JUDGMENT OF THE GENERAL COURT (Seventh Chamber)
31 May 2018 (*)
(EU trade mark — Invalidity proceedings — European Union figurative mark Outsource 2 India — 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‑340/16,
Flatworld Solutions Pvt Ltd, established in Bangalore (India), represented by S.O. Gillert, K. Vanden Bossche, B. Köhn-Gerdes and J. Schumacher, lawyers,
applicant,
v
European Union Intellectual Property Office (EUIPO), represented by D. Gája, acting as Agent,
defendant,
the intervener before the General Court, given leave to replace the other party to the proceedings before the Board of Appeal of EUIPO, being
Outsource Professional Services Ltd, established in Friedrichshafen (Germany), represented by A. Kempter, lawyer,
ACTION brought against the decision of the Fourth Board of Appeal of EUIPO of 15 April 2016 (Case R 611/2015-4), relating to invalidity proceedings between Flatworld Solutions and Outsource2India,
THE GENERAL COURT (Seventh Chamber),
composed of V. Tomljenović, President, E. Bieliūnas (Rapporteur) and A. Kornezov, Judges,
Registrar: E. Coulon,
having regard to the application lodged at the Court Registry on 28 June 2016,
having regard to the response of EUIPO lodged at the Court Registry on 24 August 2016,
having regard to the response of the intervener lodged at the Court Registry on 28 September 2016,
having regard to the order of 8 December 2016 granting leave to Outsource Professional Services to replace Outsource2India,
having regard to the fact that no request for a hearing was submitted by the parties within three weeks from notification of the closure 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,
gives the following
Judgment
Background to the dispute
1 On 25 June 2007, Outsource2India Ltd, replaced with the Court’s leave, by the intervener, Outsource Professional Services Ltd, filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO) pursuant to 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), as amended, itself 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 Registration as a mark was sought for the following figurative sign:
3 The mark was registered on 20 May 2008 under No 006035547 in respect of services in Classes 35, 36 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.
4 On 27 April 2010, the applicant, Flatworld Solutions Pvt Ltd, also filed an application for registration of an EU trade mark with EUIPO. The mark was registered on 25 May 2011 under number 009059494 for services in Classes 35, 36 and 42 and was composed of the following figurative sign:
5 On 4 February 2013, the applicant filed an application for a declaration of invalidity, pursuant to Article 52(1)(b) of Regulation No 207/2009 (now Article 59(1)(b) of Regulation 2017/1001), in respect of the intervener’s figurative mark for the services referred to in paragraph 3 above.
6 On 3 February 2015, the Cancellation Division upheld the application for a declaration of invalidity. It considered that it was apparent from the case file that the intervener had intentionally sought to appropriate the applicant’s mark and that it had therefore acted in bad faith when filing the application for registration of the contested mark, since the latter contained the same word element as that of the applicant’s mark.
7 On 22 March 2015, the intervener filed a notice of appeal with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009 (now Articles 66 to 71 of Regulation 2017/1001) against the decision of the Cancellation Division.
8 By decision of 15 April 2016 (‘the contested decision’), the Fourth Board of Appeal of EUIPO annulled the decision of the Cancellation Division. In particular, it considered that it was not apparent from the case file that the intervener had acted in bad faith or with dishonest intent when it requested registration of the contested mark.
Forms of order sought
9 The applicant claims that the Court should:
– annul the contested decision;
– confirm the decision of the Cancellation Division;
– order EUIPO to pay the costs.
10 EUIPO and the intervener contend, respectively, that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
Law
Admissibility
Admissibility of the action
11 The intervener submits that the action is inadmissible in that the applicant should have lodged the application with the Court Registry on 18 June 2016, that is to say, within two months from notification of the contested decision, namely on 18 April 2016, in accordance with Article 65(5) of Regulation No 207/2009 (now Article 72(5) of Regulation No 2017/1001), and not, as it did, on 28 June 2016.
12 It must be borne in mind that, in accordance with Article 60 of the Rules of Procedure, procedural time limits are extended on account of distance by a single period of 10 days. Accordingly, the action brought by the applicant, 2 months and 10 days after notification of the contested decision, is admissible.
Admissibility of the applicant’s second head of claim
13 By its second head of claim, the applicant asks the Court to confirm the Cancellation Division’s decision of 3 February 2015 granting the application for a declaration of invalidity.
14 It must be noted that, by its second head of claim, the applicant seeks to obtain a confirmatory ruling from the Court. It follows from Article 65(2) and (3) of Regulation No 207/2009 (now Article 72(2) and (3) of Regulation 2017/1001) that actions brought before the General Court seek to have the lawfulness of decisions of the Boards of Appeal examined and to obtain, as the case may be, the annulment or alteration of those decisions (judgment of 15 June 2010, Actega Terra v OHIM (TERRAEFFEKT matt & gloss), T‑118/08, not published, EU:T:2010:234, paragraph 10). Consequently, such an action cannot have the objective of obtaining confirmatory or declaratory rulings in respect of those decisions (order of 7 May 2014, Sharp v OHIM (BIG PAD), T‑567/13, not published, EU:T:2014:257, paragraph 11, and judgment of 14 March 2017, IR v EUIPO — Pirelli Tyre (popchrono), T‑132/15, not published, EU:T:2017:162, paragraph 27).
15 Therefore, as EUIPO rightly pointed out, the applicant’s second head of claim must be rejected as inadmissible.
16 As to the remainder, the action is admissible and must be examined on the merits.
Substance
17 In support of its action, the applicant raises a single plea in law, alleging infringement of Article 52(1)(b) of Regulation No 207/2009.
18 The applicant claims that the Board of Appeal erred in law in finding that the intervener had not acted in bad faith when it sought registration of the contested mark. In its first complaint, the applicant states that the Board of Appeal erred in stating that the applicant did not have anytrade mark rights in the earlier mark. By its second and third complaints, the applicant contends, in essence, that the Board of Appeal’s assessment of the comparison of the signs is vitiated by inconsistency in that, on the one hand, it relies on the logo of the applicant’s company containing the wording ‘outsource2india’ (‘the applicant’s logo’) as evidence of an agreement between the parties, while, on the other hand, it assesses the degree of distinctiveness of the word element common to the signs at issue, but omits to carry out an overall assessment of the signs. In its fourth complaint, the applicant claims that the Board of Appeal failed to have regard to the fact that it was the proprietor of domain namesconstituting earlier signs for the purpose of Article 51(1)(b) of Regulation No 207/2009 (now Article 58(1)(b) of Regulation 2017/1001). Finally, by its fifth complaint, the applicant, first, states that it is clear from the evidence that it has adduced that the intervener was aware of the existence of the earlier signs of the applicant, with which it had a pre-contractual relationship, and therefore that it filed for registration of the contested mark with dishonest intent. Second, the applicant submits that the Board of Appeal did not assess the similarity between the contested mark and the earlier signs, even though that similarity could create confusion and constitute a prerequisite for the application of Article 52(1)(b) of Regulation No 207/2009.
19 EUIPO and the intervener dispute the applicant’s arguments. They maintain that the applicant has not shown that it has acquired trade mark rights in the territory of the European Union through the alleged use of the wording ‘outsource2india’, given the descriptive character of the latter. As regards the first complaint, EUIPO submits that the applicant misinterprets the contested decision, since the Board of Appeal did not in any way wish to suggest that earlier trade mark rights are necessary for a finding of bad faith. As for the second and third complaints, EUIPO considers that, with regard to the assessment of the similarity of the signs, the Board of Appeal did not in any way contradict itself by finding that the use of the logo was the only evidence of an agreement between the parties and that that logo was the only factor which made it possible to differentiate the applicant’s mark from the contested mark, the identical wording of those marks having the same descriptive character. As regards the fourth complaint, EUIPO considers that the applicant has not explained how a descriptive domain name could constitute an earlier sign for the purpose of Article 51(1)(b) of Regulation No 207/2009, let alone what might constitute such an earlier sign for the purpose of that article. Finally, as regards the fifth complaint, EUIPO and the intervener maintain that, although the intervener was aware of the applicant’s domain and subdomain names, it did not act in bad faith when filing the application for registration of the contested mark, since there had been no prior agreement between the parties prohibiting the intervener from using the wording describing the applicant’s domain in the event of the breakdown of their relationship. Finally, EUIPO and the intervener contend that it is not apparent from the evidence adduced by the applicant that the intervener acted unfairly towards the applicant or that the registration of the contested mark amounted to bad faith on its part.
20 As a preliminary point, 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 No 207/2009 (now 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 this 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 (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 in 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).
21 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 he filed the application for registration of that mark 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).
22 Moreover, 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 the legislation (judgments of 1 February 2012 in Carrols v OHIM — Gambettola (Pollo Tropical CHICKEN ON THE GRILL), T‑291/09, EU:T:2012:39, paragraph 44, and of 8 March 2017, Formata, T‑23/16, not published, EU:T:2017:149, paragraph 41).
23 According to 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).
24 However, it is apparent from the wording used by the Court of Justice in the aforementioned 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 trade mark application. In that regard, it should be noted that, in the overall analysis undertaken for the purposes of Article 52(1)(b) of Regulation No 207/2009, account may also be taken of the origin of the contested signand its use since its creation, the commercial logic underlying the filing of the application for registration of the 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).
25 Furthermore, the General Court has held that, 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 has to 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).
26 It is in the light of the foregoing considerations in particular that the legality of the contested decision must be reviewed, in so far as the Board of Appeal concluded that there was no bad faith on the part of the intervener when it filed the application for registration of the contested mark.
27 In that regard, the Board of Appeal found that the evidence, adduced by the applicant and undisputed by the intervener, did not show, as a whole, that the intervener had acted in bad faith, or even with dishonest intent when it sought registration of the contested mark, but points, at most, to a difference of interpretationbetween the parties (paragraph 7 of the contested decision).
28 For the purpose of examining the legality of the contested decision, it is therefore necessary, as a preliminary point and before the actual consideration of the complaints raised, to recall the objective circumstances of the present case as indicated by the evidence adduced by the applicant, undisputed by the intervener, and as set out by the parties in their written pleadings.
29 First of all, it must be noted that the intervener contacted the applicant, on 4 November 2006, concerning possible collaboration in the European Union, in particular in Germany. On 7 November 2006, the applicant provided the intervener with a login and a password enabling it to access its website www.outsource2india.com. On 15 and 19 November 2006, the intervener contacted the applicant in order, first, to discuss the next stages of their collaboration in Germany and the business plan that it had developed and, second, to inform it of its intended visit to India in late December 2006 — early January 2007, and indicated that, in the course of that visit, it would like the applicant to give a presentation of the services most suitable for development in the German market. On 11 December 2006, the intervener consulted the applicant regarding the areas it wished to develop for their collaboration, namely the creation and the development of the content of the website www.outsource2india.de, the use of the applicant’s logo, which corresponds to the applicant’s figurative EU trade mark registered on 25 May 2011, the sending of the memorandum of understanding and the e-learning pilot test. It also sent, on 12 December 2006, the details of the research and data development websites. On 13 December 2006, the intervener informed the applicant of the creation, in Germany, of the company Outsource2India Ltd and it also mentioned its intention of using the applicant’s logo for its letterheads and its business cards. In its email of 15 December 2006, the applicant did not object to the name chosen by the intervener for its company and agreed to the use, by the intervener, of its logo and of the non-registered mark outsource2india as part of their collaboration, but added that it would prefer more emphasis to be placed on the name of the company Flatworld Solutions. Prior to the intervener’s visit to the applicant in India, postponed until February 2007, the parties discussed the invoicing arrangements for the services offered by the intervener and the commission that it would receive. Although the applicant paid for the services supplied to it by the intervener, it nevertheless indicated, in essence, that a conflict of interest could arise as a result of those invoicing arrangements and indicated to the intervener that it did not wish to be part of a collaboration that might undermine its integrity.
30 After their meeting in India, the intervener provided the applicant with information regarding, first, the initiatives it had undertaken and which the parties had discussed to expand their market in Germany and within the European Union and, second, concerns it had about the drafting of the memorandum of understanding. Those concerns related in particular to the difficult situation in which the intervener may find itself if the applicant were to decide, should the circumstances so dictate, to terminate their contractual relationship, given the financial resources that the intervener would have to invest to set up business partnerships and make the applicant’s non-registered mark outsource2India known in the German market, only to then have to repay those funds to the applicant, even though it did not own the rights in that mark. Moreover, the intervener was concerned about the quality of the services offered by the applicant, the latter’s suggested drafting of the memorandum of understanding, which benefited the applicant alone, and the fact that only the applicant would invoice customers. Consequently, the intervener explained to the applicant that it was not willing to invest in the development of a mark over which it would subsequently have no control and from which it would reap no benefit. It therefore proposed an amendment to the memorandum of understanding, which it wanted to discuss with the applicant, seeking to rename its company and to establish its own mark, local presence and own website and to act as intermediary between European companies wishing to outsource their services and Indian companies offering this possibility. In March 2007, the applicant approved the win-win relationship proposed by the intervener and asked it to amend the memorandum of understanding accordingly, by including in particular the new name of the intervener’s company. Furthermore, the parties started negotiations concerning the subdomain www.outsource2india.com/o2i-german hosted by the applicant’s website. The intervener informed the applicant of two possible options, both, however, entailing that subdomain being taken offline, since the proprietary content would be hosted under the domain www.outsource2india.de. The first option meant that the parties would have to agree on a price for the acquisition by the intervener of the subdomain www.outsource2india.com/o2i-german, that acquisition enabling the intervener to have possession of the files on that subdomain in order to amend and reconfigure them by incorporating its new logo, and that the parties would have to discuss the possibility for the applicant of linking its website to the intervener’s website for local language versions, given that everything from that link would be redirected to the applicant’s website. The intervener added that it intended, under that option, to outsource the maintenance of all local websites to the applicant. The second option contemplated the situation where the parties failed to agree a purchase price for the subdomain www.outsource2india.com/o2i-german. In that case, the intervener stated that it would have a new webpage programmed and would request the applicant simply to take the current version with the intervener’s content offline and replace it with the previous version of the applicant’s page. Subsequent to that discussion by email, the applicant answered the intervener by expressing a preference for collaboration on a case-by-case basis, for a period of six months, in order to determine whether the German market actually offered considerable potential for the expansion of its activities and, depending on the circumstances, to sign the memorandum of understanding if the parties were still in agreement. Moreover, in the absence of an exclusivity agreement between them, the applicant pointed out that it had the option of working directly with other commercial partners in the EU market, in particular in the German market, and that the intervener also had the opportunity of working with other Indian companies which might meet its demand for quality services in the coming six months.
31 By email of 17 May 2007, the intervener asked the applicant to provide it with presentation materials in order to offer its services to potential German customers. The applicant answered the intervener stating that it did not understand the content of its email, especially after several months of silence and the use of the wording ‘outsource2india’. The applicant was indeed surprised that the intervener had an active website under the domain name www.outsource2india.de, when it had undertaken, if they did not work together, not to use it or to create a company and a mark with a different name. Furthermore, the applicant pointed out to the intervener the overwhelming similarities between the wording ‘outsource2india” and the name of the intervener’s company. On 19 May 2007, the intervener replied that it had indeed undertaken not to use the applicant’s logo or website in the event that they collaborated on a case-by-case basis and that it had therefore redeveloped its website and registered its company under the name Outsource2India Ltd, with its own trade mark and logo, in the United Kingdom and Germany.
32 On 25 May 2007, the applicant replied to the intervener, stating that it had a different interpretation and recollection of their exchanges and it had expected the intervener to register a company with a name that would sound different to its own and the website of which would be different to its own by displaying, in particular, more than a mere difference of generic top-level domain. In addition, the applicant stated that the similarities between the contested mark and its non-registered mark outsource2india were too significant for the relations between their two companies to be trouble-freeand that such similarities were intentional on the part of the intervener, which thus sought to further its own interests by taking advantage of the name of the applicant’s non-registered mark outsource2india. Consequently, the applicant decided to disassociate itself from the intervener and to work with other European partners, in particular German partners. Finally, it thanked the intervener and wished it a promising future.
33 The Court considers it appropriate to examine first the fifth complaint raised by the applicant in its single plea in law.
34 In this regard, it is appropriate to interpret the fifth complaint raised by the applicant as seeking to criticise, in essence, the Board of Appeal for not taking into account the evidence, in particular the evidence relating to the chronology of events which led to the filing of the application for registration of the contested trade mark, the knowledge of the earlier use of the applicant’s signs and the commercial logic underlying the filing of the application for registration of the contested mark.
35 First of all, it must be recalled, as was noted in paragraphs 20 and 21 above, that the mere use by the applicant of its non-registered mark outsource2india does not preclude an identical or similar mark being registered as an EU trade mark for goods and services which are identical, as did the intervener, unless it is demonstrated that the latter acted in bad faith when filing, on 25 June 2007, the application for registration of the contested mark pursuant to Article 52(1)(b) of Regulation No 207/2009, without prejudice to whether or not earlier trade mark rights might exist.
36 Moreover, as stated in paragraphs 23 and 24 above, in order to rule on whether an applicant for registration of a sign as an EU trade mark was acting in bad faith when it filed the application for a trade mark, account must be taken of all the relevant factors specific to the particular case which existed at the time the application was filed, such as: (i) 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; (ii) the applicant’s intention of preventing that third party from continuing to use such a sign; and (iii) the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration was sought, and also the origin of the contested sign and its use since its creation, the commercial logic underlying the filing of the application for registration of the sign as an EU trade mark, as well as the chronology of events that led to the filing of the application.
37 In the present case, it is appropriate to examine more specifically the intervener’s knowledge of the applicant’s use of the non-registered mark outsource2india, the intervener’s intention, the commercial logic it pursued and the chronology of events.
38 In the first place, it should be observed that the intervener knew that the applicant was using, in particular in the German territory, a similar sign for the same services, that could be confused with the contested mark. The applicant offered and provided, from 2006, its outsourcing services, under the name of its non-registered mark, to client companies established in the European Union and, more particularly, in Germany, via its German-language subdomain, hosted by its top level domain name in English. Moreover, it is apparent from the case file that the applicant wished, through the intervener, and not merely via through the commercial interface through which its German-language subdomain operated, not only to build on its presence in the German market by strengthening its relations with its existing customers, but also to extend that presence by canvassing new customers.
39 In that regard, it must be noted that the applicant not only wished to capitalise on its business in Germany, but also to develop it in other countries of the European Union, in particular in Spain and in France, by creating subdomains in Spanish and French to canvass undertakings established in those countries. Furthermore, it is apparent from the email correspondence between the parties that although the applicant considered the intervener to be its favoured marketer, it preferred to collaborate with it on a case-by-case basis, rather than on the basis of an exclusivity agreement under which it would have, inter alia, granted it all of the marketing rights in relation to some of its clients. The applicant was seeking, by its collaboration with the intervener, to be in a position to conclude new commercial partnerships in Germany and within the European Union and to enable the intervener to work with various companies located in India. Consequently, contrary to what the Board of Appeal concluded, in paragraph 20 of the contested decision, the applicant was actually marketing its outsourcing and subcontracting services in Germany using the wording ‘outsource2india’ at the time the application for registration of the contested mark was filed, and it did so through its website, which was not merely intended to provide information.
40 Therefore, the intervener was aware of the applicant’s activities under its non-registered mark outsource2india and of its intention to develop its business, including through possible collaboration with the applicant in the European Union, in particular in Germany, when it filed the contested mark.
41 However, the fact that the applicant knew or should have known that a third party had long been using, in at least one Member State, an identical or similar sign for an identical or similar product that may be confused with the sign for which registration is sought is not sufficient, in itself, to permit the conclusion that the applicant was acting in bad faith. Consideration must also be given to the applicant’s intention at the time the application for registration was filed (judgment of 11 June 2009, Chocoladefabriken Lindt & Sprüngli, C‑529/07, EU:C:2009:361, paragraphs 40 and 41).
42 Accordingly, in the second place, it is necessary to determine the intervener’s intention on the basis of objective criteria. In that regard, it must be observed that it is apparent from the objective circumstances of the present case, in particular the chronology of events, that it is the intervener that made contact with the applicant on 4 November 2006 to consider a collaboration with each other in the European Union, in particular Germany. As early as February 2007, the applicant pointed out, during a discussion regarding invoicing arrangements, the lack of integrity which the intervener had displayed and its intention to no longer work in that way. In addition, the intervener agreed to work on the basis of a case-by-case relationship with the applicant, acting as agent for six months, without being bound to it by a formal contractual commitment and, above all, it had accepted, in the event that there was no collaboration or collaboration ceased, to respect the applicant’s copyright, including rights relating to the use of the applicant’s logo, the website and all the marketing material supplied to it, although it has maintained that only the use of the applicant’s logo and the website was covered. Furthermore, the intervener undertook to rename its own mark and its own website since the parties were not bound by a contract, which it failed to do. Therefore, the applicant, understandably, was genuinely surprised when it realised that the intervener continued to use the name of its non-registered mark even though they had not agreed the memorandum of understanding and had not signed it. Finally, it should be noted that the intervener filed the application for registration of the contested mark with EUIPO on 25 June 2007, that is one month after the applicant’s last email, dated 25 May 2007, in which it indicated to the intervener that the similarities between their two marks were, intentionally, too great.
43 Therefore, it is apparent from those objective circumstances that there was a certain link between the parties, in the form of contractual negotiations, and that, by applying for registration of a sign similar to the sign of which the applicant is the proprietor, for identical services, even though the applicant had informed the intervener that the two signs displayed too many similarities, the intervener intended to exploit the economic potential that could be mined from the name of the applicant’s non-registered trade mark outsource2india.
44 In the third place, the commercial logic pursued by the intervener confirms this. In that regard, although it is true that the applicant had approved, in the event that they collaborated in the future, the creation and development of the intervener’s country code top-level domain name and the registration of its German company, it nevertheless stated that it would prefer the emphasis to be more on the name of its own company, Flatworld Solutions, rather than on that of its non-registered mark outsource2india, contrary to the intervener’s assertion. The intervener informed the applicant that it wished to amend the memorandum of understanding, by including, inter alia, the names of its company and of its mark and that it hoped that the consequential changes in drafting would not be misunderstood. The intervener also wished to include the possibility of exercising total control over the commercial strategy that it initiated, before introducing to the applicant potential German clients it had canvassed, while at the same time explaining to it that it was not confident it could successfully build up a business portfolio in the European market and represent it adequately.
45 Furthermore, contrary to what the Board of Appeal stated in paragraph 15 of the contested decision, it is apparent from the correspondence produced by the applicant, which is not disputed by the intervener, that the applicant could reasonably expect, in particular, that the intervener would actually change the name of its company. In particular, as noted in paragraph 29 above, by email of 13 December 2006, the intervener mentioned to the applicant that it had registered its company under the name Outsource2India Ltd. Moreover, as the Board of Appeal pointed out, in most of their exchanges, the parties referred to the intervener by that name. Consequently, the Board of Appeal was not in a position to conclude, at the end of paragraph 15 of the contested decision, that ‘it is not clear if this name itself is the company as renamed’. It is apparent from the foregoing, on the contrary, that the intervener had not changed the name of its company. That is, moreover, confirmed by the email of 19 March 2007, in which the applicant indicated to the intervener that it might redraft the memorandum of understanding by referring to its new name. Since the intervener had itself told the applicant that it would change the name of its company, and that, in addition, there was still no question of terminating its collaboration with the intervener, the applicant did not have to, contrary to what the Board of Appeal stated in paragraph 16 of the contested decision, make a firm request or a demand that the intervener change its name.
46 It must be concluded that, by continuing to use and emphasise the wording ‘outsource2india’, both in the name of its mark and that of its company, even though the applicant had not given its consent, the intervener sought, when it filed the contested mark, to further its own interests in order to develop the use of the non-registered mark outsource2india in the European Union and thus pursued its own commercial logic.
47 It follows from all of the foregoing that, independently of the question whether the wording ‘outsource2india’ is descriptive, since the applicant submitted its application on the basis of Article 52(1)(b) of Regulation No 207/2009, as indicated in paragraph 5 above, the intervener knew that the applicant was using that wording in its logo, in its non-registered mark and in its domain names. In particular, it should be noted that the intervener contacted the applicant specifically in order to establish collaboration in the European Union and, more specifically, in Germany, in developing the applicant’s business by making use of that wording. In addition, the intervener filed, shortly after the termination of its pre-contractual relationship with the applicant, the application for registration of the contested mark. All of those factors demonstrate its bad faith, particularly as it had, moreover, registered its company and its mark in Germany and the United Kingdom beforehand.
48 In the light of all the foregoing, it must be held that the Board of Appeal made an incorrect assessment of the relevant factors in its examination of whether the intervener had acted in bad faith and concluded, therefore, wrongly, that the intervener had not acted in bad faith when it filed the application for registration of the contested mark.
49 Consequently, without it being necessary to examine the other complaints raised by the applicant, the single plea in law must be upheld and the contested decision annulled.
Costs
50 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since EUIPO has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the applicant.
51 In accordance with Article 138(3) of the Rules of Procedure, the intervener must bear its own costs.
On those grounds,
THE GENERAL COURT (Seventh Chamber)
hereby:
1. Annuls the decision of the Fourth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 15 April 2016 (Case R 611/2015-4);
2. Orders EUIPO to bear its own costs and to pay the costs incurred by Flatworld Solutions Pvt Ltd;
3. Orders Outsource Professional Services Ltd to bear its own costs.
Tomljenović | Bieliūnas | Kornezov |
Delivered in open court in Luxembourg on 31 May 2018.