Judgments nº T-20/16 of Tribunal General de la Unión Europea, June 21, 2017

• Resolution Date: June 21, 2017
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-20/16

In Case T-20/16,

M/S. Indeutsch International, established in Noida (India), represented initially by D. Stone, D. Meale, A. Dykes, Solicitors, and S. Malynicz QC, subsequently by D. Stone and S. Malynicz and lastly by D. Stone, S. Malynicz and M. Siddiqui, Solicitor,

applicant,

v

Office of the European Union for Intellectual Property (EUIPO), represented by D. Gája, acting as Agent,

defendant,

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

Crafts Americana Group, Inc., established in Vancouver, Washington (United States), represented by J. Fish and V. Leitch, Solicitors and A. Bryson, Barrister,

ACTION brought against the decision of the First Board of Appeal of EUIPO of 5 November 2015 (Case R 1814/2014-1), relating to invalidity proceedings between Crafts Americana Group and M/S. Indeutsch International,

THE GENERAL COURT (Fifth Chamber),

composed of D. Gratsias (Rapporteur), President, I. Labucka and I. Ulloa Rubio, Judges,

Registrar: I. Dragan, Administrator,

having regard to the application lodged at the Court Registry on 21 January 2016,

having regard to the response of EUIPO lodged at the Court Registry on 4 April 2016,

having regard to the response of the intervener lodged at the Court Registry on 12 April 2016,

having regard to the Court’s written question to the parties,

further to the hearing on 12 January 2017,

having regard to the order of 2 February 2017 reopening the oral part of the procedure,

gives the following

Judgment

Background to the dispute

1 On 15 February 2010, the applicant, M/S. Indeutsch International, filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO) pursuant to Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1).

2 Registration as a mark was sought for the following figurative sign:

3 That sign was accompanied by the following description:

‘the mark consists of a repeated geometric design.’

4 That registration of that mark was sought in respect of ‘knitting needles’ and ‘crochet hooks’ in Class 26 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.

5 The mark in question was registered on 10 August 2010.

6 On 9 January 2013, the intervener, Crafts Americana Group, Inc., filed an application for a declaration of invalidity with EUIPO in respect of the mark at issue under Article 52(1)(a) of Regulation No 207/2009 read in conjunction with Article 7(1)(a) and (b) of that regulation.

7 By decision of 7 May 2014, the Cancellation Division rejected the application for a declaration of invalidity. The Cancellation Division considered, in particular, that the graphic representation of the mark at issue was clear, precise, self-contained, easily accessible, intelligible, durable and objective, so that it satisfied the requirements of Article 7(1)(a) of Regulation No 207/2009. In addition, with regard to the application of Article 7(1)(b) of Regulation No 207/2009, the Cancellation Division considered that the mark at issue had distinctive character. In that regard, the Cancellation Division emphasised that the mark in question was not a three-dimensional mark and did not represent the appearance of goods covered by its registration.

8 On 14 July 2014 the intervener filed a notice of appeal with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009, against the decision of the Cancellation Division.

9 By decision of 5 November 2015 (‘the contested decision’), the Board of Appeal annulled the decision of the Cancellation Division on the ground that the mark at issue lacked distinctive character within the meaning of Article 7(1)(b) of Regulation No 207/2009.

10 The Board of Appeal considered, in particular, that the mark at issue, referred to by its proprietor as the ‘chevron mark’, represented a pattern placed on part of the goods or covering the whole of their surface. On the basis of that finding, the Board of Appeal took into account photographs and samples of the goods marketed by the applicant at the time of filing the trade mark application, in order to identify its essential characteristics. In that context, the Board of Appeal considered that the ornamental appearance of the mark at issue would lead the relevant public, composed of average consumers of knitting needles and crochet hooks, to perceive that mark as a decoration of those goods. According to the Board of Appeal, the relevant public is accustomed to the manufacturing practice of decorating the goods covered by the mark at issue, so that it will perceive that mark, as applied to the surface of the goods concerned, as a variation of the decoration present on the market, from which it does not significantly depart. In the alternative, the Board of Appeal took the view that the relevant public would perceive that mark as having the appearance of wood grain, the material from which the goods concerned are made, and not as an indication of commercial origin. It followed, according to the Board of Appeal, that the mark at issue did not have the distinctive character required by Article 7(1)(b) of Regulation No 207/2009 in order to fulfil the function of a trade mark.

11 Against that background, the Board of Appeal annulled the decision of the Cancellation Division without examining whether the mark at issue fell within the scope of Article 7(1)(a) of Regulation No 207/2009. In addition, since the applicant had argued before the Cancellation Division that the mark at issue had, in any event, acquired distinctive character as a consequence of the use that had been made of it, in accordance with Article 7(3) of that regulation, the Board of Appeal decided to remit the case to the Cancellation Division to allow the latter to decide on that issue.

Forms of order sought

12 The applicant claims that the Court should:

- annul the contested decision;

- order EUIPO to pay the costs.

13 EUIPO and the intervener contend that the Court should:

- dismiss the application;

- order the applicant to pay the costs.

Law

14 In support of its action, the applicant puts forward five pleas in law, all alleging, in essence, infringement of Article 7(1)(b) of Regulation No 207/2009. In particular, the first plea alleges that the mark at issue departs significantly from the practices that are common in the sector to which the goods covered by the application belong. The second plea alleges infringement of the rules governing the burden of proof. The third plea alleges an incorrect assessment of the decorative nature of the mark at issue. The fourth plea alleges errors concerning the appearance of the mark at issue and, lastly, the fifth plea alleges an error concerning the relevant public’s perception of the mark at issue.

15 More specifically, the applicant argues, first, that, as is apparent from the evidence available to the Board of Appeal, the goods covered by the trade mark application do not usually have striking patterns on their surface, with the result that the Board of Appeal erred in considering that the patterns represented by the mark at issue, which were the result of a complex manufacturing process, were variations of the usual outward appearance of such goods. Secondly, in considering, on the basis of evidence produced by the applicant, that the mark at issue lacked distinctive character, the Board of Appeal infringed the rule governing the burden of proof in this regard. Thirdly, the applicant argues that in the absence of an established practice of ornamenting the goods covered by the mark at issue, the relevant public will perceive the patterns represented by that mark as indications of commercial origin. Fourthly, it is argued that the Board of Appeal erred in considering that the pattern of which the mark at issue is composed represented wood grain, since the latter has an asymmetrical and irregular appearance, unlike the pattern in question, which will be perceived as artificial. Fifthly and lastly, the applicant argues that the average consumer who makes up the relevant public, especially a knitting novice, will be struck by the pattern represented by the mark at issue, with the result that he will interpret it as an indication of the commercial origin of the knitting needles and crochet hooks.

Preliminary observations

16 The present dispute concerns the issue whether the mark at issue, reproduced in paragraph 2 above, has distinctive character within the meaning of Article 7(1)(b) of Regulation No 207/2009. As set out in greater detail below, it is apparent from the contested decision that the Board of Appeal’s assessment on that issue was not actually based on the characteristics of that mark as registered, but on the characteristics of the outward appearance of the applicant’s goods, which, according to the Board of Appeal, indicates the manner in which that mark was used.

17 The applicant, however, submits that the Board of Appeal’s assessment is vitiated by errors which constitute an infringement of Article 7(1)(b) of Regulation No 207/2009. It is therefore necessary to assess the lawfulness of the contested decision in the light of that provision.

The Board of Appeal’s reasoning

18 As can be seen from paragraphs 21, 22 and 30 to 34 of the contested decision, the Board of Appeal considered that the mark at issue represented a chevron pattern applied to the surface of knitting needles and crochet hooks and that, accordingly, its distinctive character had to be assessed in view of the rules applicable to figurative marks consisting of a part of the shape of the product that they cover. According to the Board of Appeal, decorating those surfaces with intense colours is commonplace in the sector of the goods in question, with the result that the decoration represented by...