DECISIONS
Secondly, the BoA had accepted that the evidence did not establish Hub Culture’s intention to use the VENMO mark genuinely, but nevertheless stressed that applicants were not obliged to use a trade mark immediately following registration as they enjoyed a five-year grace period. The GC found that, whilst the five-year grace period had not yet expired on the date of adoption of the BoA’s decision, the intention to prevent a third party from marketing a product may, in certain circumstances, be an element of bad faith on the part of the applicant, when it subsequently became apparent that the applicant applied for registration of an EUTM without intending to use it. Thirdly, the BoA had incorrectly relied on the fact that the sign VENMO, used by Venmo, was an unregistered sign and did not enjoy a particular reputation. Although mere use of an unregistered mark did not preclude a third party from applying to register an identical or similar mark in respect of identical or similar services, the proprietor of the unregistered trade mark would not be prevented from alleging the application had been made in bad faith. In so far as it was undisputed that Hub Culture knew about Venmo’s use of the prior unregistered mark, the assessment of its reputation was irrelevant for the purpose of determining whether Hub Culture knew or should have known that there was a potential likelihood of confusion. Finally, although Venmo had explicitly stated in correspondence to Hub Culture that it was not seeking to have global operations outside of the US, the GC held that it was apparent from the terms of that correspondence that Venmo had not entirely excluded the intention to ‘have global operations’ in the near or more distant future.
Meaning of “Establishment” under article 97(1) Hummel Holding A/S v Nike Inc. and Nike Retail BV CJ; Second Chamber; C-617/15; 18 May 2017 Following a request for a preliminary ruling from the Oberlandesgericht Düsseldorf (Higher Regional Court, Düsseldorf, Germany), the CJ has ruled that a legally distinct second-tier subsidiary (with its seat in an EU Member State) was an establishment of a parent company with no seat within the EU, within the meaning of article 97(1) if that subsidiary: • • •
is a centre of operations in that Member State; has a certain real and stable presence from which commercial activity is pursued; and has the appearance of permanency to the outside world, such as an extension of the parent company.
Hummel Holdings (‘Hummel’) (a Danish company) manufactured sports goods and clothing. Nike Inc., (‘Nike’) (an American company) was the ultimate holding company of the Nike Group. Nike Retail (a Dutch company) operated the website on which Nike goods were offered for sale and advertised for sale in Germany. Nike Deutschland GmbH (‘Nike Germany’) 40 CIPA JOURNAL
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was a subsidiary of Nike Retail that negotiated contracts with intermediaries and supported Nike Retail in connection with advertising and the performance of contracts. Nike Germany provided aftersales services for end consumers in Germany but did not have its own website nor did it sell any goods to end consumers or intermediaries. Hummel claimed that certain Nike products sold in Germany, in particular basketball shorts, infringed its EUTM registration for the figurative mark, registered in respect of clothing, footwear and headgear in class 25. Hummel brought an action for trade mark infringement against Nike and Nike Retail in the Düsseldorf Regional Court, which ruled that it had jurisdiction to hear the claim on the basis that Nike Germany was an ‘establishment’ of Nike within the meaning of article 97(1). The claim of trade mark infringement was dismissed on the merits and Hummel appealed to the Higher Regional Court in Düsseldorf. Nike and Nike Retail objected to the appeal on the basis that the German courts lacked international jurisdiction to hear the claim as Nike Germany was not an ‘establishment’ of Nike within the meaning of article 97(1). In the circumstances, the Higher Regional Court in Düsseldorf stayed the proceedings and referred the following question to the CJ: “Under which circumstances is a legally distinct secondtier subsidiary, with its seat in an EU Member State, of an undertaking that itself has no seat in the European Union to be considered as an ‘establishment’ of that undertaking within the meaning of article 97(1).” In response to this question, the CJ found that there must be visible signs to enable the existence of an ‘establishment’ to be easily recognised and that the existence of the establishment requires a certain real and stable presence, from which commercial activity is pursued, as manifested by the presence of personnel and material equipment. In addition, that establishment must have the appearance of permanency to the outside world, such as the extension of a parent company. However, whether the ‘establishment’ was a first- or a second-tier subsidiary of the parent company and whether the establishment had distinct legal personality were not deemed to be relevant issues.
Extent of protection of PDO considered in invalidity proceedings EUIPO v Instituto dos Vinhos do Douro e do Porto, IP (“IVDP”) A-G Sánchez-Bordona for the CJ; C-56/16 P; 18 May 2017 A-G Sánchez-Bordona has opined on the extent of protection afforded by the PDOs for PORT and PORTO. In a cross appeal within invalidity proceedings, the A-G recommended that both the decision of the GC and that of the Cancellation Division be annulled. www.cipa.org.uk
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