuine use over a period of five years.
Finally, the AG considered whether the CFI was correct to judge that the existence of a family of marks could be taken into account as possibly increasing the likelihood of confusion with a trade mark presented for registration only if genuine use of enough marks to constitute a family was submitted. The AG agreed with the CFI’s approach. The existence of a series of marks may well, if they are in sufficiently widespread use, affect the average consumer’s perception to the extent that he will be likely to associate any mark containing the common element with the marks in the series. However, no consumer can be expected to detect a common element in a series of marks which have never been used on the market.
Authenticity vs Trade Origin
Score Draw Ltd v Finch* (Mann J.;  EWHC 462 (Ch); 9.3.07)
Mann J. allowed the appeal and held that the trade mark, a badge being the official emblem of the CBD (which was formerly the governing body for sport in Brazil) registered in class 25 for articles of sports and leisure-wear (see below), was invalid under Sections 3(1)(b) and (c), but not under Section 3(1)(d).
The mark is of historical importance in that it is the badge that was used by the Brazilian football team between 1914 and 1971. The owner of the mark, Mr Finch, licensed it to a company which sold replica football kit. Score Draw, the applicant for the declaration of invalidity, also sold replica football kit and had sold shirts bearing a badge very similar to the mark since before the date on which Mr Finch applied for the mark. The underlying basis of Score Draw’s application for a declaration of invalidity was essentially the same in relation to Sections 3(1)(b), (c) and (d): the mark did not and had never (at least at any material time) denoted trade origin.
Mann J. held that, although the appeal took the form of a review, since the Hearing Officer had failed to give proper weight to the evidence and had erred in finding that the mark was distinctive and not characteristic of the goods, it was proper to substitute his own decision on these issues.
Mann J. was of the opinion that the purpose of the badge was to give authenticity to the shirts. This fact would be recognised by the relevant public. It followed that, under Section 3(1)(b), the use made of the badge had robbed it of its power to be distinctive of trade origin. The Judge found the analogy with the famous names cases was useful, but not determinative. Further, he distinguished both Arsenal v Reed RPC 46 and Tottenham Hotspur v O’Connell BL/O/24/03. Those cases demonstrated that the use of a mark to indicate club affiliation did not preclude the mark from being capable of trade mark use. What set the present case apart was the use that had been made of the badge before anyone contemplated registering it as a mark, that use being so strong that it now prevented it being a mark of trade origin.
Under Section 3(1)(c), Mann J. referred to the analysis in Linkin Park  ETMR 74 of subject matter qualifying as a characteristic of the goods. Although in the present case the mark (the badge) did not, in actual terms, describe the subject matter in the same way as the words “Linkin Park” described the subject matter in that case, by making those very words descriptive of the characteristics of the goods, the effect of the badge in the eyes of the relevant public was very similar. It was descriptive of a characteristic of the clothing which bore the mark in the sense that it connoted that the clothing had an association with the historic Brazilian national team.
Finally, in relation to Section 3(1)(d), Mann J. held that the Hearing Officer did not come to the wrong conclusion. The use of the badge on the kit was not there through custom, it was there through necessity in order to achieve the necessary degree of authenticity.
Parallel imports – what is consent?
MasterCigars Direct Ltd (“MDL”) v Hunter & Frankau Ltd (“H&F”) and between Corporacion Habanos SA (“HSA”) v MasterCigars Direct Ltd & Anr* (LJJ Chadwick, Jacob & Lloyd;  EWCA Civ 176; 8.3.07)
Jacob L.J. gave the decision of the Court of Appeal in which the court allowed the appeal from the decision of HHJ Fysh QC sitting a Judge of the Chancery Division  EWHC 410 (Ch). The Court of Appeal held that the Judge had erred in his consideration of the evidence; the defendants had proved that HSA had consented to the import of cigars from Cuba in to the UK in relation to the consignments in issue. However, the Court added a postscript: the judgment did not mean that the defendants could repeat the acts of importation. Whether they could or not depended upon the detailed circumstances of each consignment.
HSA is the proprietor of Community and UK registered trade marks for a variety of Cuban cigars and the sole exporter of such cigars. H&F is HSA’s sole and exclusive distributor in the UK. HSA also supplies the domestic market in Cuba via official outlets (but unconnected companies). There are legal restrictions on the number of cigars foreigners can take out of Cuba (23 loose or, if more, sealed in the official boxes). In addition, there is an “informal” arrangement between HSA and the outlets whereby restrictions are imposed on the sales made in any one visit. In relation to one set of outlets, the Casas del Habano, this restriction was roughly US $25,000.
MDL is an importer of cigars into the UK for resale. In August 2004, MDL purchased a consignment of cigars bearing HSA’s trade marks from an official outlet in Cuba and subsequently imported them to the UK. Acting on information received from H&F, HM Customs & Excise seized and detained this consignment in the belief that it contained counterfeit cigars.
MDL brought a declaratory action against H&F seeking a declaration that the goods were not counterfeit and should therefore be released. HSA brought a Part 20 claim against MDL for infringement of its registered trade marks, asserting infringement by unauthorised parallel importation and also by the presence of a number of counterfeit cigars within the consignment. The Judge found for HSA on the issue of parallel imports, but found that the counterfeit claim was unproved. The appeal related only to the issue of parallel imports.
Jacob LJ accepted HSA’s summary of the ECJ’s law on parallel imports:
1. Articles 5 to 7 of the Directive must be construed as embodying a complete harmonisation of the rules in the Community/EEA;
2. National rules providing for international exhaustion are contrary to Article 7(1) of the Directive;
3. For there to be consent within the meaning of Article 7(1) such consent must relate to each individual item of the product in respect of which exhaustion of rights is pleaded; and
4. The proprietor’s consent to the marketing of goods within the EEA may be implied where it is to be inferred from facts and circumstances which unequivocally demonstrate that the proprietor has renounced his right to oppose placing of the goods on the market within the EEA;
5. Implied consent cannot be inferred from:
a. the fact that the proprietor has not communicated his opposition to marketing within the EEA to all subsequent purchasers of goods; or
b. the fact that the goods carry no warning of a prohibition on their being placed on the market within the EEA; or
c. the fact that the proprietor has transferred the ownership of the goods without imposing a contractual reservation.
He also accepted that the onus was on the defendant to prove express or implied consent. The ECJ had not meant to set a standard of proof (HSA submitted it would be “beyond reasonable doubt”). Rather, the ECJ had stated that a proved act which was merely consistent with consent, but also consistent with the absence of consent was not enough.
Jacob LJ did not accept that consent could be given by any one of a group of linked companies, nor necessarily the rights holder either through the concept of agency or through the concept of vicarious liability. He described the argument as “just too theoretical”. The ECJ had identified the “point of control” as being what matters. This meant that the Court had to focus on what was really happening, on actual knowledge and actual, practical control or the right of control by the trade mark owner.
In this case, the Court had to examine the acts of HSA and its legal and de facto powers of control. HSA determined all aspects of packaging and trade mark use. Through the disclosure of minutes of meetings it was also obvious that HSA were acting in concert with the outlets. They were not only concerned that the domestic market should be a source of hard currency, but also with pricing in the domestic and foreign markets. Further, HSA were concerned in the outlets’ control of the facturas (the standard form invoices used by the outlets in Cuba and required by Cuban Customs) and could call for copies even though it had no strict legal entitlement to them i.e. it could police sales if it wanted to.
Jacob LJ held that the evidence supported the proposition that HSA was effectively saying to the outlets “you can these sell small but commercial quantities to foreigners and if you do you must give them the appropriate documentation so they can go through Customs so they can take them home to sell”. It followed that consent to use the trade marks in the purchaser’s home market had been given.
This conclusion applied as much to Europe as to other markets. The facturas required the nationality of the purchaser to be included and parts were written in Spanish, English, German and French. Jacob LJ found the use of German striking. He was not aware that, with the exception of Switzerland, German was the official language of any country outside the EEA.
Further, when MDL placed orders for cigars by fax to the Casa del Habanos he was not told he could not buy the cigars for resale in the UK. It was not credible to Jacob LJ that the person supplying MDL was acting without authority. He was too senior. Further, the whole point of the $25,000 limit appeared to be to sell to foreigners who were almost certainly going to take the cigars away for export.
Thus, the combination of all these factors unequivocally indicated consent. Jacob LJ further held that MDL did not have knowledge of HSA’s objection to what they were doing at the relevant time and thus this could not negate his conclusion (although he would not say whether MDL’s present knowledge changed this conclusion).
Reporter’s note: We are grateful to our colleagues at Bird & Bird for their assistance with the preparation of this report: Emilia Linde and Alice Sculthorpe.
ECJ and CFI decisions can be found at http://curia.eu.int/en/content/juris/index_form.htm and the reported cases marked * can be found at http://www.bailii.org/databases.html#ew.