OPINION OF ADVOCATE GENERAL

BOT

delivered on 6 May 2010 ¹(1)

Case C‑265/09 P

Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM)

v

BORCO-Marken-Import Matthiesen GmbH & Co. KG

(Appeal – Community trade mark – Sign consisting of one letter – Absolute grounds for refusal of registration – Regulation (EC) No 40/94 – Article 7(1)(b) – Distinctive character – Method of assessment – Examination, based on the facts, in relation to the goods or services specified in the application for registration)

1.        Is it possible for the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) to introduce under Article 7(1)(b) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark,(2) an a priori exclusion of a non-stylised letter from registration as a Community trade mark, without infringing that regulation?

2.        This, in essence, is the question raised by this appeal brought by OHIM against the judgment of the Court of First Instance of the European Communities (now ‘the General Court’) of 29 April 2009 in BORCO-Marken-Import Matthiesen v OHIM (α). (3)

3.        By the judgment under appeal, the General Court granted the application brought by BORCO-Marken-Import Matthiesen GmbH & Co. KG (‘BORCO’) against the decision of the Fourth Board of Appeal of OHIM of 30 November 2006 (‘the contested decision’) rejecting the application for registration of the sign ‘α’ on the ground of lack of any distinctive character, on the basis of Article 7(1)(b) of the regulation. The Court held that the method used by OHIM for assessing the distinctive character of that sign did not comply with that provision since OHIM had not carried out an examination, based on the facts, of the distinctive character of the sign at issue in relation to the goods specified in the application for registration. The Court therefore referred the matter back to OHIM for a re-examination of the application.

4.        In this appeal, OHIM considers that the judgment under appeal is vitiated by an error of law in the interpretation of Article 7(1)(b) of the regulation, since OHIM, contrary to what the General Court maintains, was not required to carry out such an examination of the sign at issue.

5.        In this Opinion, I shall set out the reasons why I consider that OHIM’s criticisms of the Court’s reasoning are unfounded. I shall explain that, from the moment that, under Article 4 of the regulation, letters are included among the registrable signs, the assessment of their distinctive character, within the meaning of Article 7(1)(b) of the regulation, must be carried out within the context of each specific case, taking into account the nature and particular characteristics of the goods specified in the application for registration. I shall thus agree with the General Court that, by failing to carry out any examination, based on the facts, of the distinctive character of the sign at issue, OHIM in effect introduced under Article 7(1)(b) of the regulation an a priori exclusion from registration of a non-stylised letter and thereby infringed the terms of the regulation. I shall therefore propose that the Court dismiss this appeal.

I –  Legal framework

6.        Under Article 4 of the regulation, headed ‘Signs of which a Community trade mark may consist’:

‘A Community trade mark may consist of any signs capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.’

7.        Article 7 of the regulation, which deals with absolute grounds for refusal, is worded as follows:

‘1. The following shall not be registered:

...

(b) trade marks which are devoid of any distinctive character;

...’

8.        These two provisions reproduce, in identical terms, the provisions laid down, respectively, in Articles 2 and 3(1)(b) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks. (4)

II –  Facts

9.        The facts, as stated in the judgment under appeal, may be summarised as follows.

10.      On 14 September 2005, BORCO filed an application for registration of a Community trade mark at OHIM pursuant to the regulation. Registration as a figurative mark was sought for the sign:

11.      The goods in respect of which registration of the mark was sought are in Class 33 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 to the following description: ‘alcoholic beverages, (except beers), wines, sparkling wines and beverages containing wine’.

12.      By decision of 31 May 2006, the OHIM examiner rejected the application for registration on the ground of the sign’s lack of any distinctive character, on the basis of Article 7(1)(b) of the regulation. The examiner found that the sign for which registration was sought constituted a faithful reproduction of the Greek lower case letter ‘α’, without graphical modifications, and that Greek-speaking purchasers would not detect in that sign an indication of the commercial origin of the goods described in the application for registration.

13.      On 15 June 2006, BORCO lodged an appeal with OHIM against that decision. That appeal was dismissed by the contested decision, on the ground that the sign at issue was devoid of the distinctive character required under Article 7(1)(b) of the regulation.

III –  Procedure before the General Court and the judgment under appeal

14.      By application lodged at the Registry of the General Court on 5 February 2007, BORCO brought an action against the contested decision. It put forward three pleas in law alleging infringement of three provisions of the regulation, namely Article 7(1)(b) and (c), and Article 12.

15.      By the judgment under appeal, the General Court annulled the contested decision and referred the matter back to OHIM for a re-examination of the application for registration at issue in the light of the grounds of that judgment.

IV –  Procedure before the Court of Justice and forms of order sought by the parties

16.      By the appeal lodged on 15 July 2009, OHIM asks the Court to set aside the judgment under appeal. Principally, it asks the Court to dismiss the action brought by BORCO and, in the alternative, to refer the case back to the General Court. In any event, OHIM asks the Court to order BORCO to pay the costs of both sets of proceedings.

17.      BORCO contends that the Court should dismiss the appeal and order OHIM to pay the costs.

V –  The appeal

18.      This appeal gives the Court the opportunity to define its position of principle with regard to the method which OHIM must use for assessing the distinctive character of a sign consisting of a single non-stylised letter, for the purposes of registering the sign as a Community trade mark. That definition ought to put an end to the disagreement between OHIM and the General Court in this regard.

19.      In accordance with its established decision-making practice, OHIM refuses to register single letters as trade marks on the ground that such letters are, in its opinion, devoid of any distinctive character within the meaning of Article 7(1)(b) of the regulation. This practice is expressly referred to in point 7.5.3 of the guidelines concerning proceedings before OHIM (Part B, headed ‘Examination’). (5) That point is worded as follows:

‘…

… [OHIM] still applies an objection under Article 7(1)(b) for single letters or numerals. This is justified in particular in view of the limited number of letters or numerals available for other traders. For example, the numeral called “7” was refused for cars ...

However, single letters or numerals are registrable if they are sufficiently stylised, in such a way that the overall graphic impression prevails over the mere existence of a single letter or numeral as such. For example, the following were accepted:

–         …

–        …

–        …

–        …

In other words, those signs are registrable if they are not just merely reproducing the numeral or letter in another typeface.’

20.      OHIM thus refused to register the capital letters ‘I’ and ‘E’, decisions which were both annulled by the General Court in IVG Immobilien v OHIM (I) (6) and Hartmann v OHIM (E). (7)

21.      In the judgment under appeal, as in those last two judgments, the General Court severely criticises the method used by OHIM for assessing the distinctive character of a sign consisting of a single non-stylised letter.

22.      The Court’s criticisms are directed, first of all, at paragraphs 17 to 20 of the contested decision in which the Board of Appeal found that a single letter, such as the one at issue, must be regarded as devoid of any distinctive character where there is no element of graphical presentation.

23.      In paragraph 42 of the judgment under appeal, the General Court considered that, by that analysis, OHIM implicitly but necessarily took the view, in breach of Article 4 of the regulation, that the letter at issue did not of itself have the minimum degree of distinctiveness required under Article 7(1)(b) of the regulation. In paragraph 43 of the judgment under appeal, the Court pointed out, inter alia, that, according to settled case-law, registration of a sign as a trade mark is conditional not upon a finding of a specific level of creativity on the part of the applicant for the trade mark, but only upon the ability of the sign to distinguish the goods of the applicant from goods offered by competitors.

24.      However, the General Court found that the Board of Appeal did not carry out an examination, based on the facts, in that regard. In particular, it considered that the Board of Appeal should have determined, through an examination, on the facts, of the potential capacity of the sign at issue, whether the sign was incapable of distinguishing, in the eyes of the average Greek-speaking consumer, BORCO’s goods from those of a different origin.

25.      This criticism culminates in paragraph 45 of the judgment under appeal, in which the General Court observed that the ‘refusal, as a matter of definition, to accept that single letters can have any distinctive character, stated without reservation and without undertaking [such an] examination based on the facts, is contrary to the [very] wording of Article 4 of [the regulation], which ranks letters as being among the signs, capable of being represented graphically, of which a mark may consist, provided that such signs are capable of distinguishing the goods and services of one undertaking from those of other undertakings’.

26.      It was, in particular, in paragraphs 53 to 56 of the judgment under appeal that the General Court examined the way in which OHIM assessed and reasoned the lack of any distinctive character of the sign at issue within the meaning of Article 7(1)(b) of the regulation. Those paragraphs are worded as follows:

‘53.      Fourthly, the Board of Appeal found, in paragraph 25 of the contested decision, that the reference public “might” view the letter “α” as a reference to quality (“A” quality), an indication of size, or of a type or kind of alcoholic beverage, such as those covered by the application.

54      OHIM cannot claim that, in making such a finding, the Board of Appeal carried out an examination as to whether, on the facts, the sign at issue had distinctive character. As well as being of a doubtful nature which renders it valueless, that ground does not refer to any specific fact capable of substantiating the finding that the mark at issue would be perceived by the relevant public as a reference to quality, an indication of size, or of a type or kind, in respect of the goods covered by the application (see, to that effect, E, paragraph 44). It follows that the Board of Appeal failed to establish that the sign at issue lacked distinctive character.

…

56      It follows from all of the foregoing that, by assuming from its lack of graphical modifications or ornamentations that, by definition, the sign at issue lacked distinctive character in relation to the Times New Roman character font, without carrying out an examination as to whether, on the facts, that sign is capable of distinguishing, in the mind of the reference public, the goods at issue from those of [BORCO’s] competitors, the Board of Appeal misapplied Article 7(1)(b) of [the regulation].’

27.      In support of its appeal, OHIM raises a single plea in law, alleging that the General Court misinterpreted Article 7(1)(b) of the regulation. In particular, OHIM contests the Court’s reasoning in the aforementioned paragraphs 54 and 56 of the judgment under appeal.

28.      This plea is subdivided into three parts.

29.      First, OHIM maintains that, under Article 7(1)(b) of the regulation, it is not always required, when assessing the distinctive character of the sign concerned, to carry out an examination, based on the facts, of the various goods and services covered by the application for registration. Secondly, OHIM complains that the General Court failed to understand the nature of the assessment it is required to make under that provision. Since it is an a priori assessment, it is necessarily of a doubtful nature. Thirdly, OHIM considers that the General Court misunderstood the burden of proof as regards demonstrating the distinctive character of the sign concerned.

30.      The examination of this single plea in law requires the Court, in essence, to rule on the method of assessment which OHIM must use pursuant to Article 7(1)(b) of the regulation in order to assess the distinctive character of the sign for which registration is sought.

A –    The first part, alleging that the General Court misunderstood the method of assessing the distinctive character of the sign at issue, within the meaning of Article 7(1)(b) of the regulation

31.      In support of the first part of its plea, OHIM claims that, according to settled case-law, it is not always required, when assessing the distinctive character of the sign concerned pursuant to Article 7(1)(b) of the regulation, to carry out an examination, based on the facts, of the various goods and services covered by the application for registration. OHIM maintains that, in that assessment, it may rely on general statements concerning the perception of the consumer.

32.      I think that this first part is unfounded.

33.      OHIM’s criticism of the General Court stems from a confusion between the letter and spirit of Article 4 of the regulation and those of Article 7(1)(b) thereof.

34.      According to settled case-law, the essential function of the trade mark is to guarantee the identity of the origin of the marked product or service to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the product or service from others which have another origin. (8)

35.      Article 4 of the regulation thus provides that any signs capable of being represented graphically, such as words, designs, letters, numerals, or even the shape or packaging of goods, may constitute a Community trade mark provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.

36.      This provision clearly presumes that a letter is capable of constituting a sign registrable as a Community trade mark, that is to say, it is capable, as such, of having a distinctive character. Therefore, although it might be reasonable to ask whether a colour, a sound or a smell is capable of being a ‘registrable sign’, the question does not arise with regard to a letter.

37.      However, that is not enough to ensure registration of a letter as a Community trade mark. OHIM still has to examine whether there are any absolute grounds to refuse registration. In particular, it must carry out the examination referred to in Article 7(1)(b) of the regulation, which requires, in each individual case, an assessment, based on the facts, of the distinctive character of the sign at issue in relation to the class of goods in question, that is to say, of the capacity of that sign to constitute an indication of origin of the goods or services in respect of which registration is sought.

38.      That requires a specific examination, in connection with which OHIM has particular obligations, and the content of which has been, to a great extent, defined by the Court.

39.      An examination of the case-law of the Court thus allows us, without much difficulty, to subscribe to the line of reasoning adopted by the General Court in paragraphs 54 to 56 of the judgment under appeal and to reject the argument raised by OHIM in support of the first part of its plea.

40.      Indeed, so far as concerns Article 3 of the directive, the wording of which is identical to that of Article 7 of the regulation, the Court has repeatedly pointed out that the examination which takes place when registration is applied for must not be cursory, that the examination of the grounds for refusal listed in Article 3 of the directive must be rigorous, thorough and full, and that the competent authority cannot carry out the examination in abstracto. (9)

41.      According to the Court, such requirements are justified in the light of the nature of the examination, which is above all an a priori examination, and of the wide range of actions available to applicants when OHIM refuses to register a trade mark. For reasons of legal certainty and sound administration, it is necessary to ensure that trade marks are not improperly registered. The Court also takes into account the number and detailed nature of the obstacles to registration under Articles 2 and 3 of the directive (by analogy, Articles 4 and 7 of the regulation). In that regard, it points out that it is sufficient that one of the absolute grounds for refusal applies for the sign concerned not to be registrable as a Community trade mark. Similarly, as the General Court noted in paragraph 39 of the judgment under appeal, the Court of Justice also points out that, to prevent application of Article 7(1)(b) of the regulation, it is sufficient if the sign at issue has a minimum degree of distinctiveness.

42.      Consequently, since registration of a mark is always sought in respect of specific goods or services, the Court considers that the existence of an absolute ground for refusal, such as that relating to lack of any distinctive character, must be assessed specifically by reference to each of the goods or services in respect of which registration is sought. (10) Although that may in fact prove difficult to do for some trade marks, the Court nevertheless refuses to allow the competent authorities to use those difficulties as an excuse for assuming that such marks are, a priori, devoid of any distinctive character. (11)

43.      Similarly, the Court stresses that each competent authority must fulfil its obligation to state reasons. As it has recently pointed out, that obligation must ensure effective judicial protection of the rights accorded to applicants. (12) In particular, the case-law of the Court requires the decision adopted by the competent authority to be reasoned in respect of each of the goods or services, when that authority refuses to register a trade mark. (13)

44.      At this stage, the question we might ask ourselves is whether the examination of the distinctive character of a single non-stylised letter, under Article 7(1)(b) of the regulation, therefore warrants a more flexible examination than that required by the Court.

45.      Not at all. As the General Court rightly pointed out in paragraph 46 of the judgment under appeal, that provision draws no distinction between the different categories of trade mark from the point of view of assessment of their distinctive character. As it rightly concluded, the criteria for assessment of the distinctive character of a trade mark which consists of a single letter are therefore the same as those applicable to the other categories of trade mark.

46.      Clearly, therefore, the case-law of the Court does not provide any support for OHIM’s argument that it is not always required, when assessing the distinctive character of the sign at issue pursuant to Article 7(1)(b) of the regulation, to carry out an examination, based on the facts, of the various goods and services specified in the application for registration.

47.      From the moment that, under Article 4 of the regulation, letters are included among the registrable signs, the assessment of their distinctive character, within the meaning of Article 7(1)(b) of the regulation, must be carried out within the context of each specific case, taking into account the nature and particular characteristics of the goods covered by the application for registration.

48.      As the General Court pointed out in paragraphs 53 to 56 of the judgment under appeal, it is clear that, by holding that the ‘reference public “might” view the letter “α” as a reference to quality (“A” quality), an indication of size, or of a type or kind of alcoholic beverage, such as those covered by the [trade mark] application’, OHIM clearly did not carry out an examination in accordance with the requirements referred to in the case-law of the Court of Justice. This was a cursory examination in which the reference to an indication of size seems to me to be irrelevant as regards the class of goods covered by this application for registration.

49.      However, that does not mean that the letter ‘α’ must be registered, in the present case, to designate alcoholic beverages. It simply means, that, first, OHIM should have carried out an examination, based on the facts, of the distinctive character of the sign at issue in relation to the goods specified in the application for registration and given reasons in that regard for its decision to refuse registration and that, secondly, it could not, without infringing the regulation, reintroduce under Article 7(1)(b) of the regulation an a priori exclusion from registration of a non-stylised letter.

50.      Therefore, I consider that the General Court was fully entitled to hold that OHIM misapplied Article 7(1)(b) of the regulation.

51.      In the light of these considerations, I therefore propose that the Court reject as unfounded the first part of the single plea in law raised by OHIM, alleging that the General Court misunderstood the method of assessing the distinctive character of the sign at issue within the meaning of Article 7(1)(b) of the regulation.

B –    The second part, alleging that the General Court misunderstood the nature of the examination of the distinctive character of the sign at issue under Article 7(1)(b) of the regulation

52.      In support of the second part of its plea, OHIM considers that the General Court misunderstood the nature of the examination of the distinctive character required under Article 7(1)(b) of the regulation. In fact, OHIM points out that it is an a priori examination and that, as a consequence, its decision is always of a doubtful nature.

53.      I consider that this second part may also be rejected in the light of the foregoing considerations.

54.      OHIM relies on the a priori nature of the examination it has to undertake under Article 7(1)(b) of the regulation to justify the cursory examination it carried out and to explain the doubtful tone of its reasoning. It is for that very reason and to avoid situations in which one trade mark is improperly registered and another is wrongly refused registration that the Court has required, on the contrary, that OHIM carry out a rigorous, full and complete examination of the grounds for refusal referred to in Article 7 of the regulation.

55.      Consequently, OHIM’s criticism of the analysis of the General Court cannot succeed and I propose that the Court reject the second part of the single plea as unfounded.

C –    The third part, alleging a failure to understand the rules relating to the burden of proof

56.      In support of the third part of its plea, OHIM relies on the judgment in Develey v OHIM (14) to claim that the General Court, in paragraph 54 of the judgment under appeal, failed to comprehend the burden of proof as regards demonstrating the distinctive character of the mark within the meaning of Article 7(1)(b) of the regulation. The Court therefore wrongly held that OHIM must always establish the lack of any distinctive character of the mark for which registration is sought, by referring to specific facts.

57.      In my view, this third part must also be rejected.

58.      First, OHIM misinterprets paragraph 54 of the judgment under appeal. In that paragraph, the General Court simply found that no examination, based on the facts, of the distinctive character of the sign at issue had been carried out in relation to the goods covered by the application for registration and concluded that the Board of Appeal had failed to establish that the mark for which registration is sought lacked any distinctive character. By reasoning in this way, the General Court in no way failed to observe the rules governing the burden of proof but applied, in accordance with the settled case-law of the Court of Justice, the rules relating to the assessment of the distinctive character of signs required under Article 7(1) of the regulation.

59.      Secondly, although it is true that, in accordance with Develey v OHIM, it is for a trade mark applicant to provide specific and substantiated information to show that, despite the Board of Appeal’s analysis, the trade mark applied for does indeed have distinctive character, OHIM must still have fulfilled its duty by examining and giving sufficient reasons for the lack of any distinctive character of the sign at issue. I therefore consider that it is extremely difficult to accept that OHIM can rely on such case-law in order to avoid its obligations under, inter alia, Article 7(1)(b) of the regulation.

60.      In my view, therefore, the third part of the single plea raised by OHIM is unfounded.

61.      In the light of all the foregoing considerations, I propose that the Court declare the single plea raised by OHIM, alleging that the General Court misinterpreted Article 7(1)(b) of the regulation, unfounded and accordingly dismiss its appeal.

VI –  Conclusion

62.      In the light of the foregoing considerations, I propose that the Court:

(1)      dismiss the appeal;

(2)      order the Office for Harmonisation in the Internal Market (Trade Marks and Designs) to pay the costs.

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1 – Original language: French.

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2 – OJ 1994 L 11, p. 1, as amended (‘the regulation’). It was repealed by Council Regulation (EC) No 207/2009 of 26 February 2009 (OJ 2009 L 78, p. 1), which came into force on 13 April 2009 and is therefore not applicable to the present dispute.

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3 – Case T‑23/07 [2009] ECR II-861, ‘the judgment under appeal’.

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4 – OJ 1989 L 40, p. 1, ‘the directive’.

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5 – Available on the OHIM Internet site at the following address: http://oami.europa.eu/ows/rw/resource/documents/CTM/guidelines/examination_en.pdf.

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6 – Case T-441/05 [2007] ECR II-1937.

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7 – Case T-302/06 of 9 July 2008.

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8 – Case C-39/97 Canon [1998] ECR I‑5507, paragraph 28.

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9 – See Case C-363/99 Koninklijke KPN Nederland [2004] ECR I‑1619, paragraph 31, and Case C‑239/05 BVBA Management, Training en Consultancy [2007] ECR I‑1455, paragraph 30 and case-law cited.

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10 – BVBA Management, Training en Consultancy, paragraph 31 and case-law cited.

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11 – See, with regard to Article 7(1)(b) of the regulation, inter alia, Joined Cases C‑468/01 P to C‑472/01 P Procter &Gamble v OHIM [2004] ECR I‑5141, paragraph 36.

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12 – Order in Case C-282/09 P CFCMCEE v OHIM [2010] ECR I-0000, paragraph 39 and case-law cited.

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13 – Ibidem, paragraph 37 and case-law cited.

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14 – Case C-238/06 P [2007] ECR I‑9375, paragraph 50.