General Court clarifies requirements for action based on Article 8(4)

In Dimian AG v Office for Harmonisation in the Internal Market (OHIM) (Case T-581/11, October 23 2013), the General Court has dismissed an appeal against a decision of the Second Board of Appeal of OHIM, and clarified the requirements for an action based on Article 8(4) of the Community Trademark Regulation (207/2009).

On October 29 2007 Bayer Design Fritz Bayer GmbH & Co KG (not to be confused with the chemical company Bayer AG) filed a Community trademark (CTM) application for BABY BAMBOLINA (and heart design) in respect of goods in Class 28 of the Nice Classification, including dolls and accessories for dolls. The CTM was registered in September 2008 and, on July 9 2009, Dimian AG filed an application for a declaration of invalidity with OHIM based on its unregistered trademark BAMBOLINA, which was allegedly used in many EU countries for dolls and their accessories. Dimian's action was based on Article 53(1)(c) read in conjunction with Article 8(4) of the regulation. The invalidity action was rejected by the Cancellation Division of OHIM; Dimian also failed before the Second Board of Appeal of OHIM and subsequently before the General Court, as it was not able to show a sufficient use of BAMBOLINA in the course of the trade for a specific period of time.

Dimian and some associated companies apparently started to use BAMBOLINA for dolls and accessories for dolls in 2004. Dimian tried to obtain a German registration in 2004, but its application was rejected by the examiner on the grounds that BAMBOLINA lacked distinctiveness and was merely descriptive. In May 2008 related companies of Dimian started to file CTMs which all predated Bayer Design's CTM. Bayer Design allowed some of these CTMs to proceed, but opposed others which were then withdrawn or are still pending. Dimian and the associated companies apparently wanted to clear the way for their CTMs by filing the invalidity action against the prior sign BABY BAMBOLINA in July 2009.

In the course of the proceedings, Dimian focused on Articles 8(4) and 53(1)(c) of the regulation, according to which the proprietor of an unregistered trademark or other sign can successfully oppose, or request the cancellation of, an earlier CTM if the following cumulative conditions are met:

• the unregistered trademark or other sign is used in the course of trade;
• the mark has more than mere local significance;
• the unregistered trademark or other sign was acquired prior to the date of application of the earlier CTM; and
• the unregistered trademark or other sign confers on its proprietor the right to prohibit the use of a subsequent sign under the local law of the member state in which the prior sign was used.

The General Court held that these conditions must be interpreted in the light of the uniform standards of EU law (Paragraph 23). Furthermore, it pointed out that the reference to "more than mere local significance" cannot be limited to the geographical dimension (Paragraphs 24 and 25). This means that it is necessary to determine not only the territory where the sign is used, but also the economic dimension of this sign's significance, the length of time of the use and the degree to which it has been used. The exposure given to the sign through advertising and on the Internet is also relevant. Therefore, the General Court held that the examination of these conditions must not confine itself to a purely formal assessment, but must examine the impact of that sign in the territory in question after it has been used as a distinctive element. This also implies a certain volume of sales of products, as well as a relationship between this volume of sales and the general volume of sales of products of this kind in the country at issue (Paragraph 39). Therefore, the owner of the unregistered sign has to show its position on the relevant local market (Paragraphs 53 to 55).

The General Court further pointed out that, when the owner of the unregistered sign asserts use in several countries, it must be assessed separately for each of the territories and a cumulative assessment is normally not possible (Paragraph 30). The General Court also confirmed the finding of the Second Board of Appeal that the use of an earlier 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 trademark” (Paragraph 29).

Having laid down these general guidelines for use of a sign in the course of the trade under Article 8(4), the General Court considered to the relevant period of time during which use had to be shown. The General Court stated that the earlier right must still exist at the time when the notice of opposition or the invalidity action are filed, and referred to Rule 19(2)(d) of the Community Trademark Implementation Regulation (2868/95), according to which, in an opposition based on Article 8(4) of the Community Trademark Regulation, and likewise in a cancellation action, the applicant must provide evidence of:

• the acquisition of the earlier right;
• the continued existence of that right; and
• the scope of protection of that right.

While Article 8(4) refers only to the acquisition and the scope of protection of the earlier right, Rule 19(2)(d) of the Implementing Regulation sets out a further requirement - namely, that the unregistered right must still exist when the opposition or cancellation action is filed. The General Court did not discuss these differences in detail, but justified this in Paragraph 27 by arguing that “it is precisely the use of the sign in the course of trade which is the basis of the existence of the right to that sign”. This reasoning might be correct, but further analysis by the General Court in this respect would have been appropriate.

With this (additional) requirement in mind, neither the Cancellation Division, nor the Board of Appeal, nor the General Court considered the use of BAMBOLINA by Dimian in the period between 2004 and 2007 (ie, prior to the CTM application for BABY BAMBOLINA), but only examined the proof of use of the unregistered sign BAMBOLINA between October 29 2007 (the filing date of the CTM) and July 2009 (the filing date of the invalidity action). The General Court clearly stated that the sales which were asserted by Dimian in an affidavit for 2007 did not justify any conclusions for the following years (2008 and 2009), as it could not be assumed that the sales would have continued on the same level.

Dimian had also submitted some catalogues for 2008 and 2009. The General Court found that these catalogues did not demonstrate use of the earlier mark, holding that most of them were limited to a specific period of time, which meant that Dimian has not submitted any evidence at all for certain months. More importantly, the General Court also stated that the submission of four pages from catalogue did not make it possible to conclude that the mark had actually been used, that a specific volume of sales had been made or that the volume of sales of previous years had been maintained. Dimian’s own catalogue was rejected as lacking independence; arguably, this argument is not very convincing as trademark owners use catalogues to promote their own products. Nevertheless, the court found that Dimian's own catalogue did not make it possible to conclude whether it had been in fact distributed and whether products displayed in the catalogue had been sold.

The General Court thus held that the evidence submitted by Dimian to prove use of BAMBOLINA in the course of the trade between 2008 and 2009 was not sufficient. Therefore, the court found that Dimian had not fulfilled the conditions set forth by Article 8(4) and rejected the application for a declaration of invalidity.

This decision of the General Court provides two practical tips:

• If a company wants to use a trademark, it is always advisable to file a formal trademark application and to do everything possible in order to obtain a registration, otherwise it is much more difficult to prove the cumulative conditions under Article 8(4).
• It is recommended to submit all the evidence available, and not to restrict the submissions to affidavits and catalogues, as they could be rejected on the grounds that they are insufficient or lack independence.

The decision also leaves one legal question open - whether the additional requirement laid down in Rule 19 (2d) of the Implementing Regulation (ie, the unregistered sign must still exist) is an implied requirement already contained in Article 8(4) of the Community Trademark Regulation, or whether this requirement is in conflict with the other conditions laid down in Article 8(4). The General Court missed an opportunity to clarify this issue.

Carsten Albrecht, FPS Fritze Wicke Seelig, Hamburg