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28 November 2018

Genuine use of trade mark’s: General Court distinguishes English approach to evidence

A little like waiting for the proverbial and iconic red London Number 9 bus (you wait ages and then two come along at once), so too with cases in which the EU General Court considers evidence prepared by an English lawyer and distinguishes the approach. Last month it was in relation to a design case (Mamas & Papas Limited v EUIPO (Jane Wall-Budden) and now Fruit of the Loom Inc v EUIPO (Takko Holdings GmbH-FRUIT) Case T-424/17.

Fruit loops

This latest case is part of a long running saga involving the trade mark “FRUIT” in relation to clothing, footwear and headgear. Previously, Fruit of the Loom was in dispute with Blueshore Management SA, who successfully challenged an earlier FRUIT mark’s validity.

In the present case, the mark in issue was applied for in 2006. Shortly after the five year non-use period expired, Takko Holdings applied to revoke the mark on the grounds that it had not been put to genuine use.

The evidence put forward by Fruit of the Loom and their English lawyers sought to show (1) the mark FRUIT was used as part of other trade marks (most notably “Fruit of the Loom”), (2) used in other circumstances by itself, and (3) by way of stand-alone use as part of the preparation for launch of a clothing range named “Born in the USA”. In April 2014 the Cancellation Division revoked the mark in its entirety. Fruit of the Loom appealed. That appeal was dismissed in May 2015. In its decision, the Board of Appeal in relation to ground (1) contended that “FRUIT” and “Fruit of the Loom” had wholly dissimilar concepts and as a result use of one could not be considered to be use of the other. However, the Board of Appeal considered in relation to ground (3) that the use had to be aimed at end consumers. In July 2016 the General Court annulled the Board of Appeal’s decision on this ground alone and the case was remitted back to a different Board of Appeal, who in April 2017 also dismissed the appeal.

First, it was apparent there had been no use in relation to footwear and headgear. The main argument concerned clothing, in particular t-shirts. The evidence of use consisted of two witness statements from the CEO of Fruit of the Loom together with a number of annexes including a history of Fruit of the Loom, the time line for the clothing range “Born in the USA”, material concerning the fashion trade fair “Bread and Butter” which took place in Berlin in July 2012 (which Fruit of the Loom stated the Born in the USA clothes range was to be launched at), photographs, a Spring/Summer 2013 catalogue together with various sales figures and other similar material. This evidence was considered in the decision of the Board of Appeal paragraphs 31-52 in some detail. Having done so, the Board of Appeal concluded that there was no evidence of any actual use of the FRUIT mark so there could not be any genuine use. However, the Board of Appeal said that even assuming that some of the evidence did indicate use, that could not be classified as genuine because it related to a single order of 400 items to a single retailer, which occurred after the date Fruit of the Loom had decided not to go ahead with launching this clothes range. There were other issues the Board of Appeal had concerns about including Fruit of the Loom’s actual participation in the fashion trade fair, and whether sending out catalogues was genuine use (they regarded it as not being so). Fruit of the Loom appealed only in relation to clothing. There was also a subsidiary res judicata claim, but this will not be considered in this article.

Fruit ‘N Nut

The General Court (in paragraphs 25-31) set out the basic principles surrounding genuine use (the majority, ironically, from the original Fruit of the Loom/Blueshore Management trade marks decision). In essence, these are that: the use must be in accordance with the essential function; genuine use does not include token use; the burden to establish genuine use is on the proprietor; factors and circumstances to be taken into account include established practices in the relevant economic sector for maintaining or creating a market for the goods, the nature of those goods, the characteristics of the market and the extent and frequency of the use of the mark; the global assessment of the relevant factors in which there is interdependence meaning that a low volume of goods may be offset by a high intensity of use or a period of very regular use and vice versa; the extent or scale of the use including volumes overall as well as the length of period during which the mark was used and the frequency; and where there is a small commercial volume the burden is on the proprietor to produce additional evidence to show such use is genuine.

Unusually, the General Court then proceeded in considerable detail and length to review the evidence. The first point it made was that the “four elements” (meaning place, time, extent and nature of use) do not have to be established in each item of evidence: rather such evidence can be taken collectively in order to establish the necessary elements. However, an inference, from disparate items of evidence with no apparent link between them, that the use is genuine will not be drawn unless each item of evidence is corroborated by other items provided by the proprietor. In adopting this approach, the General Court is drawing a distinction from that taken under English law, in which the evidence of the CEO with an appropriate statement of truth is generally considered to be the linking/corroborating evidence.

Fruitless exercise

The General Court’s criticism of Fruit of the Loom’s evidence was it had little evidential value and did not establish key parts of the case. For example, an internal document which showed labels apparently sewed onto the outside of various garments of clothing, of itself could not amount to proof of genuine use. The applicant sought to claim that photographs (taken at the offices of the legal representatives of the applicant in London) together with additional photographs were “corroboration” of the marketing of the goods. The General Court pointed out that, even assuming the photographs were taken at the lawyers’ offices, they did not establish the goods were going to be marketed in the EU as part of the launch of the “Born in the USA” range or at all. There was also no link between any of the photographs or the internal document. The General Court accepted that the applicant was relying on the CEO’s witness statement but it reiterated that none of the individual items corroborates his statement.

In relation to the Spring/Summer 2013 “Born in the USA” brochure, the evidence relied on delivery notes from a printer to draw the conclusion that a number of brochures were delivered to the applicant, delivery reports identified businesses the brochures were sent to and the names of the person who signed for the delivery. The General Court pointed out that evidence does not show the brochures were sent to independent sales agents for the purposes of promoting the “Born in the USA” range.

Finally, and perhaps the most important point, was in relation to the alleged sale of 400 items from the “Born in the USA” range, and referred to in the CEO’s statement. These items were apparently sold during the visit of an agent to Florence but there was nothing to establish that the mark “FRUIT” was actually applied to any of these items, let alone this isolated sale was sufficient to show ‘genuine’ use.

In the end, the General Court concluded that the Board of Appeal has been correct in its analysis and decision, and even where there were minor errors, these did not affect the overall conclusion that there was no evidence of genuine use.   

Forbidden fruit

Even after Brexit, there will be many cases before CJEU in which the evidence has been masterminded by a UK lawyer, because of a client relationship, and the UK representatives have offices in Europe enabling them to handle such cases (as Venner Shipley has). However, it really is time lessons were learned about the approach to evidence taken by the European Tribunals, and what to them constitutes “corroborating” evidence.

Where, however, does this leave Fruit of the Loom? Somewhat bizarrely, Fruit of the Loom already had an existing registration for “FRUIT” (filed in 1998) for the identical goods, and which remains on the register, yet this was not attacked. Fruit of the Loom also have a registration filed in March 2013. This may have been a defensive move if they were aware of the fact that Takko Holdings intended to launch its’ application for revocation, which it did on 26th April 2013. No doubt, by now, there will be some genuine use of the FRUIT mark. If not, we may be in for yet another round in this seemingly endless saga.

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