Failure at the second bite

1st Sep 2020

Applicants should not stint on substantiation, says Loren Ravenscroft. R 2023/2018-2, Diffulice SARL v Beiersdorf AG, EUIPO, 11th June 2020

The EUIPO has issued a decision in an appeal for invalidity by Diffulice SARL (Diffulice) against a 3D mark registered by Beiersdorf AG (Beiersdorf) for cosmetic skin creams. The action was brought on 26th July 2017 under Articles 59(1)(a) and 7(1)(b) EUTMR.

In its decision, the Cancellation Division (CD) noted that Diffulice had submitted a single sentence to support its claim and no facts or arguments other than a reference to the examination proceedings. The CD held that an inherent distinctiveness objection being raised in the examination does not relieve an applicant for cancellation of its burden of proof and that Diffulice’s claim had not been substantiated.

The CD found Beiersdorf’s evidence in reply inadmissible, having been sent via courier due to technical limitations and received one day later than the request for Continuation of Proceedings (CoP). Both parties appealed the decision.

Diffulice’s appeal

Diffulice contended that the CD should have taken “well-known facts” into account, including the Article 7(1)(b) refusal at the examination stage. Further, it argued that Beiersdorf had admitted a lack of inherent distinctiveness by claiming that the mark had acquired distinctiveness, and that its evidence thereto had been insufficient. Nonetheless, the Board of Appeal (BoA) upheld the CD’s decision and concluded that it is for the applicant for invalidity to produce the specific arguments and facts that call the validity of the mark into question, which Diffulice had not done. It also held that:

Beiersdorf’s decision to base its application on acquired distinctiveness was not an admission that the sign lacked inherent distinctiveness.
Diffulice’s claim that the evidence of acquired distinctiveness in the examination was insufficient is irrelevant, because the cancellation was based only on Articles 59(1)(a) and 7(1)(b).
The findings of the Examiner could not be relied upon, as the notice of refusal was not final and the reasoning behind it was not public.
Diffulice’s evidence before the BoA was the first evidence received and was inadmissible.

Cross-appeal

Beiersdorf argued that “carrying out the omitted act” in its request for CoP should be interpreted to mean that it had done everything it could have, and that the CD should have applied its discretionary powers pursuant to Article 95(2). The BoA agreed and held that:

Sending the documents via courier, under the circumstances, amounted to carrying out the omitted act.
The CD could have exercised discretion, as the material filed could have been relevant to the outcome, the proceedings were not at an advanced stage and there were exceptional circumstances justifying why the documents were received the day after they were sent.

The decision demonstrates that it is not enough to rely on “well-known facts” raised at the examination stage, and that it is not for the EUIPO to establish whether a contested mark was commonly used in the relevant sector at the time of filing. The cross-appeal indicates that the EUIPO has a wide discretion to decide whether to take late submissions into account under the CoP provision. However, having to rely on such discretion is never a comfortable position to be in, and Beiersdorf was fortunate that the decision went in its favour.

Key points

It is for an applicant for invalidity to produce the specific arguments and facts which call the validity of the mark into question, and it is important to properly substantiate a call for invalidity
Basing an application on acquired distinctiveness does not amount to an admission that the mark is devoid of distinctive character
The EUIPO has a wide discretion to decide whether or not to take late submissions into account under the Continuation of Proceedings provision