Name your non-registered trade mark -- The GC on Ronaldinho's 'R10' CTM

A few hours before the World Cup’s kick-off match, the General Court wrote another Chapter of the “R10” saga, concerning a trade mark related to one of the funniest Brazilian football players ever [Case T‑137/09 RENV, Nike International Ltd v OHIM, available in French and Spanish].

For those who are not familiar with the game, “R10” is the distinctive sign that is almost universally evocative the former Brazilian star player Ronaldo de Assis Moreira, better known as Ronaldinho -- "R” stands for “Ronaldhino”, “10” is the number he used to carry upon his strip when he played for Brazil and a number of quite important clubs. In the good old days, Ronaldinho was one of the most famous Nike product endorsers.

Ronaldinho -- "R10"

On January 2006 some Aurelio Muñoz Molina, who apparently has nothing to do with Ronaldinho, filed a trade mark application for the Community “R10” word mark No 4813713, in connection with products in classes 18, 25, and 35. On October 2006, DL Sports & Marketing Ltda (DL Sports), a mysterious company that owned other Ronaldinho-related rights, opposed on the basis of a Spanish “R10” non-registered mark. The Opposition Division allowed DL Sports a period to prove the existence and validity of the earlier non-registered right it relied on. For some reason, DL Sports failed to submit evidence in that regard.

While the opposition was still ongoing, DL Sports and Nike closed an assignment agreement whereby the first transferred to the US company various trade marks and trade mark applications covering the “R10” sign in the US, Europe and Argentina, along with “all rights, titles and interests related to the above mentioned trade marks” (the ‘Agreement’). Believing that the Agreement had transferred the ownership of the Spanish non-registered “R10” trade mark on which the opposition was based, Nike joined the procedure in place of DL Sports.

On February 2008, the Opposition Division rejected the opposition on the ground that DL Sports had not substantiated the existence of the earlier non-registered right. One month later, Nike appealed the decision to the First Board of Appeal. Without hearing the parties, the Board of Appeal considered the appeal inadmissible: since the Agreement made no specific mention of the Spanish “R10” non-registered trade mark, Nike was not qualified to be a party to the opposition.

Ronaldo -- "R9"

This ruling was the subject of subsequent decisions by the General Court (GC) [Case T-137/09, which found Nike’s right of defence had been violated as it had not be granted with the opportunity to present its comments or to produce additional evidence to show that its standing to sue] and the Court of Justice of the European Union (CJEU) [Case C‑53/11 P], which set aside the GC’s decision and remitted the question for an assessment on the merit of whether the assignment of the Spanish “R10” non-registered trade mark actually took place under the Agreement.

In the decision rendered yesterday [whose French version is curiously entitled “DOCUMENT DE TRAVAIL”, “working document”], the GC found that non-registered trade marks, like any registered rights, should be explicitly mentioned in a transfer agreement for their assignment to take place, and that this had not happened in the Agreement between DL Sports and Nike.

First, the GC noted that the first Recital of the Agreement carefully listed seven trade marks and 13 trade mark applications covering the signs “R10” and “10R”, while no non-registered trade marks were mentioned. Moreover, Clause 3 of the Agreement, stating that “the above mentioned trade marks cover the whole and all the trade mark applications registered by DL Sports upon the ’R 10’ and ‘10R’ signs”, appeared to confirm that the Agreement was limited to “registered” signs only, the GC held.

A further element that convinced the GC in the same sense was Clause 2 of the Agreement, according to which

“[DL Sports] transfers to [Nike] … all rights, titles and interest related to the above mentioned trade marks, as well as the goodwill related thereto and there included the common law rights and other rights related to said trade marks, and the claims, applications and grounds for appeal (either acknowledged by law or equity)”.

Cristiano Ronaldo -- "CR7"

In order to include the Spanish non-registered trade mark on which the opposition was based within the subject matter of the Agreement, Nike proposed a broad interpretation of that clause. By contrast, the GC found that the reference to the “above mentioned trade marks” further confirmed that no exclusive right other than the registered ones listed under Recital 1 was involved in the assignment Agreement.

Eventually, the GC focused on Recital 2 of the Agreement, according to which Nike “owns all the rights, titles and interests related to logos, designs, models, trade marks and other IP rights” related to Ronaldinho’s activity, on the basis of another agreement between Nike and the player.

Should this be true, the GC stated, Nike would have initially owned the Spanish non-registered trade mark at issue and no transfer of ownership from DL Sports would have taken place. Addressing the GC’s question, however, Nike insisted on alleging that the Spanish non-registered trade mark was actually the property of DL Sports at the moment the opposition was brought. Given that Recital 2 of the Agreement did not explicitly mention that trade mark and that Nike failed to provide further clarification on its relation with DL Sports at the time the opposition was filed, the GC concluded that Nike did not own the Spanish “R10” non-registered trade mark at the moment it joined the opposition and thus had no title to appeal the Opposition Division decision to the Board of Appeal.

The morals of this story are threefold: (i) although non-registered trade marks are often considered second-rate players, specific mention of them in assignment agreements involving all existing rights on a certain sign might be a good idea; (ii) to this end, mentioning the relevant territory where the non-registered trade mark is protected might be key to its a valid identification; (iii) if, for whatever reason, one should decide to ask a third company to register and enforce some trade marks in which one has an interest, with a view to a later assignment, a couple of preliminary meetings to agree upon a common strategy would be in order.

UPDATE: a learned Katfriend (katpat!) lets us know that, actually, “under Spanish law there is no such thing as a non-registered trade mark. There are notoriously known marks (6bis Paris Convention) but these fall under 8(2)(c) CTMR, not under 8(4).” While it is more than likely that "R10" was well-known back in 2006, the opposition was based on both Article 8(4) and 8(2)(c) CTMR. Further, the GC refers to the trade mark at issue simply as "non-registered mark" -- and all this bring us back to an old, tricky question: shouldn't EU Courts know national law?

Ronaldinho here. 

Ronaldo here.

Cristiano Ronaldo here. 

This Kat's apologies to those who are already fed up with all this football here.