The cancellation of the trademark the "Flower Thrower"

Published by Toyin Dodo-Williams (Jurist and Trademark Attorney) · 29 September 2020
Tags: #Banksy, #FlowerThrower, #Trademark, #Copyright, #Intellectualproperty, #paradigmarks

The cancellation of the trademark "Flower Thrower", the iconic graffiti by Banksy risk creating a mine field whose effect goes beyond the dispute.

On September 14 2020, the Cancellation Division of the European Union Intellectual Property Office (EUIPO) declared invalid the below figurative trademark for all the goods and services in classes 2, 9, 16, 18, 19, 24, 25, 27, 28, 41, and 42 of the Nice Classification.

The applicant / owner of the trademark is Pest Control Office Ltd, the company that deals with the matters of the famous graffiti artist Banksy. The invalidated trademark is an exact reproduction of the “Flower Thrower” the iconic work of the artist which was registered in August 2014.

The application for invalidity was filed by Full Colour Black Ltd in March 2019 on the ground of bad faith[1] and that Banksy the artist had no intention on of using the trademark. The application was also filed on the ground that the trademark has been registered contrary to the provisions of absolute grounds for refusal[2]. Furthermore, questions involving broader issues regarding anonymity of the artist and the monopolisation of art work on an indefinite basis contrary to the provisions of copyright law were also presented.

However, the Cancellation Division reached its decision on the findings that the applicant was acting in bad faith when he filed the application for the figurative trademark “Flower Thrower” without the necessity to examine the case further on the provisions of absolute grounds for refusal.

The proceeding is very peculiar in that much of the arguments and evidence adduced refer to opinions and beliefs of Banksy regarding his artworks in relation to intellectual property and not to any act or omission directly committed by the proprietor of the trademark. In order to establish bad faith of the owner at the time of filing for the trademark references were made to Banksy’s statement and aversions to intellectual property such as “copyright is for losers”, “any advert in public space that gives you no choice whether you see it or not is yours” and that the public is morally and legally free to reproduce, amend and otherwise use any copyright works forced upon them by third parties.

In its assessment of bad faith the Cancellation Division was guided by the statement of the European Court of Justice (ECJ) that “the ground of bad faith applies where it is apparent from relevant and consistent indicia that the proprietor of an EU trademark filed its application for registration without any intention of using the contested EUTM, or without the aim of engaging fairly in competition, but with the intention of undermining the interests of third parties, in a manner inconsistent with honest practices, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin[3]”.

Accordingly, the Cancellation Division finds bad faith on the part of the trademark proprietor Pest Control Office Ltd from Banksy’s intention of undermining the interests of third parties, in a manner inconsistent with honest practices, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin. Further, it considers that the evidence submitted by Full Colour Black Ltd shows that there is a connection between Banksy and the proprietor Pest Control Office Ltd, who would appear to be the legal representatives of Banksy.

As a result, the Cancellation Division in reference to East side Mario[4] holds that “the term ‘Applicant’ in Article 59(1)(b) EUTMR has to be construed as meaning the person applying for the EUTM in its own name, the principal of an agent acting in the name of its principal or any person instructing a nominee to act in its (the nominee’s) own name, but who, according to an arrangement between them, merely serves the interests of the former, while acting in good faith and being unaware of the former’s bad faith”.

A point which seems significant to me in the present case is that the reference in East Side Mario does not fit the factual circumstances and its legal implications in the present case. Moreover, its application by the Cancellation Division to reach the conclusion that Pest Control Office Ltd the proprietor of the trademark “is the representative of Banksy, probably due to his wish to stay anonymous, and therefore the proprietor’s filing of the EUTM would have been carried out in the interests of Banksy” creates a lot of gaps filled with mine field whose effect goes beyond the present dispute.

To infer that the trademark owner Pest Control Office Ltd is the agent of Banksy and thereby the action or responsibility of Banksy is directly superimposable on the owner is highly questionable in my opinion. Such an assertion would violate the principle of separate legal personality of the owner and blurs the line of distinction between the responsibilities of a natural person and that of an entity.

The matter of separate legal personality[5] is settled in law in all jurisdictions since it was established in Salomon v Salomon[6] in 1896. In that case according to Lord Macnaghten “The company is at law a different person altogether from the subscribers to the memorandum; and, though it may be that after incorporation the business is precisely the same as it was before, and the same persons are managers, and the same hands receive the profits, the company is not in law the agent of the subscribers or trustee for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by the Act”.

Likewise in Salomon, the statement of Lord Herschell further highlights the anomaly in the position adopted by the Cancellation Division in the present case: “Under these circumstances, I am at a loss to understand what is meant by saying that A. Salomon & Co. Limited, [Pest Control Office Ltd], is but an “alias” for A. Salomon [Banksy]. It is not another name for the same person; the company is ex hypothesi a distinct legal persona. As little am I able to adopt the view that the company was the agent of Salomon [Banksy] to carry on his business for him. In a popular sense, a company may in every case be said to carry on business for and on behalf of its shareholders; but this certainly does not in point of law constitute the relation of principal and agent between them”.

From the perspective of the principle of separate legal personality, contrary to the conclusion of the Cancellation Division in the instant case, Banksy would qualify at most to be a shareholder of the company Pest Control Office Ltd but this certainly does not in point of law constitute the relationship of principal and agent between them.

It follows that the deductions of the Cancellation Division in relations to Banksy’s statements and aversions as directly equivalent to the intensions of Pest Control Office Ltd is untenable. Such a deduction would remain flawed even in a farfetched hypothesis of artificial elevation of Banksy’s status to that of a controlling entity and Pest Control Office Ltd as its subsidiary. Under such hypothesis, “according to settled case-law, liability for the conduct of a subsidiary can be imputed to its parent company in particular where, although it has separate legal personality, that subsidiary does not decide independently on its own conduct on the market, but carries out, in all material respects, the instructions given to it by the parent company, having regard in particular to the economic, organisational and legal links between those two legal entities”[7].

Under such hypothesis the conclusion of the Cancellation Division could perhaps be tenable only by lifting the veil of personality behind the company owner of the trademark to ascertain the identity of the eventual controlling entity having regards, in particular to the economic, organisational and legal links between the two legal entities. Short of applying such an established pattern to ascertain the subsistence of control, inconclusive inferences could only leave a lot of rooms for legal uncertainties. Indeed, the superimposition by the Cancellation Division of the purported bad faith of Banksy as the bad faith of the proprietor is legally overstretching in my opinion.

From this viewpoint, it’s irrelevant for the purpose of establishing the bad faith of the trademark owner that the Cancellation Division finds that “Banksy has chosen to remain anonymous and for the most part to paint graffiti on other people’s property without their permission rather than to paint it on canvases or his own property. He has also chosen to be very vocal regarding his disdain for intellectual property rights, although clearly his aversion for intellectual property rights does not annul any validly acquired rights to copyright or trademarks. It must be pointed out that another factor worthy of consideration is that he cannot be identified as the unquestionable owner of such works as his identity is hidden; it further cannot be established without question that the artist holds any copyrights to a graffiti. The contested EUTM was filed in order for Banksy to have legal rights over the sign as he could not rely on copyright rights, but that is not a function of a trade mark”. It remains that factually and legally Banksy is not the legal entity that is the registered owner of the trademark.

Likewise, the question of non-use of the trademark till the beginning of the invalidity procedure, taking into consideration by the Cancellation Division in its assessment of bad faith of the proprietor of the trademark is inconsistent in my opinion, as it undermines the validity of the grace period. It is important to denote that that Pest Control Office Ltd is still within the five years grace period, granted to trademark owners before non-use can be contested[8].

It follows that on the facts of the case, the evidence adduced and the motives behind the decision of the Cancellation Division that the “proprietor’s actions are inconsistent with honest practices as it had no intention to use the EUTM as a trade mark according to its function and thus the EUTM was filed in bad faith”, is based on flawed premise of denial of the existence of the principle of separate legal personality. Consequently for all the foregoing reasons, I am persuaded that the cancellation of the trademark the “Flower Thrower” by Banksy is badly decided and would need to be appealed in order to curtail its undesired effects in the future.

[1] Article 59(1)(b) European Union Trademark Regulation (EUTMR).

[2] Article 59(1)(a) EUTMR in combination with Articles 7(1)(b) and 7(1)(c)EUTMR.

[3] Case C-104/18 P, STYLO & KOTON, EU:C:2019:724, § 46 and C 371/18, SKY, EU:C:2020:45, § 81

[4] R 582/2003 4, East Side Mario, § 17 18

[5] Article 2 Directive 68/151/EEC

[6] [1897] A.C. 22 - UK Supreme Court

[7] Case C-623/15, EU:C:2017:21, Toshiba v Commission, § 45 and the case-law cited.

[8] Article 18 EUTMR