Court of Justice of the European Communities (including Court of First Instance Decisions)

(Appeal Community trade mark Regulation (EC) No 40/94 Article 8(5) Reputation Taking unfair advantage of the distinctive character or the repute of the earlier mark Application for registration as a Community trade mark of the word mark 'TDK' Opposition by the proprietor of the Community and national word and figurative marks TDK Refusal to register)

In Case C-197/07 P,

APPEAL under Article 56 of the Statute of the Court of Justice, brought on 10 April 2007,

Aktieselskabet af 21. november 2001, represented by C. Barrett Christiansen, advokat,

applicant,

the other parties to the proceedings being:

Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by G. Schneider, acting as Agent,

defendant at first instance,

TDK Kabushiki Kaisha (TDK Corp.), represented by A. Norris, Barrister,

intervener at first instance,

composed of T. von Danwitz, President of the Chamber, G. Arestis (Rapporteur) and J. Malenovský, Judges,

Advocate General: D. Ruiz-Jarabo Colomer,

Registrar: R. Grass,

after hearing the Advocate General,

makes the following

1. By its appeal, Aktieselskabet af 21. november 2001 requests the Court to set aside the judgment of the Court of First Instance of the European Communities of 6 February 2007 in Case T-477/04 Aktieselskabet af 21. november 2001 v OHIM TDK Kabushiki Kaisha (TDK) [2007] ECR II-399 (the judgment under appeal), in which that court dismissed the appellant's action against the decision of the First Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) of 7 October 2004 (Case R 36/2003-1) ('the contested decision'), concerning opposition proceedings between TDK Kabushiki Kaisha (TDK Corp.) ('TDK Kabushiki KaishČ) and the appellant.

Legal context

2. Article 8(5) of Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1) states:

'Furthermore, upon opposition by the proprietor of an earlier trade mark within the meaning of paragraph 2, the trade mark applied for shall not be registered where it is identical with or similar to the earlier trade mark and is to be registered for goods or services which are not similar to those for which the earlier trade mark is registered, where in the case of an earlier Community trade mark the trade mark has a reputation in the Community and, in the case of an earlier national trade mark, the trade mark has a reputation in the Member State concerned and where the use without due cause of the trade mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.'

Background to the dispute

3. The facts of the dispute were set out as follows by the Court of First Instance in paragraphs 1 to 9 of the judgment under appeal:

'1 On 21 June 1999, the applicant submitted an application for a Community trade mark to [OHIM] pursuant to [Regulation No 40/94].

2 The trade mark for which registration was sought is the word mark TDK. The goods for which registration was sought are in Class 25 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. They correspond to the following description: 'clothing, footwear, headgear'. On 24 January 2000, the trade mark application was published in Community Trade Marks Bulletin No 8/2000.

3 On 25 April 2000, TDK Kabushiki Kaisha ... filed an opposition against the registration of the trade mark applied for.

4 The opposition was based on the existence of a Community trade mark, together with 35 earlier national trade marks, which were registered for goods in Class 9 (in particular, 'apparatus for recording transmission or reproduction of sound or images').

5 The earlier marks in question were either the word mark TDK, or the word and figurative mark reproduced below:

6 The intervener based its opposition on Article 8(1)(b) and Article 8(5) of Regulation No 40/94. The opposition was directed against all the goods specified in the trade mark application. In order to establish the reputation of its earlier trade marks, the intervener submitted annexes, marked A to R.

7 By decision of 28 March 2003, the Opposition Division found that there was no likelihood of confusion within the meaning of Article 8(1)(b) of Regulation No 40/94. It none the less upheld the opposition on the basis of Article 8(5) of that regulation and refused the application for a Community trade mark.

8 On 27 May 2003, the applicant brought an appeal against the decision referred to above, pursuant to Articles 57 to 62 of Regulation No 40/94.

9 By [the contested decision], the First Board of Appeal of OHIM dismissed the appeal brought by the applicant, thereby confirming the decision of the Opposition Division.'

Proceedings before the Court of First Instance and the judgment under appeal

4. By application lodged at the Registry of the Court of First Instance on 14 December 2004, the appellant brought an action against the contested decision.
5. In support of its action the appellant relied on a single plea in law, alleging infringement of Article 8(5) of Regulation No 40/94.
6. By the judgment under appeal, the Court of First Instance dismissed that single plea and the action as a whole.
7. In particular concerning, firstly, the question whether the earlier marks in question had a reputation within the meaning of Article 8(5) of Regulation No 40/94, the Court of First Instance, in paragraphs 51 to 59 of the judgment under appeal, held that the Board of Appeal had not committed any error in assessing the evidence put forward by the intervener for the purposes of establishing the reputation of the earlier marks and concluded that the arguments relied on in that respect by the appellant should be rejected. For that purpose, the Court of First Instance relied on the following grounds:

'56 Having regard to the documents before the Court, the findings made in paragraphs 29 to 32 of the contested decision must be upheld. The intervener has, on the basis of Annexes A to R, taken as a whole, established the nature and scope of its commercial activities in Europe since 1988, as regards the production, marketing, sponsorship and advertising of the earlier marks in question; this extends to heavily populated Member States.

57 The Court also finds that the sales levels achieved by the goods bearing the earlier marks in question, such as audio and video cassettes, the use of which is widespread in European homes, and the size, frequency and regularity of sponsored events attracting large numbers of spectators at which those marks are used, support the finding of the Board of Appeal that the earlier marks in question satisfy the criteria laid down in the case-law in respect of reputation, that is to say, that they are known by a substantial part of the public.

58 As regards the alleged lack of evidential value of certain of the annexes submitted by the intervener in order to establish the reputation of its earlier marks for the purposes of Article 8(5) of Regulation No 40/94 (see paragraphs 14 and 15 above), in particular Annex O, the Court finds that, even if their evidential value was inadequate, that would not undermine the findings set out in paragraphs 56 and 57 above. The Board of Appeal based its consideration of the reputation of the earlier marks in question on all the annexes submitted by the intervener. When they are read together, it is clear that the Board of Appeal did not commit any error in its assessment of the evidential value of the annexes taken as a whole.'

8. Secondly, concerning the question whether the use of the mark applied for would take unfair advantage of the distinctive character or the repute of the earlier trade marks in question, in paragraph 61 of the judgment under appeal the Court of First Instance indicated the paragraphs of the contested decision which explain why such an unfair advantage would arise, and then in paragraphs 62 to 67 of that judgment dismissed the arguments relied upon by the appellant on that point, as follows:

'62 Thus, the Board of Appeal essentially based its conclusion on the following considerations. The reputation, as established, of the earlier marks and their distinctive character extended to the intervener's activities of promotion and advertising in sponsoring sporting and musical events. As regards, more particularly, sporting events, the public is accustomed to seeing the TDK mark on clothing associated with such events. In addition, the use of the mark applied for by the applicant on clothing in general and, in particular, on clothing habitually used by the intervener in its sponsored sporting events, could lead the public to believe that such clothing was manufactured by, or under licence from, the intervener. On the basis of the evidence available to it, the Board of Appeal found that use by the applicant of the mark applied for could encourage the public to buy the applicant's goods by reason of the association it would be likely to make between the TDK mark and the commercial value attached to the reputation and distinctive character of the earlier marks.

63 The applicant essentially calls into question the evidential value of the documents in the case on which the Board of Appeal's conclusion was based. It maintains in particular ... that the goods it proposes to sell to the public will be sold through very different distribution channels and that the earlier marks, which appear on athletes' identification numbers and on branded T-shirts (for example, Adidas) are associated in the mind of the public only with the intervener's sponsorship activities ...

64 The Court would point out that the Board of Appeal is not required to establish actual and present harm to an earlier mark. It must simply have available to it prima facie evidence of a future risk, which is not hypothetical, of unfair advantage ([Case T-67/04 Spa Monopole v OHIM ' Spa-Finders Travel Arrangements (SPA-FINDERS) [2005] ECR II-1825], paragraph 40).

65 It must also be noted that the concept of taking unfair advantage of the distinctive character or the repute of the earlier mark must be understood as encompassing instances where there is clear exploitation and free-riding on the coat-tails of a famous mark or an attempt to trade upon its reputation (SPA-FINDERS, paragraph 51). The stronger the earlier mark's distinctive character and reputation, the easier it will be to accept that detriment has been caused to it ([Case C-375/97] General Motors [[1999] ECR I-5421], paragraph 30, and SPA-FINDERS, paragraph 41).

66 In the present case, it is clear that the intervener established the reputation of its earlier marks for the purposes of Article 8(5) of Regulation No 40/94 and that the Board of Appeal found (paragraph 32 of the contested decision), without being seriously challenged on the point, that the earlier marks had an enhanced distinctive character by reason of the reputation attached to them. That conclusion is, moreover, supported by the very high degree of penetration of the earlier marks in their reference markets.

67 In those circumstances, the Court finds that the Board of Appeal was entitled to take the view, based on the sponsorship activities of the intervener, particularly in the sporting field, that were the mark applied for to be used by the applicant on sports clothing a possibility which cannot be ruled out such use would lead to the perception that that clothing was manufactured by, or under licence from, the intervener. That in itself is sufficient to constitute prima facie evidence of a future risk, which is not hypothetical, of the taking of unfair advantage by the applicant of the reputation of the earlier marks, a reputation which is the result of the activities, efforts and investments undertaken by the intervener for more than 20 years.'

Forms of order sought by the parties before the Court of Justice

9. The appellant claims that the Court should:

set aside the judgment under appeal;

set aside the contested decision;

order OHIM to pay the costs, including those relating to the proceedings before the Court of First Instance and before OHIM.

10. OHIM and TDK Kabushiki Kaisha contend that the Court should dismiss the appeal and order the appellant to pay the costs.

The appeal

11. Under Article 119 of the Rules of Procedure, where the appeal is, in whole or in part, clearly inadmissible or clearly unfounded, the Court may at any time, acting on a report from the Judge-Rapporteur and after hearing the Advocate General, by reasoned order dismiss the appeal.
12. The appellant puts forward a single plea in law in support of its appeal, alleging infringement of Article 8(5) of Regulation No 40/94. This plea is in two parts.

The first part of the plea, alleging lack of support for the finding of the earlier marks' reputation

13. By the first part of its plea, the appellant complains, in essence, that the Court of First Instance erred in finding in the judgment under appeal that the reputation of the earlier marks in question had been established for the purposes of Article 8(5) of Regulation No 40/94.
14. The appellant submits in particular that the Court of First Instance did not distinguish between the 36 earlier marks. It also complains that the Court of First Instance took into account evidence which did not comply with the guidelines for proceedings before OHIM, in particular undated evidence and evidence which was not close in time to the filing date of the Community trade mark registration application in question. Furthermore, the appellant disputes the probative value of a market survey taken into account by the Court of First Instance in order to establish the existence of the reputation of the earlier marks concerned. Finally, it alleges that the Court of First Instance did not assess the individual evidential value of the evidence submitted to it before making an overall assessment.
15. In this regard, it must be noted that it follows from Article 225 EC and the first paragraph of Article 58 of the Statute of the Court of Justice that an appeal lies on points of law only. The Court of First Instance thus has exclusive jurisdiction to find and appraise the relevant facts and to assess the evidence. The appraisal of those facts and the assessment of that evidence thus do not, save where the facts or evidence are distorted, constitute points of law subject, as such, to review by the Court of Justice on appeal (see, in particular, Case C-193/06 P Nestlé v OHIM [2007] ECR I-114, paragraph 53 and the case-law cited therein).
16. In the present case, by the first part of its single plea the appellant is clearly attempting essentially to obtain a re-examination by the Court of Justice of the factual assessment made by the Court of First Instance of the probative value of the documents in the case which enabled that court to hold, in paragraph 59 of the judgment under appeal, that there was no reason to set aside the contested decision as far as concerned the reputation of the earlier marks in question within the meaning of Article 8(5) of Regulation No 40/94.
17. It follows that, since no distortion of the facts or of the evidence submitted to the Court of First Instance has been alleged by the appellant, the appellant's arguments on the first part of its single plea relied upon in support of its appeal must be rejected as clearly inadmissible.

The second part of the plea, according to which the use of the mark applied for will take unfair advantage of the distinctive character or the repute of the earlier marks

18. By the second part of its plea, the appellant complains that the Court of First Instance erroneously held, in paragraphs 62 to 67 of the judgment under appeal, that use of the mark applied for would take unfair advantage of the distinctive character or the reputation of the earlier marks in question within the meaning of Article 8(5) of Regulation No 40/94.
19. The appellant essentially maintains that the Court of First Instance wrongly based its conclusion with regard to the existence of an unfair advantage on the notion of 'reputation', in English, of the earlier marks, whereas Article 8(5) of Regulation No 40/94 requires that the existence of such an advantage be based on the notion of 'repute', in English. It claims in that regard that that provision of the regulation differentiates between those two notions. The former simply means that the trade mark is known by a significant part of the relevant public, whereas the latter requires the existence of a particular image of the mark.
20. In addition, the appellant considers that the Court of First Instance committed an error in automatically inferring the existence of an unfair advantage, which must be probable, merely from the fact that the earlier mark has a 'reputation' and is identical or similar to the mark for which registration is sought. It submits in that respect that it is necessary to produce evidence to show that the actual or future use of that latter mark has caused, or is likely to cause, detriment to the distinctive character or the repute of the earlier mark, or that it has taken, or is likely to take, unfair advantage of its repute.
21. In this case, even assuming that there is a difference in legal meaning between 'reputation' and 'repute', in English, referred to in Article 8(5) of Regulation No 40/94, it need merely be stated that, as is clear from paragraphs 62 to 67 of the judgment under appeal, the Court of First Instance correctly established the existence of an unfair advantage within the meaning of that provision by relying, in any event, on a certain image of the earlier marks in question, resulting from the intervener's event sponsorship activities, in particular sponsorship of sport events.
22. With regard to the appellant's argument concerning the standard of proof required of the existence of unfair advantage taken of the repute of the earlier mark, it must be noted that it is not necessary to demonstrate actual and present injury to an earlier mark; it is sufficient that evidence be produced enabling it to be concluded prima facie that there is a risk, which is not hypothetical, of unfair advantage or detriment in the future (see, by analogy, concerning the provisions of Article 4(4)(a) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (OJ 1989 L 40, p. 1), Case C-252/07 Intel Corporation [2008] ECR I-0000, paragraph 38).
23. In the present case, it is clear that the Court of First Instance, in paragraph 67 of the judgment under appeal, properly established the existence of an unfair advantage within the meaning of Article 8(5) of Regulation No 40/94 in correctly considering that it had available to it evidence enabling it to conclude prima facie that there was a risk, which was not hypothetical, of unfair advantage in the future.
24. Therefore, the second part of the single plea relied upon by the appellant in support of its appeal must be dismissed as clearly unfounded.
25. It follows from all of the foregoing that the appeal must be dismissed as in part clearly inadmissible and in part clearly unfounded.

Costs

26. Under Article 69(2) of the Rules of Procedure, applicable to appeal proceedings by virtue of Article 118 thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party's pleadings. As OHIM and TDK Kabushiki Kaisha have applied for costs against the appellant and the latter has been unsuccessful, the appellant must be ordered to pay the costs.

On those grounds, the Court (Eighth Chamber) hereby orders:

1. The appeal is dismissed.

2. Aktieselskabet af 21. november 2001 shall pay the costs.

[Signatures]

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* Language of the case: English.