International Jurisprudence
On 10 August 2012, M. Srl. filed an application for registration of an EU trademark with the European Union Intellectual Property Office (EUIPO, the word sign MARINA YACHTING After several transfers of the application for registration, the mark applied for was registered on 28 September 2014 in the name of the I. Sp. Co. Srl. On 13 October 2017, I. Sp. Co. Srl was declared insolvent by judgment No 142/2017 of the Tribunale di Venezia (District Court, Venice, Italy).
On 18 October 2017, the transfer of the mark at issue, from M. Srl to S. H. SARL, was entered in EUIPO’s register.
On
25 October 2017, the appointed liquidator of the I. S. Co. Srl informed
EUIPO that the company had been declared insolvent, he requested that the
bankruptcy proceedings relating to the I. S. Co. Srl be
entered in EUIPO’s register, in accordance with Article 24 of
Regulation 2017/1001, and that the recordal of the transfer of the mark at
issue to S. H. Sarl be cancelled, in
accordance with Article 103 of that regulation, applications admitted by the
EUIPO.
On
16 April 2018, the applicant, M. Y. B. M. Co. Ltd, filed a recordal
application for the transfer of the mark at issue to itself. It claimed
that that mark, which had initially been assigned by M. Srl to S.
H. SARL, had subsequently been assigned to it by S. H. Sarl. The application
was admitted by the EUIPO.
On
9 April 2019, the liquidator filed an application for recordal of a
judgment delivered on 13 March 2019 by the Tribunale di Venezia (District
Court, Venice), which was responsible for the bankruptcy proceedings relating
to I. S. Co. Srl, authorising
judicial seizure of the mark, as a precautionary measure under the
Italian Code of Civil Procedure, on account of the invalidity and fraudulent
nature of transfers.
On
31 January 2019, M. Y. B. M. Co. Ltd filed two notices of
appeal, pursuant to Articles 66 to 71 of Regulation 2017/1001, against the
decisions of the department in charge of EUIPO’s register, for cancelling
registrations referring to transfers to I. S. Co. Srl și S. H. SARL. By decision of
10 February 2020 the Board of Appeal dismissed the appeals of M.Y. B. M. Co. Ltd.
In the
Case T‑169/20 an action was made against the Decision of
10 February 2020 of the EUIPO Board of Appeal that dismissed two notices
of appeal of 31 January 2019 against the decisions of the department in
charge of EUIPO’s register cancelling register entries. The EU General Court
(Ninth Chamber) dismissed the action by decision of 22 September 2021.
The
case analyses the application and interpretation of Articles 103, 20, 24
and 27 of Council Regulation (EC) No 207/2009 on the European Union
trademark, and of Articles 3, 7 and 19 of Regulation (EU) 2015/848 of the
European Parliament and of the Council of 20 May 2015 on insolvency
proceedings.
The case is of interest from an insolvency law perspective in several
respects.
Firstly,
The General Court established that under Article 24(1) of Regulation
2017/1001 and also under Article 7, Article 19, Article 27(2,4) of
Regulation 2015/848, the Italian Law on bankruptcy, as the law of the Member
State in the territory of which the I. S. Co. Srl had its centre of main interests at the time
when it was declared insolvent, governs the insolvency proceedings in which the
mark is involved. It also regulates the issues relating to the effects
vis-à-vis third parties of those insolvency proceedings, as well as the rules regarding the nullity, annulment, or
unenforceability of legal acts prejudicial to the creedal mass. The insolvency decision of
Tribunale di Venezia is automatically effective throughout the European Union
regarding all the third parties and therefore, in the present case, regarding
the applicant and EUIPO.
Secondly, The General Court established that it is not for EUIPO to
consider the validity and the legal effects of a transfer of an EU trademark
under the applicable national law, Italian law in the case. Although it is true
that EUIPO must confine itself to examining the formal requirements for the
validity of an application for registration of a transfer of a mark, that
examination nonetheless implies that it must diligently take into account
facts that are capable of having legal implications for the application for
registration of such a transfer, including the existence of insolvency
proceedings, in order to take into consideration the objective of guaranteeing
the effectiveness’ of the insolvency proceedings which is referred to in
recital 36 of Regulation 2015/848, in particular if the existence,
validity or certain date of that transfer is disputed by the liquidator.
Finally, the General Court explained that the EUIPO had the obligation
to suspend the registration of transfers at the request of M.Y. B. M. Co. Ltd until the national court examines the merits of the case. Since the
mark was mentioned in the inventory list annexed to the judgment declaring
I. S. Co. Srl in liquidation proceedings, EUIPO was required to take
that fact into account and enter the insolvency proceedings relating to that
mark in the register, as requested by the liquidator. The lack of effects
vis-à-vis third parties of the agreement to transfer the mark which have not
been entered in the register is intended to protect a person who has, or may
have, rights in an EU trademark as an object of property. Article 27(1)
of Regulation 2017/1001 is intended, in the present case, to protect any person
who has, or may have, rights in the mark at issue as an object of property, as the
creditors of the company which has been declared insolvent. The
fact that the company which subsequently entered bankruptcy/liquidation
proceedings was aware of the transfer of the trademark, but not registered, is not relevant and cannot affect the rights of its creditors to its
liquidated assets.
Action under Article 263 TFEU. The applicant, Mr E. P., seeks the annulment and alteration of the Decision of the Fourth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 23 March 2021 (Case R 888/2020-4).
Earlier marks: the Slovenian word mark TALIS,
registered on 24 February 1994; the Slovenian word mark TALIS, registered
on 24 February 1999; the Slovenian figurative mark registered on
18 April 2000; international registration designating the European Union
in respect of the figurative mark registered on 27 April 2012.
On 11 July 2016, KPMS filed an application for registration
of an EU trademark with EUIPO, for the word sign TALIS. The trademark
was registered on 26 October 2016. On 5 January 2017, a transfer of
ownership of the trademark from KPMS to its subsidiary, Š. (KPMS has a majority
shareholding of 56.85% in Š.), was entered in the EUIPO register. On
3 April 2018, that mark was transferred from Š. to company ETA.
On 21 August 2018, Mr. EP filed an application for a
declaration that the mark was invalid, application based on earlier trademarks, over which he had a lien following enforcement proceedings
against his debtor B., now S., trademarks being assets of the bankrupt
company of formerly B, from liquidation proceedings.
On 17 March 2020, the EUIPO Cancellation Division rejected the
application for a declaration of invalidity.
On 12 May 2020, Mr EP notice of appeal with EUIPO against the
decision of the Cancellation Division.
By the decision of the Fourth Board of Appeal (EUIPO) of 23 March 2021, the EUIPO Board of Appeal upheld the decision of the Cancellation Division.
In this procedure, Mr. E.P sustained that the company P.Š. has
transferred the earlier trademarks and its business operations to B., and B., in
the light of a bankruptcy procedure, transferred them to the company M. The
effect of the transfer has been annulled by decision of the District Court of
Nova Gorica. When M. itself entered bankruptcy proceedings, all its business
activities have been transferred to Š.
Immediately after the sale of P. Š. to B., the company P. Š. bought
business share in Š. The latter is owned by KPMS, which holds a share of
56,85%, and which applied for the registration of the contested EUTM.
The applicant puts forward that KPMS is a partial owner of Š., which is
a by-pass company of P. Š., owned by B. The company Š. is, therefore, de facto
part of the pyramidal ownership of the holder of the earlier trademarks, B.
The applicant submitted observations by the Bankruptcy Trustee of
Bankruptcy Estate B. Ltd., who is the successor of B. According to these
observations, the bankruptcy estate of B. Ltd. has obtained ownership of the
earlier marks.
The Board of Appeal set out, inter alia, the following relevant facts relied on by the
parties.
On 12 June 2008, Mr E.P. sold 100% of his shares in P. Š. to B. for
a total amount of EUR 6 million, of which EUR 2 million was
not paid by B. In 2008, P. Š. transferred those marks to B; on 15 February
2009, B. and Š. concluded a contract under which B. authorised Š. to
manufacture and sell goods under debated trademarks, and on 14 May 2023
transferred to Š. the respective intellectual property rights; those transfers
were not recorded at WIPO or national office.
Mr EP enforced his claim for EUR 2 million, he was granted a
lien over the Slovenian marks and the international registration, which were
pledged on 9 May 2013 and 13 April 2016 respectively. By decision of
16.04.2018, the Belgrade Commercial Court, enforceable in Slovenia, confirmed
Mr. E. P’s claim against B., as well as the right to separate reimbursement of
the claim, the amount of which represents the value of the seized trademarks. By
the Decision of 23.01.2018, the Supreme Court of the Republic of Slovenia,
regarding the registration of the trademark "Taliss" by Š., stated
that the very nature of the pledge gives the pledgee the right to prevent the
devastation of an intellectual property right that is subject to lien. Therefore,
claims Mr EP, he has active legal standing in promoting the action, as guarantor/pledgee
of an earlier mark.
Mr EP maintains that the contested mark was registered in the knowledge
and with the intention that such registration would be detrimental to his
rights as pledgor of the earlier marks. Companies B., KPMS and Š. acted in bad
faith, their aim was to prevent repayment of the debt owed to him by B.
In the
Case T‑238/21 Mr. E.P. brought an action against ETA for the
annulment/modification of the Decision of 23 March 2021 of the EUIPO the Fourth Board
of Appeal. The EU General Court (Second Chamber), by decision of 13 July
2022, partially admitted the action, annulled the decision of the Fourth Board of Appeal of the EUIPO of 23 March
2021 (Case R 888/2020-4).
As a preliminary point, the Court explained that the concept of bad faith
referred to in Article 52(1)(b) of Regulation No 207/2009 is not
defined, delimited, or even described in any way in EU legislation, the determination
criteria being highlighted by jurisprudence.
The Court pointed out that the earlier
marks were pledged as part of B.’s bankruptcy assets, but the contested mark
does not form part of that group of pledged marks. It follows that, if the
earlier marks were to be sold, to ensure that the applicant would obtain
repayment of B.’s debt, the contested mark would not form part of that sale.
Relating the pledged marks, a potential
purchaser would be faced with a situation where, after its potential purchase
of those marks, another mark would continue to exist, which would be identical
or like those marks, and in which that potential purchaser would have no
rights. The parties do not dispute that the marks at
issue are identical or similar. In the present case, it must be held that, from
the point of view of a potential purchaser of the earlier pledged marks, the
contested mark, which is identical or similar to the earlier marks, might be
perceived as being capable of exploiting their distinctive character or their
reputation.
Court observed that the applicant has provided sufficient evidence of
the potential effect which the registration of the contested mark might
have on the value of the earlier marks and on their attractiveness to potential
purchasers, which inherently affects that value. KPMS transferred the contested
mark to Š. shortly after its registration, those two companies are linked
economically. KPMS ought to have been aware of the pledge of the earlier marks,
that would mean that, when it filed the application for registration of the
contested mark, it would have known or ought to have known that such filing it
could prevent enforcement of the debt owed to the applicant. Such conduct on
the part of KPMS could not be perceived as irrelevant to the assessment of
whether it was acting in bad faith. Secondly, the systemic
analysis of the links between the applicant, KPMS, Š. and B., as part
of the same group of companies, of their contractual relationship and potential economic interdependence, are relevant to the outcome of the case. The assessment of whether the
applicant is acting in bad faith requires that all relevant factors
specific to the particular case to be taken into account.
The Court stated that EUIPO Board of Appeal did not correctly assess
whether there was bad faith in the case and accordingly infringed
Article 52(1)(b) of Regulation No 207/2009, upheld the action and annulled
the decision.
Case R1298/2020-4
Decision of the Fourth Board of Appeal of 23
June 2021
Cancellation decision 33322
On 21 February 2019, P. Bank S.A., Eurobank E. S.A., and the N. Bank of Greece S.A. filed against N. LTD (‘the EUTM proprietor’) request for a declaration of invalidity of European Union trademark ‘ELLO’ (word mark), filed on 30/01/2014 and registered on 19/07/2014 for all the goods and services covered by the EUTM in Class 35, by Article 59(1)(b) EUTMR.
The applicants argue that when filing for
the contested EUTM, the EUTM proprietor acted in a fictitious, misleading and
abusive manner, as an interposed legal person of the applicants’ debtor, the
Greek company K. S.A., in order to
achieve the fraudulent ‘rescue’ of K’s identical national trade mark from
bankruptcy and thus to ensure the continuation of the monopoly on the distinctive feature, through the European trade mark and against
the legitimate interest of K’s creditors.
· K. used to be the
proprietor of several highly reputed Greek trademarks. In the same group, the Greek company B. S.A., having the same seat and a similar
object of activity to K., also owned Greek national trademarks,
which became reputed.
·
On 15 May 2013, the EUTM
proprietor was incorporated in Cyprus. During 2014 and 2015, the EUTM
proprietor filed nine EUTMs, all related to the
Greek trademarks owned either by K., or B. S.A. Licenses were granted to K. and
B. S.A., to use the EUTM trademarks for the
whole EU, including Greece, even though the licensees held or had held
identical or highly similar Greek trademarks.
· K. and other companies from the B. Group faced for some time difficulties regarding liquidity and the carrying out of their obligations. The company K. has significant lending obligations (several thousands of millions of Euros) towards several lender banks (inter alia, the applicants) arising from a series of credit agreements entered starting with 1995. On 23/06/2017, K. filed the application before the Multimember Court of First Instance of Piraeus requesting to be declared bankrupt due to its failure to fulfil its overdue financial obligations. Its lender banks (inter alia, the applicants), requested to the same Court to submit K. to an extraordinary procedure of special administration. The aim of such procedure was the expedient sale of the company’s assets by a special administrator appointed by the court for the bankruptcy to be avoided. The application was upheld on 19/04/2018. Two months before the application for bankruptcy and even though its national marks had been renewed for another decade, K. started to surrender its most famous Greek national trademarks.
By decision of 29 April 2020, EUIPO, the Cancellation Division
upheld the application for a declaration of invalidity, declared the EUTM
invalid, applying the Article 59(1) EUTMR.
· The Cancellation Division finds
that the EUTM proprietor’s intention when applying for the contested mark was
to be a stand-in for the applicants’ debtor, in an asset protection scheme, and
with the intention of effectively putting an obstacle to K’s
creditors in recuperating their debts.
· It was established that on 19 July 2014 N. LTD
(‘the EUTM proprietor’) obtained the registration of European Union trademark
consisting of the word mark ELLO, for a variety goods and services in Classes
29 and 35. Several licenses were registered between 2017-2018. The EUTM
proprietor also filed several other EUTMs which were all surrendered on 17 June
2018 upon its request. On the same day
the EUTM proprietor requested the surrender of the four EUTMs, another Cypriot
company, C. LIMITED, with the same registered address and representative
as the EUTM proprietor, applied for the registration of four identical EUTMs
for the same goods and services.
· In the present
case, the timing and circumstances of filing the EUTM, the subsequent events
(in particular, allowing the Greek mark to lapse, less than two years
later the exclusive license to K. or C., followed by its cancellation), the
granting of other licenses, the lack of any evidence as to the actual use of
the mark by the proprietor or by any of its licensees topped with the filing
and subsequent registration of eight other EUTMs (following essentially the same pattern) demonstrate that the
filing and registration of the contested EUTM was part of an unlawful strategy
to ‘rescue’ Greek trademarks, including the trade mark ‘ELLO’, which were
assets of K. in fraudum creditoris.
· When the EUTM proprietor filed the contested
EUTM, it had colluded with K., which was the cancellation applicants’ debtor, with the sole aim of creating the impression
that the ‘ELLO’ trademark was a new trademark owned by a different entity. By such
conduct, it had diminished K.’s assets and effectively put an obstacle to the
cancellation applicants in having their monetary claims satisfied. In conclusion,
the Cancellation Division found the EUTM proprietor to have been acting in bad
faith.
In the case R 1298/2020-4, by the decision of
23 June 2021, the EUIPO Board of
Appeal upheld the decision of the Cancellation Division.
In the assessment of bad faith, it is stated that
the contested EUTM was filed in bad faith, a key part
of a coordinated strategy to remove a number of high value Greek trademarks,
including the trademark ‘ELLO’ from the assets of K. after
assuring the registration of equivalent trade mark rights by way of EUTMs (consisting of the same signs or composite signs including those earlier signs,
covering the same goods and valid also in Greece), in a dishonest scheme
designed to transfer value out of the latter company.
The dishonest plan was to effectively export the K. company’s valuable Greek trade mark rights into the form of EUTMs, and to dispose of the original Greek rights, draining the company of value before applying for insolvency, and also avoiding that the administrator to repay creditors by way of the sale of these valuable Greek trade mark rights. The EUTM proprietor filed the application for registration 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, in order to transfer the valuable trade mark rights out of jurisdiction and thus prevent the creditors from laying their hands on these valuable rights originally owned and developed by K. for decades.
Case number 000032421, Cancellation No. 32 421 C (Revocation)
On 30/01/2019, the applicant S. E. P. SA filed against V.F.N. S.p.A., in bankruptcy, an application for revocation in EUTM of trademark registered on 20/04/2005, for services in Class 35,38,41,42.
The applicant argued that the mark has not been
put to genuine use in the last five years for the services listed, in 2013 was
declared invalid and that the sign subsequently has been used for goods other
than registered services.
In its observations, the
proprietor claims that, in the relevant period, the trademark was used
with its consent by A. S.r.l.,
as per the licensing agreement concluded on 11/01/2013. The proprietor
explained that in 2018, the Fallement Section of the Court of Monza
authorized the liquidator of the bankruptcy estate of V.F.N S.p. A. to
grant the contested EU trademark exclusive use by licensing, and that on 17/01/2019 there
was the auctioneering of the mark. However, while the preparatory
activities for drafting the licensing contract ongoing, several circumstances
led to the bankruptcy proceedings brought before the Monza Court and suspension of the award of the trademark.
In its application, the
liquidator observed that the only offer received had been brought by a
company, which, owing to its name ‘IMCO 1972 S.r.l.’, could increase the
confusion existing on the trademark and its use, but also that they were
companies with likely links with the VV Italia S.r.l., which had failed to
fulfil its previous obligations under an auction of 18/12/2013, aspects taken
in consideration by the General Court of Monza. The proprietor therefore claims
that the complex litigations linked to these auctions in the years
2017 and 2018 are legitimate reasons for non - use of the trademark.
EUIPO’s Cancellation Division, by the Decision on 31 January 2020, established that the proprietor has not demonstrated genuine use of the contested EU trademark for the services for which it is registered, admitted the application for revocation and the contested European Union trademark was revoked in its entirety.
As grounds for decision it
was explained that, pursuant to Article 58(1)(a) EUTMR, the rights
of the Community trade mark holder shall be lost if, within a continuous period of five years, the trade mark has
not been put to genuine use in the Union in connection with the goods or
services in respect of which it is registered, and there are no proper reasons
for non -use. According to relevant jurisprudence, for its use to be genuine, the trademark
must be used in the market for the goods or services protected and the
use must not be symbolic. In revocation proceedings that rely on lack of use, the burden of
proof falls to the proprietor of the contested trademark.
In this case, the contested EU
trademark was registered on 20/04/2005. The application for revocation was
filed on 30/01/2019. Consequently, the contested trademark had been registered
for more than five years. The
proprietor had to demonstrate genuine use of the trademark between 30/01/2014 and 29/01/2019. In this respect, in the
absence of any proof that could demonstrate that the contested EUTM has been
used for the relevant services, the conclusion of a licensing contract
involving the sign in question is not in itself sufficient to demonstrate the
genuine use of the trademark on the market.
Pursuant to Article 58(1)(a) EUTMR, the proprietor of a EU trademark may prove that there are proper reasons for non-use, circumstances beyond its control. From this point of view, the financial difficulties encountered by a company are not considered to be legitimate reasons for non -use, as these types of difficulties constitute a natural part of its management. In addition, the interests of a failed company are taken care of by the bankruptcy practitioner and therefore there is no absolute inability to use the mark. As example, in this case, in insolvency proceedings, national authorities have consented to the possibility of granting others the use of the sign through competitive procedures, as contracts of licensing.
Case number 000032421, Cancellation No. 32 421 C (Revocation)
On 30/01/2019, the applicant S. E. P. SA filed against V.F.N. S.p.A., in bankruptcy, an application for revocation in EUTM of trademark registered on 20/04/2005, for services in Class 35,38,41,42.
The applicant argued that the mark has not been
put to genuine use in the last five years for the services listed, in 2013 was
declared invalid and that the sign subsequently has been used for goods other
than registered services.
In its observations, the
proprietor claims that, in the relevant period, the trademark was used
with its consent by A. S.r.l.,
as per the licensing agreement concluded on 11/01/2013. The proprietor
explained that in 2018, the Fallement Section of the Court of Monza
authorized the liquidator of the bankruptcy estate of V.F.N S.p. A. to
grant the contested EU trademark exclusive use by licensing, and that on 17/01/2019 there
was the auctioneering of the mark. However, while the preparatory
activities for drafting the licensing contract ongoing, several circumstances
led to the bankruptcy proceedings brought before the Monza Court and suspension of the award of the trademark.
In its application, the
liquidator observed that the only offer received had been brought by a
company, which, owing to its name ‘IMCO 1972 S.r.l.’, could increase the
confusion existing on the trademark and its use, but also that they were
companies with likely links with the VV Italia S.r.l., which had failed to
fulfil its previous obligations under an auction of 18/12/2013, aspects taken
in consideration by the General Court of Monza. The proprietor therefore claims
that the complex litigations linked to these auctions in the years
2017 and 2018 are legitimate reasons for non - use of the trademark.
EUIPO’s Cancellation Division, by the Decision on 31 January 2020, established that the proprietor has not demonstrated genuine use of the contested EU trademark for the services for which it is registered, admitted the application for revocation and the contested European Union trademark was revoked in its entirety.
As grounds for decision it
was explained that, pursuant to Article 58(1)(a) EUTMR, the rights
of the Community trade mark holder shall be lost if, within a continuous period of five years, the trade mark has
not been put to genuine use in the Union in connection with the goods or
services in respect of which it is registered, and there are no proper reasons
for non -use. According to relevant jurisprudence, for its use to be genuine, the trademark
must be used in the market for the goods or services protected and the
use must not be symbolic. In revocation proceedings that rely on lack of use, the burden of
proof falls to the proprietor of the contested trademark.
In this case, the contested EU
trademark was registered on 20/04/2005. The application for revocation was
filed on 30/01/2019. Consequently, the contested trademark had been registered
for more than five years. The
proprietor had to demonstrate genuine use of the trademark between 30/01/2014 and 29/01/2019. In this respect, in the
absence of any proof that could demonstrate that the contested EUTM has been
used for the relevant services, the conclusion of a licensing contract
involving the sign in question is not in itself sufficient to demonstrate the
genuine use of the trademark on the market.
Pursuant to Article 58(1)(a) EUTMR, the proprietor of a EU trademark may prove that there are proper reasons for non-use, circumstances beyond its control. From this point of view, the financial difficulties encountered by a company are not considered to be legitimate reasons for non -use, as these types of difficulties constitute a natural part of its management. In addition, the interests of a failed company are taken care of by the bankruptcy practitioner and therefore there is no absolute inability to use the mark. As example, in this case, in insolvency proceedings, national authorities have consented to the possibility of granting others the use of the sign through competitive procedures, as contracts of licensing.
“Treatment of intellectual property rights -
trademarks - in cross-border insolvency. Protection and harmonisation through
supranational statutory mechanisms and EUIPO best practices”
26 Years of Experience
In Legal Services
Eu turpis egestas pretium aenean pharetra magna ac placerat vestibulum lorem ipsum doler sit a met. Turpis in eu mi bibendum neque egestas congue quisque. Eu non diam phasellus vestibulum lorem.