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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Cadila Healthcare Ltd, v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), v Novartis AG [2013] EUECJ C-268/12 (08 May 2013)
URL: http://www.bailii.org/eu/cases/EUECJ/2013/C26812_A.html
Cite as: [2013] EUECJ C-268/12
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ORDER OF THE COURT (Eighth Chamber)

8 May 2013 (*)

(Appeal – Article 181 of the Rules of Procedure of the Court of Justice – Community trade mark – Regulation (EC) No 40/94 – Article 8(1)(b) – Likelihood of confusion – Word mark ZYDUS – Opposition by the proprietor of the Community trade mark ZIMBUS – Partial refusal of registration by the Board of Appeal of OHIM)

In Case C-268/12 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 23 May 2012,

Cadila Healthcare Ltd, established in Ahmedabad (India), represented by S. Malynicz, Barrister,

appellant,

the other parties to the proceedings being:

Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by A. Folliard-Monguiral, acting as Agent,

defendant at first instance,

Novartis AG, established in Basle (Switzerland), represented by N. Hebeis, Rechtsanwalt,

intervener at first instance,

THE COURT (Eighth Chamber),

composed of E. Jarašiūnas, President of the Chamber, A. Ó Caoimh and C.G. Fernlund (Rapporteur), Judges,

Advocate General: J. Kokott,

Registrar: A. Calot Escobar,

having decided, after hearing the Advocate General, to give a decision by reasoned order, pursuant to Article 181 of the Rules of Procedure of the Court of Justice,

makes the following

Order

1        By its appeal, Cadila Healthcare Ltd (‘Cadila Healthcare’) seeks to have set aside the judgment of the General Court of the European Union of 15 March 2012 in Case T-288/08 Cadila Healthcare v OHIM – Novartis (ZYDUS) (‘the judgment under appeal’), by which the General Court dismissed its action for annulment of the decision of the Second Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) of 7 May 2008 (Case R 1092/2007-2), relating to opposition proceedings between Novartis AG (‘Novartis’) and Cadila Healthcare (‘the contested decision’).

 Legal context

2        Under the heading ‘Relative grounds for refusal’, Article 8(1)(b) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1) states:

‘Upon opposition by the proprietor of an earlier trade mark, the trade mark applied for shall not be registered:

…

(b)      if because of its identity with or similarity to the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks there exists a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected; the likelihood of confusion includes the likelihood of association with the earlier trade mark.’

3        Article 113 of the Rules of Procedure of the General Court provides:

‘The General Court may at any time, of its own motion, after hearing the parties, decide whether there exists any absolute bar to proceeding with an action or declare that the action has become devoid of purpose and that there is no need to adjudicate on it …’.

 Background to the dispute

4        On 18 July 2003 Cadila Healthcare filed an application for registration of a Community trade mark with OHIM pursuant to Regulation No 40/94.

5        The mark for which registration was sought is the word sign ‘ZYDUS’.

6        The goods in respect of which registration was sought fall within, inter alia, Class 5 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, in particular, to the following description:

‘Pharmaceutical, veterinary and sanitary preparations; dietetic substances adapted for medical use; disinfectants; fungicides.’

7        On 3 August 2004 Novartis, the intervener at first instance, filed a notice of opposition to the registration of the mark at issue in respect of all of the goods covered by the application for registration.

8        The opposition was based on the earlier Community word mark ZIMBUS, filed on 29 August 2001 and registered on 6 February 2003, under number 2 356 954, for pharmaceutical preparations falling within Class 5 of the Nice Agreement.

9        The grounds relied on in support of the opposition were those set out in Article 8(1)(b) of Regulation No 40/94.

10      By decision of 31 May 2007 the Opposition Division of OHIM upheld the opposition in respect of pharmaceutical, veterinary and sanitary preparations and fungicides, but rejected it in respect of dietetic substances adapted for medical use and disinfectants.

11      On 13 July 2007 the appellant filed a notice of appeal with OHIM against that decision.

12      In the contested decision, the Second Board of Appeal of OHIM upheld the appeal in part, in respect of fungicides, and, accordingly, annulled the decision of the Opposition Division in so far as it had refused, in respect of those goods, the application for registration as a Community trade mark.

13      By contrast, the Board of Appeal confirmed the decision of the Opposition Division in so far as it upheld the opposition in respect of pharmaceutical, veterinary and sanitary preparations.

 The action before the General Court and the judgment under appeal

14      By application lodged at the Registry of the General Court on 25 July 2008, Cadila Healthcare brought an action seeking annulment of the contested decision. In support of that action it raised a single plea in law, alleging infringement of Article 8(1)(b) of Regulation No 40/94. It complained that the Second Board of Appeal of OHIM had, wrongly, found the veterinary and sanitary preparations covered by the mark for which registration was sought to be identical or very similar to the pharmaceutical preparations covered by the earlier trade mark. It disputed the existence of a phonetic similarity and of a likelihood of confusion between the marks at issue.

15      By letter lodged at the Registry of the General Court on 13 September 2011, Cadila Healthcare applied to the General Court for a declaration that there was no longer any need to adjudicate, on the ground that the earlier mark had not been in force since 29 August 2011, Novartis having failed to renew its registration. Both OHIM and Novartis opposed that application.

16      In the judgment under appeal, the General Court dismissed the action brought by Cadila Healthcare.

17      As regards the application for a declaration that there was no need to adjudicate, the General Court held, in paragraphs 21 to 23 of the judgment under appeal:

‘21      It is common ground between the parties that [Novartis] did not submit a request for renewal of the registration of the earlier mark within the six-month period provided for by the first sentence of Article 47(3) of Regulation No [40/94], that is to say, before 31 August 2011. However, as [Novartis] still has the possibility of submitting such a request, and of paying the requisite fees, within the further period of six months referred to in the third sentence of that provision, which expires in the present case on 1 March 2012, it is only if, by that latter date, it has not made use of that possibility that the registration may once and for all be regarded as having expired on 29 August 2011. It is not apparent from the case-file whether [Novartis] has acted to that effect or not.

22      In any event, even if it were to appear that the registration of the earlier mark expired on 29 August 2011, it could not be held that the present action has become devoid of purpose. It is only as of that date that that mark no longer has the effects provided for by Regulation No 40/94 … and not in respect of the earlier period with regard to which the contested decision was adopted (see, by analogy, judgment of 4 November 2008 in Case T-161/07 Group Lottuss v OHIM – Ugly (COYOTE UGLY), not published in the ECR, paragraphs 49 and 50). Consequently, no account can be taken of a possible non-renewal of the earlier mark for the purpose of assessing the validity of the contested decision. The action brought in the present case does indeed relate to an earlier mark which produced effects at the time when that decision was adopted.

23      The application for a ruling that there is no need to adjudicate must therefore be dismissed.’

18      As regards the similarity of the signs, the General Court held, in paragraphs 51 to 57 of the judgment under appeal, that the marks at issue must be regarded as being similar overall because of a certain degree of visual similarity and a strong phonetic similarity, at least in certain languages of the European Union, such as Spanish and Portuguese, even though they have no meaning conceptually.

19      In relation to visual similarity, the General Court held, in paragraphs 52 and 53 of the judgment under appeal:

‘52      Secondly, it must be pointed out that the mark ZIMBUS and the mark ZYDUS consist of a single word comprising almost the same number of letters, namely, six and five respectively. Those marks begin with the same letter “z” and end in the same group of letters “us”. Furthermore, as [Novartis] correctly points out, the letters “b” (in the case of the earlier mark) and “d” (in the case of the mark applied for), which directly precede that group of letters, are themselves very similar. In that regard, it must be borne in mind that, according to the case-law, in relatively short word signs, the elements at the beginning and end of the sign are as important as the central elements (see judgment of 16 September 2009 in Case T-221/06 Hipp & Co v OHIM – Laboratorios Ordesa (Bebimil), not published in the ECR, paragraph 47 and the case-law cited). Consequently, in visual terms, the only notable difference between the marks at issue is the presence, between their initial letter and their three final letters, of the letters “i” and “m” (in the case of the earlier mark) and of the letter “y” (in the case of the mark applied for). In the context of the overall visual assessment of the marks at issue, that difference is not, however, sufficient to preclude all visual similarity between those marks. In that regard, it must be borne in mind that the consumer is deemed only rarely to have the chance to make a direct comparison between the different marks but must place his trust in the imperfect picture of them that he has kept in his mind (Case C-342/97 Lloyd Schuhfabrik Meyer [1999] ECR I-3819, paragraph 26).

53      Consequently, it must be held, as had the Opposition Division in its decision of 31 May 2007, that there is a certain degree of visual similarity between the marks at issue.’

20      In paragraphs 54 and 55 of the judgment under appeal, the General Court held, as regards phonetic similarity:

‘54      In the second place, as regards the phonetic comparison of the marks at issue, first, it must be pointed out that each of them consists of two syllables. Secondly, it must be stated that in several European Union languages, including Spanish and Portuguese, the letters “i” and “y” are pronounced identically, with the result that the marks at issue begin with the same sound “zi”. Furthermore, as OHIM correctly points out, the first syllables of those marks, that is to say, “zim” and “zy”, respectively, are very close phonetically in so far as the sound produced by the letter “m” at the end of the first syllable of the earlier mark is absorbed by that produced by the consonant “b”, which directly follows that letter and is more audible. The fact that the letter “m” is not present in the first syllable of the mark applied for cannot therefore call into question the Board of Appeal’s finding that the marks at issue are phonetically similar. Lastly, it must be pointed out that those marks end in the same sound “us”. It is true that the group of letters “us” is preceded by the letter “b” in the case of the earlier mark and by the letter “d” in the case of the mark applied for and that those two letters are pronounced differently. However, as OHIM correctly points out, that difference will go unnoticed by most consumers since it affects the second syllable of each of the marks at issue and that is not the syllable on which the main stress falls. In particular in Spanish and Portuguese, if a word contains only two syllables, the main stress falls, as a general rule, on the first syllable. In the present case, consumers will therefore remember more the fact that the marks at issue have a very similar beginning and ending.

55      Consequently, the Board of Appeal’s finding that there is a strong phonetic similarity between the marks at issue, at least in some languages of the European Union, such as Spanish and Portuguese, must be upheld.’

21      So far as concerns the assessment of the likelihood of confusion, the General Court, in paragraph 62 of the judgment under appeal, held that the Second Board of Appeal of OHIM had not erred in law in finding that there was a likelihood of confusion between the marks at issue. In paragraphs 63 to 66 of the judgment under appeal, the General Court held:

‘63      The foregoing considerations are not called into question by the applicant’s argument that, given that pharmaceutical preparations and sanitary preparations are not generally purchased orally, the phonetic similarity between the marks at issue is of limited significance.

64      Admittedly, according to settled case-law, in the context of the global assessment of the likelihood of confusion, the visual, phonetic or conceptual aspects of the signs at issue do not always have the same weight and it is appropriate then to examine the objective conditions under which the marks may be present on the market (Case T-129/01 Alejandro v OHIM – Anheuser-Busch (BUDMEN) [2003] ECR II-2251, paragraph 57, and Joined Cases T-117/03 to T-119/03 and T-171/03 New Look v OHIM – Naulover (NLSPORT, NLJEANS, NLACTIVE and NLCollection) [2004] ECR II-3471, paragraph 49). The extent of the similarity or difference between the signs at issue may depend, in particular, on the inherent qualities of the signs or the conditions under which the goods or services covered by them are marketed. If the goods covered by the marks in question are usually sold in self-service stores where consumers choose the product themselves and must therefore rely primarily on the image of the trade mark applied to the product, the visual similarity between the signs will, as a general rule, be more important. If, on the other hand, the product is primarily sold orally, greater weight will usually be attributed to any phonetic similarity between the signs (NLSPORT, NLJEANS, NLACTIVE and NLCollection, paragraph 49).

65      In the present case, the relevant consumers are faced both visually and phonetically with the marks designating the goods at issue. There is no factor which makes it possible to attribute a preponderant weight to the visual aspect or, conversely, to the phonetic aspect in the overall assessment of the likelihood of confusion. In certain cases, those goods are sold by means of self-service in commercial establishments (pharmacies, supermarkets or specialist shops) by being placed on shelves where they may be examined by consumers. In other cases, for example if what are involved are pharmaceutical or veterinary preparations dispensed exclusively on prescription or goods sold over the counter but kept in a place which is not directly accessible to the public, the purchases are made with the assistance of a professional and involve a verbal reference to the marks concerned.

66      In any event, even if one were to assume that the goods at issue – including veterinary preparations, which the applicant does not refer to in the argument currently being examined – are usually purchased without the name of the mark having to be pronounced, and the visual aspect is therefore of greater importance in the overall assessment of the likelihood of confusion, the Board of Appeal’s finding that such a likelihood exists would still be fully justified because, as was stated in paragraphs 52 and 53 above, the marks at issue indeed also display a certain degree of visual similarity.’

 Forms of order sought by the parties before the Court

22      Cadila Healthcare claims that the Court should set aside the judgment under appeal and order OHIM and Novartis to pay the costs.

23      OHIM and Novartis contend that the appeal should be dismissed and Cadila Healthcare ordered to pay the costs.

 The appeal

24      Under Article 181 of its Rules of Procedure, where the appeal is, in whole or in part, manifestly inadmissible or manifestly unfounded, the Court of Justice may at any time, acting on a proposal from the Judge-Rapporteur and after hearing the Advocate General, decide by reasoned order to dismiss that appeal in whole or in part.

25      It is appropriate to apply that provision to the present case.

26      In support of its appeal, Cadila Healthcare relies, essentially, on two grounds of appeal. The first ground of appeal alleges infringement of Article 113 of the Rules of Procedure of the General Court. The second ground of appeal alleges infringement of Article 8(1)(b) of Regulation No 40/94.

 First ground of appeal

 Arguments of the parties

27      Cadila Healthcare complains that the General Court failed to find that there was no need to adjudicate. According to paragraph 21 of the judgment under appeal, the period of time for submitting a request for renewal of the registration of the earlier mark ZIMBUS expired on 1 March 2012. The earlier mark had therefore definitively ceased to exist when the General Court delivered its judgment. As the earlier mark expired in the course of the proceedings, the General Court should have found that there was no need to adjudicate, as has been held in certain cases.

28      Cadila Healthcare claims that the General Court should have, of its own motion, between 1 March 2012 and the delivery of the judgment under appeal, invited the parties to clarify whether Novartis had renewed the registration of its mark and, if Novartis had not, should have granted the application for a declaration that there was no need to adjudicate. It submits that the General Court could not justify its position by relying, in paragraph 22 of the judgment under appeal, on the judgment in Group Lottuss v OHIM – Ugly (COYOTE UGLY). That judgment, it argues, concerns the date on which the rights of the proprietor of a registered trade mark may be declared to be revoked on the ground of non-use, in accordance with the provisions of Article 43(2) of Regulation No 40/94, which expressly provides for a period of time and a framework within which an applicant for registration of a trade mark may defend himself in opposition proceedings by invoking the failure to use the earlier mark. Cadila Healthcare submits that there is, however, no equivalent rule for the non-renewal of an earlier mark and its consequences for opposition proceedings.

29      According to OHIM, Article 113 of the Rules of Procedure of the General Court allows the latter to declare an action devoid of purpose, without, however, requiring it to do so or prescribing the measures to be taken. OHIM contends that the General Court may not annul or vary a decision on grounds that emerge subsequent to its adoption. As the earlier mark was valid on the date of the contested decision, the General Court could legitimately hold, in paragraph 22 of the judgment under appeal, that ‘no account can be taken of a possible non-renewal of the earlier mark for the purpose of assessing the validity of the contested decision’.

30      Novartis states that it continues to have an interest in ensuring that the mark ZYDUS is not registered. That interest may be based on the fact that it is the proprietor of a trade mark that is similar or even identical to the (now expired) earlier mark. Novartis accordingly takes the view that it must be able to rely on the decision of the Second Board of Appeal of OHIM, according to which there is a likelihood of confusion.

 Findings of the Court

31      The purpose of the proceedings must continue to exist, like the interest in bringing proceedings, until the final decision, failing which there will be no need to adjudicate; this presupposes that the action must be liable, if successful, to procure an advantage to the party bringing it (Case C-362/05 P Wunenburger v Commission [2007] ECR I-4333, paragraph 42 and the case-law cited).

32      In dismissing the plea, raised by Cadila Healthcare, that there was no need to adjudicate, the General Court held, in paragraph 22 of the judgment under appeal, that the proceedings still had a purpose. The General Court took the view, in essence, that the possible expiry of the earlier mark did not affect the assessment of the validity of the contested decision since that mark produced effects at the time when that decision was adopted.

33      The expiry of the earlier mark, which occurred after the action had been brought, did not deprive the contested decision of its purpose or of its effects. In addition, the assessment in that decision, to the effect that a likelihood of confusion exists between the marks ZYDUS and ZIMBUS as regards pharmaceutical, veterinary or sanitary preparations, continued to produce its effects at the time when the General Court delivered the judgment under appeal. The General Court did not, therefore, err in law in holding, in paragraph 22 of the judgment under appeal, that the action had not become devoid of purpose.

34      Contrary to what Cadila Healthcare has claimed, the General Court was not under an obligation, before giving judgment in the proceedings, to ask the parties about the renewal of the earlier mark. By contrast, Cadila Healthcare, as applicant at first instance, had the option, if it took the view that the purpose of the proceedings had ceased to exist, to discontinue the proceedings.

35      It follows from the foregoing that the first ground of appeal is manifestly unfounded.

 Second ground of appeal

 Arguments of the parties

36      The second ground of appeal consists of three parts. By the first part, Cadila Healthcare claims that the General Court clearly distorted the facts and the evidence when, in paragraphs 54 and 55 of the judgment under appeal, it found that there was a strong phonetic similarity between the marks at issue in languages such as Spanish and Portuguese. That finding, Cadila Healthcare submits, is contradicted by an expert’s report which it submitted in the proceedings at first instance, a report which Novartis never disputed.

37      By the second part of the second ground of appeal, Cadila Healthcare complains that the General Court, in paragraph 52 of the judgment under appeal, misapplied its own case-law according to which, on a visual comparison of two relatively short marks, the central elements of the signs at issue may take on exactly the same importance as the elements at the beginning and at the end of those signs (Case T-273/02 Krüger v OHIM – Calpis (CALPICO) [2005] ECR II-1271, paragraph 39, and judgment of 21 October 2008 in Case T-95/07 Aventis Pharma v OHIM – Nycomed (PRAZOL), paragraph 43). In paragraph 52 of the judgment under appeal, the General Court misapplied that case-law in holding that, for short signs, the elements at the beginning and at the end are more important than the central elements.

38      By the third part of the second ground of appeal, Cadila Healthcare claims that the General Court was wrong to hold that the verbal use of the marks at issue gives rise to a likelihood of confusion. It criticises the General Court for having held, in paragraph 65 of the judgment under appeal, that there were situations in which the marks at issue might be the subject of verbal use, in particular where the goods designated by the marks are on sale over-the-counter. It was on this basis that the General Court found there to be a ‘strong’ phonetic similarity between the marks at issue, giving rise to a likelihood of confusion. However, it submits, those findings are incorrect and distort commonly known facts. A consumer cannot help himself to a pharmaceutical preparation that is not directly accessible but has to rely on the intervention of a professional. In all situations involving verbal use of those marks, a knowledgeable person will be present to assist the consumer with his purchase, thereby limiting the possibility of any confusion resulting from the phonetic similarity of the marks at issue.

39      OHIM and Novartis contend, in essence, that the first and second parts of the second ground of appeal are inadmissible as they effectively seek to have the Court undertake a fresh assessment of the facts.

40      OHIM contends that the third part of the second ground of appeal is inadmissible and/or ineffective. It submits that it is in any event unfounded, a view shared by Novartis.

 Findings of the Court

41      Under Article 256(1) TFEU and the first paragraph of Article 58 of the Statute of the Court of Justice of the European Union, an appeal lies on points of law only. The General Court 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, inter alia, Case C-104/00 P DKV v OHIM [2002] ECR I-7561, paragraph 22, and Case C-16/06 P Les Éditions Albert René v OHIM [2008] ECR I-10053, paragraph 68).

42      As regards the first and second parts of the second ground of appeal, it is true that Cadila Healthcare has been careful to refer to a point of law, namely the alleged misapplication by the General Court of its own case-law relating to the visual comparison of relatively short word marks, and to plead distortion of an expert’s report placed on the case-file, which, Cadila Healthcare argues, establishes that there is no phonetic similarity between the marks at issue in Spanish and Portuguese.

43      Those points of criticism, however, seek, in reality, to challenge the factual assessments made by the General Court, in the exercise of its own jurisdiction, in paragraphs 52, 54 and 55 of the judgment under appeal, in the course of its review of the degrees of visual and phonetic similarity of the marks at issue.

44      As regards Cadila Healthcare’s arguments directed at paragraph 52 of the judgment under appeal, that paragraph states that ‘the only notable difference between the marks at issue is the presence, between their initial letter and their three final letters, of the letters “i” and “m” (in the case of the earlier mark) and of the letter “y” (in the case of the mark applied for). In the context of the overall visual assessment of the marks at issue, that difference is not, however, sufficient to preclude all visual similarity between those marks’. However, the assessments that Cadila Healthcare disputes by relying on an alleged error of law relate, in reality, to matters of fact, and are consequently not amenable to review by the Court in the context of an appeal.

45      As for the argument relating to a distortion of the evidence, it must be noted that the General Court held, in paragraph 55 of the judgment under appeal, that ‘there is a strong phonetic similarity between the marks at issue, at least in some languages of the European Union, such as Spanish and Portuguese’. That conclusion is based on the findings set out in paragraph 54 of the judgment under appeal, according to which the marks at issue begin with syllables which ‘are very close phonetically’ and ‘end in the same sound “us”‘, such that ‘consumers will therefore remember more the fact that the marks at issue have a very similar beginning and ending’. Those findings of the General Court are purely factual in nature and are not, as such, amenable to review by the Court in the context of an appeal.

46      Furthermore, the report that Cadila Healthcare alleges was distorted by the General Court merely lists and describes the pronunciation of, and phonological and phonetical differences between, the marks at issue in Spanish, German, English, French, Italian and Portuguese. Cadila Healthcare is thus seeking, not to demonstrate that the General Court distorted that report by altering its clear sense, but rather to challenge the validity of the General Court’s factual assessments as to the significance of the phonetic similarities which it had established.

47      The first and second parts of the second ground of appeal are, therefore, manifestly inadmissible.

48      As for the third part of the second ground of appeal, that part seeks to challenge the General Court’s factual assessments in paragraph 65 of the judgment under appeal. That third part is, therefore, also manifestly inadmissible.

49      It follows that the second ground of appeal must be rejected as being manifestly inadmissible.

50      In the light of the foregoing, the appeal must be dismissed as being in part manifestly inadmissible and in part manifestly unfounded.

 Costs

51      Under Article 138(1) of the Rules of Procedure of the Court of Justice, which applies to appeal proceedings by virtue of Article 184(1) thereof, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since Novartis and OHIM have applied for costs and Cadila Healthcare has been unsuccessful, Cadila Healthcare must be ordered to pay the costs.

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

1.      The appeal is dismissed.

2.      Cadila Healthcare Ltd shall pay the costs.

[Signatures]

* Language of the case: English.

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