JUDGMENT OF THE GENERAL COURT (Second Chamber)
7 November 2014 (*)
(Community trade mark — Application for Community word mark KAATSU — Absolute ground for refusal — Descriptive character — Article 7(1)(c) of Regulation (EC) No 207/2009 — Rights of the defence — Article 75, second sentence, of Regulation No 207/2009)
In Case T‑567/12,
Kaatsu Japan Co. Ltd, established in Tokyo (Japan), represented by M. Edenborough QC,
applicant,
v
Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by V. Melgar and I. Harrington, acting as Agents,
defendant,
ACTION brought against the decision of the Second Board of Appeal of OHIM of 9 October 2012 (Case R 435/2012-2), relating to an application for registration of the word sign KAATSU as a Community trade mark,
THE GENERAL COURT (Second Chamber),
composed of M.E. Martins Ribeiro (Rapporteur), President, S. Gervasoni and L. Madise, Judges,
Registrar: J. Weychert, Administrator,
having regard to the application lodged at the Registry of the General Court on 21 December 2012,
having regard to the response lodged at the Court Registry on 15 April 2013,
having regard to the reply lodged at the Court Registry on 3 July 2013,
having regard to the order of 19 June 2014 admitting Kaatsu Japan Co. Ltd as the applicant in place of Kaatsu International Co. Ltd.
further to the hearing on 11 July 2014,
gives the following
Judgment
Background to the dispute
1        On 5 August 2011, Sato Sports Plaza Co. Ltd, the predecessor of Kaatsu International Co. Ltd, which has been replaced by the applicant, Kaatsu Japan Co. Ltd, filed an application for a Community trade mark with the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) under Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1).
2        The trade mark in respect of which registration was sought is the word sign KAATSU.
3        The goods and services in respect of which registration was sought fall within Classes 9, 10, 16, 28, 41 and 44 of the Nice Agreement of 15 June 1957 concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks, as revised and amended, and correspond, for each of those classes, to the following description:
–        Class 9: ‘Scientific, nautical, surveying, photographic, cinematographic, optical, weighing, measuring, signalling, checking (supervision), life-saving and teaching apparatus and instruments; apparatus and instruments for conducting, switching, transforming, accumulating, regulating or controlling electricity; apparatus for recording, transmission or reproduction of sound or images; magnetic data carriers, recording discs; automatic vending machines and mechanisms for coin-operated apparatus; cash registers, calculating machines, data processing equipment and computers; fire-extinguishing apparatus; pre-recorded video tapes, compact disks (CDs), laser disks (LDs), digital versatile disks (DVDs) and computer software; parts and fittings for all the aforesaid goods’;
–        Class 10: ‘Surgical, medical, dental and veterinary apparatus and instruments, artificial limbs, eyes and teeth; orthopaedic articles; suture materials; apparatus for physical training for medical use; parts and fittings for all the aforesaid goods’;
–        Class 16: ‘Paper, cardboard and goods made from these materials, not included in other classes; printed matter; bookbinding material; photographs; stationery; adhesives for stationery or household purposes; artists’ materials; paint brushes; typewriters and office requisites (except furniture); instructional and teaching material (except apparatus); plastic materials for packaging (not included in other classes); printers’ type; printing blocks; parts and fittings for all of the aforesaid goods’;
–        Class 28: ‘Games and playthings; gymnastic and sporting articles not included in other classes; decorations for Christmas trees; training and exercise equipment for fitness purposes; parts and fittings for all the aforesaid goods’;
–        Class 41: ‘Education; providing of training; entertainment; sporting and cultural activities; educational services; providing seminars and workshops; training instructors in the field of physical training; rental of training and exercise equipment for fitness purposes; qualification of instructors in the field of physical training; providing sports facilities; provision of information, advisory and consultancy services in relation to all of the aforesaid services’;
–        Class 44: ‘Medical services, veterinary services; hygienic and beauty care for human beings or animals; agriculture, horticulture and forestry services; providing medical information; physical therapy services; kinesitherapy services; rental of medical equipment; provision of information, advisory and consultancy services in relation to all of the aforesaid services’.
4        By letter of 7 September 2011, the examiner informed the applicant that the mark applied for did not appear to him to be eligible for registration pursuant to Article 7(1)(b) and (c) and Article 7(2) of Regulation No 207/2009 in respect of the goods and services covered by the application for registration. The examiner considered that the relevant public was the general public in Europe and that the sign KAATSU could be understood in most European languages. In the examiner’s view, the word was used to describe a method of physical exercise.
5        By letter of 3 November 2011, the applicant replied to the examiner that the mark applied for had been created by its chairman and that all the internet articles produced by the examiner were references to that mark, from which the applicant inferred that the mark was distinctive.
6        By decision of 11 January 2012, the examiner rejected the application for registration because the mark applied for was caught by the ground for refusal set out in Article 7(1)(c) and Article 7(2) of Regulation No 207/2009 for the following goods and services:
–        Class 9: ‘Scientific, measuring and teaching apparatus and instruments; pre-recorded videotapes, compact disks (CDs), laser disks (LDs), digital versatile disks (DVDs) and computer software; parts and fittings for all the aforesaid goods’;
–        Class 10: ‘Surgical, medical and veterinary apparatus and instruments, orthopaedic articles; apparatus for physical training for medical use; parts and fittings for all the aforesaid goods’;
–        Class 16: ‘Paper, cardboard and goods made from these materials, not included in other classes; printed matter; instructional and teaching material (except apparatus); parts and fittings for all the aforesaid goods’;
–        Class 28: ‘Gymnastic and sporting articles not included in other classes; training and exercise equipment for fitness purposes; parts and fittings for all the aforesaid goods’;
–        Class 41: ‘Education; providing of training; entertainment; sporting and cultural activities; educational services; providing seminars and workshops; training instructors in the field of physical training; qualification of instructors in the field of physical training; provision of information, advisory and consultancy services in relation to all of the aforesaid services’;
–        Class 44: ‘Medical services; veterinary services; hygienic and beauty care for human beings or animals; providing medical information; physical therapy services; kinesitherapy services; provision of information, advisory and consultancy services in relation to all of the aforesaid services’.
7        On 2 March 2012, the applicant filed a notice of appeal against that decision with OHIM, pursuant to Articles 58 to 64 of Regulation No 207/2009.
8        By decision of 9 October 2012 (‘the contested decision’), the Second Board of Appeal dismissed the appeal. In particular, it held, in points 19 to 21 of the contested decision, that the mark applied for related to an exercise method or technique which induces muscle hypertrophy and increases muscle strength, essentially by applying a controlled reduction of blood flow to the muscles exercised by means of compressing the proximal vasculature and related areas, and that the term ‘kaatsu’ referred to that method and informed the consumer directly and without the need for further reflection on his part about the goods and services in question. The Board of Appeal went on to say, in point 23 of the contested decision, that the mark applied for was neither merely suggestive nor allusive, but directly descriptive of certain characteristics of the goods and services offered by the applicant. The Board of Appeal concluded, in point 31 of the contested decision, that the mark applied for was descriptive in character, within the meaning of Article 7(1)(c) of Regulation No 207/2009. It also held, in point 45 of the contested decision, that the applicant had failed to show that the mark applied for had acquired distinctiveness through use.
Forms of order sought
9        The applicant claims that the Court should:
–        annul the contested decision;
–        order OHIM to pay the costs.
10      OHIM contends that the Court should:
–        dismiss the action;
–        order the applicant to pay the costs.
Admissibility
Admissibility of the action
11      OHIM argues that the action is inadmissible because the applicant has failed to state clearly the grounds on which it is based. OHIM argues that the applicant makes no mention of an infringement by the Board of Appeal of any rule of law whatsoever but merely refers to points of law that it submits are applicable in the case.
12      That plea of inadmissibility cannot be upheld.
13      First, it must be observed that it is clear from paragraphs 1, 2 and 21 of the application that the applicant objects to the fact that the Board of Appeal rejected the application for the mark on the basis of Article 7(1)(c) of Regulation No 207/2009; the applicant therefore relies on an infringement of that provision as regards, in particular, the burden of proof with respect to the distinctive character of the mark applied for.
14      Furthermore, by stating, in paragraphs 18 to 20 of the application, that the Board of Appeal rejected the application for the mark on the basis of documents that had not previously been made available to the applicant and on which it had not had the opportunity to comment, the applicant sets out with sufficient clarity its allegation of a breach by the Board of Appeal of the rights of the defence.
15      Therefore, in support of its action the applicant relies, as it confirmed at the hearing in response to a question put by the Court and as was noted in the minutes of the hearing, on two pleas, one alleging an infringement of Article 7(1)(c) of Regulation No 207/2009 and the other alleging a breach of the principle of respect for the rights of the defence.
16      Finally, it must be held that, notwithstanding that the objection of inadmissibility was raised, it is clear from OHIM’s response that OHIM was in a position to understand the allegations made by the applicant against the contested decision and, accordingly, the explanations provided by the applicant at the hearing cannot be considered — contrary to what OHIM maintained at the hearing — to have been given too late.
17      It follows from the foregoing that the plea of inadmissibility raised by OHIM must be rejected.
The admissibility of the new evidence submitted by OHIM
18      OHIM attached two annexes to its response which, in its submission, showed that a patent had been granted in respect of the Kaatsu method.
19      In that regard, it should be borne in mind that the purpose of an action before the Court is to review the legality of decisions of the Boards of Appeal of OHIM within the meaning of Article 65 of Regulation No 207/2009. It is therefore not the Court’s function to re-evaluate the factual circumstances in the light of evidence which has been adduced for the first time before it (judgments of 19 November 2008 in Rautaruukki v OHIM (RAUTARUUKKI), T‑269/06, EU:T:2008:512, paragraph 20, and of 25 June 2010 in MIP Metro v OHIM — CBT Comunicación Multimedia (Metromeet), T‑407/08, ECR, EU:T:2010:256, paragraph 16).
20      Moreover, it should be noted that OHIM has not given any reason why it might have been prevented from producing those annexes in the course of the administrative proceedings.
21      At the hearing, OHIM argued that the annexes were admissible on the ground that they did not change the subject-matter of the proceedings.
22      In that regard, it suffices to observe that a finding that the annexes are inadmissible is, in the present case, justified not by the fact that the subject-matter of the proceedings would be changed, but, as is clear from paragraph 19 above, by the fact that it is not the Court’s function to re-evaluate the factual circumstances in the light of evidence which has been adduced for the first time before it.
23      In those circumstances, the annexes referred to in paragraph 18 above, which were not produced by OHIM in the course of the administrative proceedings, must be declared to be inadmissible.
Substance
24      In support of its application for annulment of the contested decision, the applicant relies, in essence, on two pleas alleging, first, infringement of Article 7(1)(c) of Regulation No 207/2009 and, second, breach of the principle of respect for the rights of the defence.
The first plea, alleging infringement of Article 7(1)(c) of Regulation No 207/2009
25      The applicant alleges, in essence, that the Board of Appeal was wrong to conclude that the word sign KAATSU was descriptive as regards the goods and services referred to in the application for registration.
26      Under Article 7(1)(c) of Regulation No 207/2009, ‘trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service’ are not to be registered. In addition, Article 7(2) of Regulation No 207/2009 states that ‘[p]aragraph 1 shall apply notwithstanding that the grounds of non-registrability obtain in only part of the Community’.
27      According to the case-law, Article 7(1)(c) of Regulation No 207/2009 prevents the signs or indications to which it refers from being reserved to one undertaking alone because they have been registered as trade marks. That provision thus pursues an aim that is in the public interest, which requires that such signs and indications may be freely used by all (see judgments of 23 October 2003 in OHIM v Wrigley, C‑191/01 P, ECR, EU:C:2003:579, paragraph 31 and the case-law cited, and of 10 May 2012 in Amador López v OHIM (AUTOCOACHING), T‑325/11, EU:T:2012:230, paragraph 14 and the case-law cited).
28      Furthermore, signs or indications which may serve in trade to designate the characteristics of the goods or service in respect of which registration is sought are, by virtue of Article 7(1)(c) of Regulation No 207/2009, regarded as incapable of performing the essential function of a trade mark, namely that of identifying the commercial origin of the goods or services, in order thereby to enable the consumer who acquired the goods or service designated by the mark to repeat the experience, if it proves to be positive, or to avoid it, if it proves to be negative, on the occasion of a subsequent acquisition (judgments in OHIM v Wrigley, paragraph 27 above, EU:C:2003:579, paragraph 30, and in AUTOCOACHING, paragraph 27 above, EU:T:2012:230, paragraph 15).
29      It follows that, in order for a sign to be caught by the prohibition set out in that provision, there must be a sufficiently direct and specific relationship between the sign and the goods or services in question to enable the public concerned immediately to perceive, without further reflection, a description of the goods and services in question or one of their characteristics (judgment in AUTOCOACHING, paragraph 27 above, EU:T:2012:230, paragraph 16 and the case-law cited).
30      It should also be noted that a sign’s descriptive nature can only be assessed, first, by reference to the way in which it is understood by the relevant public and, second, by reference to the goods or services concerned (see judgment of 27 February 2002 in Eurocool Logistik v OHIM (EUROCOOL), T‑34/00, ECR, EU:T:2002:41, paragraph 38, and judgment in AUTOCOACHING, paragraph 27 above, EU:T:2012:230, paragraph 19).
31      As regards the relevant public, it must be held that, as is clear from point 18 of the contested decision, which has not been challenged by the applicant, the goods and services referred to are intended not only for the general public, but also for a specialist public, which is represented, in particular, by professionals and companies specialised or operating in the medical field, trainers and fitness centres for personal training and body-building. Furthermore, the Board of Appeal also found that the relevant public was that of the European Union because the mark applied for was capable of being understood in any Member State of the Union. That finding, which has not been challenged by the applicant, must be confirmed.
32      Accordingly, it is necessary, for the purpose of applying Article 7(1)(c) of Regulation No 207/2009, to consider, on the basis of a given meaning of the sign in question, whether, from the point of view of the relevant public, there is a sufficiently direct and specific relationship between the sign and the goods or services in respect of which registration is sought (see, to that effect, judgments of 26 November 2003 in HERON Robotunits v OHIM (ROBOTUNITS), T‑222/02, ECR, EU:T:2003:315, paragraph 38, and of 7 July 2011 in Cree v OHIM (TRUEWHITE), T‑208/10, EU:T:2011:340, paragraph 19 and case-law cited).
33      The Board of Appeal held, in point 19 of the contested decision, that the mark applied for relates to an exercise method or technique that induces muscle hypertrophy and increases muscle strength, basically by applying a controlled reduction of blood flow to the muscles exercised by means of compressing the vasculature proximal and related areas.
34      The applicant’s primary submission is that the applicant itself developed that exercise technique and that it used the term KAATSU in order to identify its products and services. The applicant argues that the Board of Appeal therefore fell into error as regards the burden of proof.
35      First, it must be observed that the fact that the mark applied for was created by the applicant’s chairman, namely Professor S., in order to designate a particular exercise method does not mean that the mark in question must automatically benefit from Community registration.
36      Pursuant to the case-law referred to in paragraph 28 above, the mark applied for must, in order to be able to benefit from Community registration, enable the relevant public immediately to perceive the mark as an indication of goods or services offered by the holder of that mark and thus to distinguish them from the same goods and services that have a different commercial origin.
37      Since, as is clear from the research carried out as part of the administrative proceedings and notified to the applicant, the sign KAATSU is presented as a particular exercise method and not as an indicator of goods and services offered by the applicant, it follows that the Board of Appeal was correct to refuse registration of the mark applied for on the basis of Article 7(1)(c) of Regulation No 207/2009.
38      As the Board of Appeal held, correctly, in points 19 and 20 of the contested decision, the mark applied for will be understood as containing direct information as to the nature and subject-matter of the goods and services referred to, namely goods or services whose purpose is to induce, by a method or through exercises, muscle hypertrophy and to increase muscle strength, basically by applying a controlled reduction of blood flow to the muscles exercised by means of compressing the vasculature proximal and related areas.
39      It follows from the foregoing that, since the term KAATSU can be used to designate a particular method or technique of physical exercise and to inform the consumer, directly and without the need for further reflection on his part, that the goods or services in question concern that method or technique of physical exercise, that term must, having regard to the public interest that underlies Article 7(1)(c) of Regulation No 207/2009, remain available for public use and not become the subject of a monopoly, even if the term is not yet commonly used.
40      Second, in so far as the applicant maintains in its application that the finding that the mark applied for was commonly used on the relevant market was based only on material found on the internet, it must be held — even though the applicant appears to withdraw the complaint in its reply — that that complaint is directed against a reason — mentioned in point 2 of the contested decision (which summarised the examiner’s letter of 7 September 2001 confirmed by the examiner’s decision of 11 January 2012, referred to in paragraphs 4 and 6 above respectively) — which was not, however, adopted by the Board of Appeal in the contested decision.
41      It follows that the applicant’s complaint is directed against reasoning that is not included in the assessment made by the Board of Appeal and thus that complaint must be rejected.
42      In any event, it must be recalled that is not necessary that the signs and indications composing the mark that are referred to in Article 7(1)(c) of Regulation No 207/2009 actually be in use at the time of the application for registration in a way that is descriptive of the goods or services in respect of which the application is filed, or of characteristics of those goods or services. It suffices, as the wording of that provision itself indicates, that the signs and indications could be used for such purposes (see order of 9 December 2009 in Prana Haus v OHIM, C‑494/08 P, EU:C:2009:759, paragraph 52 and the case-law cited, and judgment of 17 September 2008 in Prana Haus v OHIM (PRANAHAUS), T‑226/07, EU:T:2008:381, paragraph 36).
43      Thus, the criterion according to which the Board of Appeal was required, when applying Article 7(1)(c) of Regulation No 207/2009, to determine whether the mark applied for could be registered entailed assessing, as the Board of Appeal indeed did, whether the sign for which registration as a trade mark was sought was associated at the time, in the mind of the relevant class of persons, with the category of goods and services concerned, or whether it was reasonable to assume that such an association might be established in the future (see order in Prana Haus v OHIM, paragraph 42 above, EU:C:2009:759, paragraph 53 and the case-law cited).
44      By contrast, the question whether a sign or an indication has, or is likely to, become customary in the current language is not a condition under Article 7(1)(c) of Regulation No 207/2009 but under Article 7(1)(d) of that regulation (order in Prana Haus v OHIM, paragraph 42 above, EU:C:2009:759, paragraph 56).
45      It follows that the complaint based on the absence of common use of the mark applied for cannot be upheld.
46      Having regard to all the foregoing considerations, the first plea must be rejected.
The second plea, alleging breach of the rights of the defence
47      The applicant submits that the Board of Appeal breached the principle of respect for the rights of the defence in adopting a conclusion based on evidence that had not previously been disclosed to the applicant.
48      The applicant thus claims, in essence, that the Board of Appeal took into account information derived from the internet while omitting to make the results of its research available to the applicant and, consequently, acted in breach of the second sentence of Article 75 of Regulation No 207/2009.
49      It should be recalled that the principle of respect for the rights of the defence is laid down in the second sentence of Article 75 of Regulation No 207/2009, which provides that OHIM’s decisions are to be based only on reasons on which the parties have had an opportunity to present their comments.
50      Furthermore, respect for the rights of the defence is a general principle of EU law, according to which a person whose interests are appreciably affected by a decision addressed to him by a public authority, as in the present case, must be given the opportunity to make his point of view known (see order of 4 March 2010 in Kaul v OHIM, C‑193/09 P, EU:C:2010:121, paragraph 58; and judgments in EUROCOOL, paragraph 30 above, EU:T:2002:41, paragraph 21, and of 18 January 2013 in FunFactory v OHIM (Vibrateur), T‑137/12, EU:T:2013:26, paragraph 53).
51      In accordance with that principle, a Board of Appeal of OHIM may base its decision only on matters of fact or of law on which the parties have been able to set out their views. Consequently, where the Board of Appeal gathers facts intended to serve as a basis for its decision, it is under an obligation to notify the parties of those facts in order that the parties may submit their views on them (judgment of 21 October 2004 in KWS Saat v OHIM, C‑447/02 P, ECR, EU:C:2004:649, paragraphs 42 and 43, and judgment in Vibrateur, paragraph 50 above, EU:T:2013:26, paragraph 54).
52      According to the applicant, in stating that the contested decision was based, among others, on five documents, the Board of Appeal therefore took into consideration documents that it had not notified to the applicant.
53      It must be stated that the applicant’s interpretation of the contested decision is based on a misreading of that decision.
54      In this respect, it must be noted that in point 27 of the contested decision the Board of Appeal made the following observations:
‘The applicant remarks that, contrary to Article 37(3) [of Regulation No 207/2009], the conclusion that the mark is descriptive and lacks distinctiveness has been reached on the basis of material, in particular, certain web pages apparently available which were not expressly cited in the decision and on which the applicant has not been given the opportunity to comment. However, it remains clear both from the wording of the contested decision and from the evidence available that the references to the web pages cited were those which the examiner deemed sufficient to provide convincing support in concluding on the descriptiveness of the trade mark in combination with the remaining references and the considerations of the decision. Therefore the web sites cited were the ones considered most relevant but, in no case, were they intended to be exhaustive in the sense of being all-inclusive as regards the evidence available. For these reasons, the applicant’s argument must be rejected as unfounded.’
55      It is clear from that passage that the Board of Appeal held that the evidence upon which the examiner had based his conclusion was sufficient to establish the descriptive nature of the mark applied for.
56      In referring to the fact that other evidence of descriptiveness existed, the Board of Appeal did not state that it was taking that evidence into consideration, but merely pointed out that other evidence existed so that the evidence upon which the contested decision was based was not exhaustive.
57      Therefore, it cannot properly be inferred from that passage that other evidence, which was not made available to the applicant, was taken into consideration in the administrative proceedings.
58      It follows from the foregoing that the second plea must be rejected and the action dismissed in its entirety.
Costs
59      Under Article 87(2) 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 form of order sought by OHIM.
On those grounds,
THE GENERAL COURT (Second Chamber)
hereby:
1.      Dismisses the action;
2.      Orders Kaatsu Japan Co. Ltd to pay the costs.
Martins Ribeiro
Gervasoni
Madise
Delivered in open court in Luxembourg on 7 November 2014.
[Signatures]
* Language of the case: English.