JUDGMENT OF THE GENERAL COURT (Fifth Chamber, Extended Composition)
15 September 2021 (*)
(EU trade mark – Invalidity proceedings – Figurative EU mark depicting a shade of the colour orange – Absolute ground for refusal – Article 7(1)(b) of Regulation (EC) No 40/94 (now Article 7(1)(b) of Regulation (EU) 2017/1001) – Examination of the facts of the EUIPO’s own motion – Article 95(1) of Regulation 2017/1001 – Nature of the mark – Colour mark – Right to be heard – Article 94 of Regulation 2017/1001)
In Case T‑274/20,
MHCS, established in Épernay (France), represented by O. Vrins and B. Raus, lawyers,
applicant,
v
European Union Intellectual Property Office (EUIPO), represented by A. Söder and V. Ruzek, acting as Agents,
defendant,
the other party to the proceedings before the Board of Appeal of EUIPO, intervener before the General Court, being
Lidl Stiftung & Co. KG, established in Neckarsulm (Germany), represented by M. Kefferpütz and K. Wagner, lawyers,
ACTION brought against the decision of the First Board of Appeal of EUIPO of 24 February 2020 (Case R 2392/2018-1), relating to invalidity proceedings between Lidl Stiftung & Co. & MHCS,
THE GENERAL COURT (Fifth Chamber, Extended Composition),
composed of D. Spielmann (Rapporteur), President, U. Öberg, O. Spineanu-Matei, R. Mastroianni and R. Norkus, Judges,
Registrar: J. Pichon, Administrator,
having regard to the application lodged at the Court Registry on 11 May 2020,
having regard to the response of EUIPO lodged at the Court Registry on 23 July 2020,
having regard to the response of the intervener lodged at the Court Registry on 15 July 2020,
having regard to the written questions put by the Court to the parties and their answers to those questions, which were lodged at the Court Registry on 22 February 2021,
further to the hearing on 27 April 2021,
gives the following
Judgment
Background to the dispute
1        On 12 February 1998, SA Veuve Cliquot Ponsardin, the predecessor in law to the applicant, MHCS, 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 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)).
2        The trade mark in respect of which registration was sought was referred to as a figurative mark in the application form, which stated under the heading ‘Colour claimed’ that ‘protection [was] claimed for the colour orange for which the scientific definition [was] as follows: trichromatic co-ordinates / colour characteristics: x 0.520, y 0.428 – diffuse reflectance 42.3% – dominant wavelength 586.5 mm – excitation purity 0.860 – colorimetric purity: 0.894’. That trade mark was depicted as follows:
3        The goods in respect of which registration was sought fall inter alia within Class 33 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 to the following description: ‘champagne wines’.
4        By letter of 30 July 1998, the examiner informed SA Veuve Cliquot Ponsardin that the trade mark did not appear to satisfy the conditions necessary for registration since single colours, of simple design, were devoid of any distinctive character. On 5 August 1998, SA Veuve Cliquot Ponsardin submitted its observations in reply, noting inter alia that a colour was capable of being depicted graphically and having a distinctive character and that that was the case here, having regard to the goods in question and the fact that the application clearly stated that protection was sought for the shade of colour described.
5        By decision of 20 January 2000, the examiner dismissed the EU trade mark application on the ground that it was devoid of any distinctive character within the meaning of Article 7(1)(b) of Regulation No 40/94 (now Article 7(1)(b) of Regulation 2017/1001). The examiner stated that the trade mark was not a colour mark per se but a figurative mark in colour and that, if the subject of the application was a colour, the box ‘other’ should have been ticked on the application form instead of the ‘figurative mark’ box.
6        By decision of 20 November 2002 (R 246/2000-2), the Second Board of Appeal stated that the standard application form had to be interpreted as referring to an application seeking protection for a colour mark, even though the box for a figurative mark had been ticked. It annulled the examiner’s decision and remitted the case to the examiner to determine whether the trade mark had acquired a distinctive character through use in accordance with Article 7(3) of Regulation No 40/94 (now Article 7(3) of Regulation 2017/1001).
7        By decision of 19 December 2003, the examiner, who referred to the trade mark in respect of which registration was sought as having been filed ‘in the form of a colour per se’, dismissed the application on the ground that it had not been established that a distinctive character had been acquired through use in accordance with Article 7(3) of Regulation (EC) No 40/94.
8        By decision of 26 April 2006 (Case R 148/2004-2), the Second Board of Appeal annulled the examiner’s second decision and concluded that it had been demonstrated that a distinctive character had been acquired through use in respect of champagne wines.
9        The trade mark application was published in Community Trade Marks Bulletin
No 37/2006 on 11 September 2006 and registered on 23 March 2007 under number 747949. On EUIPO’s ‘eSearch plus’ database and in its electronic register, the trade mark type stated is ‘figurative mark’.
10      On 16 March 2010, the trade mark was assigned to the applicant.
11      On 3 November 2015, the intervener, Lidl Stiftung & Co. KG, filed an application for a declaration of invalidity of the contested trade mark on the basis of Article 52(1)(a) of Regulation No 207/2009 (now Article 59(1)(a) of Regulation 2017/1001), read in conjunction with Article 7(1)(a) and (b) of that regulation (now Article 7(1)(a) and (b) of Regulation 2017/1001).
12      The application for a declaration of invalidity was based on Article 4 of Regulation No 40/94 (subsequently Article 4 of Regulation 2017/2011) on the ground that specifying the colour shade claimed using a scientific definition was not sufficient, and that that trade mark lacked any distinctive character.
13      By decision of 12 November 2018, the Cancellation Division dismissed the application for a declaration of invalidity. First, it took the view that, despite the fact that the trade mark had been filed and registered as a ‘figurative mark’, the parties had not disputed that it was a colour mark per se, as the Board of Appeal had recognised in its decisions of 20 November 2002 and 26 April 2006. Secondly, it considered that the requirements of Article 4 of Regulation No 40/94 had been met on the grounds that the trade mark’s depiction was immediately understandable and that the description made it possible for third parties to acquire precise knowledge of the sign for which protection had been sought. Thirdly, it took the view that a distinctive character acquired through use had been established on the date on which the application for registration was filed in the 15 relevant Member States (Belgium, Denmark, Germany, Ireland, Greece, Spain, France, Italy, Luxembourg, Netherlands, Austria, Portugal, Finland, Sweden and United Kingdom).
14      On 6 December 2018, the intervener filed a notice of appeal with EUIPO, under Articles 66 to 71 of Regulation 2017/1001, against the Cancellation Division’s decision.
15      By decision of 24 February 2020 (‘the contested decision’), the First Board of Appeal annulled the Cancellation Division’s decision and remitted the case to it.
16      In the first place, the Board of Appeal examined the type of the contested trade mark. It stated in that regard that it could not be the subject of an agreement between the parties and that the information on the type of the trade mark in the application form was not ambiguous. It noted that, first, the ‘figurative mark’ box had been ticked on the application form, secondly, the applicant had referred on many occasions to a figurative mark in colour and the Second Board of Appeal had, of its own motion, interpreted the application as relating to a colour mark, thirdly, the applicant had never requested that the application be amended and the trade mark had been registered as a figurative mark and, fourthly, the Second Board of Appeal did not have jurisdiction to reclassify the trade mark of its own motion. It recalled that colour marks were devoid of any shape, whereas figurative marks had a clearly defined contour, which influenced consumer perception and had an effect on the distinctive character of the trade mark in question. According to the Board of Appeal, the choice of the nature of the mark was therefore a matter for the applicant, and choosing one classification rather than another cannot be regarded as a manifest error, since the contested mark could be considered, according to its depiction, only as a figurative mark claiming a specific colour. It added that the applicant had never requested that the contested mark be reclassified in EUIPO’s database. In the second place, the Board of Appeal noted that the amendment in the classification of a mark was such as to influence the analysis of its distinctive character. In the third place, after having recalled that EUIPO’s decisions may be based only on reasons or evidence on which the parties concerned have had an opportunity to present their observations, it took the view that it was necessary to annul the Cancellation Division’s decision and remit the case to it for reconsideration, in order to allow the parties to adapt their observations to take account of its interpretation and to ensure that the rights of the defence were respected.
Forms of order sought
17      The applicant claims that the Court should:
–        annul the contested decision;
–        order EUIPO and the intervener to bear their own costs and EUIPO to bear the applicant’s costs.
18      EUIPO contends that the Court should:
–        annul the contested decision;
–        order each party to bear its own costs.
19      The intervener submits that the Court should:
–        dismiss the present action;
–        in the alternative, remit the case back to the Board of Appeal for reconsideration;
–        order the applicant to pay the costs.
Law
20      A preliminary point to note is that, in so far as, according to settled case-law, the rules of procedure are deemed applicable on the date they come 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 No 207/2009 regarding the invalidity proceedings brought on 3 November 2015 (paragraph 11 above) and by the procedural provisions of Regulation 2017/1001 regarding the action brought on 6 December 2018 against the Cancellation Division’s decision which led to the contested decision being adopted.
Admissibility of the action
21      The intervener submits that the action is inadmissible since the application for a declaration of invalidity was not upheld by the Board of Appeal and, therefore, it cannot be claimed that, by merely remitting the case to the Cancellation Division, the Board of Appeal did not uphold the applicant’s claims.
22      The intervener and EUIPO dispute that line of argument.
23      It should be borne in mind that, under Article 72(4) of Regulation 2017/1001, ‘the action shall be open to any party to proceedings before the Board of Appeal adversely affected by its decision’. According to the case-law, in so far as a decision of a Board of Appeal upholds in their entirety the claims of the party concerned, that party does not have standing to bring an action before the Court (see judgment of 5 February 2020, Globalia Corporación Empresarial v EUIPO – Touring Club Italiano (TC Touring Club), T‑44/19, not published, EU:T:2020:31, paragraph 28 and the case-law cited).
24      In the present case, the Cancellation Division’s decision of 12 November 2018 dismissed the application for a declaration of invalidity. The Board of Appeal annulled that decision and remitted the case to the Cancellation Division. In so doing, it did not uphold the applicant’s claims, which asked the Board of Appeal to declare the appeal manifestly unfounded on account of the distinctive character of its mark.
25      The present action is therefore admissible.
Substance
26      In support of its action, the applicant relies on four pleas in law. The first plea alleges infringement of Article 95(1) of Regulation 2017/1001, on the ground that the Board of Appeal went beyond the scope of the factual observations made by the parties. The second plea alleges infringement of Article 26(1) of Regulation No 40/94 read in conjunction with Rule 1(1)(d) and Rule 3(2), (3) and (5) of Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Regulation No 40/94 (OJ 1995 L 303, p. 1), on the ground that the First Board of Appeal incorrectly reclassified the colour mark at issue as a figurative mark. The third plea alleges infringement of the principles of the protection of legitimate expectations and legal certainty. The fourth plea alleges infringement of Article 94 of Regulation 2017/1001 and of Article 41(2) of the Charter of Fundamental Rights of the European Union (‘the Charter’), in that the contested decision infringes the principle of sound administration, including the obligation to state reasons, and the rights of the defence.
First plea alleging infringement of Article 95(1) of Regulation 2017/1001
27      In the context of its first plea in law, alleging infringement of Article 95(1) of Regulation 2017/1001, the applicant submits that, in the absence of any dispute between the parties concerning the nature of the contested mark, the Board of Appeal interpreted the trade mark application filed on 12 February 1998 of its own motion as relating to a figurative mark composed of a clearly defined contour and, in so doing, exceeded the bounds of the parties’ factual observations.
28      EUIPO submits that, contrary to what is claimed by the applicant, the Board of Appeal was entitled to examine the nature of the contested mark even though the issue was not discussed before it by the parties, since it was a condition to be taken into consideration in order to determine the scope of the protection sought. That issue of the nature of the mark necessarily falls within the scope of the action. In response to a question put in the context of a measure of organisation of procedure, EUIPO states, inter alia, that the Board of Appeal had jurisdiction, in the context of invalidity proceedings, to examine the nature of the mark and was not bound by the decision of the Second Board of Appeal of 20 November 2002, but adds that it should have stated reasons for its decision to depart from that decision and give the parties the opportunity to be heard in that regard.
29      The intervener submits that the Board of Appeal had jurisdiction to interpret the nature of the contested mark in light of the application form which had been produced by the parties. In its reply to the questions asked in the context of a measure of organisation of procedure, it adds that the Board of Appeal also had jurisdiction to declare the contested mark invalid in the event of a contradiction between the clear choice of figurative mark and a further specification of the form.
30      Article 95(1) of Regulation 2017/1001 provides as follows:
‘In proceedings before it the Office shall examine the facts of its own motion … In invalidity proceedings pursuant to Article 59, the Office shall limit its examination to the grounds and arguments submitted by the parties.’
31      In addition, Article 27(2) of Commission Delegated Regulation (EU) 2018/625 of 5 March 2018 supplementing Regulation 2017/1001 and repealing Delegated Regulation (EU) 2017/1430 (OJ 2018 L 104, p. 1) provides as follows:
‘In inter partes proceedings, the examination of the appeal and, as the case may be, the cross appeal, shall be restricted to the grounds invoked in the statement of grounds and, as the case may be, in the cross appeal. Matters of law not raised by the parties shall be examined by the Board of Appeal only where they concern essential procedural requirements or where it is necessary to resolve them in order to ensure a correct application of Regulation (EU) 2017/1001 having regard to the facts, evidence and arguments presented by the parties.’
32      According to the case-law, in accordance with Article 95(1) of Regulation 2017/1001, when considering absolute grounds for refusal, EUIPO examiners and, on appeal, the Boards of Appeal of EUIPO are required to examine the facts of their own motion in order to determine whether the mark the registration of which is sought comes within one of the grounds for refusal of registration laid down in Article 7 of that regulation. It follows that the competent bodies of EUIPO may be led to base their decisions on facts which have not been put forward by the applicant for the mark. EUIPO is required to examine of its own motion the relevant facts which may lead it to apply an absolute ground for refusal (judgment of 13 February 2019, Nemius Group v EUIPO (DENTALDISK), T‑278/18, not published, EU:T:2019:86, paragraph 30; see also, by analogy, judgments of 22 June 2006, Storck v OHIM, C‑25/05 P, EU:C:2006:422, paragraph 50, and of 19 April 2007, OHIM v Celltech, C‑273/05 P, EU:C:2007:224, paragraph 38).
33      That being so, in the context of a declaration of invalidity, by virtue of the presumption of validity of the registered mark, EUIPO’s obligation, under Article 95(1) of Regulation 2017/1001, to examine of its own motion the relevant facts which may lead it to apply absolute grounds for refusal, is restricted to the examination of the application for an EU trade mark carried out by the examiners of EUIPO and, on appeal, by the Boards of Appeal during the procedure for registration of that mark. As the registered EU trade mark is presumed to be valid, it is for the person who has filed the application for a declaration of invalidity of that mark to invoke before EUIPO the specific facts which call the validity of that trade mark into question (see, by analogy, judgments of 13 September 2013, Fürstlich Castell’sches Domänenamt v OHIM – Castel Frères (CASTEL), T‑320/10, EU:T:2013:424, paragraph 28; of 28 September 2016, European Food v EUIPO – Société des produits Nestlé (FITNESS), T‑476/15, EU: T:2016:568, paragraph 48; and of 29 March 2019, All Star v EUIPO – Carrefour Hypermarchés (Shape of a shoe sole), T‑611/17, not published, EU:T:2019:210, paragraph 45 and the case-law cited).
34      In the present case, it must be held that the question of the nature of the contested mark was not an argument or plea submitted by the parties before the First Board of Appeal within the meaning of Article 95(1) of Regulation 2017/1001.
35      That issue of the nature of the contested mark had been discussed in the context of the procedure for registration of that mark. The examiner had found that it was a figurative mark and, in the decision of 20 November 2002 (R 246/2000-2) (paragraph 6 above), the Second Board of Appeal took the view that it was, on the contrary, a colour mark. The decision of the Second Board of Appeal of 26 April 2006 (R 148/2004-2) then concluded the registration procedure, finding that it had been demonstrated that the distinctive character had been acquired through use of the contested mark in respect of champagne wines.
36      As EUIPO conceded in its answers to the written questions put by the Court, its department responsible for the register wrongly did not rectify the registration of the contested mark as ‘another mark’ or as a ‘colour mark’ instead of a ‘figurative mark’.
37      In that context, at the inter partes stage of the application for a declaration of invalidity at issue in the present case, the question of the nature of the contested mark was not a matter of fact or of law raised by the parties. Nor did that question concern a relevant fact or essential procedural requirements. Lastly, contrary to what EUIPO and the intervener submit, it was not necessary to resolve it in order to ensure the correct application of Regulation 2017/1001. The Second Board of Appeal had taken that issue of the nature of the contested mark into account and had already decided it in the context of the registration procedure.
38      It is true that it flows from the case-law that the presumption of validity of the registration cannot prevent EUIPO, inter alia in the light of what was put forward by the party calling the validity of the contested mark into question, from relying not only on its arguments and any evidence submitted by that party in support of its application for a declaration of invalidity, but also on the well-known facts identified by EUIPO in the course of the invalidity proceedings (judgments of 24 October 2019, Rubik’s Brand v EUIPO – Simba Toys (Shape of a cube with surfaces having a grid structure), T‑601/17, not published, EU:T:2019:765, paragraph 82, and of 15 October 2020, smart things solutions v EUIPO – Samsung Electronics (smart:)things), T‑48/19, not published, EU:T:2020:483, paragraph 69).
39      However, in the present case, no evidence or well-known fact was submitted or relied on before the First Board of Appeal.
40      It follows from all of the foregoing that the First Board of Appeal went beyond the pleas and arguments submitted by the parties, in infringement of the last sentence of Article 95(1) of Regulation 2017/1001, read in conjunction with Article 27(2) of Delegated Regulation 2018/625. In so doing, it exceeded its jurisdiction.
41      The first plea in law must therefore be upheld.
42      The Court considers it appropriate to examine, for the sake of completeness, the fourth plea raised by the applicant.
The fourth plea in law, alleging infringement of Article 94 of Regulation 2017/1001 and Article 41(2) of the Charter
43      The applicant claims, in essence, that the contested decision infringes Article 94 of Regulation 2017/1001 and Article 41(2) of the Charter. It is apparent from its answers to the questions raised by way of measures of organisation of procedure that it claims, inter alia, that the First Board of Appeal infringed its rights of defence.
44      EUIPO also submits that the First Board of Appeal should have given the parties the opportunity to submit their observations on the classification of the contested mark.
45      The intervener disputes the applicant’s arguments on the grounds that the nature of the contested mark was not a decisive aspect of the dispute and that the contested decision remits the case back to the Cancellation Division for re-examination to enable the parties to adapt to this interpretation and ensure full respect for their rights of defence.
46      The second sentence of Article 94(1) of Regulation 2017/1001 provides that decisions of the EUIPO ‘shall be based only on reasons or evidence on which the parties concerned have had an opportunity to present their comments’. The second sentence of that article thus enshrines the general principle of protection of the rights of the defence. In that regard, it must be borne in mind that observance of the rights of the defence is a general principle of EU law, guaranteed, furthermore, by Article 41(2)(a) of the Charter, a person whose interests are appreciably affected by a decision taken by a public authority must be given the opportunity to make his or her point of view known (judgments of 19 April 2005, Success-Marketing v OHIM – Chipita (PAN & CO), T‑380/02 and T‑128/03, EU:T:2005:133, paragraph 94, and of 12 December 2019, Refan Bulgaria v EUIPO (Shape of a flower), T‑747/18, not published, EU:T:2019:849, paragraphs 24 and 25).
47      In the present case, it is apparent from the documents before the Court that the First Board of Appeal did not question the parties, in particular the applicant, on the issue of the nature of the contested mark which it raised of its own motion.
48      In so doing, it infringed the applicant’s rights of defence, guaranteed by the second sentence of Article 94(1) of Regulation 2017/1001.
49      Contrary to what the intervener submits, in essence, the question of the nature of the contested mark was a ground for the contested decision. The Board of Appeal found that that question was a decisive aspect of the dispute, since it was a condition to be taken into consideration in order to determine the scope of the protection sought, having regard to the fact that the classification of the contested mark was such as to influence the analysis of its distinctive character and the fact that the difference in interpretation of the nature of the mark was also liable to affect the conditions for filing.
50      Similarly, the intervener’s argument that the First Board of Appeal decided to remit the case to the Cancellation Division in order to ensure that the parties’ rights of defence were respected must also be rejected. It must be borne in mind that the First Board of Appeal’s interpretation is binding on the Cancellation Division to which the case is remitted pursuant to Article 71(2) of Regulation 2017/1001. In the present case, in view of the reasoning of the contested decision, that interpretation necessarily leads to the contested mark being classified as a figurative mark. In particular, in paragraphs 25 to 35 of the contested decision, the First Board of Appeal relied on a number of considerations, at the end of which it stated that the contested mark could be considered only as a figurative mark claiming a specific colour.
51      It follows that the applicant’s fourth plea is well founded in so far as it alleges infringement of its right to be heard, within the meaning of Article 94(1) of Regulation 2017/1001 and Article 41(2)(a) of the Charter.
52      Consequently, the first plea in law must be upheld and, for the sake of completeness, the fourth plea in law and, consequently, the contested decision must be annulled.
Costs
53      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. Moreover, under Article 134(2) of the Rules of Procedure, where there is more than one unsuccessful party the Court is to decide how the costs are to be shared.
54      Since EUIPO and the intervener have been unsuccessful, in so far as the contested decision is annulled, they must be ordered to bear their own costs and to pay, in equal shares, those incurred by the applicant, in accordance with the form of order sought by the applicant.
On those grounds,
THE GENERAL COURT (Fifth Chamber, Extended Composition),
hereby:
1.      Annuls the decision of the First Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 24 February 2020 (Case R 2392/2018-1);
2.      Orders EUIPO to pay, in addition to its own costs, half of the costs incurred by MHCS;
3.      Orders Lidl Stiftung & Co. KG to pay, in addition to its own costs, half of the costs incurred by MHCS.
Spielmann
Öberg
Spineanu-Matei
Mastroianni
Norkus
Delivered in open court in Luxembourg on 15 September 2021.
E. Coulon
S. Papasavvas
Registrar
President
*      Language of the case: English.