EUIPO Grand Board decision against Gleissner aims to end trade mark system abuse

The Grand Board of the EU Intellectual Property Office (EUIPO) dismissed an appeal by the Michael Gleissner-owned company Fashion TV Brand Holdings C.V., and held that its actions before the EUIPO amounted to abuse of rights and abuse of process in revocation proceedings concerning the ‘Sandra Pabst’ trade mark. The Grand Board, a body composed of senior members of the Board of Appeal, took a strong stand against abusive practices of Michael Gleissner and his companies. If not successfully challenged, this long-awaited decision will be binding on all EUIPO instances.

Who is Michael Gleissner?

Michael Gleissner needs no introduction to trade mark practitioners. His prolific and mysterious activities not only caused headaches for many brand owners, but also gave him a quasi-celebrity status in the trade mark world. Known as the ‘infamous trade mark troll’, Michael Gleissner owns thousands of shell companies responsible for massive trade mark filings and domain name registrations worldwide, including applications containing famous third-party trade marks, such as ‘British Airways’, ‘Trump TV’ or ‘EUIPO’. Gleissner-related companies also initiated thousands of cancellations, including non-use actions against well-known and clearly used marks. Gleissner was linked to 850 revocations filed before the EUIPO between 2015 and 2018, amounting to 11% of all cancellation actions (on all grounds) filed to the EUIPO in the same period. He had previously failed on several occasions before the UK IPO, such as in a notable case concerning the unsuccessful mass attack on 68 trade marks owned by one of world's largest technology companies and recently in a decision concerning bad faith applications for ‘Parasite’ marks. The recent decision of the Grand Board aims to put an end to Gleissner’s activities before the EU office.

Background

The present case dates back to 2016 when Gleissner's Fashion TV Brand Holdings C.V. filed a request for non-use revocation of the EUTM registration ‘Sandra Pabst’ owned by CBM Creative Brands Marken GmbH, a company belonging to the fashion group Peek & Cloppenburg. At the time of the application, the mark was registered for more than five years and vulnerable to non-use action. Pursuant to the EU Trade Mark Regulation (EUTMR), the burden of proof to demonstrate genuine use lies with the mark proprietor. In its response to the revocation action, CBM provided various documents aimed at proving use of the attacked mark.

Aside from the usual arguments, CBM also claimed that the revocation request was filed as an "abuse of law" and with the intention of blackmail. CBM argued that Fashion TV also attacked other 36 EU trade marks owned by CBM or companies belonging to the Peek & Cloppenburg group. CBM also revealed that another Gleissner-related entity had previously tried to purchase two of those trade marks and that Fashion TV later offered to withdraw the revocations in exchange for the transfers of said marks. Secondly, the CBM pointed out that Gleissner-related companies filed various trade mark applications for marks belonging to the Peek & Cloppenburg group. Finally, CBM stressed that Fashion TV was founded only days before the revocation request was filed and has only a ‘virtual office’ address, which shows that it was established for the sole purposes of the revocation proceedings.

First instance decision

The EUIPO Cancellation Division rejected the request for revocation on the grounds that Fashion TV brought the action for abusive ends (i.e. for ends not related to the public interest underlying the non-use revocation proceedings). Interestingly, the Cancellation Division ruled that there was no need to examine the proof of use filed by the EUTM proprietor, which under normal circumstances constitutes the ‘core’ of revocation proceedings.

The Cancellation Division first stressed that, in principle, revocation action may be brought by anyone and no specific interest to do so is required, as it is in the public interest to remove unused marks from the register. However, this cannot reasonably be interpreted as an absolute principle “that would oblige the Office to turn a blind eye to any type of circumstances surrounding a particular case”, in particular indications of abusive practices.

The Cancellation Division then stated that neither the EUTMR nor the EU Trade Mark Implementing Regulation contain any general provision on abusive practices in administrative proceedings before the EUIPO. Hence, it referred to the “principles of procedural law generally recognised in the Member States.” Stating that one such principle is not to allow administrative or judicial actions constituting a clear abuse of law or abuse of process, the Cancellation Division rejected the revocation action as unfounded.

Fashion TV appealed the first instance decision arguing that it has a genuine right to attack non-used trade marks and acted in line with the general purpose of provisions underlying revocation proceedings (i.e. to remove unused marks from the registry). Fashion TV stressed that a cancellation applicant does not have to show any particular interest in bringing action. At a later stage of the appeal proceedings, Fashion TV also argued that allegations of Gleissner's support of the revocation cases was a conspiracy theory and should be disregarded.

In December 2017, the Presidium of the Boards of Appeal remitted the case to the Grand Board in light of the importance of the legal issues involved, in particular abuse of law and abuse of process.

Grand Board decision

In its decision, the Grand Board confirmed that the revocation request was brought before the Office with an improper and illegitimate ulterior purpose and thus constituted an abuse of rights and process.

In its preliminary remarks, the Grand Board qualified the notion of abuse of process as a “general procedural objection of a preliminary nature”, which prevents a discussion of the merits of the case (i.e. assessment of genuine use of the mark).

Interestingly, even though the proof of use submitted by the mark owner was not examined in the proceedings, the Board stressed that the mere fact it was filed was in itself relevant for the assessment of the abuse of process. This is because, according to the Grand Board, the filing corroborated CBM’s argument that initiating the revocation action entails substantial effort on the mark owner’s side, and proves that the Board “is not confronted with a trade mark which was not used at all”. The Board further stated that – even though a revocation applicant is by no means required to verify whether the attacked mark was actually used – the contested mark’s presence on the market was another indication that the revocation request was filed for an ulterior purpose. At the same time, the Board stressed that the mere fact that the applicant could have been aware of the use of the contested mark would certainly not be sufficient for establishing abuse of process.

Since the abuse of process constituted a bar to the admissibility of the revocation request and prevented the analysis of the substance of the case, the Board ruled that it is entitled to examine certain facts ex officio, as long as they can be derived from other Board of Appeal cases or from the EUIPO Register. In fact, the Board partially relied on circumstances revealed in other Gleissner-related cases, in particular to establish a factual relationship between the revocation applicant and Gleissner and ‘his’ other companies.

In response to Fashion TV’s arguments that no particular interest for filing a revocation action is required, the Board ruled that the abuse of rights or process is completely independent of the rules regarding who is entitled to bring a cancellation request, and whether or not an interest in filing the request must be shown. The law does not allow one to take advantage of the legal conditions if the reliance on these legal conditions is in itself abusive. The Board stressed that such abuse occurs precisely when – despite the formal observance of the relevant legislation where no owner interest need be shown – the purpose of these legislative rules is not achieved.

According to the Board, the actions of the applicant do not serve the purpose for which the legislator set up the revocation procedures. While it is in the public interest to cancel a non-used trade mark, it is not in the public interest to flood other parties or even trade mark offices with “vexatious requests” and burdensome litigation. The Board further stressed that the public interest underlying revocation of non-used marks is not absolute.

Different from the Cancellation Division, the Board stressed that a notion of abuse of process is “a bar of genuine European Union law” and no reference to the generally recognised principles of national procedural law was needed.

The Board further disregarded Fashion TV’s claims that the Cancellation Division failed to establish the abuse of law or process. In its assessment of, the Board took into account all of the following circumstances:

• The simultaneous and massive attack on CBM’s trade marks, consisting of 37 different revocation requests filed by Fashion TV and associated companies as a retaliatory measure and thus with an improper and illegitimate ulterior purpose; the Board stressed that the abusiveness of these actions was further aggravated by the exponential, leveraged effect of CBM having to respond to 37 requests at the same time and collect evidence of use;

• The artificial nature of the company that filed the revocation request, established only days before the revocation request was filed, holding a virtual address and having no actual business activity other than acting as a revocation applicant; the Board also took into account the great number of other similar ‘empty shell’ companies, all of which are under de facto control of Gleissner or his partners;

• The great number of revocation actions filed before the EUIPO and the national offices, which “serve no other purpose than to flood other parties and the Office with burdensome litigation” and form part of an orchestrated and systematic strategy adopted by Gleissner and associated companies; the Board also referred to numerous revocation actions filed in the UK by Gleissner-related companies, which were struck down by the UK Registrar back in 2017;

• The excessive number of trade mark applications, company name registrations and domain names filed by Gleissner-related companies around the world with no apparent legitimate business interests behind them; the Board stressed that these filings included applications for trade marks, such as ‘Trump’ or even ‘EUIPO’.

Based on the above, the Board ruled that Fashion TV’s revocation action was filed with a ‘fraudulent end’ aimed at obtaining undue advantage and constituted an abuse of rights and of process.

Why is it important?

The Grand Board decision in the ‘Sandra Pabst’ case is an important milestone in the on-going battle against trade mark system abuse. The Board confirmed that a non-use revocation, despite the formal observance of requirements laid down in the Regulation, can amount to abuse of law and process, if it was filed for an ulterior and fraudulent purpose. The Board did not examine proof of use of the contested mark, but took into account a wide range of circumstances, which go beyond the ‘usual’ scope of revocation proceedings. In particular, the Board considered numerous revocation actions filed against the same mark owner, and several trade mark applications filed by the revocation applicant and associated companies for marks identical to those held by the mark owner. The Board also took into account the revocation applicant’s activities in unrelated matters, not only before the EUIPO, but other national offices.

The decision sent a strong signal that abusive practices will not be tolerated in proceedings before the EUIPO. If not successfully challenged, the decision will become binding on the decision-making instances of the EUIPO. The case also has a direct impact on hundreds of cancellation cases, which are currently suspended pending the final outcome of the present proceedings, including 120 suspended non-use revocation actions brought by Gleissner-related companies against trade marks owned by one of world's largest technology companies.

For more information on this ruling and trade mark issues in the EU, contact your regular CMS advisor or local CMS expert.