When Dublin-based Alder Capital applied for a Community Trade Mark, Netherlands-based Halder Investments opposed, based on their monicker’s prior use and registration. Alder said Halder’s prior use didn’t count as the relevant financial services were not authorised by the local regulator. Anna Williams reports the verdict.
Who: Alder Capital Limited and the Office for Harmonisation in the Internal Market
When: 13 April 2011
Where: The EU General Court
Law stated as at: 5 May 2011
Back in 16 August 2001, Alder Capital Limited filed an application for registration of a Community trade mark with the Office for Harmonisation in the Internal Market (OHIM) in respect of the word mark "ALDER CAPITAL". Registration was sought for services falling within Class 36 including financial services, banking, investment banking and corporate finance services, currency fund management, and advisory and consultancy services relating to such financial services. In February 2003, Alder Capital's CTM was accepted for registration for the services applied for.
In October 2005, Halder Holdings BV (now known as Gimv Nederland BV) filed an application for a declaration of invalidity of Alder Capital's CTM on the basis of what is now Article 8(1)(b) and (4) and Article 53(1)(a) and (c) of Regulation No 207/2009. In support of its application regarding the likelihood of confusion between the various marks, Halder Holdings relied on its following marks:
- word marks for "Halder" and "Halder Investments" registered with the Bureau Benelux des marques (Benelux Trade Marks Office) in 1998 for services in respect of Classes 35 and 36;
- an international word mark for "Halder" registered in 1999 with effect in Germany, France, and Italy for services in Classes 35 and 36; and
- the unregistered trade and company names "Halder", "Halder Holdings", "Halder Investments" and "Halder Interest", used in the course of trade in the Netherlands for investing capital in companies and acquiring investors for the benefit of investment funds.
The decision of the Cancellation Division of OHIM
In their decision of 15 January 2008, the Cancellation Division of OHIM declared the CTM "ALDER CAPITAL" to be invalid in its entirety on the basis of Halder Holdings' unregistered Netherlands rights. However, the Cancellation Division also found that there had been no genuine use of Halder Holdings' earlier registered marks in the period from October 2000 to October 2005. Alder Capital therefore filed an appeal against the Cancellation Division's decision as did Halder Holdings which requested the Board of Appeal to reconsider the findings of the Cancellation Division as regards proof of use of its earlier trade marks.
The decision of the Second Board of Appeal of OHIM
The Second Board of Appeal of OHIM dismissed Alder Capital's appeal on the ground that there was a likelihood of confusion between the CTM "ALDER CAPITAL" and: (i) the earlier mark "Halder Investments", the use of which as a mark was proved in the Benelux countries for services of acquiring investors for the benefit of investment funds, setting up investment funds, and company buy-outs; and (ii) the earlier mark "Halder", use of which was proved in the Benelux countries, Germany and Italy for the same services. Alder Capital appealed once again to the EU General Court this time.
The views of the EU General Court
Alder Capital argued that the General Court should annual the contested decision and order OHIM and Halder Holdings to pay all costs, including those incurred by Alder Capital before the Board of Appeal. Alder Capital submitted that, by acceding to Halder Holding's request that it reconsider the findings of the Cancellation Division as regards proof of use of the earlier marks, the Board of Appeal infringed Articles 57 and 58 of Regulation No 40/94 and Article 8(3) of Regulation No 216/96.
Amongst other things, Alder Capital also argued that Article 8(3) of Regulation No 216/96, on the basis of which Halder Holding's request was considered by the Board of Appeal, was invalid. It argued the regulations do not empower the European Commission to create additional legal remedies against a decision taken at the first level of adjudication. Also, even if the Commission had been empowered to create an ‘ancillary’ appeal under Article 8(3) of Regulation No 216/96, that provision would be invalid since the legislative act which introduced it did not state reasons for that alteration to the structure of appeals against OHIM decisions taken at the first level of adjudication. Halder Holdings however argued that, regardless of Alder Capital's argument, the Board of Appeal may still exercise any power within the competence of the Cancellation Division and is thus entitled to examine genuine use of the trade marks on its own motion, whether requested to do so or not.
The General Court ruled that the Board of Appeal was indeed required to carry out a full examination, in terms both of law and of fact. Some interesting arguments were raised by Alder Capital during the appeal regarding what constitutes "genuine use" in a trade mark sense. In its arguments, amongst other things Alder Capital submitted that:
5. genuine use of Halder Holding's earlier marks had not been proved as the documents produced to establish genuine use must either be drafted in the language of the case or translated into that language. According to Alder Capital, the Board of Appeal’s statement that the documents, whose ‘content speaks for itself’, can be taken into account is difficult to understand and should not permit account to be taken of documents which have not been translated;
6. the evidence produced did not prove the use of the marks but in fact showed use as a trade or company name only;
7. the fact that the company or trade name and the mark are identical must not lead to a ‘downwards review’ of the criteria for genuine use of a mark. Where there are doubts, as in the present case, it should be found that genuine use has not been established;
8. the evidence taken into account by the Board of Appeal (which included references to Halder Holdings in newspaper articles) did not show genuine use of the marks at issue. Alder Capital submitted that, in particular, newspaper articles do not constitute evidence capable of demonstrating use of a mark (since they are not included in the exhaustive list of permissible evidence under Rule 22(4) of Regulation No 2868/95); and
9. Halder Holdings was not authorised to provide financial services in the Benelux countries, Germany, Italy or France, in breach of numerous Directives and financial instruments and so to accept use of the earlier marks for financial services when that use was unlawful would amount to a breach of the principle of good faith, which, although not expressly referred to in Regulation No 40/94, should underpin the examination of genuine use.
In response to these submissions, the General Court raised some interesting points of its own regarding assessing whether there has been a "genuine use" of a mark:
1. use of the term “halder” independently of any mention of its corporate form or investment fund number constituted use as a mark for the services referred to in the advertisements referred to;
2. press articles can in some cases constitute evidence of use of a mark, since the list of permissible evidence for such cases is not exhaustive and the fact that the press articles were written by a journalist, and not by Halder Holdings for advertising purposes, cannot mean that they have no evidentiary value;
3. the use of “halder” to designate investment funds, which frequently take the form of separate companies, constitutes not only trade name use but also use as a mark for the subcategories of financial services of such funds, since that use establishes a link between the sign Halder and such financial services; and
4. the fact that the names of the funds (Halder I, Halder II etc.) are composed of the term “halder”, to which a Roman numeral has been added, does not call genuine use into question since, because of their brevity, weak distinctive character and ancillary position, those additions do not alter the distinctive character of the mark in the form in which it was registered.
Finally, in response to Alder Capital's submission that because Halder Holdings was not authorised to provide financial services in the Benelux countries, Germany, Italy or France, the use of their earlier marks for financial services could not amount to genuine use as it was an unlawful use, the General Court stated that where "genuine use" is concerned, there is no requirement that the services provided by the trade mark owner be lawful or that the mark must be used in good faith.
Why this matters:
This case is a reminder to all that trade mark registration and appeal processes do differ from those relating to domain names. Where domain names are concerned, it is possible to apply for a registration to be revoked where there is evidence that the domain name has been registered in bad faith (such as in a cypersquatting scenario for potential financial gain). However, within its ruling the EU General Court has made it clear that where "genuine use" is concerned, there is no such requirement that the services provided by the trade mark owner be lawful or that the mark must be used in good faith. This means that when seeking to take action against an infringing trade mark, brand owners must ensure they have other arguments up their sleeve to defeat any registrations or oppositions filed by counterfeiters or others who use a similar brand for business activities that may not be 100% legitimate. This is not something the brand owner can rely on in isolation when seeking to enforce branding rights.