JUDGMENT OF THE GENERAL COURT (Second Chamber)
24 November 2021 (*)
(EU trade mark – Invalidity proceedings – EU figurative mark dziandruk – Absolute ground for invalidity – Absence of bad faith – Article 52(1)(b) of Regulation (EC) No 207/2009 (now Article 59(1)(b) of Regulation (EU) 2017/1001))
In Case T‑434/20,
Piotr Włodarczyk, residing in Pabianice (Poland), represented byM. Bohaczewski and A. Zalewska, lawyers,
applicant,
v
European Union Intellectual Property Office (EUIPO), represented by D. Walicka and V. Ruzek, acting as Agents,
defendant,
the other party to the proceedings before the Board of Appeal of EUIPO, intervener before the General Court, being
Ave Investment sp. z o.o., established in Pabianice, represented byK. Błach Morysińska, lawyer,
ACTION brought against the decision of the Fourth Board of Appeal of EUIPO of 8 May 2020 (Case
R 2192/2019‑4), relating to invalidity proceedings between Mr Włodarczyk and Ave Investment,
THE GENERAL COURT (Second Chamber),
composed of V. Tomljenović, President, J. Schwarcz and I. Nõmm (Rapporteur), Judges,
Registrar: A. Juhász-Tóth, Administrator,
having regard to the application lodged at the Court Registry on 9 July 2020,
having regard to the response of EUIPO lodged at the Court Registry on 5 January 2021,
having regard to the response of the intervener lodged at the Court Registry on 26 February 2021,
having regard to the designation of another Judge to complete the Chamber as one of its Members was prevented from acting,
further to the hearing on 5 July 2021,
gives the following
Judgment
Background to the dispute
1        On 10 August 2016, the intervener, Ave Investment sp. z o.o., filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO) pursuant to Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1), as amended (replaced by Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (OJ 2017 L 154, p. 1)).
2        Registration as a mark was sought for the following figurative sign:
3        The goods and services in respect of which registration was sought are in Classes 23, 24, 35 and 40 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.
4        The trade mark application was published in European Union Trade Marks Bulletin
No 212/2016 of 9 November 2016 and the trade mark at issue was registered on 16 February 2017 under number 15742091.
5        On 4 September 2017, the applicant, Mr Piotr Włodarczyk, filed an application for a declaration of invalidity of the EU trade mark referred to in paragraph 1 above, pursuant to Article 52(1)(b) of Regulation No 207/2009 (now Article 59(1)(b) of Regulation 2017/1001). That application was directed against all of the goods covered by the contested mark.
6        On 29 July 2019, the Cancellation Division cancelled the contested mark in respect of all the goods covered by it. In essence, the Cancellation Division found that the contested mark had been filed in bad faith.
7        On 27 September 2019, the intervener filed a notice of appeal with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009 (now Articles 66 to 71 of Regulation 2017/1001), against the decision of the Cancellation Division.
8        By decision of 8 May 2020 (‘the contested decision’), the Fourth Board of Appeal of EUIPO upheld the appeal, annulled the decision of the Cancellation Division and rejected the application for a declaration of invalidity. In essence, first, the Board of Appeal found that the applicant had not adduced evidence that the application for registration of the contested mark had been made in bad faith. Secondly, it considered that the intervener had demonstrated a legitimate interest in having that mark registered, namely to prevent competitors from filing an application for an identical or similar designation as an EU trade mark and that the intervener’s intention was part of a normal commercial strategy.
Forms of order sought
9        The applicant claims that the Court should:
–        annul the contested decision;
–        order EUIPO to pay the costs of the proceedings before the General Court as well as those before the Cancellation Division and the Board of Appeal;
–        in the alternative, order the intervener to pay the costs of the proceedings before the General Court as well as those before the Cancellation Division and the Board of Appeal.
10      EUIPO contends that the Court should:
–        dismiss the action;
–        order the applicant to pay the costs;
11      The intervener contends that the Court should:
–        dismiss the action and uphold the contested decision;
–        order the applicant to pay the costs.
Law
Admissibility
12      In the light of the clarifications provided at the hearing, the intervener submits that Annexes A.5 to A.13 to the application are inadmissible in so far as they were produced for the first time before the Court.
13      In that regard, it should be noted that the documents produced in Annexes A.5 to A.11 to the application contain information relating to company A and concern the use of the contested mark by that company. The document produced in Annex A.12 to the application is a notarial act by which it is certified that the images produced in Annexes A.6 and A.7 to the application are authentic. Lastly, Annex A.13 to the application contains decisions of company B adopted in 2014 and 2015. As the intervener rightly submits, all of those documents were not submitted during the administrative proceedings before EUIPO.
14      In that regard, it must be noted that the purpose of actions before the General Court is to review the legality of decisions of the Boards of Appeal of EUIPO for the purposes of Article 72 of Regulation 2017/1001, so it is not the Court’s function to review the facts in the light of documents produced for the first time before it (see, to that effect, judgments of 24 November 2005, Sadas v OHIM – LTJ Diffusion (ARTHUR ET FELICIE), T‑346/04, EU:T:2005:420, paragraph 19 and the case-law cited, and of 18 March 2016, Karl-May-Verlag v OHIM – Constantin Film Produktion (WINNETOU), T‑501/13, EU:T:2016:161, paragraph 17).
15      It follows that Annexes A.5 to A.13 to the application must be rejected as inadmissible.
16      Furthermore, the intervener submits that all of the documents which the applicant annexed to the application are written in Polish and not in the language of the case, namely English. Similarly, it argues that the applicant did not fulfil the obligation to submit evidence in the language of the case during the administrative proceedings and that the untranslated documents should not be taken into account.
17      Those arguments can only be rejected. First, it must be stated that Annexes A.5 to A.13 to the application were declared inadmissible (see paragraph 15 above), with the result that the issue of whether they are submitted in the language of the case is no longer relevant. As regards the information contained in Annexes A.1 to A.4 to the application, it must be noted, as the intervener also acknowledged at the hearing, that that information is in the administrative file. Secondly, as regards the documents submitted during the administrative proceedings before EUIPO, it is true that it is apparent from Rule 38(2) of Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Regulation No 40/94 (OJ 1995 L 303, p. 1), applicable to the present invalidity proceedings, that where the evidence in support of the application is not filed in the language of the revocation or invalidity proceedings, the applicant must file a translation of that evidence into that language within a period of two months after the filing of such evidence. In that regard, it must be noted that some of the evidence submitted by the applicant is not translated into the language of the case.
18      However, in so far as the intervener’s argument should be understood as an independent plea in law under Article 173(3) of the Rules of Procedure of the General Court, it can only be rejected since such a plea is incompatible with the form of order which it is seeking (see judgment of 27 September 2018, TenneT Holding v EUIPO – Ngrid Intellectual Property (NorthSeaGrid), T‑70/17, not published, EU:T:2018:611, paragraphs 33 to 35 and the case-law cited). In its response, the intervener has not sought the annulment or alteration of the contested decision. On the contrary, it claims that the Court should dismiss the action brought by the applicant.
19      Moreover, and in any event, the intervener’s argument does not satisfy the requirements of Article 180(1)(c) of the Rules of Procedure in so far as, first, it did not identify the documents which should be disregarded on the ground that they had not been translated into the language of the case during the administrative proceedings and, second, it did not dispute the Board of Appeal’s findings which were based on those documents.
Substance
20      In view of the date on which the application for registration in question was made, namely 10 August 2016, which is decisive for the purposes of identifying the applicable substantive law, the facts of the present dispute are governed by the substantive provisions of Council Regulation (EC) No 207/2009 (see, to that effect, order of 5 October 2004, Alcon v OHIM, C‑192/03 P, EU:C:2004:587, paragraphs 39 and 40, and judgment of 23 April 2020, Gugler France v Gugler and EUIPO, C‑736/18 P, not published, EU:C:2020:308, paragraph 3 and the case-law cited).
21      Consequently, in the present case, as regards the substantive rules, the references made by the Board of Appeal in the contested decision, as well as those made by the applicant, EUIPO and the intervener in their pleadings, to Article 59(1)(b) 2017/1001, must be understood as referring to Article 52(1)(b) of Regulation No 207/2009, which is identical in content.
22      In support of its action, the applicant relies on a single plea in law, alleging infringement of Article 52(1)(b) of Regulation No 207/2009.
23      The applicant submits that the circumstances of the case, established during the administrative proceedings, clearly show that the intervener acted in bad faith when filing
the application for the contested mark and that its intention was to enable a person controlling the intervener to recover a sign that had been used for years by company B, with which that person is associated.
24      In that regard, the applicant submits that the Board of Appeal made an error in its assessment of the intervener’s intentions when the contested mark was filed and submits, in particular, that the Board of Appeal failed to correctly assess the relevance of the following matters: the existence of the relationship between the intervener and company B, the user of the sign, the existence of a dispute between members of that company when the application for that mark was filed, the chronology of events following that application and the intervener’s conduct, which was contrary to honest practices in industrial and commercial matters.
25      EUIPO and the intervener dispute the applicant’s arguments.
26      It should be noted first of all 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 28 January 2016, Davó Lledó v OHIM – Administradora y Franquicias América and Inversiones Ged (DoggiS), T‑335/14, EU:T:2016:39, paragraph 43).
27      This rule is qualified, in particular, by Article 52(1)(b) of Regulation No 207/2009, under which an EU trade mark is to be declared invalid on application to EUIPO or on the basis of a counterclaim in infringement proceedings, where the applicant acted in bad faith when it filed the application for the trade mark (judgment of 28 January 2016, DoggiS, T‑335/14, EU:T:2016:39, paragraph 44).
28      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 EU legislation (judgment of 28 January 2016, DoggiS, T‑335/14, EU:T:2016:39, paragraph 45).
29      According to the case-law, the concept of bad faith relates to a subjective motivation on the part of the trade mark applicant, namely a dishonest intention or other ‘sinister motive’. It involves conduct which departs from accepted principles of ethical behaviour or honest commercial and business practices (judgment of 7 July 2016, Copernicus-Trademarks v EUIPO – Maquet (LUCEO), T‑82/14, EU:T:2016:396, paragraph 28).
30      In that regard, the Court has stated that, in order to determine whether there was bad faith, consideration also had to be given to the applicant’s intention at the time when he or she filed the application for registration. It must be observed in that regard that 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, paragraphs 41 and 42).
31      Similarly, according to the Court, the absolute ground for invalidity referred to in Article 52(1)(b) of Regulation No 207/2009 applies where it is apparent from relevant and consistent indicia that the proprietor of an EU trade mark has filed the application for registration of that mark not with the aim of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin (see judgment of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C‑104/18 P, EU:C:2019:724, paragraph 46 and the case-law cited).
32      In order to determine whether an applicant is acting in bad faith, it is necessary to take into consideration all the relevant factors specific to the particular case which pertained at the time of filing the application for registration of the sign as an EU trade mark (judgment of 11 June 2009, Chocoladefabriken Lindt & Sprüngli, C‑529/07, EU:C:2009:361, paragraph 53).
33      The facts taken into account in the case-law in the context of the overall analysis carried out pursuant to Article 52(1)(b) of Regulation No 207/2009 include, inter alia, the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product or service capable of being confused with the sign for which registration is sought, the applicant’s intention to prevent that third party from continuing to use such a sign, the degree of legal protection enjoyed by the signs at issue, the applicant’s intention to prevent a third party from marketing a product, the origin of the contested sign and its use since its creation, the commercial logic underlying the filing of the application for registration of the sign as an EU trade mark, and the chronology of events relating to that filing (see, to that effect, judgments of 11 June 2009, Chocoladefabriken Lindt & Sprüngli, C‑529/07, EU:C:2009:361, paragraphs 38 and 44, and of 28 January 2016, DoggiS, T‑335/14, EU:T:2016:39, paragraphs 46 and 48).
34      That said, it should be pointed out that the factors referred to in paragraph 33 above are only examples drawn from a number of factors which can be taken into account in order to determine whether an applicant for registration was acting in bad faith at the time of filing the trade mark application (see judgment of 14 February 2019, Mouldpro v EUIPO – Wenz Kunststoff (MOULDPRO), T‑796/17, not published, EU:T:2019:88, paragraph 83 and the case-law cited).
35      Furthermore, it should be noted that it is for the applicant for a declaration of invalidity who seeks to rely on the ground set out in Article 52(1)(b) of Regulation 2017/1001 to prove the circumstances which substantiate a finding that the EU trade mark proprietor had been acting in bad faith when it filed the application for registration of that mark and that there is a presumption of good faith until proof to the contrary is adduced (judgment of 8 March 2017, Biernacka-Hoba v EUIPO – Formata Bogusław Hoba (Formata), T‑23/16, not published, EU:T:2017:149, paragraph 45).
36      It is, in particular, in the light of the foregoing considerations that the legality of the contested decision must be reviewed, in so far as the Board of Appeal concluded that the intervener was not acting in bad faith when it filed the application for registration of the contested mark.
37      In the present case, as follows, inter alia, from paragraph 8 above, the contested decision is based on two pillars, namely, first, the finding that the applicant did not demonstrate the existence of bad faith on the part of the intervener when the application for registration of the contested mark was filed and, second, the finding that the intervener had due cause to apply for registration of that mark.
38      It follows from the case-law that, where the operative part of a decision is based on several pillars of reasoning, each of which would in itself be sufficient to justify that operative part, that decision should, in principle, be annulled only if each of those pillars is vitiated by an illegality. In such a case, an error or other illegality which affects only one of the pillars of reasoning cannot be sufficient to justify annulment of the decision at issue because that error could not have had a decisive effect on the operative part adopted by the decision-maker (see judgment of 20 January 2021, Jareš Procházková and Jareš v EUIPO – Elton Hodinářská (MANUFACTURE PRIM 1949), T‑656/18, not published, EU:T:2021:17, paragraph 19 and the case-law cited).
39      Thus, first of all, it is necessary to examine the merits of the finding that the applicant did not demonstrate that there was bad faith on the part of the intervener when the application for registration of the contested mark was filed, and the applicant’s complaints directed against that pillar of the contested decision.
40      In that regard, it should be noted, as observed in the case-law cited in paragraph 35 above, that it is for the applicant for a declaration of invalidity to prove the circumstances which substantiate a finding that
the EU trade mark proprietor had been acting in bad faith when it filed
the application for registration of that mark. Similarly, as the Board of Appeal rightly stated in paragraph 21 of the contested decision, it is necessary to establish the existence of bad faith when the application for registration of the contested mark was filed, namely 10 August 2016.
41      In the present case, the applicant put forward the following facts and arguments, which are also set out in paragraph 3 of the contested decision.
42      Firstly, the applicant submitted that company B had been active in the textile products sector since 1995 and had, in the course of trade, used a sign identical to the contested mark since 2009. Similarly, he stated that that company had been the proprietor of two Polish marks, one a word mark and the other a figurative mark, containing the word element ‘dzian druk’ which had expired in 2015.
43      Secondly, the applicant submitted that
C and he each held 50% of the shares in company B, and that C was the 100% shareholder in the intervener, with the result that the latter was aware of the use of the sign Dzian Druk. Similarly, the applicant submitted that the intervener held 95% of the shares in company A.
44      Thirdly, the applicant stated that there was a dispute between the shareholders of company B and that, in 2016, C was appointed as administrator of that company. The applicant stated that, subsequently, at a meeting of shareholders of that company, which he did not attend, D and E, who are C’s daughter and son-in-law, were appointed as members of the management board which, in turn, gave commercial power of attorney to C. The applicant stated that the application for registration of the contested mark was filed during that dispute.
45      Fourthly, the applicant claimed that C, D and E had appropriated the business activity of company B using the contested mark through the intervener and company A.
He submitted that the application for registration of the contested mark had been made only a few months after the dispute in question and that the intervener had dishonestly intended to appropriate that sign and create the impression that company A was linked to company B.
46      In that regard, in the first place, it should be noted that the applicant has adduced evidence relating to company B’s use of a sign identical to the contested mark in the course of trade, in particular for textile goods, which is not disputed by the intervener. However, account must be taken of the fact that the sign used by that company was not registered as a trade mark. That is a relevant circumstance in the light of the case-law cited in paragraph 33 above.
47      Similarly, it should be noted that, in order to find that the application for registration of the contested mark was filed in bad faith by the intervener, it is the interests of the proprietor of the sign at issue, namely company B, which must be taken into account.
48      In the second place, as regards the intervener’s awareness of company B’s use of a sign identical to the contested mark, it is not disputed that the intervener, wholly owned by C, who also owns 50% of company B, knew that company B used that sign in the course of trade.
49      However, as the Board of Appeal rightly stated in paragraph 18 of the contested decision, the fact that the applicant knows or must know that a third party has long been using, in at least one Member State, an identical or similar sign for an identical or similar product capable of being confused 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 (judgment of 11 June 2009, Chocoladefabriken Lindt Sprüngli, C‑529/07, EU:C:2009:361, paragraph 40).
50      In the third place, as regards the dispute between the shareholders of company B, it has indeed been held that the fact that one party had applied for registration of the contested mark, for which no earlier use had been demonstrated, only a few months after the start of the corporate dispute between it and the other party and which had created a period of uncertainty with regard to internal equilibrium within the latter, warranted particular attention in order to assess whether there was bad faith on its part (judgment of 11 July 2013, SA.PAR. v OHIM – Salini Costruttori (GRUPPO SALINI), T‑321/10, EU:T:2013:372, paragraph 30). In the present case, the Board of Appeal paid a high degree of attention to that aspect and, in particular, to the question of whether company B could have been represented when the application for registration of the contested mark was filed, as is apparent from paragraphs 23 to 29 of the contested decision.
51      In that regard, it must be noted that the Board of Appeal demonstrated that, contrary to the applicant’s claims, the applicant was aware of the shareholders’ meeting of company B held on 4 October 2016.
52      It must therefore be held that, in the present case, the existence of a dispute between the shareholders of company B cannot, in itself, demonstrate that the intervener acted in bad faith when the application for registration of the contested mark was filed. The applicant has not adduced evidence demonstrating that there was dishonest intent on the part of the intervener at the time of that filing in accordance with the case-law cited in paragraphs 29,
31 and 35 above.
53      In the fourth place, the arguments that the intervener, C, D or E appropriated the contested mark in order to create the impression that companies A and B are linked are purely speculative and unsubstantiated.
54      In particular, the only specific evidence relating to the use of the contested mark by company A submitted during the administrative proceedings is clearly insufficient to demonstrate any dishonest intention on the part of the intervener. It should be noted that the evidence to that effect submitted by the applicant during the administrative proceedings is limited to an Easter greeting card and three images. All of those elements are not dated and demonstrate simultaneous use of the contested mark and the sign GVF. Although they constitute circumstantial evidence, those elements, which are undated, do not make it possible to assess the context in which that mark has been used. Moreover, in one of the photos, it is possible to see the details of company B’s internet address, thus ruling out the argument that that mark was used unlawfully in order to mislead consumers.
55      It follows that, although the evidence submitted by the applicant during the administrative proceedings clarifies the context in which the contested mark was filed, it is nevertheless insufficient to demonstrate dishonest intention on the part of the intervener, as the Board of Appeal, in essence, found.
56      Thus, in view of all the circumstances of the present case which the Board of Appeal duly took into account, as is apparent, inter alia, from paragraph 30 of the contested decision and, in particular, from the fact that the sign which was identical to the contested mark was not registered,
the fact that the applicant had to show that the registration of that mark adversely affected company B’s interests and
the fact that the applicant did not adduce convincing evidence to that effect, it must be held that it has not been demonstrated in the present case that the intervener acted in bad faith when the contested mark was filed.
57      That conclusion cannot be called into question by the other complaints raised by the applicant.
58      Firstly, contrary to the applicant’s arguments, the Board of Appeal did take into account the link between company B and the intervener. It found, first, that ‘both parties knew that the sign was marketed and used before that filing date’ (paragraph 18 of the contested decision) and, second, that C held 50% of the shares in company B and 100% of the shares in the intervener (paragraphs 4, 20 and 22 of that decision).
59      Secondly, it must be noted that the Board of Appeal also took due account of the dispute between the shareholders of company B, as is apparent from paragraphs 23 to 29 of the contested decision (see paragraph 50 above).
60      Thirdly, as regards the applicant’s claim that the Board of Appeal disregarded the circumstances of the misleading use of the contested mark by company A, it must be noted that the Board of Appeal did not in fact examine those alleged circumstances or their effect on the possible existence of bad faith on the part of the intervener when the application for registration of the contested mark was filed. In that regard, it should be noted, however, that the Board of Appeal did refer to that argument of the applicant in paragraph 3 of the contested decision, with the result that the Board of Appeal cannot be accused of failing to take that argument into account (see, to that effect, judgment of 20 January 2021, MANUFACTURE PRIM 1949, T‑656/18, not published, EU:T:2021:17, paragraphs 63 and 64). On the contrary, it can be inferred from this that the Board of Appeal did not consider that argument to be relevant.
61      As is apparent from paragraph 55 above, the evidence adduced by the applicant during the administrative proceedings relating to the use of the contested mark by company A is not capable of demonstrating that the intervener acted in bad faith when the application for registration of the contested mark was filed, with the result that the applicant’s argument relating to the taking into account of that evidence must be rejected.
62      It follows that the Board of Appeal did not err in finding that the applicant had not demonstrated that the intervener had acted in bad faith when the application for registration of the contested mark was filed.
63      In those circumstances, in accordance with the case-law cited in paragraph 38 above, there is no need to examine the applicant’s complaints directed against the second pillar of the contested decision.
64      Accordingly, the applicant’s single plea in law must be rejected and the action must be dismissed in its entirety.
Costs
65      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.
66      Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by EUIPO and the intervener.
On those grounds,
THE GENERAL COURT (Second Chamber)
hereby:
1.      Dismisses the action;
2.      Orders Mr Piotr Włodarczyk to pay the costs.
Tomljenović
Schwarcz
Nõmm
Delivered in open court in Luxembourg on 24 November 2021.
E. Coulon
M. van der Woude
Registrar
President
*      Language of the case: English.