JUDGMENT OF THE GENERAL COURT (Eighth Chamber)

5 May 2017 ([\*](#Footnote*))

(EU trade mark — Invalidity proceedings — EU word mark VENMO — Bad faith — Article 52(1)(b) of Regulation (EC) No 207/2009)

In Case T‐132/16,

**PayPal, Inc.,** established in San José, California (United States), represented by A. Renck, lawyer, and I. Junkar, Solicitor,

applicant,

v

**European Union Intellectual Property Office (EUIPO),** represented by D. Walicka, acting as Agent,

defendant,

the other party to the proceedings before the Board of Appeal of EUIPO, intervener before the Court, being

**Hub Culture Ltd,** established in Hamilton, Bermuda (United Kingdom), represented by J. Hill, Barrister,

ACTION brought against the decision of the Fifth Board of Appeal of EUIPO of 12 January 2016 (Case R 2974/2014-5), relating to invalidity proceedings between PayPal and Hub Culture,

THE GENERAL COURT (Eighth Chamber),

composed of A.M. Collins, President, M. Kancheva and J. Passer (Rapporteur), Judges,

Registrar: I. Dragan, Administrator,

having regard to the application lodged at the Court Registry on 23 March 2016,

having regard to the response of EUIPO lodged at the Court Registry on 8 July 2016,

having regard to the response of the intervener lodged at the Court Registry on 8 July 2016,

further to the hearing on 9 February 2017,

gives the following

**Judgment**

**Background to the proceedings**

1        In 2007 the intervener, Hub Culture Ltd, established a virtual digital social currency called ‘VEN’ which can be exchanged and traded on the internet and at physical premises known as ‘Pavilions’ operated by the intervener.

2        On 6 July 2007, the intervener filed an application for registration of the sign VEN as a US word mark for financial services in Class 36 with the United States Patent and Trademark Office (USPTO). On 28 April 2009, the mark was registered under No 3 613 111.

3        On 9 April 2009, a company called Venmo Inc., registered in Delaware (United States), was established. The company provides online payment services in the United States, under the unregistered mark VENMO, primarily enabling individuals to complete transactions between themselves.

4        On 8 June 2010, the intervener’s legal representatives wrote to Venmo, expressing their concern at the use of the VENMO trade mark by Venmo in the United States, which they claimed could lead to confusion with the intervener’s prior US rights to the VEN trade mark. The letter suggested exploring possibilities of a commercial resolution to the matter.

5        On 7 October 2010, the intervener registered the domain name ‘venmoney.net’.

6        On 25 October 2010, in the absence of an answer to the letter of 8 June 2010, the intervener’s legal representatives sent a follow-up letter to Venmo, essentially repeating the complaint relating to the confusion caused by use of the VENMO trade mark and reiterating the suggestion to explore possibilities of a commercial resolution to the matter.

7        In early November 2010, the representatives of Venmo and of the intervener met at a meeting held in Philadelphia (United States).

8        On 9 November 2010, the intervener filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO) pursuant to Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1).

9        Registration as a mark was sought for the word sign VENMO.

10      The goods and services in respect of which registration was sought are in Classes 9 and 36 of the Nice Agreement concerning 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, for each of those classes, to the following description:

–        Class 9: ‘Computer software, firmware and programs; computer software and programs for transmitting and encoding emails and electronic communications; virtual currency; tokens in digital form; digital stamps of monetary value; computer software and programs for providing email and electronic communication systems, utilising a system for the verification and renewal of virtual currency, tokens or digital stamps of monetary value, upon receiving such emails or electronic communications; computer software and programs for developing and administering reward and incentive programs and promotional schemes; computer software and programs for the facilitation of e-commerce transactions, including the reception of requests for payments and the transfer of virtual currency, tokens or digital stamps of monetary value’;

–        Class 36: ‘Issue and redemption of tokens of value, benefits and incentives; issue and redemption of tokens of value, benefits and incentives in the form of virtual currency, tokens or digital stamps of monetary value; secure electronic transfer of virtual currency, tokens or digital stamps of monetary value; clearing and payment services relating to the sale and redemption of virtual currency, tokens and digital stamps of monetary value; trading of virtual currency, tokens and digital stamps of monetary value; brokerage of virtual currency, tokens and digital stamps of monetary value; small valued financial transactions for e-commerce services; micro-payment services; information, advisory and consultancy services relating to all of the aforesaid’.

11      On 8 December 2010, Venmo’s legal representative wrote to the intervener’s legal representatives stating, first, that at that time Venmo was not intending to engage in a partnership or a business venture with the intervener and that it was not seeking to have global operations, but rather to confine its services to specific cities within the United States, and, secondly, that it was willing to continue conversations throughout 2011, after the parties had entered into a mutual non-disclosure agreement. The legal representative also disputed the intervener’s claims relating to the likelihood of confusion between the signs VEN and VENMO.

12      On 6 January 2011, the intervener’s legal representatives responded by way of letter in which they noted that Venmo was not interested in partnering with the intervener at that time and welcomed the suggestion made by Venmo to keep the conversation open throughout 2011. Nevertheless, they stressed the existence of a likelihood of confusion between the two signs and suggested, as a temporary measure, and until workable commercial cooperation between the parties became possible, the conclusion of a licence agreement in respect of Venmo’s use of the VENMO trade mark.

13      On 26 April 2011, the sign VENMO was registered as an EU trade mark under No 9 509 357 (‘the mark at issue’).

14      On 27 June 2013, the applicant’s predecessor-in-title, Braintree Payment Solutions LLC, which owned Venmo, filed a request for a declaration of invalidity of the mark at issue for all the goods and services mentioned in paragraph 10 above. The request for a declaration of invalidity relied on Article 52(1)(b) of Regulation No 207/2009.

15      On 15 May 2014, Braintree Payment Solutions LLC merged with Braintree, Inc., which itself was then acquired by and merged into PayPal, Inc.

16      By decision of 23 September 2014, the Cancellation Division declared that the mark at issue was invalid.

17      First, it held that, in the light of the abovementioned facts and even though no formal agreement had been signed, a pre-contractual relationship existed between the applicant and the intervener which created a close enough link to deem it fair to expect the intervener not to file an application for an EU trade mark, such as the mark at issue, without giving the applicant prior notice.

18      Second, it stated that the intervener had sought to register the mark at issue as a defensive mark or a ‘weapon’, which was not consonant with the essential function of a trade mark, which is to guarantee the identity of the origin of the goods or services for which it is registered.

19      On 21 November 2014, the intervener filed a notice of appeal with EUIPO against the Cancellation Division’s decision.

20      By decision of 12 January 2016 (‘the contested decision’), the Fifth Board of Appeal of EUIPO annulled the decision of the Cancellation Division, taking the view that no act in bad faith for the purposes of Article 52(1)(b) of Regulation No 207/2009 had been established.

21      The Board of Appeal found that the intervener was clearly aware of the applicant’s use of the unregistered VENMO trade mark and corporate name in the United States. However, with regard to the intervener’s intention at the time of filing the application to register the mark at issue, it concluded that bad faith on the part of the latter could not be established. That conclusion was based on a number of grounds.

22      First, the Board of Appeal noted that there was no evidence in the file that the applicant’s sign had been used over a long period of time and that it was either legally protected through registration or by virtue of being well known or otherwise reputed. The sign was the name of a company established in April 2009, around one year and seven months before the filing of the application to register the mark at issue, and had not been genuinely used in the European Union. On the other hand, the intervener had enjoyed protection of its VEN trade mark in the United States since 2007 and could have been validly concerned about the use of the sign VENMO by the applicant in so far as such use was liable to give rise to a likelihood of confusion both in the United States and in the European Union (if the applicant decided one day to expand its business operations in the European Union).

23      Secondly, the Board of Appeal held that the registration of the sign VENMO could be seen as a logical commercial trajectory in so far as the intervener was the proprietor of the VEN trade mark, used ‘venmoney.net’ as an internet domain name and feared that VENMO could be seen as an abbreviation of VEN MONEY. According to the Board of Appeal, it therefore could not be excluded that the intervener could have had an interest in securing its interests by consolidating its VEN trade marks and registering the sign VENMO, which could be associated with the expression VEN MONEY.

24      Thirdly, the Board of Appeal observed that, following the meeting between the parties in early November 2010, the applicant stated, in the letter of 8 December 2010, that it was not at that point seeking to expand its operations to the European Union. The Board of Appeal held that it would therefore be unreasonable to expect the intervener to have perpetually refrained from filing the mark at issue and to bear the risk that any other trader could seek protection for the VENMO mark, which it obviously perceived as potentially infringing its VEN mark. Such an obligation could not be inferred from the duty of fair play following the parties’ contact. Taking into account that the sign VENMO did not have any particular reputation and was not registered, it would be excessive to expect the intervener to refrain from securing its rights in the European Union.

25      Fourthly, the Board of Appeal found that, whilst the evidence did not confirm that the intervener intended to use the VENMO mark genuinely, it also did not provide a basis for the contrary conclusion that the mark had been registered only to exclude the applicant from the market. In this regard, the Board of Appeal recalled that, under the European Union trade mark system, applicants were not under an obligation to use the trade mark immediately after registration, but enjoyed a five‐year grace period. According to the Board of Appeal, the intervener might have had a legitimate interest in consolidating the VEN and VENMO trade marks in the European Union and, even if one of the reasons was to prevent others from using the sign VENMO for related services, this in itself did not amount to bad faith as long as the applicant had clearly declared that it was not currently interested in the European market. It also held that, according to the evidence on file, the intervener had not attempted to create associations with the applicant’s business or to take advantage of its reputation. Lastly, it stated that the situation would have been different had the cancellation applicant revealed to the intervener its plans to go global or if the sign VENMO had enjoyed a particular reputation which the intervener then attempted to misappropriate, a situation which it went on to rule out.

**Forms of order sought**

26      The applicant claims that the Court should:

–        annul the contested decision;

–        order EUIPO and the intervener to pay the costs.

27      EUIPO and the intervener contend that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

**Law**

28      In support of its action, the applicant raises a single plea in law, alleging infringement of Article 52(1)(b) of Regulation No 207/2009.

29      The applicant claims, in essence, that the Board of Appeal erred in annulling the decision of the Cancellation Division of 23 September 2014 on the ground that bad faith on the part of the intervener at the time of filing the application for registration of the mark at issue had not been established. First, the Board of Appeal erred in relying on the registration, by the intervener, of the domain name ‘venmoney.net’, the use of the sign VEN MONEY, the letter dated 8 December 2010 and the lack of reputation or ownership of rights by the applicant. Secondly, the Board of Appeal erred in ignoring or not giving appropriate weight to the other relevant factors, in particular the chronology of events in the present case and the fact that the sign VENMO had been created and used by the applicant and that the intervener had never used that sign. Furthermore, there was no plausible commercial logic behind the filing of the application for registration of the mark at issue.

30      EUIPO and the intervener dispute the applicant’s arguments.

31      It should be noted, as a preliminary point, that the EU trade mark registration system is based on the ‘first-to-file’ principle laid down in Article 8(2) of Regulation No 207/2009. In accordance with that principle, a sign may be registered as an EU trade mark only in so far as this is not precluded by an earlier mark, whether an EU trade mark, a trade mark registered in a Member State or by the Benelux Office for Intellectual Property, a trade mark registered under international arrangements which have effect in a Member State or a trade mark registered under international arrangements which have effect in the European Union. On the other hand, without prejudice to the possible application of Article 8(4) of Regulation No 207/2009, the mere use by a third party of a non-registered mark does not preclude an identical or similar mark from being registered as an EU trade mark for identical or similar goods or services (judgment of 14 February 2012, *Peeters Landbouwmachines* v *OHIM — Fors MW (BIGAB)*, T‐33/11, EU:T:2012:77, paragraph 16).

32      The application of that principle is qualified, inter alia, by Article 52(1)(b) of Regulation No 207/2009, under which, following an application to EUIPO or on the basis of a counterclaim in infringement proceedings, an EU trade mark is to be declared invalid where the applicant for registration was acting in bad faith when it filed the application for registration of the trade mark (judgment of 14 February 2012, *BIGAB*, T‐33/11, EU:T:2012:77, paragraph 17).

33      In that regard, where the applicant for a declaration of invalidity seeks to rely on that ground, it is for that party to prove the circumstances which substantiate a finding that the EU trade mark proprietor was acting in bad faith when it filed the application for registration of that mark (judgment of 14 February 2012, *BIGAB*, T‐33/11, EU:T:2012:77, paragraph 17).

34      The concept of ‘bad faith’ referred to in Article 52(1)(b) of Regulation No 207/2009 is not defined, delimited or even described in any way in the legislation of the European Union (judgment of 26 February 2015, *Pangyrus* v *OHIM — RSVP Design (COLOURBLIND)*, T‐257/11, not published, EU:T:2015:115, paragraph 64).

35      It is apparent from Article 52(1)(b) of Regulation No 207/2009 that the relevant time for determining whether there was bad faith on the part of the applicant for registration is the time of filing the application for registration (judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraph 35).

36      Moreover, in order to determine whether the applicant for registration is acting in bad faith, account must be taken of all the relevant factors specific to the particular case which pertained at the time of filing the application for registration of a sign as an EU trade mark and, in particular: (i) the fact that the applicant knows or must know that a third party is using an identical or similar sign for identical or similar goods or services capable of being confused with the sign for which registration is sought; (ii) the applicant’s intention to prevent that third party from continuing to use such a sign; and (iii) the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought (see, to that effect, judgments of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraphs 37 and 53, and of 27 June 2013, *Malaysia Dairy Industries*, C‐320/12, EU:C:2013:435, paragraphs 36 and 37).

37      As regards the terms ‘must know’, it should be pointed out that a presumption of knowledge, by the applicant, of the use by a third party of an identical or similar sign for identical or similar goods capable of being confused with the sign for which registration is sought may arise, inter alia, from general knowledge in the economic sector concerned of such use, and that knowledge can be inferred, inter alia, from the duration of such use. The more that use is long-standing, the more probable it is that the applicant will, when filing the application for registration, have knowledge of it (judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraph 39).

38      However, the fact that the applicant knows or must know that a third party has long been using an identical or similar sign for identical or similar goods, which could give rise to confusion with the sign for which registration is sought, is not sufficient in itself to permit the conclusion that the applicant was acting in bad faith (see, to that effect, judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraph 40).

39      Therefore, in order to determine whether there was bad faith, consideration must also be given to the applicant’s intention at the time when he files the application for registration (judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraph 41).

40      The applicant’s intention at the relevant time is a subjective factor which must be determined by reference to the objective circumstances of the particular case (judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraph 42).

41      Accordingly, the intention to prevent a third party from marketing a product may, in certain circumstances, be an element of bad faith on the part of applicant (judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraph 43).

42      That is in particular the case when it becomes apparent, subsequently, that the applicant applied for registration of a sign as an EU trade mark without intending to use it, his sole objective being to prevent a third party from entering the market (judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraph 44).

43      In such a case the mark does not fulfil its essential function, namely that of ensuring that the consumer or end user can identify the origin of the goods or services concerned by allowing him to distinguish those goods or services from those of different origin, without any confusion (judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraph 45).

44      Moreover,it is apparent from the wording usedin the judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli* (C‐529/07, EU:C:2009:361), that the three factors listed in paragraph 36 above are only examples drawn from a number of factors which can be taken into account in order to decide whether the applicant was acting in bad faith at the time when the application was filed (judgment of 14 February 2012, *BIGAB*, T‐33/11, EU:T:2012:77, paragraph 20).

45      It must therefore be held that, in the context of the overall analysis undertaken pursuant to Article 52(1)(b) of Regulation No 207/2009, account may also be taken of the origin of the contested sign and its use since its creation, the commercial logic underlying the filing of the application for registration of that sign as an EU trade mark, and the chronology of events leading up to that filing (judgment of 26 February 2015, *COLOURBLIND*, T‐257/11, not published, EU:T:2015:115, paragraph 68).

46      In the present case, the Board of Appeal was therefore right to examine other relevant factors after noting that it was common ground that the intervener knew about Venmo’s use of an identical sign to the mark at issue.

47      Before filing the application for registration of the mark at issue, the intervener itself expressed to Venmo its concern at the use of the sign VENMO and alleged a likelihood of confusion with the intervener’s earlier mark (see letters of 8 June and 25 October 2010). It is also common ground that the intervener’s representatives met with those of Venmo to discuss that subject (early November 2010).

48      However, as is clear from the abovementioned case-law, the fact that the intervener knew about Venmo’s use of an identical sign is not sufficient in itself to permit the conclusion that the intervener was acting in bad faith.

49      Accordingly, it was necessary to examine the other objective circumstances in order to determine the intervener’s intention at the time of filing the application for registration.

50      However, it must be held that the analysis carried out by the Board of Appeal in that regard was not based on all of the relevant factors, in accordance with the case‐law, and is vitiated by several errors.

51      In the first place, despite its findings that the intervener was clearly aware, at the time of filing the application for registration of the mark at issue, that Venmo was using an identical sign to the mark at issue and that the intervener had not used that sign before the filing of the application for registration of the mark at issue, the Board of Appeal concluded that the registration, by the intervener, of the mark at issue could follow a logical commercial trajectory. That conclusion was based, inter alia, on the registrations, in the United States and within the European Union, of the VEN trade mark and on the use of the sign VEN MONEY and the domain name ‘venmoney.net’.

52      However, with the exception of the registration of the domain name ‘venmoney.net’, the use of the sign VEN MONEY, in itself or as an integral part of that internet domain name, has not been established. As was apparent at the hearing, nothing supports the conclusion that the photo submitted by the intervener before the Board of Appeal in order to substantiate the use of the sign VEN MONEY had actually been taken in Davos (Switzerland) in 2013. Even if that were the case, it is in any event an isolated factor insufficient to establish active and genuine use of the sign VEN MONEY. Moreover, it should be recalled that the relevant time for determining whether there was bad faith on the part of the applicant is the time of filing the application for registration, here 9 November 2010. Furthermore, as was also apparent at the hearing, nothing supports the conclusion that the promotional material submitted by the intervener before the Board of Appeal had actually been used in commercial relations.

53      As regards the domain name ‘venmoney.net’, while it is true that the use of domain names solely for the purposes of redirection to other sites is legitimate, the fact that the intervener’s site is a mere redirection and was registered shortly before the filing of the application for registration of the mark at issue also warrants particular attention in order to assess whether the intervener acted in bad faith at the time of filing the application for registration of the mark at issue (see, by analogy, judgment of 3 June 2010, *Internetportal und Marketing*, C‐569/08, EU:C:2010:311, paragraph 52).

54      In that regard, the Board of Appeal also found, without in-depth analysis, that the intervener could have been validly concerned about the applicant’s use of the sign VENMO in so far as such use was liable to give rise to a likelihood of confusion in the mind of the relevant public.

55      However, as the applicant submitted at the hearing, without being contradicted by EUIPO or the intervener, the ‘mo’ element cannot be understood as a natural abbreviation of the word ‘money’.

56      In any event, even if the genuine use of the sign VEN MONEY were established, in itself or as an integral part of the domain name ‘venmoney.net’, and the sign VENMO might be perceived by the relevant public as an abbreviation of the sign VEN MONEY, that fact is not sufficient in itself to find, in the present case, that there was a plausible commercial logic underlying the registration of the mark at issue.

57      If the intervener’s intention was to protect its VEN trade mark, it would have been sufficient for it to apply, for example, for registration of the sign VEN MONEY, which it also claims to use. However, it chose to register the sign VENMO, which had not been used at all by it and was identical to that used by Venmo (see also paragraph 65 below).

58      The intervener’s argument that the registration of the sign VEN MONEY (and the sign VEN CURRENCY or VENCU) was not necessary because the registrations of its VEN trade mark gave it adequate protection for the first two abovementioned marks, and that it was not aware of any undertaking that might start using any of those marks at some point in the future, cannot succeed.

59      First, there was nothing to preclude, a priori, the registration of those signs. Secondly, if the intervener maintains that the VEN trade mark adequately protects it against potential use of the sign VEN MONEY by a third party and if, at the same time, it contends that the sign VENMO may be perceived as an abbreviation of venmoney and, thus, leads to confusion with the VEN trade mark, this implies that, following the intervener’s own logic, the VEN trade mark would also protect it against the use of the sign VENMO without it being necessary to register that sign. Thirdly, that argument of the intervener could, on the contrary, demonstrate its intention to prevent the applicant’s entry into the EU market and prevent the applicant from continuing to use the sign VENMO.

60      Moreover, the filing of the application for registration of the mark at issue occurred in the context of direct relations with the applicant, where the intervener, first, contested the use of the sign VENMO by Venmo by alleging a likelihood of confusion with the intervener’s VEN trade mark and, secondly, suggested exploring possibilities of a commercial resolution, which was confirmed by the intervener itself in the letter of 6 January 2011 (‘we welcome the suggestion made by Venmo that the parties continue conversations throughout 2011 in view of a possible future trade association. Hub Culture is happy to keep these conversations open’).

61      However, instead of continuing to explore possibilities of a commercial resolution with the applicant and, moreover, immediately after the first meeting with it in early November 2010 and before the abovementioned letter, the intervener chose to ‘appropriate’ the applicant’s sign.

62      Furthermore, it did so without informing the applicant of its intention to file the application for registration of the mark at issue, with the result that that application could be regarded as a ‘concealed act’ (judgment of 16 June 2015, *Silicium España Laboratorios* v *OHIM — LLR-G5 (LLRG5)*, T‐306/13, not published, EU:T:2015:382, paragraph 71; see also, *a contrario*, judgment of 26 February 2015, *COLOURBLIND*, T‐257/11, not published, EU:T:2015:115, paragraph 140).

63      In the second place, the Board of Appeal accepted that the evidence did not establish the intervener’s intention to use the VENMO mark genuinely. In that regard, it nevertheless stressed that, under the EU trade mark system, applicants were not under an obligation to use the trade mark immediately after registration, but enjoyed a five-year grace period.

64      However, while the five-year grace period enjoyed by all registered EU trade marks, laid down in Regulation No 207/2009, had not yet expired on the date of adoption of the Board of Appeal’s decision, it follows from the abovementioned case-law that the intention to prevent a third party from marketing a product may, in certain circumstances, be an element of bad faith on the part of applicant, when it becomes apparent, subsequently, that the applicant applied for registration of a sign as an EU trade mark without intending to use it (judgments of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraphs 43 and 44, and of 14 February 2012, *BIGAB*, T‐33/11, EU:T:2012:77, paragraph 24).

65      In that regard, the intervener conceded at the hearing that it had never used the mark at issue, neither before the filing of the application for registration of the mark applied for, nor after it.

66      In the third place, the Board of Appeal relied on the fact that the sign VENMO, used by Venmo, was an unregistered sign and did not enjoy a particular reputation.

67      However, it should be recalled, first of all, that although, in accordance the ‘first-to-file’ principle, the mere use by a third party of a non‐registered mark does not preclude an identical or similar mark from being registered as an EU trade mark for identical or similar goods or services (judgment of 14 February 2012, *BIGAB*, T‐33/11, EU:T:2012:77, paragraph 16), that does not rule out the possibility for the proprietor of such an unregistered trade mark to rely on the bad faith of the applicant for registration of the EU trade mark. The possibility provided for in Article 52(1)(b) of Regulation No 207/2009 of having a trade mark declared invalid where an applicant was acting in bad faith when it filed the application for the trade mark, and of not being prevented from bringing that type of action by virtue of acquiescence, as is clear from Article 54(1) of Regulation No 207/2009, is precisely in accordance with the requirement of ensuring wide protection for any trader using a sign despite not yet having registered it (judgment of 11 July 2013, *SA.PAR.*v *OHIM — Salini Costruttori (GRUPPO SALINI)*, T‐321/10, EU:T:2013:372, paragraph 35).

68      Next, in so far as it is undisputed that the intervener knew about Venmo’s use of the sign VENMO, the assessment of the reputation of Venmo and its sign is irrelevant for the purpose of determining whether the intervener knew or should have known that a third party was using an identical or similar sign for identical or similar goods, which could give rise to confusion with the sign for which registration was sought (judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraphs 38 and 39).

69      Finally, while it cannot be argued, taking into account the lack of substantial reputation of Venmo and its sign, that the intervener sought to take advantage of the rights conferred by the EU trade mark with the sole aim of competing unfairly with a competitor who is using a sign which, because of characteristics of its own, had by that time obtained some degree of legal protection (judgment of 11 June 2009, *Chocoladefabriken Lindt & Sprüngli*, C‐529/07, EU:C:2009:361, paragraph 47), that fact is also not sufficient in itself to exclude the existence of bad faith on the part of the intervener.

70      In the fourth place, the Board of Appeal noted that Venmo explicitly stated, in its letter of 8 December 2010 to the intervener, that ‘Venmo [was] not currently at a point that it [was] seeking to have global operations, but rather [was] trying to confine its services to specific cities within the United States’.

71      However, even supposing that the terms of that letter, after the filing of the application for registration of the mark at issue, correspond to the statement allegedly made by the applicant during the meeting with the intervener in early November 2010, before the filing of the application for registration of the mark at issue, it should be noted that it is apparent from the terms of that letter that Venmo had not entirely excluded the intention to ‘have global operations’ in the near or more distant future.

72      Accordingly, it must be held that the contested decision was not based on an analysis of all of the relevant factors, as required by the case-law, and is vitiated by several errors in that regard.

73      It follows that the single plea in law must be upheld and the contested decision annulled.

**Costs**

74      Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since EUIPO has been unsuccessful, it must be ordered to pay the costs.

75      In accordance with Article 138(3) of the Rules of Procedure, the intervener must bear its own costs.

On those grounds,

THE GENERAL COURT (Eighth Chamber)

hereby:

1.      **Annuls the decision of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 12 January 2016 (Case R 2974/2014-5);**

2.      **Orders EUIPO to pay, in addition to its own costs, those incurred by PayPal, Inc.;**

3.      **Orders Hub Culture Ltd to bear its own costs.**

| | | |
| --- | --- | --- |
| Collins | Kancheva | Passer |

Delivered in open court in Luxembourg on 5 May 2017.

| | | |
| --- | --- | --- |
| E. Coulon | | A. M. Collins |

| | | |
| --- | --- | --- |
| Registrar | | President |

---

[\*](#Footref*) Language of the case: English.