Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE GENERAL COURT (Ninth Chamber)

16 December 2020 (*)

(EU trade mark – Invalidity proceedings – EU word mark BIKOR EGYPTIAN EARTH – Absolute ground for refusal – 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‑438/18,

Pareto Trading Co., Inc., established in Carlstadt, New Jersey (United States), represented by I. Sempere Massa, C. Martínez-Tercero Molina and V. Balaguer Fuentes, lawyers,

applicant,

v

European Union Intellectual Property Office (EUIPO), represented by D. Gája, H. O’Neill, V. Ruzek and S. Hanne, acting as Agents,

defendant,

the other parties to the proceedings before the Board of Appeal of EUIPO being

Elżbieta Korbut Bikor, residing in Gdańsk (Poland),

and

Bikor Professional Color Cosmetics Małgorzata Wedekind, established in Gdańsk,

ACTION brought against the decision of the First Board of Appeal of EUIPO of 24 April 2018 (Case R 1826/2015-1) relating to invalidity proceedings between Pareto Trading, on the one hand, and Ms Bikor and Bikor Professional Color Cosmetics Małgorzata Wedekind, on the other,

THE GENERAL COURT (Ninth Chamber),

composed of M.J. Costeira, President, B. Berke (Rapporteur) and T. Perišin, Judges,

Registrar: A. Juhász-Tóth, Administrator,

having regard to the application lodged at the Court Registry on 18 July 2018,

having regard to the response lodged at the Court Registry on 26 September 2018,

having regard to the decision of 9 April 2019 to stay the proceedings,

having regard to the measure of organisation of procedure of 3 December 2019 and the responses of EUIPO and the applicant lodged at the Court Registry on 11 and 13 December 2019, respectively,

further to the hearing on 17 September 2020,

gives the following

Judgment

 Background to the dispute

1        On 30 November 2010, Ms Elżbieta Korbut Bikor and Bikor Professional Color Cosmetics Małgorzata Wedekind filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO) pursuant to Council 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        On 22 August 2012, the EU word mark BIKOR EGYPTIAN EARTH, which is contested in the present case, was registered.

3        The goods and services in respect of which the contested mark was registered are in Classes 3 and 41 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, for each of those classes, to the following description:

–        Class 3: ‘Cosmetics for beauty treatment and correction treatment not for medical purposes; cosmetic preparations for bodycare; sun-tanning preparations other than oils or sun-tanning oils; oils for cosmetic purposes; sun-tanning oils and sun-tanning preparations; not for medical purposes; tonics for cosmetic purposes; shaving preparations; antiperspirants not for medical purposes; depilatory preparations, not for medical purposes; cleansing milk for toilet purposes; cosmetic conditioners not for medical purposes; cosmetic mousse; nail varnish; dentifrices; liquid, solid and gas deodorants for personal use; cosmetic cleansing preparations and theatre make-up removing preparations; cosmetic incense for beauty salons and for household purposes; cosmetic pencils, other than eyebrow and eyelash pencils, not for medical purposes; eyebrow and eyelash pencils; special pencils for theatre make-up; eyeshadows; cosmetic blusher; powdered amber and natural amber solvent solutions for cosmetic purposes; oils and essential essences for cosmetic products; not for medical purposes; calming and antiallergic additives for depilatory preparations, not for medical purposes; detergents for cosmetics, not for medical or laundry purposes; solvent and lyophilised extracts of flowers and roots for cosmetics; exsiccations; decoctions and infusions of herbs; roots and flowers being cosmetic ingredients; alums, not for medical purposes; cosmetic transfers other than for dry tattoos; adhesives for affixing eyelashes and eyebrows, not for medical purposes; petroleum jelly for cosmetic purposes; non-medicated creams and pomades for cosmetic purposes; cosmetic foundation fluids and make-up solid base for applying and rubbing in; paste powders and solid powders; cosmetic powders for spraying and wiping; “wet stone”-type powders for rubbing in; decolorants for dermatological, non-medical, purposes; lipsticks; lipbalms; lipglosses; theatre cosmetic pomades; plasters for cosmetic purposes; false eyelashes; talcum powder for toilet use; mascara; lip dyes; preparations of fat specially designed for cosmetic purposes; mouth-freshening sprays; cosmetic moustache and eyebrow wax; cosmetic sets not for medical purposes for certain groups such as allergy sufferers, persons with a particularly sensitive skin, diabetics, babies, preschool pupils, schoolgirls, elderly people with age-related dermatological changes’;

–        Class 41: ‘Organisation, arranging and conducting of all kinds of exhibitions and shows of cosmetics, make-up competitions, beauty competitions in different categories, cosmetic symposiums, specialist conventions in the cosmetics sector; courses of professional in-service training and distance courses for professional cosmeticians and dermatologists; organisation and conducting of specialist conferences in the cosmetics sector, face-lifting and dermatological care; organisation of cosmetic educational demonstrations; recording of audio and video sequences for presenting new cosmetics and cosmetic techniques; preparation of programs for the aforesaid types of event; publication of texts (other than educational publicity texts) relating to cosmetic techniques’.

4        On 23 December 2013, the applicant, Pareto Trading Co., Inc., filed an application for a declaration of invalidity of the contested mark with EUIPO on the basis of Article 52(1)(b) and Article 7(1)(b) and (e)(ii) of Regulation No 207/2009 (now Article 59(1)(b) and Article 7(1)(b) and (e)(ii) of Regulation 2017/1001), on the ground that the application for registration of that mark had been made in bad faith as the mark includes the mark EGYPTIAN EARTH, which the applicant had registered in the United States and Canada and used as a non-registered mark in Europe.

5        By decision of 17 July 2015, the Cancellation Division upheld the application for a declaration of invalidity of the contested mark, considering that the proprietors of that mark had acted in bad faith when they filed the application for the contested mark.

6        On 14 September 2015, the proprietors of the contested mark lodged an appeal with EUIPO against the Cancellation Division’s decision.

7        By decision of 24 April 2018 (Case R 1826/2015‑1) (‘the contested decision’), the First Board of Appeal of EUIPO annulled the Cancellation Division’s decision.

8        In essence, the Board of Appeal considered that the applicant had not proved that the proprietors of the contested mark were acting in bad faith when they filed the application for the contested mark.

 Forms of order sought

9        The applicant claims that the Court should:

–        annul the contested decision;

–        uphold the application for a declaration of invalidity lodged by the applicant against registration of the contested mark;

–        order EUIPO to pay the costs, including those incurred in connection with the proceedings before the Board of Appeal of EUIPO.

10      EUIPO contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

11      Given the date of filing of the application for registration in question, namely 30 November 2010, which is decisive for the purpose of identifying the applicable substantive law, the facts of the case are governed by the substantive provisions of Regulation 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).

12      As a result, in the present case, as regards the substantive rules, the references made by the Board of Appeal in the contested decision and by the applicant in its arguments to Article 59(1)(b) of Regulation 2017/1001 must be understood as referring to the identical provisions of Article 52(1)(b) of Regulation No 207/2009.

13      In support of the action the applicant raises a single plea in law, alleging infringement of Article 52(1)(b) of Regulation No 207/2009.

14      The applicant claims that the Board of Appeal erred in concluding that the proprietors of the contested mark did not act in bad faith when they sought registration of the contested mark.

15      First, the applicant takes the view that the Board of Appeal erred in considering that the applicant had no right over the mark EGYPTIAN EARTH. In addition, the contested mark could have been applied for in bad faith even if it was considered descriptive.

16      Second, the applicant claims that the Board of Appeal reached an erroneous conclusion in refusing to acknowledge the bad faith of the proprietors of the contested mark in so far as the applicant had demonstrated that they knew, or should have known, the applicant’s mark and that they intended to force the applicant not to use it, arguing infringement of their trade mark.

17      EUIPO disputes the applicant’s arguments.

18      In that regard, it should first 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 No 207/2009 (now Article 8(2) of Regulation 2017/1001). Under 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 that be an EU trade mark, a trade mark registered in a Member State or by the Benelux Office for Intellectual Property (BOIP), 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 within the European Union. By contrast, without prejudice to the possible application of Article 8(4) of Regulation No 207/2009 (now 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 being registered as an EU trade mark for identical or similar goods or services (see judgment of 9 July 2015, CMT v OHIM – Camomilla (CAMOMILLA), T‑100/13, not published, EU:T:2015:481, paragraph 30 and the case-law cited). The same applies, in principle, to third-party use of a mark registered outside of the European Union (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).

19      Nevertheless, the application of that principle is qualified, inter alia, by Article 52(1)(b) of Regulation No 207/2009, under which, following an application to EUIPO or on the basis of a counterclaim in infringement proceedings, an EU trade mark is to be declared invalid where the applicant was acting in bad faith when it filed the application for the trade mark. It must be noted that it is for the applicant for a declaration of invalidity, who intends to rely on that ground, to establish the circumstances which make it possible to conclude that the proprietor of an EU trade mark was acting in bad faith when the application for registration of that mark was filed and that there is a presumption of good faith until proof to the contrary is adduced (see judgment of 8 March 2017, Biernacka-Hoba v EUIPO – Formata Bogusław Hoba (Formata), T‑23/16, not published, EU:T:2017:149, paragraph 45 and the case-law cited).

20      In accordance with the case-law, in order to determine whether the applicant for registration was acting in bad faith within the meaning of Article 52(1)(b) of Regulation No 207/2009, account must be taken of all the relevant factors specific to the particular case which existed at the time of filing the application for registration of a sign as an EU trade mark, in particular: the fact that the applicant knew or should have known that a third party was using, in at least one Member State, an identical or similar sign for an identical or similar product or service that could be confused with the sign for which registration was sought; the applicant’s intention of preventing that third party from continuing to use such a sign; and the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration was sought (judgment of 11 June 2009, Chocoladefabriken Lindt & Sprüngli, C‑529/07, EU:C:2009:361, paragraph 53).

21      However, it is apparent from the wording used by the Court of Justice in the judgment of 11 June 2009, Chocoladefabriken Lindt & Sprüngli (C‑529/07, EU:C:2009:361), that the factors listed are merely examples drawn from a number of factors which may be taken into account in order to decide whether the applicant for registration of a sign as an EU trade mark was acting in bad faith at the time of filing the application for the mark. In that regard, it should be noted that, in the context of the overall analysis undertaken pursuant to Article 52(1)(b) of Regulation No 207/2009, account may also be taken of the origin of the sign and its use since its creation, the commercial logic underlying the filing of the application for registration of that sign as an EU trade mark, and the chronology of events leading up to that filing (see judgments of 26 February 2015, Pangyrus v OHIM – RSVP Design (COLOURBLIND), T‑257/11, not published, EU:T:2015:115, paragraph 68 and the case-law cited, and of 9 July 2015, CAMOMILLA, T‑100/13, not published, EU:T:2015:481, paragraphs 35 and 36 and the case-law cited).

22      Furthermore, in order to assess whether there was bad faith, the applicant’s intention at the time of filing the application for registration, which is a subjective factor that must be determined by reference to the objective circumstances of the particular case, must also be taken into account (see judgment of 8 March 2017, Formata, T‑23/16, not published, EU:T:2017:149, paragraph 44 and the case-law cited).

23      In the present case, the Board of Appeal considered, in paragraphs 19 to 26 of the contested decision, that the applicant had not proved ownership of any registered trade mark rights or ownership of unregistered rights for the term ‘egyptian earth’ in the European Union. That term is descriptive of cosmetics and there is no proof of acquired distinctive character through use that would show that consumers recognise it as a distinctive trade mark, with the result that it does not enjoy protection as a distinctive trade mark in the European Union. The Board of Appeal also considered that the term was the name of a cosmetic product, namely a bronzing powder, and that it was, therefore, descriptive of the goods and services in question, which were all related to cosmetics and could, accordingly, include bronzing powder.

24      Moreover, the Board of Appeal considered, in paragraph 27 of the contested decision, that the applicant could not infer from the inclusion of the expression ‘egyptian earth’ in the contested mark that there had been bad faith on the part of the proprietors of that mark when they filed the application for the mark, since that expression is descriptive and the mark also consists of a distinctive term, namely ‘bikor’.

25      First of all, the applicant claims that the Board of Appeal erred in stating that the applicant had no right over the mark EGYPTIAN EARTH and in disregarding the evidence that the applicant had submitted for the purpose of demonstrating that it had such a right and the proof that it had been the first to make use of that mark both worldwide and throughout the European Union. In addition, it claims that the Board of Appeal erred in not considering the registrations and use of that mark in other countries outside the European Union to be an indication of its good faith and the good will attached to the mark.

26      Next, the applicant claims that the mark EGYPTIAN EARTH is not descriptive for cosmetics, but a suggestive mark that is distinctive in its area of the market. The Board of Appeal was wrong to rely on the order of 1 March 2017, Ikos v EUIPO (AEGYPTISCHE ERDE) (T‑76/16, not published, EU:T:2017:140) in order to conclude that the mark is descriptive, because the goods and services in respect of which that mark had been registered were not the same as in the present case. In addition, it considers that it is not necessary to assess the likelihood of confusion in the present case.

27      Lastly, the applicant emphasises that, in accordance with the judgment of 31 May 2018, Flatworld Solutions v EUIPO – Outsource Professional Services (Outsource 2 India) (T‑340/16, not published, EU:T:2018:314, paragraph 47), even if the contested mark was considered descriptive, the fact remains that it could have been applied for in bad faith. The Board of Appeal was therefore wrong to conclude that there was no bad faith on the part of the proprietors of the contested mark on account of the ‘supposed descriptiveness’ of part of that mark.

28      In accordance with the case-law, the potentially descriptive nature of a word element comprising a mark does not prevent the conclusion that the proprietor of that mark acted in bad faith when filing the application for the mark within the meaning of Article 52(1)(b) of Regulation No 207/2009 (see, to that effect, judgment of 13 November 2019, Outsource Professional Services v EUIPO, C‑528/18 P, not published, EU:C:2019:961, paragraph 69).

29      Thus, irrespective of whether the term ‘egyptian earth’ forming part of the contested mark is potentially descriptive, or of whether distinctive character has been acquired by use of that term, the issue of whether or not the proprietors of that mark acted in bad faith when they filed the application for the mark must be examined with the help of the criteria identified in the case-law referred to in paragraphs 20 and 21 above.

30      It is therefore necessary to assess the grounds put forward by the Board of Appeal in that regard, without there being a need, in the present case, to rule on the applicant’s arguments concerning the degree of legal protection enjoyed by the mark EGYPTIAN EARTH, in the light of the Court’s case-law set out in paragraph 28 above.

31      In paragraph 33 of the contested decision, the Board of Appeal concluded that the applicant had not proved that the proprietors of the contested mark were acting in bad faith when they filed the application for the mark.

32      As regards, in the first place, the fact that the applicant for registration knew or should have known that a third party was using, in at least one Member State, an identical or similar sign for an identical or similar product or service that could be confused with the sign for which registration was sought, it is apparent from the documents in the file that the applicant in the present proceedings had entrusted the distribution of its products in Europe to an intermediary and had authorised that intermediary to use the sign EGYPTIAN EARTH under certain conditions, and that that intermediary also had a business relationship with the proprietors of the contested mark, as the latter were clients of that intermediary.

33      The applicant infers from this that the proprietors of the contested mark should have known that the applicant was using, in at least one Member State, an identical or similar sign for an identical or similar product or service that could be confused with the contested mark.

34      However, as was stated, in essence, by the Board of Appeal, the evidence adduced by the applicant does not demonstrate to the requisite legal standard that the proprietors of the contested mark had knowledge of the use of the mark EGYPTIAN EARTH.

35      Bad faith on the part of the proprietors of the contested mark cannot be presumed merely on the basis of their business relationship with an intermediary who knew of the existence of the mark EGYPTIAN EARTH.

36      Moreover, it is common ground that the proprietors of the contested mark were not linked to the applicant.

37      Similarly, the fact that, after registering the contested mark, the proprietors of that mark sent a letter to one of the applicant’s European clients demanding that it cease using the mark EGYPTIAN EARTH is not an indication of their bad faith when filing the application for the mark, as was stated, in essence, by the Board of Appeal (see, to that effect, judgment of 14 February 2012, Peeters Landbouwmachines v OHIM – Fors MW (BIGAB), T‑33/11, EU:T:2012:77, paragraph 33).

38      In the light of the foregoing, the evidence provided by the applicant does not lead to the conclusion that, when they filed the application for the contested mark, the proprietors of that mark knew or should have known that the applicant was using the mark EGYPTIAN EARTH for the marketing of goods similar to those covered by the contested mark.

39      As regards, in the second place, the intention of the proprietors of the contested mark, the applicant fails to demonstrate that the proprietors of the contested mark had the sole intention of preventing the applicant from using its mark and that they did not intend to use the contested mark.

40      As the Board of Appeal stated in paragraph 30 of the contested decision, the fact that the proprietors of the contested mark are also proprietors of other marks using the same term in different language versions suggests that the registration of that mark is not artificial in nature or devoid of logic in commercial terms.

41      The Board of Appeal therefore did not err in considering that the registration of the contested mark had a legitimate aim.

42      In the third place, as the Board of Appeal noted, in essence, in paragraph 29 of the contested decision, the contested mark distinguishes itself from the mark EGYPTIAN EARTH by the addition of the distinctive term ‘bikor’.

43      That element suggests a lack of bad faith on the part of the proprietors of the contested mark when filing the application for the mark.

44      The evidence adduced by the applicant is therefore not such as to call into question the Board of Appeal’s conclusion that the applicant had not proved that the proprietors of the contested mark were acting in bad faith when they filed the application for the mark.

45      As a result, the Board of Appeal did not err in considering that the applicant had not proved that the proprietors of the contested mark were acting in bad faith when they filed the application for the mark within the meaning of Article 52(1)(b) of Regulation No 207/2009.

46      Accordingly, the single plea in law must be rejected and, therefore, the action must be dismissed in its entirety.

 Costs

47      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.

48      Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by EUIPO.

On those grounds,

THE GENERAL COURT (Ninth Chamber)

hereby:

1.      Dismisses the action;

2.      Orders Pareto Trading Co., Inc. to pay the costs.

Delivered in open court in Luxembourg on 16 December 2020.

*      Language of the case: English.

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