It is now about 18 months since CTM litigation became a reality with the first granted CTMs being the subject of national infringement proceedings and the first refused CTMs being the subject of CFI appeal proceedings. The fact that (a) the substantive law on infringement is the same for national trade marks and CTMs and (b) infringement proceedings involving CTMs have also involved parallel national trade marks means that very few, if any, pure CTM issues have been raised in such proceedings. The CFI appeal decisions however have begun to generate a body of law both on the absolute grounds for refusal i.e., lack of distinctiveness and the procedures to be adopted in the conduct of the prosecution before OHIM and also the appeal to the CFI itself. This article, therefore, concentrates on the CFI decisions to date.
Although there is apparently no central database of the appeals which have been filed at the CFI against OHIM Board of Appeal decisions, a manual review of, inter alia, the Official Journal of the European Communities reveals that about 45 appeals had been filed as of the end of last year.
Of those 45, all but 2 of them have appeals against a refusal by an OHIM Board of Appeal to register the mark in issue on absolute grounds i.e., lack of distinctiveness. OHIM does not have the power to refuse a mark on relative grounds i.e., the existence of a national or Community prior right. Such prior rights may however be the subject of opposition proceedings.
As at the end of January of this year, there had been 12 decisions, all but one of which were concerned with refusals by OHIM to register word marks based on lack of distinctiveness:
- in Companyline, Options, Trusted Link, Investorworld, Electronica and Giroform, the Board of Appeal decisions to refuse to register the marks in issue were upheld and the appeals were dismissed;
- in Vitalite, Cine Action and Cine Comedy, the Board of Appeal decisions to refuse to register the marks in issue were annulled in part i.e., the registrations of the marks in issue were allowed for a wider range of goods and services than those allowed by the Board of Appeal;
- in Doublemint and Baby-Dry, the Board of Appeal decisions to refuse to register the mark in issue were annulled. In Baby-Dry, the decision was based on a procedural irregularity namely, the refusal of the Board of Appeal to consider evidence of use to establish distinctiveness in fact under article 7(3), the evidence having not been submitted to the Examiner. In Doublemint, the decision was based on the suggestive or ambiguous (rather than descriptive) meaning of the combination of the 2 English words, "double" and "mint".
Finally, in P&G Soap Bar Shape, the Board of Appeal decision to refuse to register the mark in issue was annulled on several grounds, some procedural and one substantive. Two are of particular interest: first, as a matter of procedure, the CFI held that the Board of Appeal was wrong not to allow the applicant to submit its views on fresh grounds of refusal raised for the first time by the Board of Appeal; second, as a matter of substance, the CFI held that the Board of Appeal was wrong to conclude that the mark in issue consisted exclusively of a shape which resulted from the nature of the goods, there being many other shapes of soap on the market. The views of the CFI on this issue have been echoed recently by the Opinion of the Advocate General in the pending reference to the ECJ in Philips v Remington (the 3-headed razor case). The Judgment in the Philips case is still pending.
In essence, there are 3 stages to CFI appeal proceedings: (1) the commencement of the appeal proceedings; (2) the service of written pleadings and (3) the hearing.
Stage 1: Commencement of Appeal Proceedings
The application must be filed at the CFI by the applicant within 2 months from the date of notification of the decision of the Board of Appeal
The application is served by OHIM on Office and, in the case of an appeal from a decision in opposition proceedings, any prospective intervenors. In the case of an appeal from a decision in opposition proceedings, the CFI first determines the language of the proceedings. OHIM forwards to the CFI the file relating to the application and the proceedings before the Board of Appeal.
Stage 2: Service of Pleadings
OHIM and the intervenors (if any) have 2 months from the service of the application to submit responses. The response from an intervenor may seek an order annulling or altering the decision of the Board of Appeal on a point and also raise arguments not raised in the application.
In the event of an intervenor raising new arguments in its response, OHIM and the applicant have 2 months from service of the intervenor's response to file a further pleadings confined to such new arguments. Otherwise, the parties can only serve further pleadings with the permission of the President on an application made within 2 weeks of service of the last pleading.
Stage 3: Oral Hearing
After the written stage of the proceedings has finished, the President fixes a date for the oral hearing. At the oral hearing which is in public, the parties are able to address the Court on the issues in dispute through their representatives. Judgment is reserved.
Costs are a matter of discretion for the CFI. The general rule is that the CFI will order the losing party to pay the costs of the winning party. In those appeals where the CFI has has only annulled the Board of Appeal's decision in part (e.g., Cine Action and Cine Comedy) or the CFI has annulled the Board of Appeal's decision but rejected some of the applicant's arguments, the CFI ordered the parties to bear their own costs (e.g., Baby-Dry) or ordered OHIM to pay only half of the applicant's costs (or as in the case of Vitalite).
The Legal Principlea Laid Down by the CFI
From the 12 judgments handed down as at the end of January 2001, the CFI has laid down the following principles of substantive and procedural law:
- to be eligible for registration a sign has to have the capacity to distinguish the goods of one undertaking from those of another and further that the distinctive character of a sign can only be assessed in relation to the goods or services in respect of which the registration is being applied for. (See Baby-Dry)
- it is sufficient if only one of the absolute grounds for refusal exists for a sign to be ineligble for registration. (See Baby-Dry)
- it is sufficient if the absolute grounds for refusal obtain in only part of the Community. See Companyline)
- in the case of a word which is devoid of distinctive character in a substantial part of the Community, acquired distinctiveness through use must be shown in that part of the Community. Thus, in Options where the appeal was dismissed, the applicant had not submitted any evidence of use in France despite the express finding of lack of distinctiveness by the Examiner of the word "Options" in French as well as English.
- the fact that the sign whose registration is being applied for has been registered nationally is not determintive of the issue of its registrability as a CTM. The relevance of the fact of such registrations will depend on the similarity between the marks and the goods and services and also whether such registrations are in countries whose language is the same as that on which the absolute ground of refusal for non-distrinctiveness has been raised. (See P&G Soap Bar Shape, Trusted Link, Electronica, Giroform and Vitalite).
- an applicant can raise arguments before the Board of Appeal which were not raised before the Examiner. Thus, in Baby-Dry, the CFI annulled the Board of Appeal's decision not to consider P&G's argument under article 7(3) (i.e., the fact that the mark in question had acquired distinctiveness through use) merely on the ground that it was not raised before the Examiner.
- by the same token, the Board of Appeal can also raise of its own motion absolute grounds for refusal which were not raised by the Examiner. However, the Board of Appeal must give the applicant the opportunity to submit its views on the new grounds for refusal. (See P&G Soap Bar Shape)
- on the other hand, the Board of Appeal cannot raise of its own motion a formal irregularity to the application not raised by the Examiner. Thus, in P&G Soap Bar Shape, the CFI annulled the Board of Appeal's decision that the application was inadmissable because the application form had wrongly stated that the mark being applied for was a figurative and not a 3D mark.
- by constrast, however, on an appeal to the CFI itself, an applicant cannot raise arguments not raised before the Board of Appeal nor can the applicant raise subsequent to filing the application for an appeal itself, arguments not raised in that application. Thus, in Vitalite, the applicant in its original application on the appeal claimed that the Board of Appeal's decision should be annulled but at the hearing further claimed that in the alternative the Board of Appeal's decision should merely be altered. The CFI held that the new claim was not admissable having not been included in the original application. (See also Baby-Dry)
First published in Trade Mark World in April 2001.