Silicium Espana Laboratorios v OHMI - LLR-G5 (LLRG5) (Judgment) [2015] EUECJ T-306/13 (16 June 2015)

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(Community trade mark - Invalidity proceedings - Community word mark ‘LLRG5’ - Absolute ground for refusal - Bad faith on the part of the Community trade mark proprietor - Article 52(1)(b) of Regulation (EC) No 207/2009)

Silicium España Laboratorios, SL, established in Vila-Seca, Tarragona (Spain), represented by C. Sueiras Villalobos, lawyer,

Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by A. Folliard-Monguiral, acting as Agent,

the other party to the proceedings before the Board of Appeal of OHIM, intervener before the General Court, being

LLR-G5 Ltd, established in Castlebar (Ireland), represented by A. von Mühlendahl and H. Hartwig, lawyers,

ACTION brought against the decision of the First Chamber of the Board of Appeal of OHIM of 7 March 2013 (case R 383/2012-1), relating to invalidity proceedings between LLR-G5 Ltd and Silicium España Laboratorios, SL,

composed of S. Papasavvas, President, N.J. Forwood (Rapporteur), and E. Bieliūnas, Judges,

having regard to the application lodged at the Registry of the General Court on 5 June 2013,

having regard to the response of OHIM lodged at the Court Registry on 12 September 2013,

having regard to the response of the intervener lodged at the Court Registry on 18 September 2013,

1 The intervener, LLR-G5 Ltd, is a company incorporated on 24 September 1999 in Ireland. Its business is the production and sale of organic silicon under the name ‘G5’. Upon its creation, Mr R and Mr V each held 50% of the shares and were the two directors of the company.

2 On 2 September 2003, Mr I, filed an application for registration of a Community trade mark at OHIM, under 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)).

3 The mark for which registration was sought is, in particular, the word sign LLRG5.

4 The goods and services for which registration was sought fall within Classes 5, 32 and 44 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, in relation to each of those classes, to the following description:

- Class 5: ‘Pharmaceutical, veterinary and sanitary preparations; dietetic substances adapted for medical purposes; dietetic foods adapted for medical purposes; dietetic beverages adapted for medical purposes; analgesics and anaesthetics; balms for pharmaceutical purposes; ointments for medical and pharmaceutical purposes; Sera; vitamins’;

- Class 32: ‘Non-alcoholic drinks; energy drinks, vitamin drinks, revitalising drinks, tonics and reviving drinks; syrups and other preparations for making energy drinks’;

- Class 44: ‘Medical services; veterinary services; hygiene and beauty care for human beings and/or animals’.

5 On 24 February 2004, Mr R resigned from his duties as a director of the company LLR-G5 but remained a shareholder until November 2006.

6 On 7 April 2004, Mr I submitted to OHIM a request to register the assignment of the application for the Community trade mark at issue to Mr R. The change of proprietor was registered in the Register of Community Trade Marks on 10 May 2004.

7 The application for a Community trade mark was published in Community Trade Marks Bulletin No 40/2004 of 4 October 2004.

8 On 21 December 2004, Mr R and the intervener concluded an agreement headed ‘Memorandum of Agreement’ (‘the Memorandum’), of which Clauses 1.A, 1.E and 1.F are respectively worded as follows:

‘The said [Mr R] will confer upon the Company an exclusive license to manufacture and distribute the product known as G5 and any other health products of the same range.

[Mr R] will use his best endeavours to promote all products at present and presently produced and distributed by LLR-G5 Limited and will not cause any problems for the Company, its Directors or employees.

[Mr R] will not authorise any other Company, individual or partnership to use [his] name or the names LLRG5 or G5 to manufacture or promote any food supplements, health products or medical/medicinal products based on Organic Silicon, Organic Silicon, Organic Silicium, monomethylsilanetriol or any other product formulated from the same range or any other combination thereof.’

9 As no opposition was brought against the registration of the mark applied for, it was registered on 27 April 2005. The registration was published in Community Trade Marks Bulletin No 27/2005 of 4 July 2005.

10 On 28 September 2005, the intervener, through its lawyers, A&L Goodbody Solicitors, sent a warning letter to a company named Silicium España established in Spain (‘the warning letter’), the relevant part of which was worded as follows:

‘As you are aware from recent discussions with Mr V, a director of the company, Mr R signed an agreement with LLR-G5 Limited on 21 December 2004 allowing LLR-G5 Limited the exclusive licence to use [his] name, or the names ‘LLRG5’ or ‘G5’ and to manufacture and promote any food supplements, health products or medical/medicinal products based on Organic Silicon, Organic Silica, Organic Silicium, monmethylsilanetriol or any other product from the same range or any combination thereof.’

12 On 11 March 2008, the intervener sent OHIM an application for registration of the transfer of Mr R’s Community mark LLRG5 into its name, on the basis of the Memorandum. By decision of 26 January 2009, OHIM’s ‘Trade Marks and Register’ department refused to register the transfer on the ground that the Memorandum did not state that Mr R had actually transferred the contested mark to the intervener. That decision was not appealed against and thus became final.

13 On 9 February 2010, the intervener filed an application before OHIM for a declaration of invalidity of the Community mark LLRG5 on the basis of an absolute ground for invalidity, namely that the proprietor of the Community mark in question had acted in bad faith when filing the application for registration of the said mark, within the meaning of Article 52(1)(b) of Regulation No 207/2009. The request for a declaration of invalidity covered all the goods and services referred to in paragraph 4 above.

14 On 2 July 2010, Mr C provided OHIM with a document issued by the executor of Mr R’s will, certifying that the registration of the Community trade mark at issue had been transferred to him. The transfer of the mark at issue to Mr C was registered in the Register of Community Trade Marks on 14 July 2010.

15 On 21 February 2011, Mr C transferred the registration of the Community trade mark to the applicant Silicium España Laboratorios, S.L. OHIM’s Trade Marks and Register Department registered that change of ownership on 25 February 2011.

16 On 20 December 2011, OHIM’s Cancellation Division rejected the request for a declaration of invalidity on the ground that nothing proved that Mr R had acted in bad faith in instructing Mr I to file the application for registration of the Community trade mark LLRG5.

17 On 17 February 2012, the intervener filed an appeal with OHIM’s Board of Appeal, under Articles 58 to 60 of Regulation No 207/2009, against the Cancellation Division’s decision.

18 By decision of 7 March 2013 (‘the contested decision’), the First Board of Appeal of OHIM upheld the intervener’s appeal, annulled the Cancellation Division’s decision and declared the contested mark to be invalid. It relied, first, on the current ownership of the contested mark, second, on the concept of the Community trade mark ‘applicant’ within the meaning of Article 52(1)(b) of Regulation No 207/2009, and, third, on the existence of bad faith on the part of the former proprietor of the mark on the date of the application for registration.

19 Thus, in the first place, the Board of Appeal stated that the legality of the transfer of the registration of the contested Community trade mark to Mr C in succession to Mr R could no longer be challenged and that the proprietor of the said trade mark at that time was the registered successor-in-title of the original applicant as entered in the Community trade mark register.

20 In the second place, the Board of Appeal concluded that the finding of bad faith had to be examined in the conduct of Mr R, who had to be regarded as the ‘applicant’ for the purposes of applying Article 52(1)(b) of Regulation No 207/2009.

21 In the third place, the Board of Appeal found that Mr R, as beneficial applicant, had acted in bad faith when instructing an intermediary to file an application for registration of the said trade mark.

22 The applicant brought the present action by application lodged at the Court Registry on 5 June 2013.

25 It must be noted that, by the second head of claim, the applicant seeks to obtain from the Court a declaratory judgment. However, it follows from paragraphs 2 and 3 of Article 65 of Regulation No 207/2009 that an action before the Court may examine the legality of the decisions of the Boards of Appeal and may lead, in the appropriate case, to the annulment or the alteration of those decisions (judgment of 15 June 2010 in Actega Terra v OHIM (TERRAEFFEKT matt & gloss), T-118/08, EU:T:2010:234, paragraph 10), with the result that an action may not seek, in respect of such decisions, a confirmatory or declaratory judgment.

27 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. According to the applicant, the Board of Appeal committed an error of law in finding that Mr R acted in bad faith in filing, through another person, an application before OHIM seeking the registration of the sign LLRG5 as a Community mark.

28 It should be noted, first of all, that the Community trade mark registration system is based on the ‘first-to-file’ principle, laid down in Article 8(2) of Regulation No 207/2009. In accordance with that principle, a sign may be registered as a Community trade mark only in so far as that is not precluded by an earlier mark. On the other hand, without prejudice to the possible application of Article 8(4) of Regulation No 207/2009, the mere use by a third party of a non-registered mark does not preclude an identical or similar mark from being registered as a Community trade mark for identical or similar goods or services (judgment of 11 July 2013 in SA.PAR. v OHIM - Salini Costruttori (GRUPPO SALINI), T-321/10, ECR, EU:T:2013:372, paragraph 17).

29 However, 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 OHIM or on the basis of a counterclaim in infringement proceedings, a Community trade mark is to be declared invalid where the applicant was acting in bad faith when it filed the application for the trade mark. Where the applicant for a declaration of invalidity seeks to rely on that ground, it is for that party to prove the circumstances which substantiate a finding that the Community trade mark proprietor had been acting in bad faith when it filed the application for registration of that mark (judgment in GRUPPO SALINI, paragraph 28 above, EU:T:2013:372, paragraph 18).

30 The concept of ‘bad faith’ referred to in Article 52(1)(b) of Regulation No 207/2009 is not defined, delimited or even described in any way in EU legislation (judgment of 26 February 2015 in Pangyrus v OHIM - RSVP Design (COLOURBLIND), T-257/11, EU:T:2015:115, paragraph 64). Nevertheless, the Court has given several clarifications as to the way in which that concept should be understood.

31 According to the Court, in order to determine whether the applicant is acting in bad faith, all the relevant factors specific to the particular case which pertained at the time of filing the application for registration of the sign as a Community trade mark must be taken into consideration, in particular: (1) the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product capable of being confused with the sign for which registration is sought; (2) the applicant’s intention to prevent that third party from continuing to use such a sign; and, (3) the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought (judgment of 11 June 2009 in Chocoladefabriken Lindt & Sprüngli, C-529/07, ECR, EU:C:2009:361, paragraph 53).

32 Thus, the fact that a third party has long used a sign for an identical or similar product capable of being confused with the mark applied for and that sign enjoys some degree of legal protection is one of the factors relevant to the determination as to whether the applicant was acting in bad faith. In such a case, the applicant’s sole aim in taking advantage of the rights conferred by the Community trade mark might be to compete unfairly with a competitor who is using a sign which, because of characteristics of its own, has by that time obtained some degree of legal protection (judgment in Chocoladefabriken Lindt & Sprüngli, paragraph 31 above, EU:C:2009:361, paragraphs 46 and 47).

33 Nevertheless, the criteria established by the case-law, listed in paragraph 31 above, are not exhaustive and other criteria may be applied where they are not at variance with the criteria established in Chocoladefabriken Lindt & Sprüngli, paragraph 31 above (EU:C:2009:361), but add to those criteria, in accordance with the approach set out in that judgment, consisting in an overall assessment of all of the relevant factors in the particular case (see, to that effect, judgment of 8 May 2014 in Simca Europe v OHIM - PSA Peugeot Citroën (Simca), T-327/12, ECR, EU:T:2014:240, paragraph 40).

34 Thus, in the context of the overall assessment undertaken pursuant to Article 52(1)(b) of Regulation No 207/2009, account may also be taken of the origin of the sign at issue, its use since its creation, the commercial logic underlying the filing of the application for registration of that sign as a Community trade mark and the chronology of events leading to that filing (see, to that effect, judgments of 14 February 2012 in Peeters Landbouwmachines v OHIM - Fors MW (BIGAB), T-33/11, EU:T:2012:77, paragraph 21, and GRUPPO SALINI, paragraph 28 above, EU:T:2013:372, paragraph 30).

35 In the present case, the Board of Appeal held that the contested mark must be annulled since Mr R, as the beneficial applicant, had acted in bad faith in instructing an intermediary to file an application for the registration of the contested Community mark.

36 In arriving at that conclusion, the Board of Appeal held, first, that the intervener had established facts that led to the conclusion that Mr R acted in bad faith when filing the application for registration of the mark at issue. The Board of Appeal considered that it was apparent from the documents in the case file that by registering, in his name, the distinctive element of the company name LLR-G5 Ltd as a Community trade mark (and doing so through an intermediary), without even informing or consulting the company even though he held the position of a Director, Mr R had knowingly made his personal interests prevail over those of the company and had damaged the interests of the company since he knew that he would severely limit the possibility of the company to continue to trade under its name.

37 In the second place, the Board of Appeal considered that the applicant had not demonstrated that the sign LLRG5 was the property of Mr R in France or elsewhere, all the more so since the only sign used by Mr R was the sign G5 and not LLRG5. Additionally, the Board of Appeal held that neither the Memorandum nor the warning letter proved that the mark LLRG5 was Mr R’s property and that he had licensed it to the intervener.

38 In the third place, the Board of Appeal noted the lack of explanation as to the reasons that had led Mr R to apply for the registration of the sign at issue, through an intermediary, as a Community mark in his name, or why that had been done specifically in September 2003.

39 The applicant considers, in essence, that the Board of Appeal erred in law in finding that the registration of the contested mark had been applied for in bad faith. According to the applicant, Mr R had pursued a legitimate interest in applying, in particular, for the registration of the Community mark LLRG5.

40 The applicant considers, first, that the application for a declaration of invalidity based on bad faith on the part of Mr R has not been substantiated by clear and convincing evidence and the applicant disputes the probative value of matters that were taken into consideration by the Board of Appeal in its determination of bad faith. The applicant considers, second, that the Board of Appeal did not draw the conclusions that, in its opinion, should have been drawn having regard to the evidence that the applicant itself had produced.

41 As regards, first, the plea of the insufficiency of the evidence of Mr R’s bad faith and its probative value, it should be noted, first of all, that the facts set out in paragraphs 1 to 15 above are not disputed by the parties.

42 Furthermore, it must be noted that in support of its application for a declaration of invalidity of the contested trade mark, the intervener produced a formal statement by its representative, Mr V, dated 27 January 2010, made before a solicitor, and a set of official documents to which that statement referred.

43 That statement repeats a number of facts that are undisputed in the present case, inter alia: the date on which the intervener was incorporated, the names of its founders and co-directors, the date that Mr R resigned as a co-director of the intervener and certain details relating to the filing of the application for registration of the contested mark, LLRG5. That document contains, in addition, a statement concerning the use of the name LLR-G5 by the intervener, and the opinion of Mr V that the filing of the application for registration as a Community mark of sign LLRG5 was made in bad faith since, having regard to the identity of the mark applied for and the name of the company, the fact that the effective beneficiary of the filing at the time of the application for registration was one of the directors of the intervener and the fact that the filing was made without the knowledge of the intervener, it was a dishonest act that was inconsistent with acceptable commercial behaviour.

44 In that regard, it should be recalled that it is settled case-law that in order to assess the probative value of ‘statements in writing sworn or affirmed or having a similar effect under the law of the State in which the statement is drawn up’ within the meaning of Article 78(1)(f) of Regulation No 207/2009, it is necessary to verify the credibility of the information they contain, taking into account inter alia the provenance of the document, the circumstances in which it came into being, the person to whom it was addressed and whether, on its face, it appears sound and reliable (see judgments of 16 November 2011 in Buffalo Milke Automotive Polishing Products v OHIM - Werner & Mertz (BUFFALO MILKE Automotive Polishing Products), T-308/06, ECR, EU:T:2011:675, paragraph 58, and COLOURBLIND, paragraph 30 above, EU:T:2015:115, paragraph 121).

45 It follows that, whilst it is true that, in view of the links between the author of the formal statement and the intervener, that statement must, in order not to fall solely into the category of self-supporting evidence, be corroborated by the content of the other evidence provided by the intervener in order to have probative value, the fact remains that the circumstance that such a statement emanates from the Managing Director of the intervener cannot in itself render it worthless. In addition, the information contained in the statement is in fact substantiated by the documents submitted to OHIM. In particular, the applicant does not dispute that the registration of the sign at issue, used by the intervener as its company name since its incorporation, was applied for without the knowledge or consent of the intervener whilst the effective beneficiary of the application for registration was one of its co-directors.

46 Thus, it must be held that the Board of Appeal did not err in law in finding that the application for a declaration of invalidity, based on bad faith on the part of Mr R, had been substantiated by clear and convincing evidence, including, in particular, the formal statement by Mr V, and, thus, is not open to challenge.

47 As regards, secondly, the plea under which the application alleges that the Board of Appeal did not draw the conclusions that, in its opinion, it should have drawn from the evidence that it had produced, it is apparent, first of all, from the case file, and without it being possible seriously to dispute the matter, that Mr R could not have been unaware, or knew, that since 1999 the intervener had used the sign LLR-G5 as its company name.

48 Nevertheless, such knowledge on the part of the applicant for the mark, albeit ‘qualified’, is still not, in itself, sufficient to establish the existence of bad faith on the part of that person. It is also necessary to take into account the intention of the applicant at the time of filing the application for registration. Although that intention is necessarily a subjective matter, it must none the less be determined by reference to the objective circumstances of the particular case (Chocoladefabriken Lindt & Sprüngli, paragraph 31 above, EU:C:2009:361, paragraph 42).

49 Thus, it is necessary to examine the intentions of the applicant such as they may be inferred from objective circumstances and from his specific actions, from his role or position, from the awareness he possessed of the use of the earlier sign, from the contractual, pre-contractual or post-contractual relationship he had with the applicant for a declaration of invalidity, from the existence of reciprocal duties or obligations, including the duties of loyalty and integrity arising because he occupies, or has occupied, a position in the executive body of the company or has exercised, or still exercises, management functions within the company of the applicant for a declaration of invalidity, and, more generally, from all the objective situations of conflicting interests in which the trade mark applicant has operated (judgment in GRUPPO SALINI, paragraph 28 above, EU:T:2013:372, paragraph 28).

50 First, the Court must emphasise the lack of detail available as to the circumstances and the conditions of the creation of the intervener, the resignation of Mr R as a co-director of the company and, finally, the filing of the application for registration of the sign at issue.

51 It is nevertheless apparent from the case file that the intervener was created on 20 September 1999 by Mr R and Mr V acting jointly, that they were both named as co-directors from the start and that the intervener used LLR-G5 as its company name from the moment of its incorporation.

52 Although it is not possible to establish with certainty what the common intention between the parties was as regards the sign LLR-G5, nothing in the case file leads to the conclusion that Mr R had reserved rights to himself over that name.

53 In that regard, it must be noted, in the first place, that the applicant merely asserts on numerous occasions that Mr R enjoyed exclusive rights that it argued it had in respect of the contested sign without, however, the applicant adducing any evidence as to the origin of those rights or the regime under which they were protected.

54 OHIM contends that, contrary to the applicant’s submissions, neither the use nor the intention to use the sign LLRG5 by Mr R had been demonstrated, with the result that it was not demonstrated in the present case that Mr R had acquired exclusive rights in respect of the sign LLRG5 at the time when the application for registration was filed.

55 It is apparent from paragraphs 42 to 47 of the contested decision that the Board of Appeal had examined whether the applicant enjoyed exclusive rights in respect of the sign LLRG5 at the time when the application for the registration of the contested sign as a Community mark was made.

56 In that regard, the Board of Appeal held that the applicant’s statement relating to the existence of exclusive rights, which it argued it enjoyed in respect of the contested sign, was unfounded due to the fact that, first, it is impossible in France to acquire exclusive rights to an unregistered mark and, second, in so far as it is possible to draw certain conclusions from the content of order forms, of which the majority are in manuscript, the two articles published in the newspaper, Le Monde, and the distribution contracts added to the case file by the applicant, those documents demonstrate at most, that Mr R marketed a product named ‘G5’ or ‘Silanol’.

57 Whilst it is true that two of the letters sent by Mr R to particular clients, respectively dated 26 October 1998 and 19 February 1999, included in the case file, make reference, in a footnote, to the ‘domain name www.llrg5.com’, and a letter dated 12 June 1999 refers, also in a footnote, to the ‘website www.llrg5.com’, no reference to the sign LLRG5 as a mark was made in those documents. Furthermore, the letter of 12 June 1999 refers to ‘a whole distribution network from abroad that will be completely operational within about one month from now’. Whilst the said letters do not demonstrate the existence of any trade in products bearing the mark LLRG5 through the website in question, assuming that it existed, the possibility cannot be excluded that the website referred to was set up with a view to the creation of the intervener, named LLR-G5 and incorporated on 24 September 1999, namely 3 months after the letter of 12 June 1999 was sent.

58 It follows that the Board of Appeal did not commit an error of assessment in finding that the applicant had not proved the existence of the exclusive rights that it alleged it had acquired in respect of the sign LLRG5 before the filing of the application for registration of that sign as a Community mark.

59 In the second place, it must be held that Mr R, due to his role within the intervener until his resignation in 2003, was involved, closely and continuously, between 1999 and 2003 in the activities leading to the use of the contested sign. It must be concluded from that that he had clearly accepted that the contested sign had become the company name of the intervener and that that company name was used in the trading of the goods at issue in the present case. Nothing in the case file leads to the conclusion that Mr R had, at any time during the period at issue, stated or made it known that he reserved to himself rights in respect of the sign that had become the company name or that he demonstrated the belief that such rights belonged to him. Furthermore, having regard to the case file, it is not possible to conclude that the use of the sign at issue by the intervener as its company name was made pursuant to any tacit or informal agreement on the part of Mr R.

60 That conclusion regarding Mr R’s lack of rights in respect of the contested sign is not invalidated by the contents of the Memorandum and the warning letter.

61 In that regard, the applicant considers that the Board of Appeal erred in its assessment in that it played down the great importance of the Memorandum which, according to the applicant, clearly demonstrated that there was an agreement between Mr R and the intervener, according to which the rights to the sign LLRG5 belonged to Mr R and, in signing that agreement, the intervener recognised that the sign at issue was only given on licence. Furthermore, the applicant submits that the acknowledgement by the intervener of Mr R’s rights in respect of the contested sign is confirmed by the warning letter, in which reference is made to the Memorandum as being an ‘exclusive licence to use the names [R], LLRG5 or G5’. Hence, the applicant submits that the objective pursued by Mr R at the time of registering the contested sign, consisted of protecting his own rights.

62 In so far as it is possible to draw certain conclusions from the contents of the Memorandum and the warning letter, it must be held that in the light of other items in the case file and the circumstances in which the documents came into being, the Board of Appeal did not err in dismissing the Memorandum and the warning letter as proof of the existence of exclusive rights held by Mr R in respect of the contested sign, or even of the agreement between the signatories that the rights in respect of the sign LLRG5 belonged to Mr R.

63 As regards the circumstances in which the Memorandum came into being, the Court notes that the chronology of events between 2 September 2003, the date of filing of the application for registration, and 21 December 2004, the date of conclusion of the Memorandum, is subject to much speculation due to the lack of information shedding light on the circumstances at the time and the fact that the two protagonists, who have both since died, are no longer able to provide any explanations with regard to them.

64 It is nevertheless possible to conclude, on the basis of documents on the case file, that the agreement in question was concluded in view of the resignation of Mr R as a co-director of the intervener company, the division of the interests of the two business partners and the arrangement of their respective relationships having regard to the fact that the commercial success of the intervener was in part due to the association between the goods that it marketed and Mr R’s reputation in that field.

65 In addition, it should be noted that neither the text of the Memorandum nor the warning letter make explicit reference either to a Community mark or to an application for such a mark, or to the transfer of the registered mark at issue in the present case, made for the benefit of Mr R in April 2004.

66 Furthermore, the warning letter merely refers to the content of the Memorandum and fits with the intervener’s commercial approach, which consisted of positioning itself on the very lucrative market, according to the parties’ statements, of organic silicon, as its single authentic seller.

67 Hence, contrary to the applicant’s submissions, the Board of Appeal was entitled to conclude that the Memorandum was nothing more than an agreement between two associates in the course of separation, including a non-competition clause, in the present case Clause 1.F cited in paragraph 8 above, and that neither the Memorandum nor the warning letter proved the existence of a common understanding between the signatories that the rights in respect of the sign LLRG5 belonged to Mr R.

68 Furthermore, the applicant’s response before OHIM to the application for invalidity brought by the intervener refers to a text written by Mr R in April 2006, in which he admitted that at the start of 2004 he had concluded an agreement for the exploitation of the product ‘G5’ with a company in Spain named Silicium España, in breach of the Memorandum, shortly after it was signed. The same text states Mr R’s belief that both organic silicon ‘G5’, which he calls ‘my invention’, and his name, (without, however, making reference to the sign LLRG5), belonged to him, even though it is common ground that he did not hold any patent for an invention in respect of that product and, as has been established in paragraphs 54 to 58 above, he did not benefit from any intellectual property rights in respect of the sign LLRG5, and, as established in paragraphs 62 to 67 above, his possible belief to the contrary was not shared by his former associate, Mr V.

69 Even though the text referred to in paragraph 68 above does not lead to the conclusion that Mr R had used the sign LLRG5 or that he had ‘authorised’ its use after his departure from the intervener, the text nevertheless shows, having regard to the close proximity in time of events linked to that departure, that Mr R intended to compete with the intervener without its knowledge when filing the application for registration of the contested sign and when he resigned from his functions within the intervener shortly afterwards.

70 Furthermore, it must be held, as the Board of Appeal rightly found in the contested decision, that, in his capacity as a co-director of the intervener, Mr R was obliged to act in the intervener’s best interests. As co-director and co-founder, Mr R clearly accepted that the contested sign should become the company name of the intervener and that that name be used when trading in the goods at issue. In his position as a director and shareholder of the intervener, Mr R could not be unaware of the risk of harm that registration in his name, unbeknownst to the intervener, of a sign identical to the company name used by the intervener, which was enjoying at the time (according to Mr R’s own statements) commercial success in the relevant areas, might cause the intervener (see, to that effect, judgment in GRUPPO SALINI, paragraph 28 above, EU:T:2013:372, paragraph 30).

71 Finally, it must be noted that Mr R did not give the intervener the possibility of considering whether it was appropriate to oppose the application for registration of the sign at issue, with the result that the application may be held to be a ‘concealed act’, carried out, furthermore, through an intermediary, intended to prevent the intervener from continuing to use that sign (see, by analogy, judgment in COLOURBLIND, paragraph 30 above, EU:T:2015:115, paragraph 140).

72 It follows from all the foregoing considerations that the intervener has adduced evidence that demonstrates, or from which it might objectively be inferred, that Mr R’s conduct amounted to an act of bad faith at the relevant time and that the Board of Appeal did not err in concluding, in paragraph 64 of the contested decision, that Mr R acted in bad faith when filing, through an intermediary, an application with OHIM seeking to register as a Community mark the company name of the intervener at a time when he was one of the intervener’s co-directors and without informing the intervener of his actions.

73 Consequently, in so far as the burden of proving bad faith falls on the applicant for a declaration of invalidity and the existence of bad faith must be established on the basis of objective matters, it must be concluded that the Board of Appeal did not err in finding that the applicant had proved that the application for registration of the contested mark had been filed in knowing disregard of the rights of the intervener in respect of the sign at issue and, hence, in bad faith on the part of Mr R.

74 Hence, the single plea in law and, consequently, the application in its entirety must be dismissed as unfounded.

75 Under Article 87(2) 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.

76 Since the applicant has been unsuccessful, it must be ordered to pay the costs in accordance with the forms of order sought by OHIM and the intervener.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Silicium Espana Laboratorios v OHMI - LLR-G5 (LLRG5) (Judgment) [2015] EUECJ T-306/13 (16 June 2015) URL: http://www.bailii.org/eu/cases/EUECJ/2015/T30613.html Cite as: [2015] EUECJ T-306/13, EU:T:2015:382, ECLI:EU:T:2015:382

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