CELEX: 62015TJ0223
EU trade mark
Invalidity proceedings
EU figurative mark MORTON’S
Earlier non-registered national trade marks MORTON’S, MORTONS, MORTON’S CLUB, MORTONS CLUB, MORTON’S THE RESTAURANT, MORTONS RESTAURANT and M MORTON’S
Relative ground for refusal
Declaration of invalidity
Article 8(4) and Article 53(1)(c) of Regulation (EC) No 207/2009

Background to the dispute
On 20 July 2004, the applicant, Morton’s of Chicago Inc., filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO), 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 Community trade mark (OJ 2009 L 78, p. 1)).
Registration as a mark was sought for the following figurative sign:
The goods and services in respect of which registration was sought are in Classes 29, 30 and 43 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 relation to 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, compotes; eggs, milk and milk products; edible oils and fats’;
–        Class 30: ‘Rice, tapioca, sago; flour and preparations made from cereals, bread, pastry and confectionery, ices; honey, treacle; yeast, baking-powder; salt, mustard; vinegar, sauces (condiments); spices; ice; fruit sauces’;
–        Class 43: ‘Services for providing food and/or drink; restaurant and bar services’.
The EU trade mark application was published in
Community Trade Marks Bulletin
No 36/2005 of 5 September 2005 and the trade mark was registered on 5 June 2010 under number 3951291.
On 30 January 2012, the intervener, Mortons The Restaurant Ltd, filed an application for a declaration of invalidity of the trade mark under Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof, and under Article 52(1)(b) of that regulation. The application for a declaration of invalidity was based on the non-registered trade marks MORTON’S, MORTONS, MORTON’S CLUB, MORTONS CLUB, MORTON’S THE RESTAURANT, MORTONS RESTAURANT and M MORTON’S, used in the course of trade in the United Kingdom. Those earlier trade marks covered the following services: ‘Entertainment; cabaret, night club, theatre, casino, gaming (primarily for entertainment) and social club services; organisation and provision of private members’ clubs; musical entertainment services; entertainment and education relating to wine and food appreciation; the organisation of wine and food tasting events’, as well as ‘services for providing food and drink; temporary accommodation; café and coffee bar services; food and drink preparation services; restaurant services; restaurant and bar services; wine club services; wine bar services; hiring of rooms for social functions’.
By decision of 22 October 2013, the Cancellation Division rejected the application for a declaration of invalidity on the grounds that the intervener managed Morton’s Club and was not the proprietor of the earlier non-registered trade marks, which belonged to the owners of that club. It also concluded that the applicant, who is the proprietor of the contested trade mark, did not act in bad faith.
On 23 December 2013, the intervener filed a notice of appeal with EUIPO against the Cancellation Division’s decision, pursuant to Articles 58 to 64 of Regulation No 207/2009.
By decision of 12 February 2015 (‘the contested decision’), the First Board of Appeal of EUIPO found that the intervener (the cancellation applicant) had invoked several non-registered trade marks in the United Kingdom and therefore relied on the law of passing off. It held that the intervener had sufficiently proved that it had acquired unregistered rights and goodwill in the earlier trade marks and that the use made of those non-registered trade marks was of more than mere local significance. It took the view that, taking into account, in particular, that the goods and services in question were partly identical and partly similar and that the signs at issue were identical, the condition of misrepresentation provided for in the UK law on passing off was also met. Finally, it noted that there was also a genuine likelihood of harm being caused. It concluded that the intervener had demonstrated that it met the necessary conditions under Article 8(4) of Regulation No 207/2009, read in conjunction with the UK law on passing off. The Board of Appeal therefore annulled the Cancellation Division’s decision and declared the contested EU trade mark registration invalid for all the goods and services in question. Moreover, it took the view that it was no longer necessary to assess the ground for invalidity based on Article 52(1)(b) of Regulation No 207/2009, relied on by the intervener (the cancellation applicant) concerning the applicant’s bad faith when filing the application for registration of the contested EU trade mark.

Forms of order sought
The applicant claims that the Court should:
–        annul the contested decision;
–        order EUIPO to pay the costs.
EUIPO and the intervener contend that the Court should:
–        dismiss the action;
–        order the applicant to pay the costs.

Law
The applicant relies on two pleas in law in support of its action. The first plea in law alleges infringement of Article 8(4) of Regulation No 207/2009 on the basis that the contested decision was flawed. The second plea in law is based on the infringement of Article 52(1)(b) of the same regulation, which provides for the invalidity of an EU trade mark where the trade mark applicant was acting in bad faith when the trade mark application was filed.
Under Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof, the existence of a sign other than a mark permits a finding of invalidity of an EU mark where that sign fulfils four conditions cumulatively: that sign must be used in the course of trade; it must be of more than mere local significance; 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 the application for registration of the EU trade mark; and, lastly, the right to 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 trade marks which may be relied on to dispute the validity of an EU trade mark throughout the European Union under Article 1(2) of Regulation No 207/2009. Given that the conditions set out in Article 8(4) of Regulation No 207/2009 are cumulative, it is sufficient that only one of those conditions not be satisfied for an application for a declaration of invalidity of EU trade marks to be rejected (judgments of 24 March 2009,
Moreira da Fonseca
v O
HIM — General Óptica (GENERAL OPTICA)
, T‑318/06 to T‑321/06, EU:T:2009:77, paragraphs 32 and 47, and of 7 May 2013,
macros consult
v
OHIM — MIP Metro (makro)
, T‑579/10, EU:T:2013:232, paragraph 54).
The first plea in law consists, in essence, of five complaints, alleging, respectively, misinterpretation of the UK rules on passing off, the allegedly incorrect nature of the evidence, that the intervener does not own the goodwill, that there is no likelihood of misrepresentation and that the earlier right has only local significance.

The first complaint, based on the misinterpretation of the UK rules on passing off
The applicant submits that the rights deriving from the action for passing off are not the same as those derived from a registered trade mark and that the Board of Appeal incorrectly applied the case-law developed by UK courts.
First, the applicant submits that the Board of Appeal analysed the proprietor’s goodwill as relating to restaurant and bar services as well as entertainment and club services, whereas the goodwill should have been limited to the services of a private members’ club containing a restaurant and a bar and offering entertainment services.
EUIPO and the intervener dispute the applicant’s arguments.
It must be stated that the intervener operated a club known for providing restaurant, bar and entertainment services. Furthermore, as EUIPO argues, in order to determine whether misrepresentation exists as regards the goods and services in question, the Board of Appeal had to take account of the fact that the relevant public would understand that the private members’ club combined a number of related services, including, principally, restaurant, bar and entertainment services.
Accordingly, goodwill was correctly found to have been acquired in relation to that range of closely-related services. Indeed, as mentioned by the intervener, those services are those which the applicant mentions, namely those of a private members’ club containing a restaurant, a bar, and offering entertainment services. The applicant has therefore not shown how that approach of the Board of Appeal was erroneous as regards the conditions for bringing an action for passing off.
Secondly, the applicant argues that the Board of Appeal applied the criteria of identity and similarity of trade marks, which are applicable in a situation where there is confusion between trade marks but are not applicable with regard to misrepresentation. More specifically, it should have examined, for each of the goods and services provided under the applicant’s EU trade mark, whether the use of that trade mark may have constituted misrepresentation, suggesting that it was a good or service originating from the intervener.
EUIPO and the intervener dispute those arguments.
It must be stated that, in the context of examining misrepresentation, the Board of Appeal noted, in paragraph 37 of the contested decision, that the goods and the services in question were partly identical and partly similar. That finding was established in support of its conclusion that it was very likely that the intervener’s customers, accustomed to associating the name Morton’s with the exclusive restaurant, bar and entertainment services that it offers, would assume that the goods and services marketed under the EU trade mark at issue also originated from or were related to the intervener and that the condition of misrepresentation set out by the UK laws on passing off was therefore met (see paragraph 39 of the contested decision).
By doing so, the Board of Appeal did not apply the criteria applicable in situations where there is confusion between trade marks but on the contrary sought to verify whether the use of the EU trade mark at issue may have constituted misrepresentation for the purposes of passing off. The applicant fails to demonstrate that the Board of Appeal did not correctly apply the case-law of the UK courts in that respect.
The first complaint must therefore be rejected.

The second complaint, concerning allegedly incorrect evidence
The applicant argues that the date for determining the issue of passing off is the date on which the EU trade mark application was filed, which was 20 July 2004 in the present case, and that the majority of the evidence submitted was subsequent to that date. It emphasises the lack of data concerning the years 2002 and 2003. It adds that the statistical evidence regarding the number of members of Morton’s Club is presented in a way which is misleading and that there are only 529 members.
EUIPO and the intervener dispute those arguments.
It should be recalled that it follows from the wording of Article 53(1) of Regulation No 207/2009 that applications for a declaration of invalidity based on that provision depend on the existence of an earlier right. Furthermore, ‘earlier’ is defined in Article 8(4) of that regulation, to which Article 53(1)(c) of the same regulation makes reference, which requires that, in order to prove the existence of an earlier right, the relevant date to be taken into account is the date on which the application for an EU trade mark was filed, since it requires that an applicant seeking a declaration of invalidity has acquired rights over its non-registered national mark before that date of filing (see, by analogy, judgments of 11 June 2009,
Last Minute Network
v
OHIM — Last Minute Tour (LAST MINUTE TOUR)
, T‑114/07 and T‑115/07, EU:T:2009:196, paragraph 51, and of 9 December 2010,
Tresplain Investments
v
OHIM — Hoo Hing (Golden Elephant Brand)
, T‑303/08, EU:T:2010:505, paragraph 99).
Similarly, in order to assess the use of the sign in the course of trade, it is also necessary to take the date on which the application for registration of the trade mark at issue was filed (see, to that effect, judgments of 24 March 2009,
GENERAL OPTICA
, T‑318/06 to T‑321/06, EU:T:2009:77, paragraph 44; of 30 September 2010,
Granuband
v
OHIM — Granuflex (GRANUflex)
, T‑534/08, not published, EU:T:2010:417, paragraph 20; of 26 February 2015,
Pangyrus
v
OHIM — RSVP Design (COLOURBLIND)
, T‑257/11, not published, EU:T:2015:115, paragraph 56; and of 30 November 2016,
Fiesta Hotels & Resorts
v
EUIPO — Residencial Palladium (PALLADIUM PALACE IBIZA RESORT & SPA)
, T‑217/15, not published, EU:T:2016:691, paragraph 35).
In the present case, in paragraphs 25 to 29 of the contested decision, the Board of Appeal first noted that, to establish the existence of goodwill, it was necessary to look at the position before the date on which the EU trade mark application was filed, which was 20 July 2004 in the present case. In that regard, the Board of Appeal relied on a number of elements in reaching the conclusion that the intervener (the cancellation applicant) did indeed own the goodwill in the earlier non-registered trade marks before the date on which the EU trade mark application was filed. Next, it relied on various pieces of evidence confirming that the intervener continued to own the goodwill at that date and at the moment of the application for a declaration of invalidity on 30 January 2012. It thus noted the figures relating to advertising expenditure for Morton’s Club from 2002 to 2011, the turnover from 1995 to 2011, the press coverage in numerous publications circulating within the United Kingdom, including the appearance of the club in several restaurant guides from 2000 to 2010. In particular, the Board of Appeal referred to various press articles by name from before 20 July 2004 and noted the existence of other articles citing the club dated from September 2004 to 2011 (see paragraph 30 of the contested decision). It noted, in paragraph 31 of the contested decision, that the intervener continued to own the goodwill at the time of the application for a declaration of invalidity. Lastly, concerning the condition relating to the significance of the use of the goodwill, the Board of Appeal found that the intervener had sufficiently proved that ‘at the relevant date it had acquired unregistered rights and goodwill in the earlier marks and that the use made of these unregistered marks was of more than mere local significance’ (see paragraph 35 of the contested decision).
Accordingly, it must be held that the Board of Appeal took account of the relevant date of 20 July 2004 in finding, first, that the intervener had proved that it had acquired the goodwill on that date and, second, that the use of the earlier non-registered trade marks was of more than mere local significance.
The fact that the Board of Appeal cited a number of pieces of evidence from after 20 July 2004, for the purposes of establishing that the intervener continued to own the goodwill until its application for a declaration of invalidity of 30 January 2012, does not undermine that conclusion.
In that regard, it must be recalled that whether the evidence from before the relevant date is or is not sufficient with regard to the condition relating to the significance of the use of the earlier non-registered trade marks, and in particular the argument alleging a lack of data relative to the years 2002 and 2003, will be examined in the context of the fifth complaint, alleging that the earlier right had only local significance (see paragraphs 59 to 79 below).
Accordingly, the applicant’s argument that the wrong date was taken in order to determine the issue of passing off must be rejected.
Lastly, the applicant submits that the statistical evidence regarding the number of members of Morton’s Club is presented in a way which is misleading and that there are only 529 members. However, as is apparent from paragraph 28 above, summarising the evidence cited by the Board of Appeal, it is not clear from the contested decision that the Board of Appeal’s finding was based on the number of members of Morton’s Club. That argument is therefore ineffective in the context of the present complaint.
It follows that the applicant’s second complaint alleging that the Board of Appeal had considered the wrong evidence must be rejected.

The third complaint, alleging that the intervener does not own the goodwill
The applicant submits that the intervener did not hold the rights required to bring an action under Article 8(4) of Regulation No 207/2009. It relies on a number of successive agreements dated 1983, 18 March 1988, 14 June 2000, 28 March 2002 and 3 April 2002 concerning the conditions for the management of Morton’s Club. According to the applicant, those successive management agreements provided that the owner of Morton’s Club retained control such that the other party to the contract was merely a manager and the owner therefore retained the goodwill linked to the club. In particular, it states that, in accordance with the management agreement concluded on 28 March 2002 between the owner of Morton’s Club and the intervener, the intervener did not have a specific right enabling it to file a trade mark application, nor the right to sell the business of Morton’s Club, to set up a club of that kind elsewhere, or to oppose the appointment of new managers. It concludes from this that the intervener, which did not have the right to dispose freely of the asset acquired, did not own the goodwill linked to Morton’s Club.
EUIPO and the intervener dispute that argument.
It must be borne in mind, as the Board of Appeal stated, that it is clear from the case-law of the United Kingdom that an action for passing off protects a right of property in the business or goodwill in connection with which the mark was being used, the goodwill being described as the attractive force which brings in custom. As the Board of Appeal also stated, under United Kingdom law, goodwill, which is inseparable from the business to which it adds value (judgment in IRC v Muller (1901) AC 217), is recognised as legal property that may be transferred or assigned.
In addition, it is clear from the decisions of the United Kingdom courts that a sign used to designate goods or services may have acquired a reputation on the market for the purposes of the law applicable to passing off, even though it is used by several traders in the course of business (judgment of 30 September 2015,
Tilda Riceland Private
v
OHIM — Siam Grains (BASmALI)
, T‑136/14, EU:T:2015:734, paragraph 22). That ‘extended’ form of passing off, recognised by the United Kingdom courts, accordingly enables several traders to have rights over a sign which has acquired a reputation on the market (judgments of 18 January 2012,
Tilda Riceland Private
v
OHIM — Siam Grains (BASmALI)
, T‑304/09, EU:T:2012:13, paragraph 28, and of 30 September 2015,
BASmALI
, T‑136/14, EU:T:2015:734, paragraph 22).
In the present case, a number of management agreements succeeded each other. It is not disputed that the first agreement of 1983 did not include a transfer of the responsibility for the activities of Morton’s Club to the club’s manager. By contrast, the parties dispute the scope of the later agreements, in particular the agreements of 28 March 2002 and 3 April 2002, in force at the relevant date of 20 July 2004.
In that regard, it must be noted that the agreement of 28 March 2002, which replaced the preceding agreements, gave the intervener the right to manage the club and to conduct business in those premises (Article 2.1 of the agreement). The intervener was also granted the right to accept or reject applications for membership of the club, the list of members having to be given to shareholders if so requested (Article 3.1 of the agreement). It also had the right to use the name Morton’s and to trade with the goodwill attached to that name for the duration of the agreement (Article 12.3 of the agreement). Finally, the intervener was required to take measures to protect that name (Article 12.4 of the agreement).
Additionally, it is clear from the agreement of 3 April 2002, which transferred management of Morton’s Club to the intervener, that the parties to the contract clearly displayed their willingness to transfer the goodwill as well as a number of the undertaking’s assets. More specifically, it is clear from Article 2 of that agreement that the sale related, in particular, to the goodwill. The goodwill is moreover defined in Article 1 of that agreement as follows: ‘the goodwill of the Seller in relation to the Business, together with the exclusive right for the Buyer or its assignee to represent itself as carrying on the Business in succession to and to the exclusion of the seller and all trade names associated with the Business (subject to the provisions of the Management Agreement)’.
It follows that, as the Board of Appeal correctly found in paragraph 29 of the contested decision, it is the intervener who has been conducting the business of Morton’s Club and using the earlier rights in relation to the relevant services since 2002. Furthermore, it is also the intervener who, under the agreement of 3 April 2002, acquired the goodwill relating to Morton’s Club and the exclusive right to operate that club and use the trade names associated with it. That interpretation is furthermore in accordance with United Kingdom law, according to which goodwill can be transferred or assigned (see paragraph 37 above).
Accordingly, in light of the wording of the agreements entered into in 2002, the applicant’s argument that the owner of Morton’s Club maintained control, so that the intervener was merely a manager who did not own the goodwill, must be rejected.
Furthermore, the applicant provides no support for its claims that the fact that intervener owned the goodwill would, in light of the legislation and case-law of the United Kingdom, be at odds with the fact that it does not have a right to file a trade mark application, to sell the business of Morton’s Club, to set up such a club elsewhere or to oppose the appointment of new managers. Similarly, not having the right to freely dispose of the asset does not necessarily mean that the intervener had not acquired sufficient goodwill to bring an action for passing off. In that regard, as the intervener states, it is the intervener itself which carried on the business, which was perceived by the public as responsible for the nature or quality of the goods and services and which would suffer harm in the event of misrepresentation by a third party.
Therefore, the Board of Appeal did not err in finding that the intervener owned the goodwill in the earlier rights at the time of the EU trade mark application.

The fourth complaint, alleging that there is no likelihood of misrepresentation
The applicant submits that there is no likelihood of misrepresentation in view of the very low number of customers, who have undoubtedly been members for a long time and form a ‘niche group of wealthy individuals’ who are particularly attentive to the club’s activities; thus they should not confuse them with the activities of a restaurant bearing a similar name.
EUIPO and the intervener dispute that argument.
According to United Kingdom case-law, misrepresentation by the defendant in an action for passing off, whether or not it is intentional, is a representation which is likely to lead the claimant’s customers to attribute to the claimant the commercial origin of the goods and services offered by the defendant (judgment of 11 June 2009,
LAST MINUTE TOUR
, T‑114/07 and T‑115/07, EU:T:2009:196, paragraph 92).
It is also clear from United Kingdom case-law that the misrepresentation of goods by the defendant in an action for passing off must be assessed with regard to the claimant’s customers and not the general public (judgments of 11 June 2009,
LAST MINUTE TOUR
, T‑114/07 and T‑115/07, EU:T:2009:196, paragraph 60, and of 9 December 2010,
Golden Elephant Brand
, T‑303/08, EU:T:2010:505, paragraph 132). The property protected by an action for passing off is not property in a word or name, which third parties are restrained from using, but the very customer base which is undermined by the usage in question, since the reputation of a trade mark is the power of attraction which brings in custom and the criterion which distinguishes an established business from a new business (judgment of 11 June 2009,
LAST MINUTE TOUR
, T‑114/07 and T‑115/07, EU:T:2009:196, paragraph 61).
In the present case, the Board of Appeal took the view that, on a balance of probabilities, it is likely that a substantial number of members of the relevant group of persons would be misled into mistakenly purchasing the applicant’s goods and services in the belief that they are the intervener’s goods and services (see paragraph 36 of the contested decision).
First, it must be found that the relevant public in the present case is comprised of the intervener’s customers, namely the members of Morton’s Club and their guests. Morton’s Club is a private members’ club which it is possible to join, after a selection procedure, and which provides bar, restaurant, club and entertainment services solely to its members and their guests. Those persons therefore comprise the relevant customer base for assessing whether or not there is misrepresentation in the present case.
Next, as the Board of Appeal stated in paragraph 37 of the contested decision, the goods and services covered by the mark at issue are partly identical and partly similar to the restaurant, bar, club and entertainment services for which the intervener has proved that it had acquired rights to under the earlier non-registered trade marks; that is not disputed by the applicant.
Furthermore, the earlier unregistered rights containing or consisting of the word ‘morton’s’ are identical to the word element of the mark at issue and the signs in question are therefore practically identical; that is also not disputed by the applicant.
It follows that, faced with the mark at issue, the relevant public could be led to believe that the goods and services offered for sale by the proprietor of that mark are those of the intervener, one of its subsidiaries or an entity under its responsibility in some way or another, or which is connected to it.
The applicant’s argument that Morton’s Club members are particularly attentive to the activities of their club must be rejected. Being a member of that club does not imply that those members, and
a fortiori
their guests, are associated with the management of the business of the club or that they have access to information on that enterprise’s business strategy. Accordingly, as EUIPO argues, the members of Morton’s Club, who are accustomed to associating the name Morton’s with the intervener, might think that a restaurant bearing the name of their club was an extension of its business or was linked to it in some way. Similarly, the relatively small number of members of Morton’s Club does not alter that finding.
Thus, the relevant public, faced with practically identical signs and identical or similar goods and services might think that the goods and services offered by the applicant under the mark at issue actually come from the intervener or are an extension of its business.
The Board of Appeal was therefore right to find, in paragraph 39 of the contested decision, that the condition relating to the existence of misrepresentation was met in the present case.
It follows that the fourth complaint must be rejected.

The fifth complaint, alleging that the earlier right has only local significance
Under Article 8(4) of Regulation No 207/2009, the earlier right relied on in support of an application for a declaration of invalidity must refer to a ‘sign used in the course of trade of more than mere local significance’. The common purpose of those two conditions is to limit conflicts between signs by preventing an earlier right which is not sufficiently definite — that is to say, important and significant in the course of trade — from preventing registration of a new EU trade mark. A right to apply for a declaration of invalidity of that kind must be reserved to signs which actually have a real presence on their relevant market. It follows that, in order to be capable of annulling the registration of an EU trade mark, the sign relied on in support of an application for a declaration of invalidity must actually be used in a sufficiently significant manner in the course of trade and its geographical extent must not be merely local, which implies, where the territory in which that sign is protected may be regarded as other than local, that the sign must be used in a substantial part of that territory (see, to that effect, judgment of 29 March 2011,
Anheuser-Busch
v
Budějovický Budvar
, C‑96/09 P, EU:C:2011:189, paragraphs 157 and 159).
As regards the substantive assessment of the relevant evidence, it is necessary to take into account, first, the geographical dimension of the sign’s significance, that is to say of the territory in which it is used to identify its proprietor’s economic activity, as is apparent from a textual interpretation of Article 8(4) of Regulation No 207/2009. Account must be taken, secondly, of the economic dimension of the sign’s significance, which is assessed in light of the length of time for which it has fulfilled its function in the course of trade and the degree to which it has been used, in light of the group of addressees among which the sign in question has become known as a distinctive element, namely consumers, competitors or indeed suppliers, and also in light of the exposure given to the sign, for example, through advertising or on the internet. Consequently, in order to ascertain the actual and real significance of the sign relied on in the relevant territory, the Court must not confine itself to a purely formal assessment, but must examine the impact of that sign in the territory in question after its use as a distinctive element (see, to that effect, judgments of 29 March 2011,
Anheuser-Busch
v
Budějovický Budvar
, C‑96/09 P, EU:C:2011:189, paragraph 160; of 24 March 2009,
GENERAL OPTICA
, T‑318/06 to T‑321/06, EU:T:2009:77, paragraphs 37 and 38; and of 14 September 2011,
K-Mail Order
v
OHIM — IVKO (MEN’Z)
, T‑279/10, not published, EU:T:2011:472, paragraph 21).
Thus, a sign has more than mere local significance where its impact is not confined to a small part of the territory in which it is protected under the applicable national law and where the length and intensity of its use have been non-negligible in the circumstances of each case (judgments of 30 September 2010,
GRANUflex
, T‑534/08, not published, EU:T:2010:417, paragraph 19, and of 14 September 2011,
MEN’Z
, T‑279/10, not published, EU:T:2011:472, paragraph 24).
In the present case, the Board of Appeal found that the condition relating to use in the course of trade of more than mere local significance was met.
The applicant disputes that finding. It argues that the intervener’s earlier right had only local significance, in particular if the low number of members (529 members in 2004), who, it assumes, lived near Morton’s Club at that time, and the modest turnover of the club (GBP 1 293 467 in 2004), is compared with the size of the UK restaurant and entertainment market. It refers to the lack of data concerning the years 2002 and 2003 and argues that the growth of Morton’s Club after 2004 is irrelevant. It adds that the national press articles mentioning the club do not constitute proof of a national reputation and were unable to promote the club’s goodwill.
EUIPO and the intervener dispute those arguments.
In the present case, as regards, first, the geographical significance of the earlier signs, even though Morton’s Club is located in London, it is clear from the information set out in the case-file that it is referred to in a number of press articles with UK-wide and international coverage during the relevant period as well as in restaurant guides available in the United Kingdom. The contested decision thus notes the press coverage of that club in a number of newspapers, magazines and publications in the United Kingdom dating from before the EU trade mark application was filed.
More specifically, for the relevant period from June 1994 to 20 July 2004, the Board of Appeal noted eight national press articles referring to Morton’s Club (see paragraph 30 of the contested decision). It is clear furthermore from the file submitted by EUIPO that a number of press articles and magazines referring to Morton’s Club during the relevant period were submitted during the administrative procedure. For example, apart from the articles mentioned by the Board of Appeal, there were articles referring to the club in the
The Independent
of 22 November 1998, the
Washington Times
of 7 March 1999, the
Daily Mail
of 28 October 1999, the
Daily Telegraph
of 16 June 2001 and in other newspapers during the years 2001, 2002 and 2003. Similarly, articles featured in international newspapers were also submitted before EUIPO, such as the
New York Times
of 22 January 1989, the
British Airways ‘high life’
magazine of January 2003, the
Nouvel Observateur
of June 2004 and in restaurant guides from 2000 and 2001 such as the
Michelin Guide
,
Great Britain & Ireland
,
Michelin’s ‘The Red Guide’
London,
Harden’s Top UK Restaurants
,
Zagat’s London Restaurant Survey
and
The Britain Restaurant Guide
.
The applicant’s argument that the references to Morton’s Club in national press articles do not prove its reputation must be rejected. Such articles evidence the level of awareness on the part of the public of the earlier non-registered trade marks. They therefore contribute, as do the references to the club in the restaurant guides, to establishing the awareness of Morton’s Club among consumers and support the fact that, during the relevant period, the earlier non-registered trade marks had more than merely local significance.
Similarly, the applicant’s argument alleging a lack of data concerning the years 2002 and 2003 must also be rejected. It is clear from the information in the case-file that some of the documents submitted date from that period, in particular the United Kingdom press articles referring to Morton’s Club, its managers or the celebrities who had visited or dined there. Additionally, that relative absence of data is also explained by the fact that in 2002, Morton’s Club was closed for renovation until April 2004.
Moreover, the advertising expenditure of Morton’s Club was GBP 96 000 in 2002, GBP 114 000 in 2003 (18% of the annual turnover for 2003) and GBP 107 000 in 2004 (8.3% of the annual turnover for 2004). That advertising activity thus ensured the promotion of Morton’s Club.
It follows that, in the present case, the significance of the earlier non-registered trade marks may be viewed as going beyond the purely local context of London and as not being limited, from the point of view of the third parties in question, to a small part of the relevant territory.
As regards, secondly, the economic dimension of the significance of the earlier signs in question, it must be stated that, as the Board of Appeal noted, the turnover of Morton’s Club was more than GBP 1.3 million in the years from 1995 to 2000. In 2002, the intervener took over management of Morton’s Club, which remained closed for refurbishment for a number of months from August 2002 to April 2004. Its turnover of GBP 56 603 in 2002 then rose to GBP 634 954 in 2003 and to GBP 1 293 467 in 2004.
The actual use of the earlier non-registered trade marks during the relevant period has therefore been shown in the present case and that use is non-negligible taking account of the circumstances of the case, connected with both the selective nature of Morton’s Club and its closure for refurbishment until April 2004, which was three months before the contested EU trade mark application.
The applicant argues that Morton’s Club had only 529 members in 2004, that the club had only local significance when that figure is compared against the food and drink market and that no direct link is established between the press articles and new members of Morton’s Club.
In that regard, it should be recalled that, in order to assess whether the use of the earlier signs was sufficiently significant in the course of trade, the economic dimension of the sign’s significance must be assessed in the light of the length of time for which it has fulfilled its function in the course of trade and the degree to which it has been used and in the light of the group of addressees among which the sign in question has become known as a distinctive element (judgment of 24 March 2009,
GENERAL OPTICA
, T‑318/06 to T‑321/06, EU:T:2009:77, paragraph 37).
In the present case, Morton’s Club is a private members’ club which has existed since the 1970s. Its restaurant, bar, club and entertainment services are provided exclusively to its members and their guests. That exclusivity, noted by the Board of Appeal, is moreover part of the club’s image. Furthermore, it is clear from the information set out in the case-file that the procedure for becoming a member of that club is very selective.
It follows that the group of addressees in respect of which the economic significance of the sign is assessed, even if it includes the members and their guests, is necessarily restricted. Accordingly, in light of those particular circumstances the applicant’s argument concerning the relatively small number of members of Morton’s Club at the relevant date must be rejected.
Similarly, the restaurant, bar, club and entertainment services of Morton’s Club are provided exclusively to its members and their guests. Accordingly, contrary to what the applicant submits, the figures concerning the activities of Morton’s Club cannot be compared against the size of the food and drinks market in the United Kingdom or the European Union. Lastly, the applicant’s argument that there is no direct connection between the press articles and new members of Morton’s Club is not such as to invalidate the finding that the economic significance of the earlier non-registered trade marks is sufficient.
It follows from all the foregoing that the use of the earlier non-registered trade marks, although localised in London, has, from the point of view of the public in question, geographic significance which is not limited to a small part of the relevant territory. Furthermore, in the specific circumstances of the present case, the duration and intensity of the use of those earlier trade marks can be considered as being non-negligible for the purposes of the applicable case-law. The Board of Appeal was therefore correct to find that, in the present case, sufficient recognition by the targeted consumers in the relevant territory had been proved.
The fifth complaint, alleging that the earlier right has only local significance must therefore also be rejected and, accordingly, the first plea in law in its entirety.
Since the invalidity of the EU trade mark, declared by the Board of Appeal, is thus upheld, it is not necessary to examine the second plea in law, based on an infringement of Article 52(1)(b) of Regulation No 297/2009, by which the applicant disputes the accusation that it acted in bad faith at the time of filing the application for registration of the mark at issue.
It follows that the action must be dismissed in its entirety.

Costs
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. 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 (Sixth Chamber)
hereby:
1.
Dismisses the action;
2.
Orders Morton’s of Chicago, Inc. to pay the costs.
Berardis
Spielmann
Csehi
Delivered in open court in Luxembourg on 15 May 2017.
E. Coulon

G. Berardis
Registrar      President
*
Language of the case: English.