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

JUDGMENT OF THE GENERAL COURT (Seventh Chamber)

4 September 2024 (*)

( EU trade mark – Invalidity proceedings – EU word mark DECOPAC – Absolute ground for invalidity – No bad faith – Article 51(1)(b) of Regulation (EC) No 40/94 (now Article 59(1)(b) of Regulation (EU) 2017/1001) )

In Case T‑166/23,

Dekoback GmbH, established in Helmstadt‑Bargen (Germany), represented by V. von Moers, lawyer,

applicant,

v

European Union Intellectual Property Office (EUIPO), represented by V. Ruzek, acting as Agent,

defendant,

the other party to the proceedings before the Board of Appeal of EUIPO, intervener before the General Court, being

DecoPac, Inc., established in Anoka, Minnesota (United States), represented by J. Zecher, lawyer,

THE GENERAL COURT (Seventh Chamber),

composed of K. Kowalik-Bańczyk, President, E. Buttigieg and G. Hesse (Rapporteur), Judges,

Registrar: R. Ūkelytė, Administrator,

having regard to the written part of the procedure,

further to the hearing on 22 February 2024,

gives the following

Judgment

1        By its action under Article 263 TFEU, the applicant, Dekoback GmbH, seeks the annulment of the decision of the Fourth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 30 January 2023 (Case R 754/2022-4) (‘the contested decision’).

 Background to the dispute

2        On 1 April 1996, the predecessor in law to the intervener, DecoPac, Inc., filed an application for registration of an EU trade mark pursuant to Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), as amended (replaced by Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1), as amended, itself replaced by Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (OJ 2017 L 154, p. 1)).

3        Registration as a mark was sought for the word sign DECOPAC.

4        The goods and services covered by the abovementioned mark were in Classes 29, 30 and 35 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 corresponded, for each of those classes, to the following description:

–        Class 29: ‘Meat, fish, poultry and game; meat extracts; preserved, dried and cooked fruits and vegetables; jellies, jams, fruit sauces; eggs, milk and milk products; edible oils and fats’;

–        Class 30: ‘Edible and inedible decorations for cakes and pastries’;

–        Class 35: ‘Product merchandising and consulting services relating thereto for bakeries’.

5        The contested mark was registered on 16 June 1998.

6        On 27 October 2015, the applicant filed an application for revocation of the mark referred to in paragraph 3 above with EUIPO, alleging that the mark had not been put to genuine use within a period of five years.

7        By a decision of 26 November 2018, the Fifth Board of Appeal of EUIPO revoked the intervener’s rights to the contested mark in respect of the goods and services referred to in paragraph 4 above, with the exception of those in Class 30, namely ‘edible and inedible decorations for cakes and pastries’. The action for annulment brought by the applicant against that decision was dismissed by the General Court in its judgment of 5 March 2020, Dekoback v EUIPO – DecoPac (DECOPAC) (T‑80/19, not published, EU:T:2020:81).

8        On 19 January 2021, the applicant filed an application with EUIPO for a declaration of invalidity of the contested mark.

9        The ground relied on in support of the application for a declaration of invalidity was that set out in Article 52(1)(b) of Regulation No 207/2009 (now Article 59(1)(b) of Regulation 2017/1001).

10      On 9 March 2022, the Cancellation Division dismissed the application for a declaration of invalidity.

11      On 4 May 2022, the applicant filed a notice of appeal with EUIPO against the decision of the Cancellation Division.

12      By the contested decision, the Board of Appeal dismissed the applicant’s appeal. According to the Board of Appeal, the mere fact that the intervener’s predecessor in law filed part of its goods, namely inedible decorations for cakes and pastries in Class 30, when that class is reserved solely for edible goods, is not sufficient to demonstrate that there was bad faith on the part of the intervener’s predecessor in law at the time of filing the application for registration. Furthermore, it found that the applicant had not established that the intervener’s predecessor in law had filed the application for registration of the contested mark without intending to use it for the goods and services in Classes 29 and 35, with the result that bad faith on the part of the intervener’s predecessor in law had also not been demonstrated.

 Forms of order sought

13      The applicant claims, in essence, that the Court should:

–        annul the contested decision;

–        uphold the application for annulment of the contested mark.

14      EUIPO contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs in the event that the parties are summoned to attend an oral hearing.

15      The intervener contends, in essence, that the Court should:

–        dismiss the action as inadmissible or unfounded;

–        order the applicant to pay the costs.

 Law

16      Given the date on which the application for registration of the contested mark was filed, namely 1 April 1996, which is decisive for the purpose of identifying the applicable substantive law, the facts of the case are governed by the substantive provisions of Regulation No 40/94 (see, to that effect, order of 5 October 2004, Alcon v OHIM, C‑192/03 P, EU:C:2004:587, paragraphs 39 and 40, and judgment of 23 April 2020, Gugler France v Gugler and EUIPO, C‑736/18 P, not published, EU:C:2020:308, paragraph 3 and the case-law cited). Moreover, in so far as, according to settled case-law, procedural rules are generally held to apply on the date on which they enter into force (see judgment of 11 December 2012, Commission v Spain, C‑610/10, EU:C:2012:781, paragraph 45 and the case-law cited), the dispute is governed by the procedural provisions of Regulation 2017/1001.

17      Consequently, in the present case, as regards the substantive rules, the references made by the applicant, in its arguments, to Article 52(1)(b) of Regulation No 207/2009 (now Article 59(1)(b) of Regulation 2017/1001) must be understood as referring to Article 51(1)(b) of Regulation No 40/94, the wording of which is identical.

18      The applicant relies on a single plea in law, alleging, in essence, infringement of Article 51(1)(b) of Regulation No 40/94.

19      The applicant disputes the Board of Appeal’s finding that the classification according to the Nice Agreement serves exclusively administrative purposes. It claims, in essence, that the intervener’s predecessor in law was acting in bad faith when it filed the application for registration of the contested mark in so far as, in the first place, it filed that mark in classes for which it had no intention of using it, namely Classes 29 and 35, and, in the second place, part of the goods in Class 30 were in fact in another class. Furthermore, according to the applicant, it is important that third parties may be able to determine immediately and clearly, on the basis of the description of the classes in the register of trade marks, the subject matter of the protection claimed by a mark.

20      EUIPO and the intervener dispute those arguments.

21      It should be borne in mind that, under Article 51(1)(b) of Regulation No 40/94, an EU trade mark is to be declared invalid on application to EUIPO or on the basis of a counterclaim in infringement proceedings where the applicant was acting in bad faith when he or she filed the application for registration of that trade mark.

22      In that regard, it must be noted that the concept of ‘bad faith’ referred to in Article 51(l)(b) of Regulation No 40/94 is not defined, delimited or even described in any way in the legislation (see, to that effect, judgment of 29 June 2017, Cipriani v EUIPO – Hotel Cipriani (CIPRIANI), T‑343/14, EU:T:2017:458, paragraph 25 and the case-law cited).

23      Nevertheless, it should be noted that the Court of Justice and the General Court have provided a number of clarifications as to how the concept of bad faith referred to in Article 51(1)(b) of Regulation No 40/94 should be interpreted and the existence of that concept assessed.

24      In accordance with its usual meaning in everyday language, the concept of bad faith presupposes the presence of a dishonest state of mind or intention (judgments of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C‑104/18 P, EU:C:2019:724, paragraph 45, and of 29 January 2020, Sky and Others, C‑371/18, EU:C:2020:45, paragraph 74). The intention of an applicant for a trade mark is a subjective factor which must, however, be determined objectively. Consequently, any claim of bad faith must be the subject of an overall assessment, taking into account all the factual circumstances relevant to the particular case. It is only in that manner that a claim of bad faith can be assessed objectively (judgment of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C‑104/18 P, EU:C:2019:724, paragraph 47).

25      The concept of bad faith must moreover be understood in the context of trade mark law, which is that of the course of trade. In that regard, the rules on the EU trade mark are aimed, in particular, at contributing to the system of undistorted competition in the European Union, in which each undertaking must, in order to attract and retain customers by the quality of its goods or services, be able to have registered as trade marks signs which enable the consumer, without any possibility of confusion, to distinguish those goods or services from others which have a different origin (judgments of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C‑104/18 P, EU:C:2019:724, paragraph 45, and of 29 January 2020, Sky and Others, C‑371/18, EU:C:2020:45, paragraph 74).

26      Consequently, the absolute ground for invalidity referred to in Article 51(1)(b) of Regulation No 40/94 applies where it is apparent from relevant and consistent indicia that the proprietor of a trade mark has filed the application for registration of that mark not with the aim of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, in particular the essential function of indicating origin recalled in the previous paragraph (judgments of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C‑104/18 P, EU:C:2019:724, paragraph 46, and of 29 January 2020, Sky and Others, C‑371/18, EU:C:2020:45, paragraph 75).

27      Admittedly, the applicant for a trade mark is not required to indicate or even to know precisely, on the date on which his or her application for registration of a mark is filed or of the examination of that application, the use he or she will make of the mark applied for and he or she has a period of 5 years for beginning actual use consistent with the essential function of that trade mark (judgments of 12 September 2019, Deutsches Patent- und Markenamt (#darferdas?), C‑541/18, EU:C:2019:725, paragraph 22, and of 29 January 2020, Sky and Others, C‑371/18, EU:C:2020:45, paragraph 76).

28      However, the registration of a trade mark by an applicant without any intention to use it in relation to the goods and services covered by that registration may constitute bad faith, where there is no rationale for the application for registration in the light of the aims referred to in Regulation No 40/94. Such bad faith may, however, be established only if there is objective, relevant and consistent indicia tending to show that, when the application for a trade mark was filed, the trade mark applicant had the intention either of undermining, in a manner inconsistent with honest practices, the interests of third parties, or of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark (judgment of 29 January 2020, Sky and Others, C‑371/18, EU:C:2020:45, paragraph 77).

29      The bad faith of the trade mark applicant cannot, therefore, be presumed on the basis of the mere finding that, at the time of filing his or her application, that applicant had no economic activity corresponding to the goods and services referred to in that application (judgment of 29 January 2020, Sky and Others, C‑371/18, EU:C:2020:45, paragraph 78).

30      Furthermore, it should be borne in mind that it is for the applicant for a declaration of invalidity to prove the circumstances which substantiate a finding that the EU trade mark proprietor had been acting in bad faith when it filed the application for registration of that mark (see judgment of 8 May 2014, Simca Europe v OHIM – PSA Peugeot Citroën (Simca), T‑327/12, EU:T:2014:240, paragraph 35 and the case-law cited), there being a presumption of good faith until proof to the contrary is adduced (judgment of 13 December 2012, pelicantravel.com v OHIM – Pelikan (Pelikan), T‑136/11, not published, EU:T:2012:689, paragraph 57).

31      It is in the light of those foregoing considerations that the lawfulness of the contested decision must be reviewed.

32      As regards the complaint alleging that the Board of Appeal erred in law in endorsing the registration of the contested mark for ‘inedible decorations for cakes and pastries’ in Class 30, in disregard of the nature and purposes of the classification of goods and services under the Nice Agreement, it should be noted, as the Board of Appeal found in paragraph 42 of the contested decision, that that classification serves exclusively administrative purposes. The purpose of the Nice Classification is only to facilitate the drafting and processing of trade mark applications by suggesting certain classes and categories of goods and services (see, to that effect, judgment of 14 December 2022, Hotel Cipriani v EUIPO – Altunis (CIPRIANI FOOD), T‑358/21, not published, EU:T:2022:817, paragraph 157 and the case-law cited).

33      It is true that, as the applicant correctly noted, Rule 2(4) of Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Council Regulation (EC) No 40/94 on the Community trade mark (OJ 1995 L 303, p. 1), which states, inter alia, that the classification of goods and services is to serve exclusively administrative purposes, has been repealed, whereas the provision currently in force with the same wording as that rule, namely Article 33(7) of Regulation 2017/1001, does not provide such clarification. However, as observed by EUIPO, it must be borne in mind that Rule 2(4) of Regulation No 2868/95 applies in the present case, given that registration of the contested mark was applied for in 1996. The applicant’s argument is therefore unfounded.

34      By its second complaint, the applicant argues, in essence, that the intervener’s predecessor in law acted in bad faith at the time when it filed the application for registration of the contested mark, first, by classifying inedible decorations for cakes and pastries in an incorrect class, namely Class 30, and, secondly, by applying for registration of that mark in respect of the goods and services in Classes 29 and 35 without intending to use that mark for those goods and services. According to the applicant, the intervener’s predecessor in law thus intended to prevent other market operators from carrying out any activity relating to the goods or services in those classes.

35      The Board of Appeal noted, in essence, in paragraph 42 of the contested decision, that the incorrect classification of certain goods, in this case inedible decorations for cakes and pastries in Class 30, ‘cannot lead to a finding of bad faith’. Furthermore, in paragraph 50 of that decision, the Board of Appeal referred to the case-law according to which an undertaking is entitled to file an application for registration of a trade mark in respect of the goods and services which it intends to market in the future. Therefore, the fact that the contested mark was subsequently revoked in respect of the goods and services in Classes 29 and 35 for lack of genuine use does not demonstrate the existence of bad faith at the time of the application for registration of that mark.

36      It must be held that the Board of Appeal did not err in making such a finding and that the arguments put forward by the applicant are not such as to invalidate that finding.

37      First, as regards the goods registered in Class 30, it should be noted that, according to the explanatory notes to the Nice Classification, ‘Class 30 includes mainly foodstuffs of plant origin, except fruits and vegetables, prepared or preserved for consumption, as well as auxiliaries intended for the improvement of the flavour of food’. It is therefore common ground that the registration of inedible decorations for cakes or pastries in that class is incorrect.

38      However, the registration of a mark for goods in an incorrect class does not in itself demonstrate a dishonest state of mind or intention within the meaning of the case-law cited in paragraph 24 above.

39      It is true that, as the applicant claims, the intervener’s predecessor in law had been refused registration of the contested mark with three national trade mark offices, including the Deutsches Patent- und Markenamt (German Patent and Trade Mark Office, Germany) and the Eidgenössisches Institut für Geistiges Eigentum (Federal Institute for Intellectual Property, Switzerland), on account of the incorrect classification in Class 30 of inedible decorations for cakes and pastries. However, that does not demonstrate that the intervener’s predecessor in law, by applying for registration of that mark for inedible decorations for cakes and pastries in Class 30, had intended to cause detriment to third parties who marketed or intended to market those same or similar goods.

40      The intervener contends, without being contradicted, that the classification of those goods by the national offices responsible for registering trade marks is not uniform. Thus, those national intellectual property offices linked the goods to different classes. By contrast, the United States Patent and Trademark Office decided that inedible decorations for cakes and pastries were in Class 30. In the light of those practices, the intervener’s predecessor in law could not be criticised for having filed with EUIPO an application for registration of those decorations in Class 30.

41      In any event, since the Nice Classification has purely administrative purposes (see paragraph 32 above), it must be borne in mind that the incorrect classification of certain goods is not, in principle, capable of altering the scope of the protection conferred on a trade mark. The classification error made by the intervener’s predecessor in law in the application for registration of the contested mark, which, moreover, was not corrected by EUIPO, was therefore not such as to confer on the intervener any advantage over its competitors or potential competitors. Accordingly, the applicant has not established that the intervener’s predecessor in law had the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or had the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark, within the meaning of the case-law referred to in paragraph 26 above.

42      In addition, the applicant’s argument that the intervener’s predecessor in law intended, by registering inedible decorations in an incorrect class, to mislead potential competitors wishing to register their mark for artificial decorations cannot invalidate the foregoing. The applicant does not specify the interest for that predecessor in law, in distorting the research of its potential competitors, and the fact that that predecessor in law incorrectly classified inedible decorations for pastries and cakes in Class 30 is not sufficient, in itself, to establish its dishonest intention within the meaning of the case-law cited in paragraphs 24 and 26 above.

43      Secondly, as regards the goods and services in Classes 29 and 35, it is apparent from settled case-law, cited in paragraph 29 above, that the bad faith of a trade mark applicant cannot be presumed on the basis of the mere finding that, at the time of filing its application for registration, that applicant had no economic activity corresponding to the goods and services referred to in that application.

44      The claim that the intervener’s predecessor in law had a sign registered as an EU trade mark without the intention of using it, solely in order to prevent a third party from entering the market, for the goods and services in Classes 29 and 35, is speculative and not substantiated. Moreover, as the intervener explains, without being contradicted by the applicant, before the application for registration of the contested mark was filed with EUIPO, the services in Class 35 were already marketed under the same mark as it was registered in the United States. Likewise, it is not disputed that there were links between those commercial activities, which were already ongoing at the time when the application for registration of the contested mark was filed, and the goods in Class 29. It must be stated that there is no evidence that the intervener’s predecessor in law acted in bad faith when it applied for registration of that mark in respect of the goods and services in Classes 29 and 35, in view of their possible future marketing.

45      It is true that, as is apparent from the judgment of 5 March 2020, DECOPAC (T‑80/19, not published, EU:T:2020:81), the contested mark was revoked for the goods and services in Classes 29 and 35 for lack of genuine use. However, that does not mean that the intervener’s predecessor in law acted in bad faith when it applied for registration of that mark, in particular, in the light of the absence of other relevant and consistent evidence making it possible to make a finding of the alleged bad faith on the part of the intervener’s predecessor in law at the time of filing the application for registration of its mark.

46      In circumstances such as those described in the preceding paragraphs, revocation proceedings are the appropriate proceedings for reducing the scope of protection conferred on a trade mark where there is no genuine use. Furthermore, the fact that, in the present case, the intervener defended itself against the application for revocation of the contested mark is also not capable, contrary to what the applicant claims, of demonstrating the existence of bad faith when the application for registration of that mark was filed. The intervener cannot be criticised for having exercised its right to defend its mark irrespective of the fact that its arguments relating to genuine use of that mark in connection with the goods and services in Classes 29 and 35 were not accepted by EUIPO. The applicant’s arguments must therefore be rejected.

47      By its third complaint, the applicant argues, in essence, that the register of trade marks maintained by EUIPO must be clear and unambiguous. However, as EUIPO has pointed out, that complaint is based on the erroneous premiss that the incorrect classification of inedible decorations for cakes and pastries would result in the register no longer being clear regarding the scope of the protection conferred on the contested mark. The applicant’s arguments are therefore unfounded.

48      It follows from the foregoing that the applicant’s single plea in law must be rejected and, consequently, the action must be dismissed in its entirety.

 Costs

49      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.

50      Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the forms of order sought by EUIPO and the intervener.

On those grounds,

THE GENERAL COURT (Seventh Chamber)

hereby:

1.      Dismisses the action;

2.      Orders Dekoback GmbH to pay the costs.

Delivered in open court in Luxembourg on 4 September 2024.

*      Language of the case: English.

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