Fruit of the Loom v EUIPO - Takko (FRUIT) (Judgment) [2016] EUECJ T-431/15 (07 July 2016)

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(EU trade mark — Revocation proceedings — EU word mark FRUIT — Genuine use of a mark — Article 15 and Article 51(1)(a) of Regulation (EC) No 207/2009 — External use of the mark)

Fruit of the Loom, Inc., established in Bowling Green, Kentucky (United States), represented by S. Malynicz QC, and V. Marsland, Solicitor,

European Union Intellectual Property Office (EUIPO), represented by D. Gája, acting as Agent,

ACTION brought against the decision of the Second Board of Appeal of EUIPO of 12 May 2015 (case R 1641/2014-2) relating to revocation proceedings between Takko Holding and Fruit of the Loom,

composed of D. Gratsias (Rapporteur), President, M. Kancheva and C. Wetter, Judges,

having regard to the response lodged at the Court Registry on 22 September 2015,

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

1 On 16 May 2006, Fruit of the Loom, Inc. 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).

3 The goods in respect of which registration was sought are in Class 25 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, and correspond to the following description: ‘Clothing, footwear, headgear’.

4 That application was published in the Community Trade Marks Bulletin No 43/2006 of 23 October 2006 and the mark was registered on 4 May 2007.

5 On 26 April 2013, Takko Holding GmbH filed an application for revocation of that EU trade mark, based on Article 51(1)(a) of Regulation No 207/2009, on the ground that that mark had not been put to genuine use in respect of all the goods covered by it for a continuous period of five years prior to that application for revocation.

6 With a view to establishing genuine use of its mark between 26 April 2008 and 25 April 2013, the applicant submitted evidence by which it sought to show (i) use of the contested mark as part of other trade marks, (ii) use of the word element ‘fruit’ in circumstances other than as a mark itself, and (iii) stand-alone use of the contested mark in preparatory works for the launch of a clothing range named ‘Born in the USA’.

7 By decision of 29 April 2014, the Cancellation Division upheld the application for revocation. First, it found that the word and figurative marks invoked by the applicant, namely the marks FRUIT OF THE LOOM and FRUIT 1851, could not be considered acceptable variations of the contested mark. Accordingly, use of those marks was not sufficient to prove use of the contested mark in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered, within the meaning of Article 15(1)(a) of Regulation No 207/2009. Secondly, the Cancellation Division found that none of the uses of the word element ‘fruit’ invoked by the applicant, other than its use as a trade mark, should, in the circumstances, be taken into account when assessing whether there had been genuine use of the contested mark.

8 Lastly, having considered the evidence intended to show stand-alone use of the contested mark in preparatory works for the launch of the ‘Born in the USA’ range, the Cancellation Division found that the applicant had used that mark only in an ancillary way and that that use had been overshadowed by use of the principal word and figurative marks, Fruit of the Loom. More specifically, although the mark FRUIT was affixed on small labels stitched on the goods, the primary brand present on the ‘Born in the USA’ range was the Fruit of the Loom mark, as was evident from the title page of the catalogue for that range and from the photographs on the applicant’s stand at the ‘Bread and Butter’ fashion trade fair which took place in Berlin (Germany) in 2012. According to the Cancellation Division, the mark FRUIT did not appear on those images.

9 Finally, the Cancellation Division took into account another ‘important point’, namely the fact that the applicant had used the contested mark only internally or in limited business circles. It stated, inter alia, that there was no evidence that goods under the mark FRUIT had ever been advertised to the end consumers or actually offered for sale and that, on the contrary, the evidence proved that the launch of the goods was stopped. The Cancellation Division concluded, taking into account the size of the European market for clothing, that the evidence produced by the applicant was essentially deficient as regards the nature and extent of use of the mark FRUIT. It therefore concluded that the stand-alone use of the contested mark in relation to the launch of the ‘Born in the USA’ range could not be classified as genuine use within the meaning of Article 51(1) of Regulation No 207/2009.

10 On 27 June 2014, the applicant filed a notice of appeal with the Board of Appeal of EUIPO claiming that the Cancellation Division had committed errors of law and fact.

11 More specifically, as regards the stand-alone use of the trade mark FRUIT, the applicant claimed that the Cancellation Division failed to adequately substantiate its conclusion that the contested mark had been used only in an ancillary way and failed to provide any explanation as to why the use of a well known mark should prevent the use, by the same proprietor, of other marks from being classified as genuine use. The applicant also provided further information on the evidence produced before the adjudicating bodies of EUIPO. In particular, the applicant claimed that the labels on which the mark FRUIT was affixed were not small, that they were clearly legible and were stitched on places such as pockets located on the front side of shirts or breast pockets, that is to say places in which marks protecting goods such as those covered by the contested mark are commonly affixed.

12 As regards the extent of that use, although the Cancellation Division found that the European market for clothing was very large, the applicant claimed that it had failed to establish why minimal use of the contested mark could not be considered genuine use, in accordance with the order of 27 January 2004 in La Mer Technology (C‑259/02, EU:C:2004:50). The applicant also noted, citing the judgment of 8 November 2007 in Charlott v OHIM — Charlo (Charlott France Entre Luxe et Tradition) (T‑169/06, not published, EU:T:2007:337), that proof of having exhibited at a fashion trade fair, when taken with other evidence, has been found capable of establishing genuine use of a contested mark. In that regard, it stressed that its participation in the fashion trade fair referred to in paragraph 8 above was not the only evidence on which its arguments were based and that it had adduced proof before the Cancellation Division, first, of the distribution of catalogues and brochures featuring goods bearing the mark FRUIT, as well as the distribution of samples of goods on which that mark was affixed and, secondly, of orders made by customers in Italy for, inter alia, goods bearing the mark FRUIT. Lastly, the applicant submitted that the Cancellation Division’s assessment was unduly influenced by the subsequent decision of the proprietor of the contested mark to temporarily exit the European retail market, even though that decision did not specifically relate to goods bearing the mark FRUIT. According to the applicant, that decision should not have been taken into account in assessing whether there had been genuine and non-token use of the contested mark, since there was nothing to suggest that at the time of the launch of the ‘Born in the USA’ range the applicant had any intention other than to preserve or create a market share for the goods at issue.

13 By decision of 12 May 2015 (‘the contested decision’), the Second Board of Appeal of EUIPO dismissed the appeal. More specifically, it upheld the findings of the Cancellation Division regarding lack of genuine use of the contested mark (i) as part of other trade marks, (ii) in circumstances other than as a mark itself, and (iii) as a stand-alone trade mark in preparatory works for the launch of the ‘Born in the USA’ range.

16 The applicant raises, in substance, a single plea in law, alleging infringement of Article 15(1) of Regulation No 207/2009.

17 Article 15(1) of Regulation No 207/2009 provides that ‘if, within a period of five years following registration, the proprietor has not put the EU trade mark to genuine use in the Union in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the EU trade mark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use’.

18 Under Article 51(1)(a) of that regulation ‘the rights of the proprietor of the EU trade mark shall be declared to be revoked ...: (a) 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; however, no person may claim that the proprietor’s rights in an EU trade mark should be revoked where, during the interval between expiry of the five-year period and filing of the application ... genuine use of the trade mark has been started or resumed’.

19 The rationale for the requirement that a mark must be the subject of genuine use in order to be protected under EU law is that EUIPO’s register cannot be compared to a strategic and static depository granting an inactive proprietor a legal monopoly for an unlimited period. On the contrary, that register must faithfully reflect what companies actually use on the market to distinguish their goods and services in economic life (see, judgment of 15 July 2015 in Deutsche Rockwool Mineralwoll v OHIM — Recticel (λ), T‑215/13, not published, EU:T:2015:518, paragraph 20 and the case-law cited).

20 According to the case-law, there is genuine use of a mark where it is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services; genuine use does not include token use for the sole purpose of preserving the rights conferred by the mark (judgment of 11 March 2003 in Ansul, C‑40/01, EU:C:2003:145, paragraph 43, order of 27 January 2004 in La Mer Technology, C‑259/02, EU:C:2004:50, paragraph 27, and judgment of 21 November 2013 in Recaro v OHIM — Certino Mode (RECARO), T‑524/12, not published, EU:T:2013:604, paragraph 19).

21 The Court has thus held that the analysis of whether use of an earlier trade mark is genuine cannot be confined merely to establishing that that mark has been used in the course of trade, since that use must also be genuine, in accordance with Regulation No 207/2009. Not all proven commercial exploitation can therefore automatically be deemed genuine use of the mark in question (judgment of 17 July 2014 in Reber Holding v OHIM, C‑141/13 P, not published, EU:C:2014:2089, paragraph 32).

22 As regards the criteria for assessing whether use of the trade mark is genuine, it must be borne in mind that, in making such an assessment, regard must be had to all the facts and circumstances relevant to establishing whether the commercial use of the mark is real, particularly the practices regarded as warranted in the relevant economic sector as a means of maintaining or creating market shares for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the extent and frequency of use of the mark (see judgment of 15 July 2015 in λ, T‑215/13, not published, EU:T:2015:518, paragraph 22 and the case-law cited).

23 Furthermore, a global assessment must be carried out, which takes into account all the relevant factors of the particular case. That assessment implies a certain interdependence between the factors taken into account. Thus, a low volume of goods marketed under the trade mark may be compensated for by a high intensity or a certain consistency over time of the use of that trade mark or vice versa (see judgment of 15 July 2015 in λ, T‑215/13, not published, EU:T:2015:518, paragraph 23 and the case-law cited).

24 Lastly, genuine use cannot be proved by means of probabilities or suppositions, but must be demonstrated by solid and objective evidence of actual and sufficient use of the trade mark on the market concerned (see judgment of 15 July 2015 in λ, T‑215/13, not published, EU:T:2015:518, paragraph 26 and the case-law cited).

25 As to the extent or scale of the use to which the contested trade mark has been put, account must be taken, in particular, of the commercial volume of the overall use, as well as of the length of the period during which the mark was used and the frequency of use (see judgment of 15 July 2015 in λ, T‑215/13, not published, EU:T:2015:518, paragraph 31 and the case-law cited).

26 The turnover and the volume of sales of the goods under the contested trade mark cannot be assessed in absolute terms but must be looked at in relation to other relevant factors, such as the volume of business, production or marketing capacity or the degree of diversification of the undertaking using the trade mark and the characteristics of the goods or services on the relevant market. Accordingly, use of a mark need not always be quantitatively significant in order for it to be deemed genuine. Thus even minimal use can be sufficient to be classified as genuine, provided that it is justified, in the economic sector concerned, to maintain or create market share for the goods or services protected by the trade mark. Consequently, it is not possible to determine a priori, and in the abstract, what quantitative threshold should be chosen in order to determine whether use is genuine. A de minimis rule, which would not allow EUIPO or, on appeal, the Court, to appraise all the circumstances of the dispute before it, cannot therefore be laid down (see judgment of 15 July 2015 in λ, T‑215/13, not published, EU:T:2015:518, paragraph 32 and the case-law cited).

27 In the interpretation of the notion of genuine use, account must be taken of the fact that the rationale for the requirement that the earlier mark must have been put to genuine use is not to assess commercial success or to review the economic strategy of an undertaking, nor is it intended to restrict trade mark protection to the case where large-scale commercial use has been made of the marks (see judgments of 24 May 2012 in TMS Trademark-Schutzrechtsverwertungsgesellschaft v OHIM — Comercial Jacinto Parera (MAD), T‑152/11, not published, EU:T:2012:263, paragraph 18 and the case-law cited, and 15 July 2015 in TVR Automotive v OHIM — TVR Italia (TVR ITALIA), T‑398/13, EU:T:2015:503, paragraph 45 and the case-law cited).

28 However, the smaller the commercial volume of the use of the mark, the more necessary it is for the proprietor of the mark to produce additional evidence to dispel any doubts as to the genuineness of its use (see judgment of 15 July 2015 in λ, T‑215/13, not published, EU:T:2015:518, paragraph 33 and the case-law cited).

29 The Court must examine the applicant’s single plea in law in the light of the foregoing considerations.

30 It must be noted at the outset that the applicant contests only paragraphs 33 to 43 of the contested decision, namely the paragraphs in which the Board of Appeal considered whether there had been genuine use of the stand-alone trade mark FRUIT. On the other hand, the applicant expressly states in paragraph 9 of its application that it does not contest paragraphs 26 to 32 of that decision which relate to use of the contested mark (i) as part of other trade marks and (ii) in other circumstances.

31 In support of its single plea, the applicant essentially puts forward three complaints. It claims that the Board of Appeal infringed Article 15(1) of Regulation No 207/2009, (i) by imposing an ‘end user’ test for genuine use, (ii) in its global assessment of the circumstances of the case and the evidence submitted by the applicant and, (iii), by wrong taking into account the applicant’s decision not to pursue the launch of the ‘Born in the USA’ range when assessing whether the use invoked by the applicant could be classified as genuine.

32 Before examining the applicant’s arguments, it is appropriate to clarify the scope of the reasons on which the Board of Appeal based its conclusion with regard to whether there had been genuine use of the stand-alone trade mark FRUIT.

33 In paragraph 33 of the contested decision, the Board of Appeal observed that the Cancellation Division had concluded that the evidence relating to the ‘Born in the USA’ range was substantially flawed as regards the extent and nature of use, that the mark FRUIT was not used publicly and outwardly enough, that the intensity and length of use of the mark in the (relatively limited) business circles were quite low, and that the evidence did not prove that the applicant had seriously tried to acquire a commercial position on the market for the mark FRUIT. The Board of Appeal stated that it agreed with those conclusions for the reasons set out in the subsequent paragraphs of the contested decision.

34 In paragraph 34 of the contested decision the Board of Appeal outlined some of the factual arguments put forward by the applicant with a view to contesting the Cancellation Division’s conclusion that the use invoked by the applicant of the stand-alone trade mark FRUIT was insufficient. As described in that paragraph, the applicant argued that evidence of that use, in the present case, lay in the fact that sample products were shown at a major fashion trade fair, that sample sets were distributed to retail customers in at least 12 Member States, and that brochures were widely distributed in the European Union both directly and via the fair and follow-up contacts. The applicant claims that 1250 brochures and 19 sets of samples of the range were sent to trade customers and a further 1000 brochures and 16 sample sets were sent to sales agents, with further copies going to the applicant’s own staff.

35 In paragraph 35 of the contested decision, the Board of Appeal stated that, even if the applicant’s claims set out in paragraph 34 of the contested decision had been established, there was no evidence in the case-file capable of proving that the goods on which the contested mark was affixed ever reached the clothing market, were ever advertised, or were ever offered to end consumers for sale. On the contrary, the launch of the goods was stopped. In that context, the Board of Appeal noted that the European market for clothing goods was very large and that those goods were for everyday use.

36 In paragraph 36 of the contested decision, after recalling that, in order to be classified as genuine, use of a mark must be consistent with its essential function, which is to guarantee the identity of the origin of the goods or services to the end user, the Board of Appeal stated that genuine use implied real use of that mark on the market concerned and excluded minimal or insufficient use.

37 Next, in paragraph 37 of the contested decision, the Board of Appeal took the view that use of the mark FRUIT in circumstances such as those in the present case, namely where samples of the goods on which the mark at issue was affixed were offered to retail traders which were customers of the applicant, where such samples were exhibited at trade fairs or brochures were distributed to resellers, did not satisfy the abovementioned criteria. The Board of Appeal found that the end users and the main relevant public for the goods covered by the contested mark was the general public and common consumers. According to the Board of Appeal, ‘use of the trade mark on products which have only been seen by resellers, sales agents, etc. and the staff of the proprietor of the mark, does not guarantee the identity of the origin of goods or services to the consumer or end user, nor does it create or preserve an outlet for those goods’. In such circumstances, the mark was not used ‘in accordance with its essential function and for the purpose of maintaining or creating market share’, nor was it ‘put to real, effective use’.

38 The Board of Appeal continued its analysis by stating, in paragraph 38 of the contested decision, that in so far as a mark has not been objectively present on the market concerned in a manner that is effective, consistent over time and stable in terms of the configuration of the sign, it cannot be regarded as having been put to genuine use, irrespective of the intentions of its proprietor.

39 Lastly, in paragraph 39 of the contested decision the Board of Appeal concluded that ‘therefore, even if the mark FRUIT [had] been sufficiently and correctly used on its own on the garments mentioned, there [was] no need for the Board to evaluate this, because, in any case, the information which [could] be deduced from the evidence provided [could not] justify the conclusion that the trade mark [had] been objectively present on the market in a manner that [was] effective and consistent over time’. The use of the mark invoked by the applicant could not, consequently, ‘be held to be warranted, in the economic sector concerned and taking account of the nature of the goods concerned, for the purpose of maintaining or creating market shares for the goods protected’.

40 It follows from the above that the Board of Appeal concluded that there had been no genuine use of the stand-alone trade mark FRUIT on the basis of two lines of reasoning, one primary reasoning and one alternative reasoning.

41 The primary reasoning on which the Board of Appeal based its conclusion with regard to whether there had been genuine use of the stand-alone trade mark FRUIT is apparent from paragraphs 35 to 39 of the contested decision. The Board of Appeal found there that the Cancellation Division was fully entitled to conclude that, in the present case, it could not be considered that the contested mark had been put to genuine use and that the Cancellation Division had based that conclusion on purely legal reasons. The Board of Appeal held that in a market the size of the European Union market, as regards goods such as those at issue in the present case, it was necessary to adduce and prove commercial acts aimed at end consumers in order to establish genuine use of a mark. Consequently, according to the Board of Appeal, commercial acts aimed exclusively at professionals from the sector concerned are insufficient for that purpose. Thus, in the present case, the commercial acts invoked by the applicant (see paragraph 34 above), even if they had been established, would not have been capable, under the relevant provisions, of demonstrating genuine use of the contested mark, a fortiori since the effective launch of the goods at issue was stopped and therefore those goods were never offered for sale to end consumers.

42 The alternative reasoning relied on by the Board of Appeal is essentially apparent from paragraph 39 of the contested decision, which states that, even if the commercial acts invoked in the present case by the applicant had been capable, under the relevant provisions, of demonstrating genuine use of the contested mark, despite the fact that the goods at issue were never offered for sale to end consumers, it was ‘in any case’ clear from the circumstances and evidence in the present case that the contested mark had not been ‘objectively present on the market in a manner that [was] effective and consistent over time’.

43 In view of what has been set out above, it is appropriate to examine, first of all, the first and third complaints submitted by the applicant, which relate to the primary reasoning on which the Board of Appeal based its conclusion regarding use of the stand-alone trade mark FRUIT, before examining the second complaint, which relates to the alternative reasoning on which the Board of Appeal based that conclusion.

44 In the first complaint raised in support of its single plea, the applicant claims that the Board of Appeal committed an error of law in so far as its analysis was confined to use which guaranteed the identity of the origin of the goods at issue to end users and end consumers. More specifically, the applicant maintains that, according to the case-law of the Court of Justice, the retail or end user market is not the only relevant market on which a mark may be used for the purpose of determining whether use of that mark is genuine. According to the applicant, advertising to retail customers is sufficient to establish genuine use of the mark, even without any sales being made to those customers.

45 In its third complaint, the applicant alleges that the Board of Appeal was ‘wrong in principle’ in so far as it assessed the genuineness of the proprietor’s use of the contested mark in the light of the management decision not to pursue the ‘Born in the USA’ range. The applicant maintains that that decision was not specific to the range of garments bearing the mark FRUIT but applied to all the proprietor’s sales to retail customers in Europe. In that regard, there is nothing to suggest that the proprietor of the mark had any other aim than to create or preserve a market share for goods bearing the mark FRUIT when it undertook its advertising campaign.

46 EUIPO contends that the first complaint is based on an incorrect reading of the contested decision. It maintains that the Board of Appeal made correct factual findings before concluding that the use invoked by the applicant was insufficient, and that if the Board of Appeal had thought that the mere fact that the goods had never reached the end user or consumer was enough for not acknowledging genuine use, it would have stated so, and the outcome of the case could thus have been justified in a few sentences. As regards the third complaint, EUIPO contends that, even though it is evident that the Board of Appeal took into account the cessation of the applicant’s activities, the Board of Appeal’s conclusion as regards the genuineness of the stand-alone use of the trade mark FRUIT was not based on that factual finding alone.

47 In view of what has been stated in paragraphs 40 to 43 above, the Court must, at the outset, reject EUIPO’s argument referred to in paragraph 46 above and examine, in the light of the applicant’s arguments, whether the primary reasoning on which the Board of Appeal based its conclusion with regard to the genuineness of the use of the stand-alone trade mark FRUIT, as set out at paragraph 41 above, is vitiated by an error of law.

48 It should be noted, in the first place, that, according to case-law, genuine use of a mark indeed requires that it be used publicly and outwardly (see judgment of 15 July 2015 in λ, T‑215/13, not published, EU:T:2015:518, paragraph 21 and the case-law cited). Consequently, the mere use of a mark in the context of the proprietor’s relations with its employees and agents cannot be classified as genuine use within the meaning of Article 15(1) of Regulation No 207/2009.

49 Nevertheless, as has been held, the outward use of a mark does not necessarily mean use aimed at end consumers. Genuine use of the mark relates to the market on which the proprietor of the EU trade mark pursues its commercial activities and on which it hopes to put its mark to use. Accordingly, taking the view that outward use of a mark, within the meaning of the case-law, must consist of use aimed at end consumers would effectively mean that marks used only in inter-corporate relations cannot enjoy the protection of Regulation No 207/2009. The relevant public to which marks are addressed do not comprise only end consumers, but also specialists, industrial customers and other professional users (see judgment of 21 November 2013 in RECARO, T‑524/12, not published, EU:T:2013:604, paragraph 25 and the case-law cited).

50 It must be stated that, in a market such as that of the European Union, in order to create or preserve an outlet for goods such as those at issue in the present case, it is common (and even necessary where a manufacturer of such goods does not have its own distribution channels) to direct commercial acts at professionals in the sector concerned and particularly at resellers. Thus, it cannot be ruled out, as a matter of principle, that proven use of a mark in commercial acts directed only at professionals from the sector concerned can be considered use consistent with the essential function of the mark within the meaning of the case-law cited in paragraph 20 above.

51 It must therefore be held that the Board of Appeal was not entitled to rule out the genuineness of the use relied upon by the applicant solely because the commercial acts invoked by the applicant were not directed at end consumers.

52 Furthermore, as the applicant states (see paragraph 44 above), promotional acts, such as those which it invokes to establish the genuine nature of the use of the contested mark, have been found, in the case-law, to be capable of being characterised as genuine use or, at the very least, of being taken into account in the overall assessment referred to in paragraph 23 above.

53 In the judgment of 11 March 2003 in Ansul (C‑40/01, EU:C:2003:145, paragraph 37), the Court of Justice held that use of a mark could relate to goods or services already marketed, or to goods or services whose marketing, prepared by the proprietor of the mark to secure customers, was imminent. Thus, according to settled case-law, advertising carried out to promote a mark is one of the factors to be taken into account when assessing the genuineness of the use of that mark (judgment of 17 July 2014 in Reber Holding v OHIM, C‑141/13 P, not published, EU:C:2014:2089, paragraph 33).

54 In that regard, the Court has already had occasion to state that a body of evidence consisting of advertising material is capable of establishing use of a contested mark to identify the source of the goods covered by that mark and, therefore, to guarantee the identity of the origin of the goods for which that mark is registered, which is the essential function of a mark within the meaning of the case-law cited in paragraph 20 above. More specifically, the Court has held that the use of a reproduction of the contested mark in advertising carried out by means of the specialist press, on banners and in the context of a trade fair may be capable of demonstrating that it has been used outwardly within the meaning of that case-law (judgment of 15 July 2015 in λ, T‑215/13, not published, EU:T:2015:518, paragraphs 40 and 41). It is also apparent from the case-law that the affixing of a trade mark on a catalogue is in principle capable of constituting ‘valid use of the sign’ as a trade mark for the goods and services designated by that mark, if the content of those publications confirms the use of the sign for goods and services covered by the mark in question (judgment of 24 May 2012 in MAD, T‑152/11, not published, EU:T:2012:263, paragraphs 28 to 39; see also, to that effect, judgment of 15 July 2015 in λ, T‑215/13, not published, EU:T:2015:518, paragraph 46 and the case-law cited).

55 In addition, the Court has already had occasion to state, in the judgment of 8 November 2007 in Charlott France Entre Luxe et Tradition (T‑169/06, not published, EU:T:2007:337, paragraph 62) with regard to similar goods to those covered by the contested mark in the present case, that participation in trade fairs or fashion shows, the publication of catalogues or the existence of a website are capable of demonstrating that a mark has been used to create business opportunities and not merely to preserve the rights conferred by that mark.

56 Admittedly, in that same judgment, the Court concluded that proof of participation in a single trade fair did not constitute proof of genuine use since, essentially, such participation indicates only a sporadic and occasional presence on the market rather than a continued presence. Nevertheless, having regard to the other evidence, the Court ultimately found that use of the contested mark in that case was not sporadic but regular or even continuous (see, to that effect, judgment of 8 November 2007 in Charlott France Entre Luxe et Tradition, T‑169/06, not published, EU:T:2007:337, paragraph 63).

57 Second, it must be held that the Board of Appeal erred, in the present case, in taking into account, when assessing the genuineness of that use, the subsequent decision of the applicant to stop the launch of the goods on which the mark at issue was affixed on the ground that that decision resulted in those goods never being offered for sale to end consumers.

58 In that regard, it should be noted that, where the marketing activities invoked to establish genuine use of a mark are capable, at the time they are undertaken by the proprietor of that mark, of creating an outlet for the goods or services concerned, subsequent circumstances may not, in principle, be taken into account when assessing whether there has been genuine use of that mark.

59 While it is true that the objective of the manufacture and marketing of goods such as those at issue is, in principle, to offer those goods for sale to the end user, the rationale for the requirement that a mark must have been put to genuine use, as recalled in paragraph 27 above, is not to assess commercial success or to review the economic strategy of an undertaking. It is clear from that case-law that a factor such as the decision to stop the launch of a range of trade-marked goods for economic or strategic reasons cannot be decisive in the assessment as to whether a mark has been put to genuine use.

60 It can moreover be inferred from the case-law that, depending on the circumstances of the case, when assessing whether use of a mark is genuine, account should be taken of the simple fact that goods similar to those covered by the contested mark have been offered for sale on the relevant market, irrespective of whether they were ever actually sold or not (see, to that effect and by analogy, judgment of 8 November 2007 in Charlott France Entre Luxe et Tradition, T‑169/06, not published, EU:T:2007:337, paragraph 61).

61 Nevertheless, that does not exclude the possibility that a decision by a proprietor of a mark to not launch goods covered by the mark on the relevant market may, depending on the circumstances of the case, be taken into account for the purpose of assessing the genuineness of the use invoked. Such a decision may constitute a factor capable of demonstrating that preparatory works for the launch of the goods at issue were merely token preparations, that is to say, that their sole purpose was to preserve the rights conferred by the mark, within the meaning of the case-law cited in paragraph 20 above.

62 The genuineness of such use cannot be ruled out unless it was determined, following an overall assessment of the material in the file and the circumstances of the case, that the commercial acts invoked by the proprietor were not sufficient to establish such genuine use, on account of their extent and scale, which must be considered in the light of the criteria set out in the case-law cited in paragraphs 22 and 23 above.

63 In that regard, it cannot be found that a proprietor of a mark which has invested considerable material and human resources in preparatory work for the launch of goods protected by the mark, assessed in relation to the economic importance of its overall commercial activity and the nature and size of the relevant market, has made only token use of that mark, without the evidence it has submitted being examined and submitted to an overall assessment. The fact that, subsequent to that use, the proprietor of the mark at issue took the commercial decision to postpone or stop the launch should not constitute the only determining factor in that assessment. On the contrary, it must be held, as the applicant has claimed (see paragraph 12 above), that such a factor is not capable, in and of itself, of establishing purely token use, within the meaning of the case-law, since it does not necessarily deprive the commercial acts carried out before such a decision of their capacity to preserve or create a market share for the goods at issue.

64 Accordingly, it must be concluded, as the applicant submits, in essence, in its first and third complaints, that the primary reasoning on which the Board of Appeal based its conclusion as to whether there had been genuine use of the stand-alone trade mark FRUIT is vitiated by an error of law in so far as the Board of Appeal held that commercial acts such as those invoked by the applicant were not, in principle, capable, under the relevant provisions, of demonstrating genuine use of a mark such as the contested mark since those acts were not aimed at final consumers.

65 However, it should be recalled that, according to case-law, where the operative part of a decision is based on several pillars of reasoning, each of which would in itself be sufficient to justify that operative part, that decision should, in principle, be annulled only if each of those pillars is vitiated by an illegality. In such a case, an error or other illegality which affects only one of the pillars of reasoning cannot be sufficient to justify annulment of the decision at issue because that error could not have had a decisive effect on the operative part adopted by the decision maker (see, to that effect, judgment of 9 September 2010 in Evropaïki Dynamiki v Commission, T‑387/08, not published, EU:T:2010:377, paragraph 59; see also, by analogy, judgment of 14 December 2005 in General Electric v Commission, T‑210/01, EU:T:2005:456, paragraphs 42 and 43 and the case-law cited).

66 Accordingly, in view of what has been set out in paragraphs 40 to 43 above, it is necessary to examine the second complaint by which the applicant contests the reasoning relied on in the alternative by the Board of Appeal.

67 In the context of its second complaint, the applicant refers to the case-law in which it has been established that use of a mark need not always be quantitatively significant for it to be deemed genuine, as that depends on the characteristics of the goods or services concerned on the corresponding market (judgment of 11 March 2003 in Ansul, C‑40/01, EU:C:2003:145, paragraph 39, and order of 27 January 2004 in La Mer Technology, C‑259/02, EU:C:2004:50, paragraph 19). In the applicant’s view, had the Board applied a qualitative test, focusing on whether the use was genuine in the light of all the evidence and the relevant circumstances, it would have concluded that the proprietor’s use served a real commercial purpose. It thus argues, in essence, that the Board of Appeal reached its conclusion regarding whether there had been genuine use of the stand-alone trade mark FRUIT without carrying out an assessment, consistent with that required by the case-law, of the circumstances of the case and the evidence submitted by the applicant.

68 In that regard, as stated in the context of the first and third complaints, EUIPO contends that, contrary to the applicant’s claim concluding its second complaint, the Board of Appeal made correct factual findings and appraised all the circumstances of the case.

69 More specifically, EUIPO maintains that, in paragraph 9 of the contested decision, the Board of Appeal reproduced the reasons set out in the decision of the Cancellation Division and that, in paragraph 33 of the contested decision, the Board of Appeal confirmed the Cancellation Division’s finding relating to the evidence on the preparatory work for the launch of the ‘Born in the USA’ range. In support of its arguments, EUIPO relies on the case-law in which it has been established that, given the continuity in terms of function, under Article 64(1) of Regulation No 207/2009, between the Cancellation Divisions and the Boards of Appeal, the decision of a Cancellation Division, together with its statement of reasons, forms part of the context in which the Board of Appeal’s decision was adopted, a context which is known to the parties and enables the Court to carry out fully its review as to whether the Board of Appeal’s assessment was well founded (see judgment of 18 March 2015 in Naazneen Investments v OHIM — Energy Brands (SMART WATER), T‑250/13, not published, EU:T:2015:160, paragraph 16 and the case-law cited). In addition, EUIPO contends that the Board of Appeal took into account the evidence submitted and concluded that, under the circumstances of the present case, that is to say, necessarily considering the nature and extent of the proprietor’s activities under the contested mark, the limited use invoked by the applicant did not fulfil the criteria of genuine use. The Board of Appeal therefore took into consideration the extent of that use as invoked by the applicant.

70 Furthermore, EUIPO maintains that, in the absence of genuinely putting goods on the market, the standard of preparations such as those the applicant claims to have undertaken in the present case for the launch of the ‘Born in the USA’ range must be quite high in order for those actions to enable the public, even if it is a professional public, to become familiarised with the trade mark in question. According to EUIPO, it was not proven, in the present case, that the public had sufficient opportunity to become familiarised with the contested mark.

71 More specifically, as regards the proprietor’s participation in the trade fair referred to in paragraph 8 above, paragraph 27 of the response states that visitors of the trade fair did not have the opportunity to notice the mark FRUIT, which appeared only on small labels stitched to the clothes, and that the invitation to that fair contained no mention of that mark. EUIPO contends that the mark FRUIT appeared only very rarely in the catalogues and brochures produced by the applicant and that the client who, according to the applicant, ordered 400 sample sets, was not exposed to prominent use of that mark.

72 Lastly, EUIPO maintains that even though, according to the case-law, even quantitatively minimal use may be sufficient, the Court of Justice has not excluded the use of a quantitative criterion and has stated that that criterion must be assessed in relation to the relevant goods and services and relevant market. Thus, according to EUIPO, the cheaper the relevant goods and the bigger the market for them, the higher the quantitative requirement must be.

73 The Court notes from the outset that, as the applicant essentially claims in paragraph 46 of the application (see paragraph 67 above), the Board of Appeal’s assessment of the evidence and the circumstances of the case, in the context of the reasoning it relied on in the alternative, does not satisfy the criteria specified in the case-law cited in paragraphs 22 and 23 above, particularly in the light of the detailed and precise nature of the arguments and evidence submitted by the applicant before the adjudicating bodies of EUIPO (see paragraphs 11 and 34 above).

74 First, it should be recalled that, in support of its arguments, the applicant has invoked commercial acts directed at professionals. It was therefore appropriate for the Board of Appeal to take into account, in the context of the overall assessment it was required to carry out, the practices in the professional sector concerned regarding marks covering goods similar to those at issue in the present case. Thus, even if the use invoked by the applicant has not been sufficient for the general public to become familiarised with the contested mark, that finding does not necessarily apply to a public composed, at least primarily, of professionals from the sector concerned.

75 It must be held, in that regard, that the Board of Appeal failed to give proper consideration to practices of marking that are specific to the clothing sector. The Court has already, however, had occasion to state that, with regard to clothing, it is common practice for marks to be affixed even on the inside of an item rather than on the outside or on the packaging containing that item of clothing (see, to that effect, judgment of 24 May 2012 in MAD, T‑152/11, not published, EU:T:2012:263, paragraph 67). In the light of that case-law and the fact that the applicant submitted specific arguments in that regard (see paragraph 11 above), the Board of Appeal wrongly failed to explain the reason why professionals from the sector concerned would not have had the opportunity, in the present case, to notice the labels stitched on the goods at issue. The contested decision does not include any specific assessment in that regard.

76 The same holds, second, in relation to the existence of the principal word and figurative marks, Fruit of the Loom. By omitting to respond to the argument submitted before it by the applicant (see paragraph 11 above), the Board of Appeal wrongly failed to provide reasons as to why professionals from the sector concerned would not have been able to notice, alongside the abovementioned principal marks, the existence of another mark put forward by the same proprietor.

77 Third, it is true that, in paragraph 39 of the contested decision, the Board of Appeal concluded that the use invoked by the applicant could not be classified as genuine use since the contested mark had not been ‘objectively present on the market in a manner that [was] effective and consistent over time’. Nevertheless, it must be held that, in that regard, the contested decision contains a mere conclusion, without being preceded by a specific analysis and without taking into account the fact that the commercial acts invoked by the applicant were carried out towards the end of the period relevant to establishing proof of genuine use of the contested mark.

78 However, according to the case-law, the mere fact that a mark has been used by the applicant for only a limited period cannot be a decisive factor in the assessment as to whether a mark has been put to genuine use. It should be noted that it is sufficient that a trade mark should have been put to genuine use during a part of the relevant period for it not to be subject to the sanctions referred to in Article 15(1) of Regulation No 207/2009. Similarly, Rule 22(3) of Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Regulation (EC) No 40/94 on the Community trade mark (OJ 1995 L 303, p. 1) lays down the criterion of ‘time’ of use without requiring that continuous use be demonstrated during the five-year period, and distinguishes it from, inter alia, the criteria of the extent and nature of use, which, taken together only, demonstrate genuine use of the earlier trade mark (see judgment of 15 July 2015 in TVR ITALIA, T‑398/13, EU:T:2015:503, paragraph 52 and the case-law cited).

79 Lastly, as regards the volume of commercial acts invoked by the applicant, it must be held that the Board of Appeal failed to carry out a specific analysis with regard to the number of brochures and catalogues distributed by the applicant in relation to the launch of the ‘Born in the USA’ range and failed to take into account, in the contested decision, orders for goods from that range which the proprietor of the contested mark claims to have received.

80 In that regard and in any event, as pointed out in paragraph 26 above and as argued by the applicant before the Board of Appeal (see paragraph 12 above), even minimal use of a mark is capable of being classified as genuine, provided that it is justified, in the economic sector concerned, taking into account other relevant factors such as the volume of business of the undertaking which is the proprietor of the mark in question and the degree of diversification in their business activities. The contested decision did not include any specific considerations in that regard. On the contrary, in paragraph 36 of the contested decision the Board of Appeal stated that genuine use is ‘to be regarded as excluding minimal or insufficient use for the purpose of determining that a mark is being put to real, effective use on a given market’. The mere abstract references to the size of the relevant product market in the European Union and to the fact that those goods are for everyday use (see paragraph 35 above) cannot, in themselves, justify the conclusions of the Board of Appeal as to whether the use invoked by the applicant was sufficient.

81 Furthermore, it should be pointed out that, contrary to what EUIPO contends in its response, the fact that the Board of Appeal confirmed the conclusions of the Cancellation Division as regards the assessment of the evidence submitted by the applicant is irrelevant in the present case.

82 It is true, as EUIPO recalls, that it follows from the continuity in terms of their functions between the various adjudicating bodies of EUIPO that, in the context of the review which the Boards of Appeal must undertake of the decisions taken by the EUIPO units which heard the application at first instance, the Boards are required to base their decisions on all the matters of fact and of law which the parties put forward, either in the proceedings before the unit which heard the application at first instance or in the appeal (see judgments of 23 September 2003 in Henkel v OHIM — LHS (UK) (KLEENCARE), T‑308/01, EU:T:2003:241, paragraphs 25 and 32 and the case-law cited, and 1 February 2005 in SPAG v OHIM — Dann et Backer (HOOLIGAN), T‑57/03, EU:T:2005:29, paragraph 18; see also judgments of 9 November 2005 in Focus Magazin Verlag v OHIM — ECI Telecom (Hi-FOCuS), T‑275/03, EU:T:2005:385, paragraph 37 and the case-law cited, and 26 September 2014 in Koscher + Würtz v OHIM — Kirchner & Wilhelm (KW SURGICAL INSTRUMENTS), T‑445/12, EU:T:2014:829, paragraph 28 and the case-law cited).

83 It must be held, in the present case, that the decision of the Cancellation Division does not contain, as regards use of the contested mark in preparatory works for the launch of the ‘Born in the USA’ range, any assessment of the evidence submitted by the applicant beyond a number of mere assertions. In that regard, classifying the business circles at which the marketing activities of the applicant were directed as ‘limited’ (see paragraph 9 above), without giving any further details, mere references to the size of the relevant market in the European Union and to the fact that the goods at issue are for everyday use (see paragraph 9 above) and the simple finding that the intensity and length of the use invoked were not sufficient to establish the genuineness of that use cannot make up for the failure to carry out a global assessment within the meaning of the case-law cited in paragraphs 22 and 23 above. The same is true, in view of what has been set out in paragraphs 74 to 78 above, as regards use of the contested mark in parallel to use of the principal word and figurative marks Fruit of the Loom, and the length of that use.

84 Lastly, there is no need to take into account the analyses and assessments carried out by EUIPO, for the first time, in their response. It was before the Court that EUIPO first asserted that ‘the standard for ... preparations [for the launch of goods covered by the contested mark], in the absence of genuinely putting goods on the market, must be quite high’. It was also before the Court that EUIPO (i) examined some of the evidence relating to the trade fair referred to in paragraph 8 above, (ii) evaluated the significance of the orders invoked by the applicant, (iii) assessed the scope of the marketing activities undertaken by the applicant in relation to the stand-alone trade mark FRUIT and (iv) responded to the argument submitted before the Board of Appeal by the applicant in relation to the coexistence of the mark FRUIT and the mark Fruit of the Loom in preparatory works for the launch of the ‘Born in the USA’ range. These explanations must be regarded as a belated attempt to state reasons for the contested decision, which is inadmissible before the Court (see, to that effect and by analogy, judgment of 24 September 2015 in Rintisch v OHIM — Compagnie laitière européenne (PROTICURD), T‑382/14, not published, EU:T:2015:686, paragraph 62 and the case-law cited).

85 Consequently, it must be held that the Board of Appeal arrived at its alternative conclusion regarding the insufficiency of the evidence submitted by the applicant to establish genuine use of the stand-alone trade mark FRUIT without carrying out a global assessment of the evidence and the circumstances of the case in accordance with the criteria set out in the case-law cited in paragraphs 26 and 80 above. Furthermore, it should be recalled in that regard that, according to the case-law, it is not for the Court to carry out such an assessment for the first time in the course of its review of the lawfulness of the contested decision (see, by analogy, judgment of 24 September 2015 in PROTICURD, T‑382/14, not published, EU:T:2015:686, paragraph 66 and the case-law cited).

86 In the light of all the foregoing, it must be held that the conclusion of the Board of Appeal with regard to the genuineness of the use of the stand-alone trade mark FRUIT, is based, as regards the primary reasoning on which its conclusion is based, on an analysis vitiated by error of law and, as regards the alternative reasoning of that conclusion, on an assessment of the evidence and the circumstances of the case which does not satisfy the criteria specified in the case-law. The action must therefore be upheld and the contested decision annulled.

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

1. Annuls the decision of the Second Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 12 May 2015 (Case R 1641/2014-2);

2. Orders EUIPO to bear its own costs and to pay those of Fruit of the Loom, Inc.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Fruit of the Loom v EUIPO - Takko (FRUIT) (Judgment) [2016] EUECJ T-431/15 (07 July 2016) URL: http://www.bailii.org/eu/cases/EUECJ/2016/T43115.html Cite as: ECLI:EU:T:2016:395, [2016] EUECJ T-431/15, EU:T:2016:395

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