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

JUDGMENT OF THE GENERAL COURT (Ninth Chamber)

21 January 2016 (*)

(Community trade mark — Opposition proceedings — Application for Community word mark HOKEY POKEY — Unregistered earlier national word mark — Proof of use — Right to prohibit use of the mark sought — Article 8(4) of Regulation (EC) No 207/2009 — Right of a Member State — Obligation to state reasons — Raised by the Court of its own motion)

In Case T‑62/14,

BR IP Holder LLC, established in Canton, Massachusetts (United States), represented by F. Traub, lawyer, and C. Rohsler, Solicitor,

applicant,

v

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

defendant,

the other party to the proceedings before the Board of Appeal of OHIM being

Greyleg Investments Ltd, established in Baltonsborough (United Kingdom),

ACTION brought against the decision of the Fourth Board of Appeal of OHIM of 22 November 2013 (Case R 1091/2012-4) relating to opposition proceedings between BR IP Holder LLC and Greyleg Investments Ltd,

THE GENERAL COURT (Ninth Chamber),

composed of G. Berardis, President, O. Czúcz (Rapporteur) and A. Popescu, Judges,

Registrar: E. Coulon,

having regard to the application lodged at the Registry of the General Court on 27 January 2014,

having regard to the response lodged at the Court Registry on 19 May 2014,

having regard to the reply lodged at the Court Registry on 16 September 2014,

having regard to the fact that no application for a hearing was made by the parties within the period of one month from notification of closure of the written procedure, and having therefore decided, acting upon a report of the Judge-Rapporteur, to rule on the action without an oral procedure pursuant to Article 135a of the Rules of Procedure of the General Court of 2 May 1991,

having regard to the decision of 28 July 2015 to reopen the written part of the procedure,

having regard to the written questions put by the Court to the parties and their answers to those questions lodged at the Court Registry on 21 and 24 August 2015,

having regard to the close of the written part of the procedure on 1 October 2015 and the Court’s decision to rule on the action without an oral procedure,

gives the following

Judgment

 Background to the dispute

1        On 27 July 2010, Greyleg Investments Ltd (‘Greyleg’), filed an application for the registration of a Community trade mark at the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), pursuant to Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1).

2        The mark in respect of which registration was sought is the word sign HOKEY POKEY.

3        Greyleg claimed seniority of the United Kingdom trade mark HOKEY POKEY No 2 229 658, applied for on 17 April 2000 and registered on 22 September 2000 for ‘Confectionery’.

4        The goods in respect of which registration was applied for are in Class 30 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: ‘Confectionery’.

5        On 2 November 2010, the applicant, BR IP Holder LLC, filed a notice of opposition, pursuant to Article 41 of Regulation No 207/2009, against registration of the mark sought.

6        The opposition was based on the unregistered earlier word mark HOKEY POKEY, used in the United Kingdom since 1997 for ‘Confectionery, namely ice cream’.

7        The ground relied on in support of the opposition was that referred to in Article 8(4) of Regulation No 207/2009. The applicant claimed, in particular, that it was entitled under the applicable law in the United Kingdom to prevent, by means of an action for passing off, use of the trade mark sought.

8        By decision of 24 May 2012, the Opposition Division dismissed the opposition, taking the view that the evidence adduced by the applicant, although showing that the earlier sign had been used to a certain extent, nevertheless was insufficient to establish use ‘of more than mere local significance’ within the meaning of Article 8(4) of Regulation No 207/2009. It recognised that the applicant’s use of the mark HOKEY POKEY was not restricted to a single region of the United Kingdom. It found, however, that the sales figures for the period 1997 to 2010, in particular 2005 to 2009, were rather moderate. Moreover, the advertising efforts made by the applicant were quite limited. According to the Opposition Division, given that the requirement that use be ‘of more than mere local significance’ had to be construed as referring not only to the geographical dimension but also to the economic dimension and intensity of use, it was not met in the present case.

9        On 11 June 2012, the applicant filed a notice of appeal under Articles 58 to 64 of Regulation No 207/2009 against the Opposition Division’s decision.

10      By decision of 22 November 2013 (‘the contested decision’), the Fourth Board of Appeal of OHIM dismissed the applicant’s appeal. It upheld the Opposition Division’s decision, whilst indicating that it had reached the same conclusion but on the basis of different reasoning.

11      The Board of Appeal found that it was Greyleg — and not the applicant — who held an absolute right of priority over the mark HOKEY POKEY.

12      The Board of Appeal further held, like the Opposition Division, that the applicant had not made out proof of the existence of ‘an earlier unregistered right establishing sufficient commercial activity’ and that, therefore, the applicant’s use of the mark HOKEY POKEY in the course of trade ‘of more than mere local significance’ had not been proven. It examined only evidence adduced by the applicant concerning the period from 1997 (start of use of the sign in question by the applicant) to 17 April 2000 (date on which Greyleg’s predecessors in title applied for the United Kingdom mark). It held that the statements produced by the applicant were not from an independent source, which limited their probative value. Nor did the documentary evidence provided by the applicant in support of those statements establish use of more than mere local significance.

13      On the basis thereof, the Board of Appeal concluded that the evidence adduced by the applicant was not sufficient to establish the existence of an unregistered mark in the United Kingdom which predated the United Kingdom mark HOKEY POKEY, the seniority of which was claimed for the Community mark. Accordingly, in its view, the applicant had not proven that it held an earlier absolute right giving it the right to prohibit use of the contested mark.

 Forms of order sought

14      The applicant claims that the Court should:

–        annul the contested decision;

–        order OHIM to pay the costs.

15      OHIM contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

16      The applicant relies on a single plea in law, alleging infringement of Article 8(4) of Regulation No 207/2009.

17      The applicant submits that the Board of Appeal incorrectly assessed the evidence in the context of the legal scheme governing the action for passing off. It argues that it did demonstrate sufficiently, according to the applicable test under United Kingdom law, that its mark HOKEY POKEY had been used in the United Kingdom prior to 22 September 2000, the date of seniority of Greyleg’s mark, in order for the Board of Appeal to be able to infer that there was goodwill arising from that use.

18       Article 8(4) of Regulation No 207/2009 provides as follows:

‘Upon opposition by the proprietor of a non-registered trade mark or of another sign used in the course of trade of more than mere local significance, the trade mark applied for shall not be registered where and to the extent that, pursuant to the Community legislation or the law of the Member State governing that sign:

(a)      rights to that sign were acquired prior to the date of application for registration of the Community trade mark, or the date of the priority claimed for the application for registration of the Community trade mark;

(b)      that sign confers on its proprietor the right to prohibit the use of a subsequent trade mark.’

19      It follows from Article 8(4) of Regulation No 207/2009 that the existence of a sign other than a registered mark makes it possible to oppose registration of a Community trade mark if that sign satisfies all of four conditions: (i) the sign must be used in the course of trade; (ii) it must be of more than mere local significance; (iii) the right to that sign must have been acquired in accordance with the law of the Member State in which the sign was used prior to the date of application for registration of the Community trade mark or the date of the priority claimed for the application for registration of the Community trade mark; and (iv) the sign must confer on its proprietor the right to prohibit the use of a subsequent trade mark. Those four conditions limit the number of signs other than marks which may be relied on to dispute the validity of a Community trade mark throughout the Union under Article 1(2) of Regulation No 207/2009 (judgment of 24 March 2009 in Moreira da Fonseca v OHIM — General Óptica (GENERAL OPTICA), T‑318/06 to T‑321/06, ECR, EU:T:2009:77, paragraph 32).

20      Those conditions are cumulative. Thus, where a sign does not satisfy one of those conditions, the opposition based on the existence of a non-registered trade mark or of other signs used in the course of trade within the meaning of Article 8(4) of Regulation No 207/2009 cannot succeed (judgment of 30 June 2009 in Danjaq v OHIM — Mission Productions (Dr. No), T‑435/05, ECR, EU:T:2009:226, paragraph 35).

21      According to the case-law, the first two conditions, namely those relating to the use of the sign relied on and its significance, which must be more than merely local, are apparent from the very wording of Article 8(4) of Regulation No 207/2009 and must therefore be interpreted in the light of EU law. Regulation No 207/2009 thus sets out uniform standards, relating to the use of signs and their significance, which are consistent with the principles underlying the system established by that regulation (judgment in GENERAL OPTICA, cited in paragraph 19 above, EU:T:2009:77, paragraph 33; see also, to that effect, judgment of 10 July 2014 in Peek & Cloppenburg v OHIM, C‑325/13 P and C‑326/13 P, EU:C:2014:2059, paragraph 51).

22      By contrast, it is apparent from the phrase ‘where and to the extent that, pursuant to … the law of the Member State governing that sign’, that the other two conditions, set out subsequently in Article 8(4)(a) and (b) of Regulation No 207/2009, constitute conditions laid down by the regulation which, unlike the conditions above, must be assessed in the light of the criteria set by the law governing the sign relied on. That reference to the law governing the sign relied on is entirely justified, given that Regulation No 207/2009 makes it possible for signs which fall outside the Community trade mark system to be relied on against a Community trade mark. Therefore, only the law which governs the sign relied on can determine whether that sign predates the Community trade mark and whether it can justify a prohibition of the use of a subsequent trade mark (judgments in GENERAL OPTICA, cited in paragraph 19 above, EU:T:2009:77, paragraph 34, and of 18 April 2013 in Peek & Cloppenburg v OHIM — Peek & Cloppenburg (Peek & Cloppenburg), T‑507/11, EU:T:2013:198, paragraph 20).

23      For the application of the fourth condition referred to in Article 8(4)(b) of Regulation No 207/2009, regard must be had, in particular, to the national rules advanced and to the judicial decisions delivered in the Member State concerned. On that basis, the opponent must establish that the sign concerned falls within the scope of the law of the Member State relied on and that it allows use of a subsequent mark to be prohibited (judgments of 29 March 2011 in Anheuser-Busch v Budějovický Budvar, C‑96/09 P, ECR, EU:C:2011:189, paragraph 190, and Peek & Cloppenburg, cited in paragraph 22 above, EU:T:2013:198, paragraph 21).

24      It should be noted that the opponent must establish only that he has available to him a right to prohibit use of a subsequent trade mark and that he cannot be required to establish that that right has been used, in other words that the opponent has actually been able to prohibit such use (judgments in Anheuser-Busch v Budějovický Budvar, cited in paragraph 23 above, EU:C:2011:189, paragraph 191, and Peek & Cloppenburg, cited in paragraph 22 above, EU:T:2013:198, paragraph 22).

25      Having regard to the pleas put forward by the applicant and the principles set out in paragraphs 16 to 24 above, it is appropriate to consider whether, in the present case, the Board of Appeal made a correct application of Article 8(4) of Regulation No 207/2009.

26      In that regard, it should be remembered that the Opposition Division dismissed the opposition, after finding that the second condition of Article 8(4) of Regulation No 207/2009 was not met (use of the sign of more than mere local significance) for the entire period from 1997 to 2010.

27      The Board of Appeal opted for a different analysis, however. It affirmed expressly in paragraph 30 of the contested decision that it was dismissing the opposition but on the basis of different reasoning than that endorsed by the Opposition Division and stated, in paragraph 34 of its decision, that it was examining the fourth condition of Article 8(4) of Regulation No 207/2009 on the right to prohibit use of the contested mark. It observed that Greyleg and its predecessors in title had held a valid United Kingdom registration since 2000 and had actually used the sign for the goods in question. It also examined the evidence of use by the applicant solely with regard to the period from 1997 to 2000, observing that it did not establish sufficient use to create an unregistered right which could be relied on against Greyleg, and even less use in the course of trade of more than mere local significance. It concluded that the applicant had not made out proof that it held an earlier absolute right allowing it to prohibit use of the contested mark.

28      Although, according to the case-law referred to in paragraphs 22 to 24 above, the fourth condition laid down in Article 8(4) of Regulation No 207/2009 must be assessed in the light of the criteria provided for in national law, it is clear that the Board of Appeal’s analysis in the contested decision does not contain any reference to the applicable national law.

29      In that regard it must also be recalled that, in accordance with the first sentence of Article 75 of Regulation No 207/2009, decisions of OHIM must state the reasons on which they are based. The obligation to state reasons, as thus laid down, has the same scope as that which derives from Article 296 TFEU. It is settled case-law that the statement of reasons required by that article must show clearly and unequivocally the reasoning of the institution which enacted the measure so as to inform the persons concerned of the justification for the measure adopted and to enable the Court to exercise its powers of review (judgment of 15 November 2011 in Abbott Laboratories v OHIM (RESTORE), T‑363/10, EU:T:2011:662, paragraph 73).

30      Thus, the statement of the reasons for a measure must be logical and contain no internal inconsistency that would prevent a proper understanding of the reasons underlying the measure (judgments of 29 September 2011 in Elf Aquitaine v Commission, C‑521/09 P, ECR, EU:C:2011:620, paragraph 151, and 12 December 2012 Electrabel v Commission, T‑332/09, ECR, EU:T:2012:672, paragraph 181).

31      A plea alleging a failure to state reasons goes to an issue of infringement of essential procedural requirements within the meaning of Article 263 TFEU and, involving a matter of public policy, must be raised by the EU judicature of its own motion (judgment of 2 April 1998 in Commission v Sytraval and Brink’s France, C‑367/95 P, ECR, EU:C:1998:154, paragraph 67).

32      It should be recalled here that, according to settled case-law, apart from special cases such as those provided for by the rules of procedure of the Courts of the European Union, those Courts may not base a decision on a plea raised by the court of its own motion, even if it involves a matter of public policy, without first inviting the parties to submit their observations on that plea (see judgments of 2 December 2009 in Commission v Ireland and Others, C‑89/08 P, ECR, EU:C:2009:742, paragraph 57, and 27 March 2014 OHIM v National Lottery Commission, C‑530/12 P, ECR, EU:C:2014:186, paragraph 54).

33      As the Court decided to examine of its own motion the issue of the Board of Appeal’s compliance with its obligation to state reasons, provided for in Article 75 of Regulation No 207/2009 and having the same scope as that under Article 296 TFEU, it adopted a measure of organisation of procedure by which it asked the parties to express their views on the matter in writing. In particular, the parties were asked to indicate whether they considered that the contested decision showed whether the Board of Appeal had applied United Kingdom law or EU law in paragraphs 34 to 39 of the contested decision in order to arrive at the conclusion set out in paragraph 40 of that decision, which states ‘the evidence submitted by the opponent is not sufficient to establish a non-registered trade mark right in the UK which pre-dates the … trade mark rights of the applicant … [and] which confers on [the opponent] the right to prohibit the use of the contested mark’.

34      In the first place, as regards the obligation to state reasons, the Board of Appeal does not state in a sufficiently clear manner in the contested decision whether it was in the light of the criteria laid down in national law that it was assessing the fourth condition provided for in Article 8(4) of Regulation No 207/2009, even less which national law was the source of the criteria in the light of which it made that assessment.

35      Secondly, and contrary to what OHIM states in response to the questions put by the Court as part of the measures of organisation of procedure, it should be noted that the contested decision, in particular paragraphs 37 to 40 relating to the question whether the applicant had proven that it held an earlier right permitting it to prohibit Greyleg from using the mark HOKEY POKEY, lacks the requisite clarity for enabling the Court to ascertain which criteria provided for under the applicable national law were actually brought to bear.

36      No presentation was made of the national rules in the light of which an assessment ought to have been made as to the existence of an earlier right. This is in sharp contrast to the Board of Appeal decisions in the cases which gave rise to the judgments of 9 December 2010 in Tresplain Investments v OHIM — Hoo Hing (Golden Elephant Brand) (T‑303/08, ECR, EU:T:2010:505), and Peek & Cloppenburg, cited in paragraph 22 above (EU:T:2013:198), in which the Boards of Appeal referred explicitly to national law (the UK Trade Mark Act and the German Markengesetz, respectively) and went on to make their assessment on the basis of national law.

37      In those circumstances, the Court is unable to verify the accuracy of the Board of Appeal’s reasoning and carry out its review of the lawfulness of the contested decision.

38      This conclusion is supported by the fact that the contested decision contains inconsistencies which make it impossible to infer from the Board of Appeal’s reasoning whether, in the present case, it did in fact examine the fourth condition provided for in Article 8(4) of Regulation No 207/2009 in the light of the criteria laid down in the applicable national law.

39      The Board of Appeal stated explicitly in paragraph 38 of the contested decision that the evidence adduced by the applicant was insufficient to prove use of the sign in question in the course of trade of more than mere local significance. An assessment such as that comes within the scope of the first and second conditions provided for in Article 8(4) of Regulation No 207/2009, which fall to be interpreted in the light of EU law, as held in the case-law referred to in paragraph 21 above, and not the fourth condition, which falls to be assessed in the light of the criteria laid down in the law governing the sign relied on. Moreover, in paragraph 39 of the contested decision, the Board of Appeal also alluded to the first and second conditions provided for in Article 8(4) of Regulation No 207/2009, concluding that the evidence adduced by the applicant was not sufficient to prove use of the sign in question in the course of trade of more than mere local significance, after having referred, in the same paragraph, to ‘damage’, which may be construed as a reference to the fourth condition provided for in Article 8(4) of Regulation No 207/2009 and, thus, to an assessment under the applicable national law, which makes it even more difficult to understand the reasoning in the contested decision.

40      Contrary to OHIM’s assertions in its response to the Court’s written questions, the reference in paragraph 39 of the contested decision to the second condition provided for in Article 8(4) of Regulation No 207/2009 cannot be understood as mere obiter dictum, given the opaque and ambiguous wording of the Board of Appeal’s reasoning set out in paragraphs 34 to 40 of the contested decision in relation to the analysis of the fourth condition provided for in Article 8(4) of Regulation No 207/2009.

41      Accordingly, given the inconsistencies found in the Board of Appeal’s reasoning, there can be no certainty, even with regard to the condition referred to in Article 8(4) of Regulation No 207/2009 which was examined in the contested decision. It follows from all the foregoing considerations that the Board of Appeal failed to observe its obligation to state reasons with respect to the elements of reasoning which are essential to support its final conclusion, with the result that the contested decision must be annulled.

 Costs

42      Under Article 134(1) of the Rules of Procedure of the General Court, 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 has been unsuccessful, it must be ordered to pay the applicant’s costs, in accordance with the form of order sought by the applicant.

On those grounds,

THE GENERAL COURT (Ninth Chamber)

hereby:

1.      Annuls the decision of the Fourth Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) of 22 November 2013 (Case R 1091/2012-4);

2.      Orders OHIM to bear its own costs and to pay those incurred by BR IP Holder LLC.

Delivered in open court in Luxembourg on 21 January 2016.

[Signatures]

* Language of the case: English.

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