JUDGMENT OF THE GENERAL COURT (Ninth Chamber)
15 December 2016 (*)
(EU trade mark — Applications for EU figurative trade marks representing a grey curve and representing a green curve — Absolute ground for refusal — Distinctive character — Simplicity of the sign — Article 7(1)(b) of Regulation (EC) No 207/2009)
In Joined Cases T‑678/15 and T‑679/15,
Novartis AG, established in Basel (Switzerland), represented by M. Zintler, lawyer,
applicant,
v
European Union Intellectual Property Office (EUIPO), represented by H. Kunz and S. Hanne, acting as Agents,
defendant,
ACTIONS brought against the decisions of the Fifth Board of Appeal of EUIPO of 23 September 2015 (Cases R 78/2015-5 and R 89/2015-5), concerning applications for registration of two figurative signs, representing a grey curve and representing a green curve, as EU trade marks,
THE GENERAL COURT (Ninth Chamber),
composed of G. Berardis (Rapporteur), President, D. Spielmann and P.G. Xuereb, Judges,
Registrar: A. Lamote, Administrator,
having regard to the applications lodged at the Court Registry on 23 November 2015,
having regard to the responses lodged at the Court Registry on 19 February 2016,
having regard to the decision of the President of the Ninth Chamber of the Court of 12 July 2016 joining Cases T‑678/15 and T‑679/15 for the purposes of the oral procedure and of the decision which closes the proceedings,
having regard to the Court’s written question to the parties and to their oral replies at the hearing,
further to the hearing on 29 September 2016,
gives the following
Judgment
Background to the dispute
1        On 20 and 21 August 2014, the applicant, Novartis AG, filed two applications for registration of EU trade marks with the European Union Intellectual Property Office (EUIPO) pursuant to Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1).
2        Registration as marks was sought for the following figurative signs — one in grey, the other in green:
3        The goods in respect of which the registrations were sought are in Class 5 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: ‘Pharmaceutical preparations’.
4        By letters of 10 September 2014, the examiner informed the applicant that the registration of the marks applied for conflicted with the absolute ground for refusal referred to in Article 7(1)(b) of Regulation No 207/2009.
5        The applicant submitted its observations in that regard by letters of 6 and 7 November 2014.
6        By decisions of 24 November 2014, the examiner rejected the applications for registration on the ground that the marks applied for were devoid of any distinctive character within the meaning of Article 7(1)(b) of Regulation No 207/2009 because they were reminiscent of the shape of the goods covered and because, in any event, the signs were too simple to be distinctive.
7        On 9 January 2015, the applicant filed two notices of appeal with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009, against the examiner’s decisions.
8        By decisions of 23 September 2015 (‘the contested decisions’), the Fifth Board of Appeal of EUIPO dismissed those appeals. To that end, the Board of Appeal noted, inter alia, the following:
–        the goods in question were intended for healthcare professionals and end consumers whose level of attention is relatively high;
–        each of the marks applied for consisted of a curved line of varying thickness in the shape of the letter ‘C’ in two shades of grey or green;
–        in the context of the goods covered, the marks applied for were perceived as representing the stylised outline of an oval-shaped pharmaceutical lozenge or pill viewed from above and from an angular perspective, even though they were not faithful reproductions thereof;
–        those marks were not ‘merely “too simple”. Rather’, they consisted of a series of components which did not allow the consumer to differentiate the pharmaceutical preparations bearing the signs at issue from pharmaceutical preparations of other manufacturers;
–        it was well known that pharmaceutical preparations marketed in the form of pills, tablets and lozenges often feature round or oval shapes, with the result that the marks applied for did not depart significantly from the norm or customs of the sector;
–        the earlier registrations cited by the applicant were not binding on the Board of Appeal and, in any event, were not comparable to the marks applied for in the present cases.
Forms of order sought
9        The applicant claims that the Court should:
–        annul the contested decisions;
–        declare that Article 7(1)(b) of Regulation No 207/2009 cannot be invoked against the signs in question in respect of the goods in Class 5 described in the applications for registration;
–        order EUIPO to pay the costs.
10      At the hearing, in reply to a question from the Court, the applicant confirmed that its second head of claim should be interpreted as seeking an alteration of the contested decisions.
11      EUIPO contends that the Court should:
–        dismiss the applicant’s second head of claim as inadmissible;
–        dismiss the actions;
–        order the applicant to pay the costs.
Law
12      In support of its actions, the applicant relies on a single plea in law, alleging infringement of Article 7(1)(b) of Regulation No 207/2009.
The applicant’s single plea in law
13      The applicant’s main argument consists in claiming that the marks applied for, far from resembling pills, are instead abstract and ambiguous. According to the applicant, they are signs which — as the Board of Appeal itself conceded — can be interpreted in many ways, and which have a unique character that makes them recognisable by reason of the concave impression created by the different shades of green or grey. In addition, given that the curved line in the shape of the letter ‘C’ does not form a full circle, those signs, the applicant claims, are not round shapes resembling a pill. In the applicant’s view, it is much more likely that one of the following would be seen in the signs: a crescent where different shades of grey or green seem to create the abstract image of an eclipse; a representation of the letter ‘C’; or an elegant and unusual design. As they do not call to mind any one clear image, those signs leave a lot of room for interpretation and encourage the relevant public to play with their various possible implied meanings.
14      At the hearing, in reply to questions from the Court, the applicant stated that, assuming that the Board of Appeal had confirmed the examiner’s alternative reasoning that, even if the signs at issue did not represent pills, they were nevertheless too simple to preclude the application of the absolute ground for refusal in Article 7(1)(b) of Regulation No 207/2009, that reasoning would conflict with the alleged abstract and ambiguous nature of those signs.
15      EUIPO, in its response, contends that, once they have been affixed to the packaging of the pharmaceutical preparations which they cover, the marks applied for are perceived as having the two-dimensional appearance of a pharmaceutical pill and not that of a crescent, the letter ‘C’ or an elegant and unusual design. In its view, the applicant’s arguments could have some merit if the signs in question were observed only in the abstract. EUIPO considers that those arguments are unfounded as those signs must, however, be assessed once they have been affixed to the goods applied for in the present case, which they resemble. In its opinion, the fact that those signs are representations taken from a particular perspective is not sufficient to make them original, complex, special or memorable and thus to distinguish them substantially from the basic shapes of the goods concerned.
16      At the hearing, in reply to questions from the Court, EUIPO asserted that the Board of Appeal had confirmed all of the examiner’s findings in her decisions — including those relating to the nature of the signs at issue as being too simple — and that those findings were correct.
17      First of all, the Court will make preliminary observations, then it will examine the merits of the reasoning expressly set out by the Board of Appeal in the contested decisions that the signs at issue are not distinctive because they are reminiscent of a pill, and, finally, if appropriate, it will take a view on the alternative scenario mentioned by the examiner concerning the allegedly over-simple nature of the signs.
Preliminary observations
18      As a preliminary point, it should be recalled that, under Article 7(1)(b) of Regulation No 207/2009, trade marks which are devoid of any distinctive character may not be registered.
19      The distinctive character of a trade mark, within the meaning of Article 7(1)(b) of Regulation No 207/2009, means that that mark must serve to identify the goods in respect of which registration is sought as originating from a particular undertaking, and thus to distinguish those goods from those of other undertakings (judgments of 29 April 2004, Henkel v OHIM, C‑456/01 P and C‑457/01 P, EU:C:2004:258, paragraph 34, and of 11 April 2014, Olive Line International v OHIM (OLIVE LINE), T‑209/13, not published, EU:T:2014:216, paragraph 18).
20      A minimum degree of distinctive character is sufficient to render inapplicable the absolute ground for refusal set out in Article 7(1)(b) of Regulation No 207/2009 (judgment of 14 March 2014, Lardini v OHIM (Affixing of a flower to a collar), T‑131/13, not published, EU:T:2014:129, paragraph 16).
21      The distinctive character of a mark must be assessed, first, by reference to the goods or services in respect of which registration has been applied for and, second, by reference to the relevant public’s perception of the mark, the relevant public consisting of average consumers of those goods or services, who are reasonably well informed and reasonably observant and circumspect (judgments of 29 April 2004, Henkel v OHIM, C‑456/01 P and C‑457/01 P, EU:C:2004:258, paragraph 35, and of 11 April 2014, OLIVE LINE, T‑209/13, not published, EU:T:2014:216, paragraph 19).
22      The criteria for assessing the distinctive character of three-dimensional marks consisting of the appearance of the goods themselves are no different from those applicable to other categories of trade mark. For the purposes of applying those criteria, the average consumer’s perception is not necessarily the same in the case of a three-dimensional mark consisting of the appearance of the goods themselves as it is in the case of a word or figurative mark consisting of a sign which is independent of the appearance of the goods which it designates. Average consumers are not in the habit of making assumptions about the origin of goods on the basis of their shape or the shape of their packaging in the absence of any graphic or word element, and it may therefore prove more difficult to establish distinctiveness in relation to such a three-dimensional mark than in relation to a word or figurative mark (see judgment of 15 May 2014, Louis Vuitton Malletier v OHIM, C‑97/12 P, not published, EU:C:2014:324, paragraph 51 and the case-law cited).
23      In those circumstances, only a mark which departs significantly from the norms or customs in the sector, and is therefore liable to fulfil its essential function as an indication of origin is not devoid of distinctive character within the meaning of Article 7(1)(b) of Regulation No 207/2009 (see judgment of 15 May 2014, Louis Vuitton Malletier v OHIM, C‑97/12 P, not published, EU:C:2014:324, paragraph 52 and case-law cited).
24      Furthermore, the line of authority that evolved in relation to three-dimensional trade marks consisting of the appearance of the goods themselves also applies where the trade mark applied for is a figurative mark consisting of the two-dimensional representation of those goods. In such cases, the mark likewise does not consist of a sign that is independent of the appearance of the goods which it designates (see judgment of 15 May 2014, Louis Vuitton Malletier v OHIM, C‑97/12 P, not published, EU:C:2014:324, paragraph 53 and the case-law cited).
The alleged lack of distinctive character on the ground that the signs at issue are reminiscent of a pill
25      In the present cases, in paragraphs 11, 13 and 15 of the contested decisions, the Board of Appeal noted, inter alia, that the marks applied for consisted of a curved C-shaped line of varying thickness, in two shades of grey or green. In the light of the goods applied for, they were considered to represent nothing beyond the stylised outline of an oval-shaped pharmaceutical lozenge or pill viewed from above and from an angular perspective. According to the Board of Appeal, even though they are not true-to-life reproductions of pills or lozenges, the signs at issue will nevertheless be perceived as depictions of such goods viewed from an angular perspective.
26      That reasoning cannot be upheld.
27      Since the curves making up the signs at issue are not closed, they are more like crescents or the letter ‘C’, as the applicant rightly submits. It is, therefore, very unlikely that the relevant public will distinguish the shape of a pill, even once the signs have been affixed to the packaging of pharmaceutical products. Such a perception of the signs at issue is even more unlikely because there is a slight twist in the signs and a play of light and shadow which steer them even further away from the representation of a pill.
28      If the signs at issue are thus perceived as shapes with no link to any pharmaceutical products, they cannot be regarded as being devoid of distinctive character on the ground that they give rise to a two-dimensional representation of those goods.
29      In that respect, the Court must point out that, although it is true that the distinctive character of a sign is to be assessed, inter alia, according to the goods that it covers, the affixing of a sign on the packaging of those goods cannot, however, have the effect of making the relevant public perceive that sign as a representation of those goods when in fact the usual shape of those goods is not sufficiently close to that of the sign at issue.
30      It follows that the basic premiss of the Board of Appeal’s reasoning is erroneous and that the applicant’s main argument is therefore well founded.
31      In those circumstances, the Court must assess whether the signs at issue are too simple to be capable of having the minimum distinctive character necessary to preclude application of the absolute ground for refusal in Article 7(1)(b) of Regulation No 207/2009.
The alleged lack of distinctive character on the ground that the signs at issue are too simple
32      In her decisions, the examiner found, essentially, that, even if the signs at issue were not reminiscent of the shape of a pill, they were nevertheless devoid of distinctive character because of their excessive simplicity. That reasoning amounted to an alternative yet sufficient and autonomous finding that underpinned the operative part of those decisions.
33      In the contested decisions, the Board of Appeal did not expressly reiterate that reasoning.
34      However, in paragraph 14 of each of the contested decisions, the Board of Appeal stated the following with regard to each of the signs at issue, respectively:
‘Despite the fact that it is stylised and features two shades of the colour [in question], the sign applied for does not contain any distinguishing elements, such as specific design features, a logotype or a particular figurative element, which would enable the consumer to recognise it as a badge of commercial origin. It should be stressed that the sign is not merely “too simple”. Rather, it consists of a series of components which, as a whole and due to their nature, do not allow the consumer to differentiate the pharmaceutical preparations bearing the sign from pharmaceutical preparations of other manufacturers. It is not the simplicity of the figurative element(s) [that] matters here, but rather how those elements are perceived by the public.’
35      As noted by EUIPO at the hearing, the Board of Appeal’s use of the words ‘merely’ and ‘rather’ might suggest that it implicitly endorsed the examiner’s alternative reasoning.
36      However, the applicant rightly observed at the hearing that paragraph 14 of each of the contested decisions is not devoid of ambiguity.
37      Without it being necessary to identify the precise point of view of the Board of Appeal in paragraph 14 of each of the contested decisions with regard to the simplicity of the marks applied for, suffice it to state that the simplicity of the signs at issue, in any event, is not such as to deprive them of the necessary minimum distinctive character which would preclude application of the absolute ground for refusal set out in Article 7(1)(b) of Regulation No 207/2009.
38      In that regard, it must be borne in mind that, according to the case-law, a sign which is excessively simple and is constituted by a basic geometrical figure, such as a circle, a line, a rectangle or a conventional pentagon, is not, in itself, capable of conveying a message which consumers will be able to remember, with the result that they will not regard it as a trade mark unless it has acquired distinctive character through use (see judgment of 29 September 2009, The Smiley Company v OHIM (Representation of half a smiley smile), T‑139/08, EU:T:2009:364, paragraph 26 and the case-law cited).
39      That said, a finding that a mark has distinctive character within the meaning of Article 7(1)(b) of Regulation No 207/2009 is not subject to a finding of a specific level of linguistic or artistic creativity or imaginativeness on the part of the proprietor of the trade mark. It suffices that the trade mark enables the relevant public to identify the origin of the goods or services which it covers and to distinguish them from those of other undertakings (see judgment of 29 September 2009, Representation of half a smiley smile, T‑139/08, EU:T:2009:364, paragraph 27 and the case-law cited).
40      In the present case, it is common ground that the signs at issue do not represent a geometrical figure. However, that circumstance, as such, does not suffice to support the view that they have the minimum distinctive character necessary for registration as EU trade marks.
41      There must also be certain aspects of the signs at issue which may be easily and instantly memorised by the relevant public and which would make it possible for those signs to be perceived immediately as indications of the commercial origin of the goods they cover (see, to that effect and by analogy, judgment of 29 September 2009, Representation of half a smiley smile, T‑139/08, EU:T:2009:364, paragraph 31).
42      In that respect, it must be noted that, because they are reminiscent of both the letter ‘C’ and a crescent moon, and because the different shades of colour create a play of light and shadow and the curves that constitute them are of varying thickness and have a slight twist, the signs at issue display characteristics which are such as to distinguish them in the eyes of the public, and they thus satisfy the requirements set out in the case-law referred to in paragraph 41, for which reasons they are endowed with the minimum distinctive character necessary for registration.
43      In the light of all of the foregoing, the applicant’s single plea must be upheld, without it being necessary to examine its other arguments.
Conclusions as to the outcome of the actions
44      Since the applicant’s single plea is well founded, the contested decisions must be annulled, in accordance with the applicant’s first head of claim.
45      With regard to the applicant’s second head of claim, which, in the light of the clarifications provided at the hearing, is to be regarded as an application for alteration of the contested decisions, it must be recalled that the Court’s power to alter decisions in Article 65(3) of Regulation No 207/2009 does not have the effect of conferring on the Court the power to carry out an assessment on which the Board of Appeal has not yet adopted a position. Exercise of the power to alter decisions must therefore, in principle, be limited to situations in which the Court, after reviewing the assessment made by the Board of Appeal, is in a position to determine, on the basis of the matters of fact and of law as established, what decision the Board of Appeal was required to take (judgment of 5 July 2011, Edwin v OHIM, C‑263/09 P, EU:C:2011:452, paragraph 72).
46      In the present case, the conditions required for alteration are satisfied. It follows from the considerations set out in paragraphs 25 to 42 above that the Board of Appeal was required to find that the marks applied for had the minimum distinctive character necessary for registration.
47      Accordingly, the contested decisions must be altered in order to allow the application to proceed before EUIPO pursuant to the finding that the absolute ground for refusal in Article 7(1)(b) of Regulation No 207/2009 does not preclude the registration of the marks applied for, which amounts to allowing the appeals brought by the applicant before the Board of Appeal.
Costs
48      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 EUIPO has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant.
On those grounds,
THE GENERAL COURT (Ninth Chamber)
hereby:
1.      Annuls the decisions of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 23 September 2015 (Cases R 78/2015‑5 and R 89/2015‑5);
2.      Allows the appeals brought by Novartis AG before that Board of Appeal;
3.      Orders EUIPO to pay the costs.
Berardis
Spielmann
Xuereb
Delivered in open court in Luxembourg on 15 December 2016.
E. Coulon
G. Berardis
Registrar
President
* Language of the case: English.