OFFICE FOR HARMONIZATION IN THE INTERNAL MARKET (TRADE MARKS AND DESIGNS) DECISION of the Second Board of Appeal of 28 February 2014

Transcription

1 OFFICE FOR HARMONIZATION IN THE INTERNAL MARKET (TRADE MARKS AND DESIGNS) The Boards of Appeal DECISION of the Second Board of Appeal of 28 February 2014 In Case R 1890/ salesforce.com, inc. The One Market StreetSuite 300 San Francisco, California United States of America Applicant / Appellant represented by BOEHMERT & BOEHMERT, Meinekestr. 26, DE Berlin, Germany APPEAL relating to Community trade mark application No THE SECOND BOARD OF APPEAL composed of T. de las Heras (Chairperson and Rapporteur), H. Salmi (Member) and C. Govers (Member) Registrar: P. López Fernández de Corres gives the following Language of the case: English

2 2 Decision Summary of the facts 1 By an application filed on 21 December 2012, salesforce.com, inc. ( the applicant ) sought to register the word mark for the following list of services: SALESCLOUD Class 35 Advertising, in particular television advertising, online advertising on computer networks, radio advertising, advertising by mail order, bill-posting, print and Internet advertising; advertising via mobile radio networks; advertising on mobile phone television; advertising on the Internet for others; advertising agency services; planning and design of advertising activities; presentation of companies on the Internet and other media; distribution of samples; sales promotion (for others), public relations; market research, including in particular for others, on digital networks (webvertising); telemarketing services; market research and analysis services; PR agency services, namely public relations; rental of advertising space on the Internet; arranging advertising events; multimedia agency services; merchandising agency services, namely advertising, sales research and market studies and analysis; auctioneering on the Internet; arranging and conducting of exhibitions and trade fairs for industrial, commercial and advertising purposes; business management services; advisory services relating to advertising and marketing; business management and organization consultancy, in particular development of business concepts; business management advisory and consultancy services; business consultancy and advisory services; business consultancy; assistance to commercial or industrial firms in the conduct of their business; arranging of trading and economical contacts, also over the Internet; arranging of contracts, for others, for the providing of services; arranging of contracts, for others, for the buying and selling of goods; arranging of commercial transactions, for others, including within the framework of e-commerce; arranging of contracts, for others, for the providing of services with regard to lotteries and competitions; administrative order processing; consumer consultancy with regard to products and claims management (office functions) via service hotlines for consumers, in particular for Internet users (call centre services); conducting research in computer files, in databases, on the Internet and on computer networks, for others, with regard to business matters and into offers for goods and services; maintenance and compilation of data and information in computer databases; systematic ordering of data in computer databases; compilation of statistics; office functions for the administration and indexing of data and information; office functions for the creating of indexes with regard to information, websites and other information sources; compilation of data, in particular image, audio and/or video data in computer databases. 2 By letter dated 21 January 2013, the examiner issued a provisional refusal of the entire CTM application. She informed the applicant that the mark applied for did not appear eligible for registration pursuant to Article 7(1)(b), (c) and (2) CTMR. 3 The examiner asserted that the mark SALESCLOUD, taken as a whole, informs consumers that the services applied for are cloud or cloud-based services for sales purposes. The link between the sign and the services is sufficiently close for the mark to be rejected pursuant to Article 7(1)(c) CTMR. The mark is also devoid of distinctive character pursuant to Article 7(1)(b) CTMR, since its descriptive meaning eclipses any impression it might have of being a sign of trade origin. 4 The applicant filed observations on the grounds of provisional refusal that can be summarized as follows:

3 3 In common parlance, the word cloud means a cloud in the sky, a large number of insects in flight, something that darkens or threatens. In the Internet age, cloud has been adapted to describe a number of nebulous functions that generally do not take place within the local computer, server or smartphone, but remotely somewhere else. In this context, cloud may refer to cloud computing. However, the overall picture is confusing and the concept is still moving. There is a lack of a clear definition of the term. Viewing the mark alone, does not readily convey what services or products the applicant offers. It is also unclear what the sales component of the mark refers to. While cloud may in the most general of terms involve the Internet or a private or public network of computers, it does not directly describe a specific service. The mark is not a technical term. It is not found in dictionaries. The mark is only offered by the applicant. There is no descriptive use of the mark on the Internet. The Office has accepted a number of marks including the word sales or the word cloud. The applicant is a world leader in business intelligence and research and SALESCLOUD has always been at the core of the applicant s offerings. The relevant consumer would not be able to perceive the mark as conveying the breadth of the offerings described above. The general meaning conveyed by SALESCLOUD is that of an entity that merely sells products or services through some remote server. Despite this being the most obvious interpretation, the applicant is not offering a market for consumers to buy or sell goods or services. The services cannot merely be classified as sales tools offered via a cloud application, because the comprehensive, interactive offerings go far beyond what the relevant consumer may perceive to be a sales tool. The mark is suggestive not descriptive, because the cloud element does not have a readily understood meaning. The applicant has made use of the mark applied for since The mark can proceed pursuant to Article 7(3) CTMR. 5 The evidence of acquired distinctiveness filed by the applicant can be summarized as follows: A table summarising the global and European market share, together with associated revenue that the applicant has generated from its SALESCLOUD offering, as reported by third-party industry analysis. Exhibit 16 contains copies of industry and analysts reports supporting the market share and revenue figures indicated in the table. The applicant is a

4 4 leading company in the CRM/SFA market with its SALESCLOUD offerings, and it has achieved the following market share/revenues for SALESCLOUD in the EU: 2010: 21.9%; approx. EUR : 25.3%; approx. EUR : 27.6%; approx. EUR The above market shares represent a progression from third largest EU market share owner to the largest market share owner within a two-year period. Nearly all the applicant s other offerings interoperate or integrate with SALESCLOUD; therefore, the applicant s annual revenue is directly attributable to its SALESCLOUD offering. Exhibit 17: examples of regional EU media coverage (in online and printed publications). Exhibit 18: information about and examples of the applicant s mark recognition on social media (Facebook, Twitter, LinkedIn, Flickr), including representative examples of third-party social media references and related statistics about the mark applied for. A table listing various significant industry recognitions awarded to the applicant for its SALESCLOUD offerings is provided. Exhibit 19: success stories of global and EU customer. Implementations of the applicant s SALESCLOUD product. A 2013 customer survey conducted by the applicant showing that the applicant s offerings helped to increase productivity by more than 36%, to increase lead conversion by 38% and to increase forecast accuracy by more than 45%. Exhibit 20: information demonstrating consumers and industry analysts praise for the SALESCLOUD offerings; the applicant s SFA market share relative to its competitors. Exhibit 21: printouts from the applicant s SALESCLOUD social media pages. Exhibit 22: the applicant s promotional material, which demonstrates the intensity of the use of the applicant s marks in social media. Screenshots and information on subscribers to and viewers of information on SALESCLOUD are provided. Since SALESCLOUD is the applicant s flagship offering, a large number of the seven million viewers of the videos promoting SALESCLOUD can be attributed to this sign/product. The applicant maintains countryspecific, native language YouTube channels (namely in Germany, France, Spain, the UK, Italy, the Netherlands and Portugal), which collectively show over 350 videos and received over half a million viewings as of 22/04/2013. Figures relating to the numbers of followers / likes / tweets of the applicant s products are provided.

5 5 Exhibit 23 and 24: promotional material and images depicting some of the applicant s promotional activities surrounding SALESCLOUD at various events such as conferences, global events and trade shows. Exhibit 25: screenshots from the applicant s websites relating to the product SALESCLOUD and associated analytics. Figures relating to 3 /16 SALESCLOUD s presence on the Internet between 01/01/2009 and 31/03/2013 are provided. Exhibit 26: representative examples of SALESCLOUD promotional materials (available through SALESFORCE.COM websites and other social channels). Exhibit 27: representative examples of SALESCLOUD promotion through third-party partner websites in the EU. The applicant claims that it has invested billions of dollars in advertising and promoting its marks worldwide. In 2012 alone, the applicant spent over USD million on advertising throughout the world, including millions of dollars on SALESCLOUD promotion and sales efforts in Europe. 6 By communication dated 31 July 2013, the examiner rejected the mark in its entirety, pursuant to Article 7(1)(b), (c) and (2) CTMR. 7 The contested decision can be summarized as follows: The meaning of the world cloud, must be assessed in relation to the relevant consumers who are business users. Such users will have an understanding of the term cloud although they may not have a precise definition. They will know that the cloud as services necessarily involving computing resources which are available in a remote location accessible over a network. Therefore, it is not an incomprehensible concept for the professional public. The word cloud has a clear meaning. It may not be obvious to the consumer whether the services on offer are private or public. However, this is irrelevant. The Board of Appeal have already considered the understanding of cloud in its decision of 7 June 2012, case R 2619/2011-1, CLOUDPLUS. Since the mark is found to be descriptive of the services, the fact that it may possess other meanings is irrelevant. Based on the above considerations, the objection is relevant to the services indicated. The mark will be understood as cloud-based sales solutions. Not surprisingly, in the media, the applicant s activities are referred to as a cloud based sales application. All of the services will be understood as being cloud-based sales solutions. Regarding the evidence of acquired distinctiveness, the fact that the applicant s company has achieved recognition or is a world leader can only

6 6 be taken into account insofar as the mark has acquired distinctiveness through use. But the applicant has not demonstrated this. While the Office is of the opinion that the applicant has demonstrated significant use of its mark in the UK and notable use in Ireland, there is no evidence or indication regarding the mark s use and, more importantly, its perception by the relevant consumer, in Malta. Consequently, the evidence as a whole is not sufficient to prove that the mark has acquired distinctiveness through use in the relevant territory. Therefore, in an overall assessment, the Office concludes that the evidence presented is insufficient to demonstrate that, in the eyes of the relevant public, the mark applied for has become distinctive in relation to the services objected to as a result of the use made of it. 8 The applicant filed a notice of appeal on 26 September 2013 and the grounds of appeal on 29 November The appeal was remitted to the Boards on 5 December Grounds of Appeal 10 The applicant requests the Board to annul the contested decision and allow the CTM application to proceed in its entirety. Its reasoning, which included a full reference to the arguments and evidence already submitted, together with substantial further evidence of use, can be summarized as follows: The mark SALESCLOUD is neither descriptive nor lacking in distinctive character with respect to the services in question. The mark has also acquired distinctiveness in the European Union through extensive use. According to the Office, the relevant territories consist of the United Kingdom, Ireland and Malta, bearing in mind that the mark SALESCLOUD is composed of English words. Therefore, it is not necessary to file evidence pertaining to other Member States. It is true that the courts have pointed out that it would be paradoxical if a Member State, which must refuse a descriptive sign applied for as a national mark, were obliged to recognised the effects of a corresponding CTM on account of the use made of it in another Member State having the same official language. Nevertheless, the European Court of Justice confirmed that only a significant proportion of the relevant public is required for the acquisition of distinctiveness. The Court found that it would be unreasonable to require proof of such acquisition for each individual Member State (see judgment of 24 May 2012, C-98/11 P, shape of a chocolate rabbit with ribbon, para. 62.) This has been followed by the decision of 11 December 2012, in case R 513/2011-2, paras Therefore, it would be unreasonable and disproportionate to oblige the applicant to provide proof of use of acquired distinctiveness through use in Malta.

7 7 The European legislator wanted to avoid that grounds of only local significance could prevent a Community trade mark from being registered. In this regard, Malta is a territory which amounts to only 0.6% of the relevant English-speaking population. In Malta, English is not the official language. Only 2% of the population of Malta consider English as their mother tongue. Bearing in mind that SALESCLOUD is a word which is not found in an English dictionary, and is not a technical term, wiit ll not be understood by the Maltese consumer who is not an English speaker. The Office has registered a number of cloud marks. It must be questioned if the examiner s objection can be applied to all the services in question. Reasons 11 The appeal complies with Articles 58, 59 and 60 CTMR and Rule 48(1) CTMIR. Therefore, it is admissible. Inherent distinctiveness of the mark 12 Article 7 CTMR, bearing the title Absolute grounds for refusal provides in material part: 1. The following shall not be registered:... (b) trade marks which are devoid of any distinctive character; (c) trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service; Para. 1 shall apply notwithstanding that the grounds of non-registrability obtain in only part of the Community; The descriptive indications referred to in Article 7(1)(c) CTMIR are those which may serve in normal usage from the point of view of the target public to designate, either directly or by reference to one of their essential characteristics, goods or services such as those in respect of which registration is sought. A sign s descriptiveness can only be assessed by reference to the goods or services

8 8 concerned and to the way in which it is understood by the target public (judgment of 20 March 2002, T-356/00, Carcard, para. 25). 14 According to case-law, Article 7(1)(c) CTMR prevents the signs or indications referred to therein from being reserved to one undertaking alone because they have been registered as trade marks. That provision thus pursues an aim in the public interest, which requires that such signs or indications may be freely used by all (see judgment of 27 February 2002, T-219/00, Ellos, para. 27 and the case-law cited, and judgment of 27 November 2003, T-348/02, Quick, para. 27). 15 As regards a mark composed of distinct elements, such as the mark in question, the distinctiveness of each taken separately may be assessed in part, but must in any event depend on an appraisal of the composite whole (see judgment of 12 June 2007 T-190/05, Twist & Pour, at para. 43). 16 The mark consists of the English words sales and cloud combined into SALESCLOUD, covering a set of advertising, marketing, commercial and business services. Since the objection to the mark is based on its meaning in English, the territories where the examiner found the mark to be objectionable were the United Kingdom, Ireland and Malta. The services are directed largely at a professional public. 17 The word SALES is plain enough. It means (in the plural) the exchange of commodity for money etc., or the act or instance of selling (see The Oxford Dictionary of Current English, 7 th edition). It is true that the word cloud has several meanings, such as a visible mass of vapour, gloom etc. (ibid.), but in the context of the services, and bearing in mind the relevant consumers, the only reasonable definition is that given by the examiner, i.e. as a metaphor for the Internet, or a distributed real-time computer network. The cloud refers to software and virtual computer platforms that are typically provided across the Internet. Data can be uploaded to the cloud or downloaded to the cloud or processed remotely in the cloud without the user having to provide his or her own resources. Indeed, as pointed out by the examiner, the applicant itself for its promotional material uses the term cloud exactly in this sense. 18 Therefore, as correctly argued by the examiner, the mark SALESCLOUD merely denotes services offered on the Internet ( the cloud ) which allows users to engage in their sales operations from any location, fixed or mobile, anywhere in fact where they can obtain an Internet connection. Such operations may include the uploading and downloading of sales data, or the manipulation, maintenance and compilation of such data (as e.g. some of the applicant s services) and coincide with the services for which registration are sought. 19 On this point, the applicant argues that the various advertising services included in the specification are not described by the mark. Nevertheless, the Board does not concur. Advertising and sales activities are close complementary activities. A trader advertises her or his goods for the purpose of selling them. It is not farfetched that one of the sales operations conducted in the cloud will be the hosting and processing of advertising material as a principle part of a sales process. The same applies with respect to market research. It cannot be denied that analysing a potential market before launching a product is an important part

9 9 of modern commerce. Such market-research functions would form part of the operations carried out in a SALESCLOUD. Parallel reasoning can be applied to the other sub-categories of services mentioned by the applicant. None of them appear to be distinct from the set of operations which might be carried out in a SALESCLOUD 20 It is not material that the mark might be understood in other ways; nor is it material that the applicant s services relating to sales operations in the cloud, might perform functions which are not strictly of this nature. On the contrary, according to Article 7(1)(c)CTMR, a sign must be refused registration if at least one of its possible meanings designates a characteristic of the goods concerned (see judgment of 23 October 2003, C-191/01P, DOUBLEMINT, para. 32). 21 Clearly the word SALESCLOUD as such does not exist in the dictionary. In normal speech the words would be separated by a space. Nevertheless, this anomaly has no significance. If the meaning which may be given to the mark does not differ from that which results from the combination of the two words of which it is composed, then the sign is not likely to create an impression different from that produced by the mere combination of meanings lent by those two words (see e.g. judgment of 10 February 2010, T-344/07, Homezone, para. 30) 22 In the eyes of the target public, i.e. business and sales people, there is a sufficiently direct and specific relationship between the mark SALESCLOUD and sales and the services in question for Article 7(1)(c) CTMR to apply (see judgment of 27 February 2002, T-106/00, Streamserve, at para. 40). 23 The applicant points out that a large number of CTMs containing the word CLOUD have been registered by the Office. The list is too large to reproduce here, but arguably many of the marks have an inherent distinctive character, such as EDGE CLOUD, JUSTCLOUD, READYCLOUD, BIZCLOUD. In any event, the Board notes that none on the list are identical or closely similar to the mark at issue in these proceedings. The Board recalls, furthermore, that as regards the reference to other decisions of the Office, it must be observed that the legality of a decision of the Board is to be assessed purely by reference to the CTMR, as interpreted by the Community judicature, and not the Office s practice in its earlier decisions (see judgment of 5 December 2000, T-32/00, Electronica, para. 47; judgment of 5 December 2002, T-130/01, Real People, Real Solutions, para. 31; judgment of 3 July 2003, T-129/01, Budmen, para. 61 and judgment of 11 May 2005, T-390/03, CM ). 24 In summary, the Board finds the mark to fall within the scope of prohibition laid down by Article 7(1)(c) CTMR, and by extension, Article 7(1)(b) CTMR (see the relevant part of the contested decision). 25 Nevertheless, the applicant claims that the mark can proceed on the basis of distinctiveness acquired through the use made of it in the European Union. Article 7(3) CTMR 26 Already before the examiner, the applicant has filed substantial evidence of acquired distinctiveness of the mark applied for in the European Union. However

10 10 the examiner found that it was insufficient for the purpose. One of her key objections was that no evidence was submitted for the territory of Malta. 27 Nevertheless, according to the Court of Justice, even if it is true that the acquisition by a mark of distinctive character through use must be proved for the part of the European Union in which that mark did not, ab initio, have such character (i.e. in this case, the United Kingdom, Ireland and Malta), it would be unreasonable to require proof of such acquisition for each individual Member State (see judgment of 24 May 2012, C-98/11 P, shape of a chocolate rabbit with a ribbon, para. 62, in fine). 28 In general, it would be unreasonable and disproportionate both to request the applicant to divert and invest important quantities of money in collecting evidence of the acquired distinctiveness in each corner of the Internal Market and to refuse protection to a trade mark whose recognition has been duly shown for the vast majority of the territory of the European Union (see decision of 11 December 2012, in case R 513/2011-2, SHAPE OF A FOUR-FINGER CHOCOLATE BAR (3D MARK), paras 45-78) 29 In any event, the applicant on appeal has submitted further and substantial evidence of acquired distinctiveness of SALESCLOUD, including new data on the use of the mark in Malta (see in particular Exhibit 32). 30 According to Article 64(1) CTMR, the Board of Appeal may exercise any power within the competence of the department which was responsible for the decision appealed or remit the case to the department responsible for that decision. In this instance, given the substantial volume of new evidence of acquired distinctiveness, the case is remitted to the Examination Division for further prosecution.

11 11 Order On those grounds, THE BOARD Remits the case to the examiner for further prosecution under Article 7(3) CTMR. Signed T. de las Heras Signed H. Salmi Signed C. Govers Registrar: Signed P. López Fernández de Corres