Judgments nº T-132/16 of The General Court, May 05, 2017

• Resolution Date: May 05, 2017
• Issuing Organization: The General Court
• Decision Number: T-132/16

(EU trade mark - Invalidity proceedings - EU word mark VENMO - Bad faith - Article 52(1)(b) of Regulation (EC) No 207/2009) In Case T-132/16,

PayPal, Inc., established in San José, California (United States), represented by A. Renck, lawyer, and I. Junkar, Solicitor,

applicant,

v

European Union Intellectual Property Office (EUIPO), represented by D. Walicka, acting as Agent,

defendant,

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

Hub Culture Ltd, established in Hamilton, Bermuda (United Kingdom), represented by J. Hill, Barrister,

ACTION brought against the decision of the Fifth Board of Appeal of EUIPO of 12 January 2016 (Case R 2974/2014-5), relating to invalidity proceedings between PayPal and Hub Culture,

THE GENERAL COURT (Eighth Chamber),

composed of A.M. Collins, President, M. Kancheva and J. Passer (Rapporteur), Judges,

Registrar: I. Dragan, Administrator,

having regard to the application lodged at the Court Registry on 23 March 2016,

having regard to the response of EUIPO lodged at the Court Registry on 8 July 2016,

having regard to the response of the intervener lodged at the Court Registry on 8 July 2016,

further to the hearing on 9 February 2017,

gives the following

Judgment

Background to the proceedings

1 In 2007 the intervener, Hub Culture Ltd, established a virtual digital social currency called ‘VEN’ which can be exchanged and traded on the internet and at physical premises known as ‘Pavilions’ operated by the intervener.

2 On 6 July 2007, the intervener filed an application for registration of the sign VEN as a US word mark for financial services in Class 36 with the United States Patent and Trademark Office (USPTO). On 28 April 2009, the mark was registered under No 3 613 111.

3 On 9 April 2009, a company called Venmo Inc., registered in Delaware (United States), was established. The company provides online payment services in the United States, under the unregistered mark VENMO, primarily enabling individuals to complete transactions between themselves.

4 On 8 June 2010, the intervener’s legal representatives wrote to Venmo, expressing their concern at the use of the VENMO trade mark by Venmo in the United States, which they claimed could lead to confusion with the intervener’s prior US rights to the VEN trade mark. The letter suggested exploring possibilities of a commercial resolution to the matter.

5 On 7 October 2010, the intervener registered the domain name ‘venmoney.net’.

6 On 25 October 2010, in the absence of an answer to the letter of 8 June 2010, the intervener’s legal representatives sent a follow-up letter to Venmo, essentially repeating the complaint relating to the confusion caused by use of the VENMO trade mark and reiterating the suggestion to explore possibilities of a commercial resolution to the matter.

7 In early November 2010, the representatives of Venmo and of the intervener met at a meeting held in Philadelphia (United States).

8 On 9 November 2010, the intervener filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO) pursuant to Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1).

9 Registration as a mark was sought for the word sign VENMO.

10 The goods and services in respect of which registration was sought are in Classes 9 and 36 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, for each of those classes, to the following description:

- Class 9: ‘Computer software, firmware and programs; computer software and programs for transmitting and encoding emails and electronic communications; virtual currency; tokens in digital form; digital stamps of monetary value; computer software and programs for providing email and electronic communication systems, utilising a system for the verification and renewal of virtual currency, tokens or digital stamps of monetary value, upon receiving such emails or electronic communications; computer software and programs for developing and administering reward and incentive programs and promotional schemes; computer software and programs for the facilitation of e-commerce transactions, including the reception of requests for payments and the transfer of virtual currency, tokens or digital stamps of monetary value’;

- Class 36: ‘Issue and redemption of tokens of value, benefits and incentives; issue and redemption of tokens of value, benefits and incentives in the form of virtual currency, tokens or digital stamps of monetary value; secure electronic transfer of virtual currency, tokens or digital stamps of monetary value; clearing and payment services relating to the sale and redemption of virtual currency, tokens and digital stamps of monetary value; trading of virtual currency, tokens and digital stamps of monetary value; brokerage of virtual currency, tokens and digital stamps of monetary value; small valued financial transactions for e-commerce services; micro-payment services; information, advisory and consultancy services relating to all of the aforesaid’.

11 On 8 December 2010, Venmo’s legal representative wrote to the intervener’s legal representatives stating, first, that at that time Venmo was not intending to engage in a partnership or a business venture with the intervener and that it was not seeking to have global operations, but rather to confine its services to specific cities within the United States, and, secondly, that it was willing to continue conversations throughout 2011, after the parties had entered into a mutual non-disclosure agreement. The legal representative also disputed the intervener’s claims relating to the likelihood of confusion between the signs VEN and VENMO.

12 On 6 January 2011, the intervener’s legal representatives responded by way of letter in which they noted that Venmo was not interested in partnering with the intervener at that time and welcomed the suggestion made by Venmo to keep the conversation open throughout 2011. Nevertheless, they stressed the existence of a likelihood of confusion between the two signs and suggested, as a temporary measure, and until workable commercial cooperation between the parties became possible, the conclusion of a licence agreement in respect of Venmo’s use of the VENMO trade mark.

13 On 26 April 2011, the sign VENMO was registered as an EU trade mark under No 9 509 357 (‘the mark at issue’).

14 On 27 June 2013, the applicant’s predecessor-in-title, Braintree Payment Solutions LLC, which owned Venmo, filed a request for a declaration of invalidity of the mark at issue for all the goods and services mentioned in paragraph 10 above. The request for a declaration of invalidity relied on Article 52(1)(b) of Regulation No 207/2009.

15 On 15 May 2014, Braintree Payment Solutions LLC merged with Braintree, Inc., which itself was then acquired by and merged into PayPal, Inc.

16 By decision of 23 September 2014, the Cancellation Division declared that the mark at issue was invalid.

17 First, it held that, in the light of the abovementioned facts and even though no formal agreement had been signed, a pre-contractual relationship existed between the applicant and the intervener which created a close enough link to deem it fair to expect the intervener not to file an application for an EU trade mark, such as the mark at issue, without giving the applicant prior notice.

18 Second, it stated that...