Ilbay v EUIPO - Pella-eu (PELLA) (EU trade mark - Judgment) [2024] EUECJ T-514/23 (23 October 2024)

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( EU trade mark - Invalidity proceedings - EU word mark PELLA - Absolute ground for invalidity - Bad faith - Article 59(1)(b) of Regulation (EU) 2017/1001 )

Ümit İlbay, residing in Baarn (Netherlands), represented by B. Backx, lawyer,

European Union Intellectual Property Office (EUIPO), represented by J. Ivanauskas, acting as Agent,

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

Pella-eu vof, established in Baarn (Netherlands), represented by N. Ruyters and L. Sliedregt, lawyers,

composed of K. Kowalik-Bańczyk, President, G. Hesse (Rapporteur) and B. Ricziová, Judges,

having regard to the fact that no request for a hearing was submitted by the parties within three weeks after service of notification of the close of the written part of the procedure, and having decided to rule on the action without an oral part of the procedure, pursuant to Article 106(3) of the Rules of Procedure of the General Court,

1 By his action under Article 263 TFEU, the applicant, Mr Ümit İlbay, seeks the annulment of the decision of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 30 May 2023 (Case R 2108/2022-5) (‘the contested decision’).

2 On 14 September 2018, the applicant filed an application for registration of an EU trade mark with EUIPO, pursuant to 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).

4 The goods in respect of which registration was sought are in Class 21 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 to the following description: ‘Microfiber cloths for cleaning’.

6 On 23 December 2020, the intervener, Pella-eu vof, filed an application for a declaration of invalidity against the contested mark. The grounds relied on in support of that application were, first, bad faith, as referred to in Article 59(1)(b) of Regulation 2017/1001 and, secondly, the existence of a non-registered trade mark or of other signs used in the course of trade, as referred to in Article 60(1)(c) of that regulation, read in conjunction with Article 8(4) of that regulation.

7 By decision of 30 August 2022, the Cancellation Division of EUIPO dismissed the application for a declaration of invalidity on the ground, first, that the applicant’s bad faith when he filed the contested mark had not been established and, secondly, that the existence of a ‘sign used in the course of trade of more than mere local significance’, within the meaning of Article 8(4) of Regulation 2017/1001, had not been proved by the intervener.

8 On 31 October 2022, the intervener filed an appeal against the decision of the Cancellation Division.

9 By the contested decision, the Board of Appeal annulled the decision of the Cancellation Division and declared the contested mark invalid on the basis of Article 59(1)(b) of Regulation 2017/1001, without examining the ground for invalidity referred to in Article 60(1)(b) of that regulation.

13 In support of the action, the applicant puts forward a single plea in law, alleging infringement of Article 59(1)(b) of Regulation 2017/1001. The applicant submits, in essence, that the Board of Appeal erred in taking the view that he was acting in bad faith when he filed the application for registration of the contested mark.

14 EUIPO and the intervener dispute all of the arguments put forward by the applicant.

15 It should be noted that the EU trade mark registration system is based on the ‘first-to-file’ principle, laid down in Article 8(2) of Regulation 2017/1001. In accordance with that principle, a sign may be registered as an EU trade mark only in so far as it 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 2017/1001, 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 (see, by analogy, judgment of 11 July 2013, SA.PAR. v OHIM - Salini Costruttori (GRUPPO SALINI), T-321/10, EU:T:2013:372, paragraph 17 and the case-law cited).

16 The application of that principle is qualified, inter alia, by Article 59(1)(b) of Regulation 2017/1001. According to that provision, 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 was acting in bad faith when he or she filed the application for registration of that mark.

17 The concept of ‘bad faith’ referred to in Article 59(1)(b) of Regulation 2017/1001 is not defined, delimited or even described in any way in the legislation (see, by analogy, judgment of 29 June 2017, Cipriani v EUIPO - Hotel Cipriani (CIPRIANI), T-343/14, EU:T:2017:458, paragraph 25 and the case-law cited).

18 If a concept set out in Regulation 2017/1001 is not defined by that regulation, its meaning and scope must be determined by considering its usual meaning in everyday language, whilst also taking into account the context in which it occurs and the objectives pursued by that regulation. That applies to the concept of ‘bad faith’ referred to in Article 59(1)(b) of Regulation 2017/1001, in the absence of any definition of that concept by the EU legislature (see, by analogy, judgment of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C-104/18 P, EU:C:2019:724, paragraphs 43 and 44).

19 While, in accordance with its usual meaning in everyday language, the concept of ‘bad faith’ presupposes the presence of a dishonest state of mind or intention, that concept must moreover be understood in the context of trade mark law, which is that of the course of trade. In that regard, the rules on the EU trade mark are aimed, in particular, at contributing to the system of undistorted competition in the European Union, in which each undertaking must, in order to attract and retain customers by the quality of its goods or services, be able to have registered as trade marks signs which enable the consumer, without any possibility of confusion, to distinguish those goods or services from others which have a different origin (judgments of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C-104/18 P, EU:C:2019:724, paragraph 45, and of 29 January 2020, Sky and Others, C-371/18, EU:C:2020:45, paragraph 74).

20 Consequently, the absolute ground for invalidity referred to in Article 59(1)(b) of Regulation 2017/1001 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 recalled in the previous paragraph (see, by analogy, judgments of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C-104/18 P, EU:C:2019:724, paragraph 46, and of 29 January 2020, Sky and Others, C-371/18, EU:C:2020:45, paragraph 75).

21 The intention of an applicant for a trade mark is a subjective factor which must, however, be determined objectively by the competent administrative or judicial authorities. Consequently, any claim of bad faith must be the subject of an overall assessment, taking into account all the factual circumstances relevant to the particular case. It is only in that manner that a claim of bad faith can be assessed objectively (see judgment of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C-104/18 P, EU:C:2019:724, paragraph 47 and the case-law cited).

22 For that purpose, 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 a sign as an EU trade mark and, in particular, first, 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, secondly, the applicant’s intention to prevent that third party from continuing to use such a sign and, thirdly, the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought (judgment of 11 June 2009, Chocoladefabriken Lindt & Sprüngli, C-529/07, EU:C:2009:361, paragraph 53).

23 The factors referred to in paragraph 22 above are only examples drawn from a number of factors which can be taken into account in order to decide whether an applicant for registration was acting in bad faith when the trade mark application was filed (see, to that effect, judgment of 29 June 2017, CIPRIANI, T-343/14, EU:T:2017:458, paragraph 28 and the case-law cited).

24 In the context of the overall analysis undertaken pursuant to Article 59(1)(b) of Regulation 2017/1001, account may also be taken of the origin of the sign at issue and its use since its creation, the commercial logic underlying the filing of the application for registration of that sign as a European Union trade mark, and the chronology of events leading up to that filing (see judgment of 7 July 2016, Copernicus-Trademarks v EUIPO - Maquet (LUCEO), T-82/14, EU:T:2016:396, paragraph 32 and the case-law cited).

25 In addition, it is important to bear in mind 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 (see judgment of 8 May 2014, Simca Europe v OHIM - PSA Peugeot Citroën (Simca), T-327/12, EU:T:2014:240, paragraph 35 and the case-law cited), good faith being presumed until proven otherwise (judgment of 13 December 2012, pelicantravel.com v OHIM - Pelikan (Pelikan), T-136/11, not published, EU:T:2012:689, paragraph 57).

26 As a preliminary point, it must be recalled that, in the light of the evidence produced by the intervener and by the applicant in the administrative procedure, the Board of Appeal noted, in respect of the objective circumstances of the case, that, before the filing of the contested mark, the intervener had used the sign

(‘the figurative sign Pella’), the sign Image not found

(‘the figurative sign Pella-eu’) and the trade name PELLA-EU on the market for microfibre cloths. The Board of Appeal moreover noted that, at the time when the intervener’s partnership agreement came into existence, a number of exchanges of correspondence had taken place between the various family members of the two partners of the intervener and of the applicant as regards the figurative sign Pella-eu and the trade name PELLA-EU without any of those exchanges indicating that that trade name belonged to the applicant. No item of evidence supports the applicant’s statement that he is behind the sign PELLA nor establishes that the mark PABELLA belongs to him. The Board of Appeal, on the other hand, observed that the statements provided by the intervener were supported by other items of evidence. The Board of Appeal stated that it did not therefore share the Cancellation Division’s point of view that it was doubtful who had developed the concept of the mark PELLA. The objective circumstances of the case do not show that the intervener had stolen the sign PELLA from the applicant, as he claims. Unlike the Cancellation Division, the Board of Appeal found that, even though the use of the earlier signs and of the trade name PELLA-EU by the intervener had started only some months before the contested mark was filed, that use had to be brought to the applicant’s attention given that he and the intervener’s two partners had close family ties, lived in the same town and carried out activities in the same sector. The Board of Appeal found that the applicant was inevitably aware of the use of the figurative signs Pella and Pella-eu and of the trade name PELLA-EU, in the sector of microfibre cloths, since he had filed the figurative mark

(‘the Turkish figurative mark PellaTR’) with the Turkish trade mark office on the same day as that of the filing of the contested mark, which reproduced almost all the elements of the intervener’s earlier signs. The Board of Appeal then took the view that the applicant had acted in bad faith when he filed the contested mark, his intention being to thwart the intervener’s activities.

27 In his action, the applicant argues that the intervener has not succeeded in demonstrating that he knew or should have known that it used an identical or similar sign in respect of identical or similar goods or services capable of being confused with the contested mark and, moreover, that he had the intention of preventing the intervener from continuing to use that sign. First, the applicant highlights that the intervener’s first public use of its figurative sign Pella-eu dates from 9 September 2018, whereas the application for registration of the contested mark was filed on 14 September 2018. The applicant submits that he was not aware and could not have been aware of the events prior to 9 September 2018, as they are listed by the Board of Appeal. Those events are internal events, or at the very least, are not public. Consequently, the applicant takes the view that it is not conclusively established that he was aware or could have been aware of the figurative sign Pella-eu before the contested mark was filed. Secondly, the fact that he has a family tie with the intervener’s two partners and that he himself and those two partners reside in the same town in the Netherlands does not constitute any conclusive evidence which would establish the existence of sufficient prior awareness to call into question the ‘first-to-file’ principle. Thirdly, the parties disagree on the identity of the creator of Pella and Pella-eu. The statements and evidence gathered contradict each other. The identity of the creator or of the first user of Pella and Pella-eu could not thus be conclusively and convincingly determined. Therefore, the Board of Appeal should have adhered to the ‘first-to-file’ principle. Fourthly, it has not been established that the applicant intended to disadvantage the intervener or to prevent it from using certain signs. Accordingly, the conditions set out by the case-law for finding bad faith are not satisfied. Fifthly, the applicant adds that he initially marketed PABELLA products, that he was the first to file the mark PELLA and that he also acted as the proprietor of that mark. Any exception to the ‘first-to-file’ principle should be interpreted restrictively. The applicant notes that good faith is presumed and that bad faith must be established. He concludes that, to the extent that bad faith has not been established in the present case, the Board of Appeal was wrong to annul the decision of the Cancellation Division.

28 Such an argument is unconvincing in view of the analysis carried out by the Board of Appeal in the contested decision in order to assess all of the objective circumstances of the particular case.

29 In the first place, the applicant’s argument that he could not have been aware of the use of the intervener’s earlier signs before 9 September 2018, the date on which the intervener publicly promoted those signs, must be rejected. EUIPO correctly states in that regard, first, that that ‘public use’ of the earlier signs took place before the filing of the contested mark and, secondly, that the applicant does not deny that he was aware of that ‘public use’ of the intervener’s signs.

30 In addition, the Board of Appeal correctly observed that it followed from the items of evidence placed on the file that, on 20 January 2018, at least eight months before the filing of the contested mark, one of the intervener’s two partners had created the figurative sign Pella-eu and that the intervener had subsequently used the figurative signs Pella and Pella-eu and the trade name PELLA-EU to promote and market microfibre cloths. The Board of Appeal also correctly noted that it was common knowledge that the applicant and the intervener’s two partners, namely the applicant’s sister-in-law and brother-in-law were close relatives, that they resided in the same town and that they pursued the same commercial activities. In view of those factors and, in particular, the applicant’s general knowledge of the economic sector concerned, he should probably have been aware of the intervener’s use of an identical or similar sign for an identical or similar product capable of being confused with the mark applied for.

31 This is all the more likely given that, as was correctly stated by the Board of Appeal, the intervener’s earlier figurative signs Pella and Pella-eu and the Turkish figurative mark PellaTR filed by the applicant on the same day as the filing of the contested mark, are virtually identical. That virtual identity clearly cannot be mere coincidence.

32 In the second place, the applicant’s argument that the fact that the intervener’s two partners and himself have a family tie and reside in the same town in the Netherlands is not a sufficiently conclusive element must be rejected. Those factual elements may be relevant in the global assessment of the objective circumstances of the case. In any event, the Board of Appeal’s finding that the applicant should have been aware of the use of the earlier figurative signs Pella and Pella-eu and of the trade name PELLA-EU is not solely based on those elements as follows from paragraphs 29 to 31 above.

33 In the third place, the applicant’s argument that the identity of the creator or of the first user of the signs Pella and Pella-eu could not be conclusively and convincingly determined must be rejected. As the Board of Appeal correctly noted, an invoice submitted by the intervener shows that one of its two partners created the Pella-eu logo using the internet site FreeLogoServices.com on 20 January 2018. Another document submitted by the intervener shows that on 27 July 2018, four palettes of microfibre cloths weighing 1 840 kg were loaded on board a vessel for the purpose of delivering them to the intervener in Rotterdam (Netherlands). The release order for the shipment of those four pallets is dated, as the Board of Appeal noted, 23 August 2018. Moreover, the intervener submitted 17 invoices dating from 5 September 2018 and from 14 September 2018, addressed to its customers in Germany, Austria, France and the Netherlands, for sales of Pella microfibre cloths which bear the figurative sign Pella-eu. Added to this is the evidence dating from 9 September 2018 showing the promotion of microfibre cloths under the figurative sign Pella-eu on social networks.

34 Conversely, the evidence submitted by the applicant does not make it possible either to determine the origin of the contested mark or to establish the use of that mark by the applicant for the products concerned since the creation of that mark. In that regard, the Board of Appeal found that the statement submitted by the applicant describing how he allegedly conceived the idea of the contested mark was not supported by any other evidence. In his written submissions before the Court, the applicant does not dispute that finding of the Board of Appeal. Although the applicant explains in his statement that the contested mark has been inspired by another mark, namely the mark PABELLA, available in Swiss shops, he does not claim that the mark PABELLA belonged to him. Accordingly, the fact, even if it were established, that the applicant marketed products of the mark PABELLA, did not enable him to substantiate his argument that the identity of the creator or of the first user of the signs Pella and Pella-eu could not be precisely determined. Furthermore, even taking account of the invoices submitted by the applicant to establish his use of the contested mark, which have been disregarded by the Board of Appeal on the ground that they were in Dutch, the fact remains that those invoices date from 2022 and are therefore subsequent to those submitted by the intervener and to the registration of the contested mark.

35 Accordingly, in the light of the items of evidence placed on the file by each of the parties, the applicant is not convincing when he claims that the identity of the creator or of the first user of the signs Pella and Pella-eu could not be conclusively and convincingly determined. The applicant therefore fails to call into question the finding in the contested decision that the figurative signs Pella and Pella-eu have been created and used by the intervener before the filing of the contested mark.

36 In the fourth place, the applicant’s argument that it has not been established that he intended to disadvantage the intervener or prevent it from using certain signs must be rejected. The applicant puts forward no other evidence in support of that claim, merely arguing that it has not been established that he was aware or should have been aware of the signs used by the intervener before the filing of the contested mark. However, as follows from paragraphs 30 and 31 above, the applicant should probably have been aware of the existence of the figurative signs Pella and Pella-eu and of the trade name PELLA-EU and of their use by the intervener. He could not thus have been unaware that filing the contested mark would undermine the intervener’s interests, which used virtually identical signs for identical products. Therefore, in the circumstances of the present case, the Board of Appeal cannot be criticised for having found, in essence, that the registration of the contested mark was guided by the intention to thwart the intervener’s activities in a manner inconsistent with honest practices.

37 In the fifth place, the applicant’s argument that he initially traded in PABELLA products, that he was the first to file the mark PELLA and that he acted as the proprietor of that mark must be rejected. In that regard, it is sufficient to note, in the light of what is summarised in paragraphs 29 to 36 above, that none of those claims can call into question the Board of Appeal’s reasoning or the conclusion it drew therefrom.

38 In the light of the foregoing, the Board of Appeal cannot be criticised for having found that, when the contested mark was filed, the applicant was acting in bad faith, which is the reason why that mark should be declared invalid pursuant to Article 59(1)(b) of Regulation 2017/1001.

39 In those circumstances, the applicant’s single plea in law must be rejected and the action must be dismissed in its entirety.

40 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.

41 Since the applicant has been unsuccessful, he must be ordered to pay the costs incurred by the intervener, in accordance with the form of order sought by the latter. By contrast, since EUIPO has applied for the applicant to be ordered to pay the costs only in the event that the oral part of the procedure is opened, it is appropriate, since no hearing has been held, to order EUIPO to bear its own costs.

2. Orders Mr Ümit İlbay to bear his own costs and to pay those incurred by Pella-eu vof;

3. Orders the European Union Intellectual Property Office (EUIPO) to bear its own costs.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Ilbay v EUIPO - Pella-eu (PELLA) (EU trade mark - Judgment) [2024] EUECJ T-514/23 (23 October 2024) URL: http://www.bailii.org/eu/cases/EUECJ/2024/T51423.html Cite as: ECLI:EU:T:2024:727, EU:T:2024:727, [2024] EUECJ T-514/23

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