Iranian Tobacco's appeals stubbed out

European Union

In Iranian Tobacco Co v Office for Harmonization in the Internal Market (OHIM) (Cases T- 223/08 and T-245/08, December 3 2009), the General Court has dismissed appeals against two decisions of the Board of Appeal of OHIM and upheld the applications for the revocation of the marks BAHMAN and TIR for cigarettes and tobacco.

In January 1999 and February 2000 Iranian Tobacco Co (established in Iran) registered the marks BAHMAN (and design) and TIR (and design) as Community trademarks (CTM) for cigarettes and tobacco in Class 34 of the Nice Classification. In November 2005 AD Bulgartabac Holding Sofia (located in Bulgaria) applied for the revocation of the registrations on the grounds of non-use under Articles 55(1)(a) and 50(1)(a) of the Community Trademark Regulation (40/94). In March 2007 the Cancellation Division of OHIM decided that the marks should be revoked because Iranian Tobacco had not submitted any evidence of use (or proper reasons for non-use). Iranian Tobacco appealed to the Board of Appeal of OHIM, which confirmed the decisions of the Cancellation Division. Iranian Tobacco appealed to the General Court.

Iranian Tobacco raised two pleas in both cases, alleging infringement of:

  • Article 55(1)(a) in respect of the requirements for an application for revocation to be admissible; and
  • Article 50(1)(a) in respect of the reasons for revocation based on the absence of genuine use.

In respect of the first plea, Iranian Tobacco argued that the decisions should have been overturned because, even if “any person” could apply for revocation on the grounds of non-use, this person had to be a natural or legal person who would be within the scope of the regulation and would have commercial interests. A legitimate interest would thus be required, even in the case of an application for cancellation on absolute grounds. Iranian Tobacco also argued that an application for revocation by a national of a non-EU country was not acceptable (Bulgaria was not a member state at the time the application for revocation was filed).

Bulgartabac claimed that it had a legitimate interest to apply for revocation because it was the owner of identical Slovenian trademark registrations. However, Iranian Tobacco argued that these marks were evidence of anti-competitive behaviour and bad faith, and should have rendered the applications for revocation inadmissible.

In respect of the second plea, Iranian Tobacco claimed that its marks were used on a 'virtual' market - that is, on its website.

The question before the court was whether Article 55(1)(a) provided that the admissibility of an application for revocation required the existence of a legitimate interest and EU nationality, or a domicile within the EU.        

The court held that Article 55(1)(a) did not refer to a requirement of nationality or legitimate interest in relation to an application for revocation or a cancellation action based on absolute grounds. The only requirement was that the action was introduced by a natural or legal person, or any group or body which had the capacity to sue and be sued. Only cancellation actions based on relative grounds had to be filed by trademark owners, owners of earlier rights or authorized licensees.

The court further held that a CTM registration should be protected only if it is in use. Therefore, in the absence of use during a fixed period, the possibility to challenge a CTM should be widely available.

There was no requirement for a natural or legal person to be an EU national or to have a domicile, residence or real and effective industrial or commercial establishment within the European Union in order to have the capacity to sue or be sued under the regulation. The only requirement in the absence of nationality or domicile, residence, or real and effective industrial or commercial establishment within the European Union, was to be represented before OHIM in all proceedings (other than the filing of CTM applications) further to Article 88 of the regulation.

In respect of the alleged anti-competitive behaviour resulting from the registration of identical Slovenian marks and the alleged bad faith of Bulgartabac, the court stated that there was no need to refer to Article 79 of the regulation (general principles of procedural law recognized in the member states) or to Article 4(4)(g) of the First Trademarks Directive (89/104/EEC) in respect of a trademark, filed in bad faith, which would be liable to be confused with a mark in use abroad.

The court explained that:

  • the provisions of Article 55(1)(a) of the regulation were not ambiguous and did not require the demonstration of good faith by the applicant for revocation in order to be admissible or well-grounded; and
  • Article 4(4)(g) of the directive related only to the registration of national marks, and not to revocation proceedings.

The argument concerning the alleged bad faith was irrelevant in these proceedings insofar as Bulgartabac did not have to show any special standing to apply for revocation. The court concluded that Bulgartabac was a legal person and was thus entitled to apply for revocation.

In response to the second plea, the court held that Iranian Tobacco had not challenged the alleged absence of evidence of use of the mark during the OHIM proceedings. Facts which were not submitted by the parties before OHIM could not be submitted at the appeal stage. The second plea was thus rejected in both cases.

Rejecting the appeals and upholding the board’s decisions, the court stated that there had been no violation of Article 55(1)(a) or 50(1)(a).

These cases were decided only a few weeks after the advocate general's opinion in Lancôme v OHIM (Case C-408/08). They confirm the difference between the protection of the general public interest in an application for revocation or in cancellation proceedings on absolute grounds on the one hand, and private interests in cancellation proceedings on relative grounds on the other.

Any natural or legal person entitled to sue or be sued may file an application for revocation (and a cancellation action on absolute grounds) and limit the protection of CTMs to those which are in use. The demonstration of a legitimate interest is not required, by contrast with a cancellation action on relative grounds. The attempt by Iranian Tobacco to base its claim on the nationality or domicile of Bulgartabac failed because this is not a requirement of admissibility.

Emilie Scheffer and Chris McLeod, Hammonds LLP, London

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