Naazneen Investments v OHMI - Energy Brands (SMART WATER) (Judgment) [2015] EUECJ T-250/13 (18 March 2015)

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(Community trade mark — Revocation proceedings — Community word mark SMART WATER — Genuine use — Article 51(1)(a) of Regulation (EC) No 207/2009 — Obligation to state reasons — Article 75 of Regulation No 207/2009)

Naazneen Investments Ltd, established in Limassol (Cyprus), represented by P. Goldenbaum, I. Rohr and T. Melchert, lawyers,

Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by A. Pohlmann, acting as Agent,

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

Energy Brands, Inc., established in New York, New York (United States), represented by S. Malynicz, Barrister, and D. Stone, Solicitor,

ACTION brought against the decision of the Second Board of Appeal of OHIM of 18 February 2013 (Case R 1101/2011-2), relating to revocation proceedings between Energy Brands, Inc. and Naazneen Investments Ltd,

composed of M. van der Woude, President, I. Wiszniewska-Białecka (Rapporteur) and I. Ulloa Rubio, Judges,

having regard to the response of OHIM lodged at the Court Registry on 24 July 2013,

having regard to the response of the intervener lodged at the Court Registry on 5 August 2013,

having regard to the decision of 4 November 2013 refusing leave to lodge a reply,

having regard to the observations of the parties lodged at the Court Registry on 23 July, 1 and 7 August 2014,

1 On 29 June 1999, Water Concepts, Inc. obtained from the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) the registration under the number 781153 of the Community word mark SMART WATER on the basis of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), as amended (replaced by Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1)).

2 The goods in respect of which the mark at issue was registered are in Class 32 of the Nice Agreement on 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 to the following description: ‘Beverages, namely water with dietary supplements’.

3 On 25 February 2002, OHIM was informed of the assignment of the mark at issue to Gondwana Trade Getränke GmbH & Co. KG, which later became Gondwana Trade International Brands GmbH & Co. KG (‘Gondwana’).

4 On 21 June 2007, OHIM was informed of the assignment of the mark at issue to the applicant, Naazneen Investments Ltd.

5 On 31 March 2008, the registration of the mark at issue was renewed until 24 March 2018.

6 On 3 July 2009, the intervener, Energy Brands, Inc., filed an application pursuant to Article 51(1)(a) of Regulation No 207/2009 for the revocation of the mark at issue for all the goods in respect of which it had been registered.

7 By decision of 18 May 2011, the Cancellation Division upheld the intervener’s application for revocation.

8 On 25 May 2011, the applicant filed a notice of appeal with OHIM, under Articles 58 to 64 of Regulation No 207/2009, against the decision of the Cancellation Division.

9 By decision of 18 February 2013 (‘the contested decision’), the Second Board of Appeal of OHIM confirmed the decision of the Cancellation Division. The Board of Appeal stated that as the application for revocation had been lodged on 3 July 2009, the five-year period to be taken into consideration for the assessment of genuine use of the mark at issue was from 3 July 2004 until 2 July 2009 (‘the relevant period’). It found, first, that the evidence provided by the applicant did not make it possible to establish that the mark at issue had been put to genuine use. Second, it found that there were no proper reasons for non-use.

12 In support of its action, the applicant raises two pleas in law, alleging, respectively, infringement of Article 51(1)(a) of Regulation No 207/2009 and infringement of Article 75 of Regulation No 207/2009.

The second plea in law, alleging infringement of Article 75 of Regulation No 207/2009

14 The first sentence of Article 75 of Regulation No 207/2009 provides that decisions of OHIM are to state the reasons on which they are based. That obligation to state reasons has the same scope as that which derives from Article 296 TFEU, pursuant to which the reasoning followed by the author of the act must be disclosed in a clear and unequivocal manner. Its purpose is twofold: first, to enable the persons concerned to ascertain the reasons for the measure adopted in order to defend their rights and, second, to enable the Courts of the European Union to exercise their power to review the legality of the decision (see judgment of 13 December 2011 in Meica v OHIM — Bösinger Fleischwaren (Schinken King), T‑61/09, EU:T:2011:733, paragraph 17 and the case-law cited).

15 The question whether the statement of reasons for a decision satisfies those requirements is to be assessed by reference not only to its wording but also to its context and the entire body of legal rules governing the matter in question (see judgment in Schinken King, cited in paragraph 14 above, EU:T:2011:733, paragraph 18 and the case-law cited).

16 When the Board of Appeal confirms a decision of the Cancellation Division in its entirety, and given the continuity in terms of function between the Cancellation Divisions and the Boards of Appeal, to which Article 64(1) of Regulation No 207/2009 attests, that decision, together with its statement of reasons, forms part of the context in which the Board of Appeal’s decision was adopted, a context which is known to the parties and enables the Court to carry out fully its review as to whether the Board of Appeal’s assessment was well founded (see judgment in Schinken King, cited in paragraph 14 above, EU:T:2011:733, paragraph 19 and the case-law cited).

17 Lastly, the Boards of Appeal cannot be required to provide an account that follows exhaustively and one by one all the lines of reasoning articulated by the parties before them. The reasoning may therefore be implicit, on condition that it enables the persons concerned to ascertain the reasons for the Board of Appeal’s decision and provides the competent Court with sufficient material for it to exercise its power of review (judgment of 9 July 2008 in Reber v OHIM — Chocoladefabriken Lindt & Sprüngli (Mozart), T‑304/06, ECR, EU:T:2008:268, paragraph 55).

18 In the present case, the applicant claims that, in the contested decision, the Board of Appeal did not take into account certain evidence of use of the mark at issue. According to the first plea in law that evidence consists of the following: advertisements (Annexes 22, 25, 26 and 45), the invoice from a photographer (Annex 30), evidence of promotional activities (Annex 27, attachments 4 to 7, 15 and 16), evidence relating to the production of beverages and labels (Annexes 16, 20, 21, 28 and 29), evidence of non-disclosure agreements concluded between Gondwana and beverage manufacturers (attachments 11 and 12) and extracts from Gondwana’s website (Annex 35).

19 It must be observed that, having regard to the case-law cited in paragraph 16 above, given that the Board of Appeal confirmed the decision of the Cancellation Division in its entirety, the statement of reasons concerning that evidence set out in the Cancellation Division’s decision must be taken into account. It is apparent from the decision of the Cancellation Division that it analysed all the evidence provided by the applicant, including the evidence referred to in paragraph 18 above. The Board of Appeal expressly mentions the analysis made by the Cancellation Division. The fact that the contested decision does not refer to Annex 45 is irrelevant, since that annex merely supplements Annex 22 by specifying the print run per issue of the German magazine that appears in Annex 22.

20 The applicant also complains that the Board of Appeal infringed the obligation to state reasons by reproducing, in the grounds of the contested decision (paragraphs 28, 35, 36 and 39 to 41), certain passages from the grounds of the Cancellation Division’s decision and certain passages from the Board of Appeal’s decision of 9 March 2010 in Case R 764/2009-4, without having examined the individual circumstances of the case.

21 It must be stated that the Board of Appeal, in confirming the decision of the Cancellation Division, could reproduce the latter’s assessments, which are obviously assessments of the circumstances of the case. Furthermore, nothing precludes the Board of Appeal from reproducing reasoning set out in an earlier decision that is relevant to the case before it. Lastly, contrary to what the applicant claims, the fact that the Board of Appeal did not provide a translation of that earlier decision in the language of the case cannot constitute a failure to provide a sufficient statement of reasons. The Board of Appeal did not merely refer to that earlier decision, but reproduced the relevant passages from that decision in the contested decision.

22 Moreover, as regards the applicant’s argument that the Board of Appeal did not address all the arguments seeking to challenge the Cancellation Division’s assessment concerning certain evidence of genuine use of the mark at issue, it must be pointed out, first, that by confirming the analysis made by the Cancellation Division — according to which proof of genuine use of the mark at issue had not been adduced — the Board of Appeal implicitly rejected the applicant’s arguments and, second, that having regard to the case-law cited in paragraph 17 above, the Board of Appeal was not required to address each of the arguments raised by the applicant.

The first plea in law, alleging infringement of Article 51(1)(a) of Regulation No 207/2009

24 The first plea in law is divided, in essence, into two complaints. By the first complaint, the applicant argues that the Board of Appeal was wrong to find that the applicant had not proved genuine use of the mark at issue in the European Union during the relevant period. By the second complaint, raised in the alternative, the applicant claims that the Board of Appeal was wrong to find that there were no proper reasons for non-use of the mark at issue.

Proof of genuine use of the mark at issue in the European Union during the relevant period

25 According to the case-law, there is genuine use of a trade mark where the mark is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services; genuine use does not include token use for the sole purpose of preserving the rights conferred by the mark (see, by analogy, judgment of 11 March 2003 in Ansul, C‑40/01, ECR, EU:C:2003:145, paragraph 43). Moreover, the condition relating to genuine use of the trade mark requires that the mark, as protected on the relevant territory, be used publicly and outwardly (judgment of 8 July 2004 in Sunrider v OHIM — Espadafor Caba (VITAFRUIT), T‑203/02, ECR, EU:T:2004:225, paragraph 39).

26 When assessing whether use of the trade mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether the commercial use of the mark is real, particularly the practices regarded as warranted in the relevant economic sector as a means of maintaining or creating market shares for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark (judgment in VITAFRUIT, cited in paragraph 25 above, EU:T:2004:225, paragraph 40; see also, by analogy, judgment in Ansul, cited in paragraph 25 above, EU:C:2003:145, paragraph 43).

27 As regards the extent of the use to which the mark at issue has been put, account must be taken, in particular, of the commercial volume of the overall use, as well as of the length of the period during which the mark was used and the frequency of use (judgments in VITAFRUIT, cited in paragraph 25 above, EU:T:2004:225, paragraph 41, and of 8 July 2004, MFE Marienfelde v OHIM — Vétoquinol (HIPOVITON), T‑334/01, ECR, EU:T:2004:223, paragraph 35).

28 In examining, in a particular case, whether a trade mark has been put to genuine use, an overall assessment must be carried out, which takes into account all the relevant factors of the particular case. That assessment implies a degree of interdependence between the factors taken into account. Thus, the low volume of goods marketed under the mark may be offset by the fact that use of the mark was extensive or very regular and vice versa (judgments in VITAFRUIT, cited in paragraph 25 above, EU:T:2004:225, paragraph 42, and HIPOVITON, cited in paragraph 27 above, EU:T:2004:223, paragraph 36).

29 In the first place, the applicant claims, in essence, that the Board of Appeal was wrong to confirm the Cancellation Division’s conclusion that the evidential value of the affidavits that it had provided was questionable.

30 According to settled case-law, affidavits from a person who has close links with the party concerned are of lower evidential value than those from third parties and they cannot therefore, on their own, constitute sufficient proof of use of the mark (see, to that effect, judgment of 25 October 2013 in Biotronik SE v OHIM — Cardios Sistemas (CARDIO MANAGER), T‑416/11, EU:T:2013:559, paragraph 41 and the case-law cited). In the present case, the affidavits are from Mr S. R., who is the Chief Executive Officer of Gondwana, and Mr J. R., who, although being an external consultant to Gondwana, has had a contractual link with Gondwana. Taking into account the existence of a link between the authors of the affidavits and the proprietor of the mark, the Board of Appeal confirmed, rightly, the Cancellation Division’s assessment that the evidential value of the affidavits was lower than had those affidavits come from third parties. In any event, the Board of Appeal took them into account and took the view that they did not serve to prove genuine use of the mark at issue.

31 In the second place, the applicant complains, in essence, that the Board of Appeal did not assess correctly the evidence of the existence of actual sales.

32 Thus, first, the applicant argues that the Board of Appeal ought to have found that the order for twelve pallets of bottles in order to carry out ‘test sales’, referred to in the letter that appears in Annex 23 to the affidavit of Mr S. R., was relevant for the purposes of establishing genuine use of the mark at issue. It claims that it is apparent from the case-law that the fact that products covered by a trade mark are provided free of charge does not prevent genuine use of that mark from being shown.

33 In this connection, suffice it to state that the Board of Appeal did take into account the delivery of those twelve pallets of bottles established by two invoices (attachment 9) as being evidence of actual sales to prove genuine use of the mark at issue (paragraph 29 of the contested decision). Consequently, the applicant’s argument cannot succeed.

34 Second, by emphasising the fact that the test sales of those twelve pallets of bottles represented 15 552 bottles, the applicant appears to be claiming that those sales were sufficient in order to establish genuine use of the mark at issue.

35 It must be recalled that the goods in question are beverages in Class 32, which are mass consumption goods aimed at the general public. In view of the fact that the market for the goods in question is of a significant size, as the Board of Appeal observed (paragraph 28 of the contested decision), a quantity of 15 552 bottles can only be regarded as small. Accordingly, the Board of Appeal was right in taking the view that, on the basis of the evidence provided, the quantity of the goods sold was so modest that it could not be concluded that there had been genuine use of the mark at issue in respect of the goods in question (paragraph 29 of the contested decision).

36 Moreover, as regards Annex 19 and Annex 24 to the affidavit of Mr S. R., on which the applicant also relies as evidence of actual sales, it is clear that those annexes do not prove the existence of such sales. Annex 19 contains only a price offer made to Gondwana for minerals and ascorbic acid together with an explanation relating to the dosage of those minerals and acid so that they dissolve in water. Annex 24 is an e-mail of 9 August 2007, with the subject ‘sample shipment’, in which Mr J. R. asks an employee of Gondwana to ‘attend to the shipment of one tray each Smart Water to company [X]’. That annex does not provide any details in relation to that delivery or in relation to the reply given to Mr J. R., as the Cancellation Division observed. The Board of Appeal was therefore right in not taking that evidence into account as proof of actual sales.

37 Accordingly, contrary to what the applicant claims, the Board of Appeal did correctly assess the evidence as to the existence of actual sales that the applicant provided.

38 In the third place, the applicant complains that the Board of appeal did not find that certain evidence produced by it before OHIM showed imminent marketing of the goods in question. In that regard, the applicant relies on the following evidence: advertisements (Annexes 22, 25, 26 and 45), the invoice from a photographer (Annex 30), evidence of promotional activities (Annex 27, attachments 4 to 7, 15 and 16) and evidence relating to the production of beverages and labels (Annexes 16, 20, 21, 28 and 29).

39 In this connection, as the applicant states, the Court of Justice has held, in paragraph 37 of the judgment in Ansul, cited in paragraph 25 above (EU:C:2003:145), that use of a mark must relate to goods or services already marketed or whose marketing is imminent and for which preparations by the undertaking to secure customers are under way, particularly in the form of advertising campaigns.

40 However, in the present case, the advertising and promotional activities and the activities relating to the production of beverages and labels, to which the evidence listed in paragraph 38 above attests, relate solely to the years 2006 and 2007. The applicant has not adduced any proof that the goods in question were marketed between 2007 and the end of the relevant period, namely 2 July 2009.

41 Furthermore, as regards the advertisements that were published in an issue of the German magazine ‘Auto Mobiles’ in 2007 (Annex 22), and in five issues of the German magazine ‘Motor Sport Magazin’ in 2007 (Annex 26), those advertisements cannot be regarded as equivalent to an advertising campaign. An advertising campaign presupposes the use of various media, a certain intensity and the possibility of reaching a large audience, and therefore advertisements in two specialist German magazines cannot suffice.

42 Accordingly, it is clear that that evidence cannot be regarded as proof of imminent marketing and the Board of Appeal was right in not assessing it as such.

43 In the fourth place, the applicant claims that the evidence of the existence of non-disclosure agreements concluded between Gondwana and beverage manufacturers (attachments 11 and 12) and the extracts from Gondwana’s website (Annex 35) also proved use of the mark at issue in respect of the goods in question.

44 As regards the non-disclosure agreements, suffice it to observe that the applicant itself acknowledges that those non-disclosure agreements were not followed by contracts for the manufacture and delivery of the goods in question. As for the extracts from the website, suffice it to observe that the applicant did not put forward, before the Board of Appeal, any argument that would make it possible to call in question the Cancellation Division’s finding that those extracts merely include the message ‘site is under construction, please visit us again later!’ and do not show any actual commercial activity (paragraph 9 of the contested decision).

45 The applicant is therefore wrong to claim that the Board of Appeal ought to have found that the non-disclosure agreements and the extracts from Gondwana’s website also proved use of the mark at issue.

46 In the fifth place, the applicant argues that, in accordance with the case-law cited in paragraph 25 above, use of a trade mark is to be regarded as token if its sole purpose is to preserve the rights conferred by the registration of the mark. It claims that the Board of Appeal contradicted itself by stating, on the one hand, in paragraph 31 of the contested decision, that the total amount of transactions over the relevant period seemed to be token, and by stating, on the other hand, in paragraph 42 of the contested decision, that it did not doubt the intention of the proprietor of the mark at issue to make real use of that mark in relation to the goods in question.

47 In this connection, suffice it to point out that the applicant’s argument is based on an incorrect reading of the contested decision. The Board of Appeal used the term ‘token’ to describe the total amount of transactions, approximately EUR 800, and not to categorise the use of the mark at issue.

48 In the sixth place, the applicant claims that the Board of Appeal, by relying solely on the insufficient use made of the mark at issue, did not comply with the case-law according to which there is no quantitative threshold, determined a priori and in the abstract, that must be chosen in order to determine whether use is genuine. The Board of Appeal also failed to comply with the case-law according to which even minimal use may be sufficient in order to be deemed genuine.

49 According to the case-law, the turnover achieved and the volume of sales of the goods under the mark at issue cannot be assessed in absolute terms but must be assessed in relation to other relevant factors, such as the volume of commercial activity, the production or marketing capacities or the degree of diversification of the undertaking using the trade mark and the characteristics of the goods or services on the relevant market. As a result, use of the mark at issue need not always be quantitatively significant in order to be deemed genuine (see, to that effect, judgments in VITAFRUIT, cited in paragraph 25 above, EU:T:2004:225, paragraph 42, and HIPOVITON, cited in paragraph 27 above, EU:T:2004:223, paragraph 36). Even minimal use can therefore be sufficient in order to be deemed genuine, provided that it is warranted, in the economic sector concerned, to maintain or create market shares for the goods or services protected by the mark. Consequently, it is not possible to determine a priori, and in the abstract, what quantitative threshold should be chosen in order to determine whether use is genuine. A de minimis rule, which would not allow OHIM or, on appeal, the General Court, to appraise all the circumstances of the dispute before it, cannot therefore be laid down (see, to that effect, order of 27 January 2004 in La Mer Technology, C‑259/02, ECR, EU:C:2004:50, paragraphs 25 and 27, and judgment of 11 May 2006 in Sunrider v OHIM, C‑416/04 P, ECR, EU:C:2006:310, paragraph 72).

50 In the present case, contrary to what the applicant claims, the Board of Appeal did not determine a minimum threshold ‘a priori and in the abstract’ so as to determine whether the use was genuine. In accordance with the case-law, it examined the volume of sales of the goods in question in relation to other factors, namely the economic sector concerned and the nature of the goods in question.

51 The Board of Appeal accordingly took the view that the market for the goods in question was of a significant size (paragraph 28 of the contested decision). It found also that the goods in question, namely non-alcoholic beverages, were for everyday use, were sold at a very reasonable price and that they were not expensive, luxury goods sold in limited numbers on a narrow market (paragraph 29 of the contested decision). Furthermore, it took the view that the total amount of transactions over the relevant period, an amount of EUR 800, seemed to be so token as to suggest, in the absence of supporting documents or convincing explanations to demonstrate otherwise, that use of the mark at issue could not be regarded as sufficient, in the economic sector concerned, for the purposes of maintaining or creating market shares for the goods covered by that mark (paragraph 31 of the contested decision).

52 It is therefore apparent, contrary to what the applicant claims, that it was in accordance with the case-law cited in paragraph 49 above that the Board of Appeal took the view that, in the present case, minimal use was not sufficient to be deemed genuine.

53 In the seventh place, the applicant argues that the Board of Appeal was wrong to find that only extensive and very regular use of the mark at issue could offset a small volume of sales. The Board of Appeal ought to have taken into consideration the reasons why the mark at issue had not been used more extensively and throughout the relevant period, and examined whether those reasons could justify a small volume of sales. The applicant states that, after the failure of the launch of the mark at issue in 2003 and 2004, the proprietor of that mark made a further attempt to launch that mark in 2006 and 2007. It follows from the judgment in HIPOVITON, cited in paragraph 27 above (EU:T:2004:223, paragraph 53), that the fact that evidence of use relates to a launch phase of the products concerned could account for a small commercial volume and, consequently, could be relevant for the assessment of genuine use. Furthermore, the applicant claims that the Board of Appeal ought to have examined whether the fact that the bottles produced by a third party for Gondwana turned out to be defective and the fact that a third party had brought revocation proceedings against the mark at issue explained the small commercial volume of the goods in question.

54 It is true that, according to paragraph 53 of the judgment in HIPOVITON, cited in paragraph 27 above (EU:T:2004:223), on which the applicant relies, an indication that the proprietor of the mark had relaunched the marketing of the products concerned and that, consequently, the commercial volume represented by them was modest can be relevant in assessing the genuineness of the use which was made of that mark, since the initial phase of marketing of a product may last more than a few months.

55 However, the circumstances of the case which gave rise to that judgment are different from those of the present case. In the former case, the few months preceding the expiry of the relevant period, during which the mark at issue had started to be used, could be considered to be a launch phase. The same is not true of the period of almost three years between the attempt to launch the mark at issue invoked by the applicant and the end of the relevant period.

56 As regards the other reasons put forward by the applicant in order to explain the small commercial volume of sales, it must be pointed out that, when the Board of Appeal assesses the genuine use of a trade mark, it takes into account the evidence of the existence of such use and not evidence explaining non-use of that trade mark, such as evidence of the defective nature of the goods in question and revocation proceedings brought by a third party against the mark at issue. That evidence was, however, taken into account by the Board of Appeal in its assessment of the reasons for non-use of that mark.

57 In the eighth place, the applicant complains that the Board of Appeal did not carry out an overall assessment of the evidence.

58 In this connection, it must be pointed out that the Board of Appeal, taking into account the affidavit of Mr S. R. (attachment 1), the two invoices (attachment 9) and an order (Annex 23 to attachment 1) (paragraph 28 of the contested decision), indicated that even if the two invoices were to be regarded as proof of actual sales of the goods in question to customers, the very limited volume of sales shown by those invoices was not offset by extensive or very regular use of the mark at issue (paragraphs 29 to 31 of the contested decision). It stated that, even taking into account the affidavits of Mr S. R. and Mr J. R., and the advertisements provided by the applicant, the evidence as a whole did not support the conclusion that the mark at issue was objectively present on the market in a manner that was effective, consistent over time and stable (paragraph 32 of the contested decision).

59 Lastly, the Board of Appeal concluded that, having regard to the very limited evidence as to the extent of use that had been submitted and the fact that no solid and objective evidence had been submitted from which the extent of use during the relevant period could be inferred, and on the basis of an overall assessment of the evidence submitted, the Cancellation Division had not erred in taking the view that the mark at issue had not been put to genuine use during the relevant period in the European Union in connection with the goods in question (paragraph 33 of the contested decision).

60 Accordingly, the applicant cannot claim that the Board of Appeal merely assessed the evidence separately and did not carry out an overall assessment of the evidence.

61 It follows from all the foregoing that the first complaint of the first plea in law must be rejected.

62 Pursuant to Article 15 of Regulation No 207/2009 and Article 51(1)(a) of that regulation, non-use of a trade mark may be justified by proper reasons.

63 According to the case-law, only obstacles having a sufficiently direct relationship with a trade mark making its use impossible or unreasonable, and which arise independently of the will of the proprietor of that mark, may be regarded as ‘proper reasons for non-use’ of that mark. It must be assessed on a case-by-case basis whether a change in the strategy of the undertaking to circumvent the obstacle under consideration would make the use of that mark unreasonable (see, by analogy, judgment of 14 June 2007 in Häupl, C‑246/05, ECR, EU:C:2007:340, paragraph 54).

64 In the present case, the applicant argues that the Board of Appeal was wrong to find that the problems encountered in 2007 concerning the manufacture of the beverages constituting the goods in question and the revocation proceedings brought in 2008 by a third party did not constitute proper reasons for non-use of the mark at issue.

65 As regards the problems concerning the manufacture of the beverages, the applicant complains that the Board of Appeal took the view that these were difficulties and market failures which constituted a natural part of running a business. It submits that since those beverages were produced by a third party, the interruption to the marketing thereof was independent of the will of the proprietor of the mark at issue. Furthermore, since the goods were defective, it had the choice either to stop using the mark at issue or to put consumers’ health in danger. Lastly, the applicant argues, relying on the judgment in Häupl, cited in paragraph 63 above (EU:C:2007:340, paragraph 54), that a change in strategy in order to circumvent the obstacle under consideration made the use of the mark at issue unreasonable.

66 According to the case-law, ‘proper reasons’ refers to circumstances unconnected with the trade mark proprietor rather than to circumstances associated with his commercial difficulties (see, to that effect, judgment of 9 July 2003 in Laboratorios RTB v OHIM — Giorgio Beverly Hills (GIORGIO AIRE), T‑156/01, ECR, EU:T:2003:198, paragraph 41). The problems associated with the manufacture of the products of an undertaking form part of the commercial difficulties encountered by that undertaking.

67 In the present case, the marketing of the goods in question was stopped because those goods were defective. Given that it was for Gondwana to supervise and control the manufacture of the goods in question even though they were being manufactured by a third party, the interruption to the marketing of those goods cannot be regarded as independent of the will of Gondwana.

68 Furthermore, the applicant is wrong in claiming that it had no choice but to stop using the mark at issue or to put consumers’ health in danger. As OHIM has observed, further products could have been manufactured and placed on the market within a reasonable period. Therefore, the applicant cannot claim that the change in strategy of the proprietor of the mark at issue made use of that mark unreasonable. The additional economic investments necessary for the manufacture of further products form, as OHIM states, part of the risks that an undertaking must face.

69 Accordingly, the applicant cannot claim that the Board of Appeal was wrong to take the view that the difficulty encountered by Gondwana concerning the manufacture of the goods in question did not constitute a proper reason for non-use of the mark at issue (paragraph 36 of the contested decision).

70 As regards the revocation proceedings brought on 5 December 2008 by a third party against the mark at issue, the applicant complains that the Board of Appeal took the view that the proprietor of the mark at issue ought to have assessed and calculated the risks, that is to say, of using the mark despite the risk of having to pay damages or of backing down and abstaining from using the mark, and consequently, of cancellation proceedings being brought. According to the applicant, while revocation proceedings were pending against the mark and its validity was called in question, it would have been unreasonable to make additional investments, or to carry out marketing or sales activities and negotiations with interested business partners or potential licensees or sub-licensees.

71 It must be pointed out, first, that the fact that revocation proceedings have been brought against a trade mark does not prevent the proprietor of that mark from using it.

72 Second, it is indeed always possible that, should such revocation proceedings lead to the revocation of the mark, an action for damages might be instituted. However, an order to pay damages is not a direct consequence of the revocation proceedings.

73 Furthermore, OHIM states, rightly, that it is for the proprietor of a trade mark to conduct an adequate assessment of its chances of prevailing in the revocation proceedings and to draw the appropriate conclusions from that assessment as to whether to continue to use its mark.

74 Accordingly, the applicant cannot claim that the Board of Appeal was wrong to take the view that the revocation proceedings brought in 2008 by a third party did not constitute a proper reason for non-use of the mark at issue.

75 It follows from all the foregoing that the second complaint of the first plea in law must be rejected.

76 The first plea in law must therefore be rejected, as must the action in its entirety.

77 Under Article 87(2) 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 the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the forms of order sought by OHIM and the intervener.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Naazneen Investments v OHMI - Energy Brands (SMART WATER) (Judgment) [2015] EUECJ T-250/13 (18 March 2015) URL: http://www.bailii.org/eu/cases/EUECJ/2015/T25013.html Cite as: [2015] EUECJ T-250/13, EU:T:2015:160, ECLI:EU:T:2015:160

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