JUDGMENT OF THE GENERAL COURT (Ninth Chamber)
13 July 2022 (*)
(EU trade mark – Revocation proceedings – EU figurative mark The Standard – Declaration of revocation – Place of the use of the mark – Advertisements and offers for sale to consumers in the EU – Article 58(1)(a) of Regulation (EU) 2017/1001)
In Case T‑768/20,
Standard International Management LLC, established in New York, New York (United States), represented by M. Edenborough QC, S. Wickenden, Barrister, and M. Maier, lawyer,
applicant,
v
European Union Intellectual Property Office (EUIPO), represented by D. Gája, acting as Agent,
defendant,
the other party to the proceedings before the Board of Appeal of EUIPO being
Asia Standard Management Services Ltd, established in Hong Kong (China),
THE GENERAL COURT (Ninth Chamber),
composed of M.J. Costeira, President, M. Kancheva and T. Perišin (Rapporteur), Judges,
Registrar: J. Pichon, Administrator,
having regard to the written part of the procedure,
further to the hearing on 17 November 2021,
gives the following
Judgment
1        By its action under Article 263 TFEU, the applicant, Standard International Management LLC, seeks annulment of the decision of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 27 November 2020 (Case R 828/2020-5) (‘the contested decision’).
Background to the dispute
2        On 16 June 2009, Hotelsab LLC, the applicant’s legal predecessor, filed an application for registration of an EU trade mark 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) (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)).
3        Registration as a mark was sought for the figurative sign reproduced below:
4        The goods and services for which registration was sought are in Classes 18, 25, 38, 39, 41, 43 and 44 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, for each of those classes, to the following description:
–        Class 18: ‘Leather goods, in particular leather desk and office accessories/ leather CD holders, book ends, wallets, handbags, backpacks, luggage, cosmetic cases and jewellery cases’;
–        Class 25: ‘Wearing apparel, in particular T-shirts, men’s and women’s underwear, headgear, jackets, sweatshirts[,]
robes, shoes, bathing suits, athletic wear and jeans’;
–        Class 38: ‘Providing computer/online internet access facilities’;
–        Class 39: ‘Parking valet services’;
–        Class 41: ‘Providing meeting/convention room facilities for educational conventions’;
–        Class 43: ‘Hotel, restaurant, bar, cafe, cocktail lounge services; providing banquet and social function facilities for special occasions; catering services; personal valet services; providing meeting/convention room facilities for other type conventions’;
–        Class 44: ‘Barber shop/beauty salon services’.
5        The application for registration was published on 31 March 2011 in European Union Trade Marks Bulletin
No 63/2011. The mark was registered as an EU trade mark on 8 July 2011 in respect of all the goods and services referred to above.
6        On 10 October 2018, Asia Standard Management Services Ltd filed an application for revocation of the registered trade mark in respect of all the abovementioned goods and services. The grounds of the application for revocation were those set out in Article 58(1)(a) of Regulation 2017/1001.
7        By decision of 2 March 2020, the Cancellation Division revoked the contested mark in its entirety with effect from 10 October 2018.
8        On 4 May 2020, the applicants filed a notice of appeal with EUIPO under Articles 66 to 71 of Regulation 2017/1001, against the decision of the Cancellation Division.
9        By the contested decision, the Fifth Board of Appeal dismissed the appeal.
10      In the first place, as regards the place of use of the contested mark, the Board of Appeal pointed out that a considerable amount of evidence concerned hotel services and ancillary services provided by the applicant in the United States.
Among that evidence, the Board of Appeal noted various documents referring to advertisements, promotional campaigns aimed at customers located in the European Union, reservations made directly by customers and through travel agencies situated in the European Union, invoices addressed to customers resident in the European Union, a bookings portal accessible to European Union customers via the applicant’s website, figures issued by Google Analytics software concerning traffic on the applicant’s website, as well as printouts from such a website referring to various hotel services and equipment offered and used by
customers, particularly in the European Union, or even articles focusing on awards and on prizes received.
The Board of Appeal, in that regard, considered that such evidence was insufficient for a finding that the contested mark had been put to use in the European Union, given that the hotel and ancillary
services in question were rendered outside the relevant territory of the European Union.
It considered that the nationality or geographical origin of the customers was, in that regard, irrelevant, as also was the fact that the advertisements or the offers of service were intended for consumers in the European Union.
11      In the second place, as regards the extent of use, for the same reasons, the Board of Appeal excluded all the evidence relating to the hotel and ancillary services provided by the applicant in the United States.
12      Consequently, in the third place, in the context of the global assessment of the evidence adduced in order to establish genuine use of the contested mark, the Board of Appeal concluded that that use had not been proved in the relevant territory and during the relevant period for any of the goods or services for which the mark had been registered. In particular, the Board of Appeal found that the relevant evidence was insufficient, taking into account the place of provision of the hotel and ancillary services, which was outside the relevant territory of the European Union, irrespective of the fact that the applicant had targeted consumers in the European Union with the advertisements and offers for sale of those services.
Forms of order sought
13      The applicant claims that the Court should:
–        annul the contested decision;
–        order EUIPO to pay the costs incurred before the Court and those incurred ‘below’.
14      EUIPO contends that the Court should:
–        dismiss the application;
–        order the applicant to pay the costs.
Law
The scope of the action
15      By its first head of claim, the applicant asks the Court, without further explanation, to annul the contested decision.
16      However, the applicant states in its application that it is challenging the contested decision only in so far as it confirms the revocation of the contested mark in respect of hotel and ancillary services, namely the services in Classes 38, 39, 41, 43 and 44.
17      In those circumstances, it must be held that the contested decision is not being challenged as regards the goods in Classes 18 and 25.
18      Accordingly, the claim for annulment made by the applicant in its action must be read as being directed against the contested decision in so far as that decision relates to the services in Classes 38, 39, 41, 43 and 44.
Substance
19      In support of its action, the applicant raises, in essence, a single plea in law, alleging infringement of Article 58(1)(a) of Regulation 2017/1001, read in conjunction with Article 18 of that regulation.
20      By its single plea in law, the applicant submits that the Board of Appeal made four errors. The Court considers that that plea is divided, in essence, into two parts by which the applicant criticises the Board of Appeal for having, first, wrongly assessed the evidence concerning the advertising and offer for sale, to the relevant public, of its hotel and ancillary services offered in the United States and, secondly, wrongly concluded that the evidence relating to the future opening of a new hotel in London (United Kingdom) did not allow genuine use of the contested mark to be established.
21      The first part of the single plea in law can be divided into two complaints. First, the applicant submits, in essence, that the Board of Appeal erred in finding that the advertisements and offers for sale, targeted at consumers in the European Union, of hotel and ancillary services in the United States, did not constitute relevant evidence in order to demonstrate, in particular, that the use of the contested mark took place in the relevant territory of the European Union and in a sufficiently important manner. Secondly, the applicant submits that such evidence of use is in itself sufficient to establish genuine use of the contested mark.
22      By its first complaint, the applicant alleges that the Board of Appeal erred in excluding the evidence of use of the contested mark referring to advertisements and offers for sale aimed at consumers in the European Union and in finding that use had occurred outside the territory of the European Union.
23      In particular, the applicant submits that, in order to establish that the acts of advertising and offering of services for sale occurred in the European Union, it is necessary to identify whether such acts of use of a mark are targeted at consumers in the European Union.
To that end, the solution adopted by the Court in the judgments of 7 December 2010, Pammer and Hotel Alpenhof (C‑585/08 and
C‑144/09, EU:C:2010:740); of 12 July
2011, L’Oréal and Others (C‑324/09, EU:C:2011:474); and of 5 September 2019, AMS Neve and Others (C‑172/18, EU:C:2019:674), apply by analogy. The applicant infers from its application that proof of use of a mark by a website which, even if it were accessible internationally, is intended for consumers in the European Union, constitutes use of a mark within that territory.
24      EUIPO agrees with the applicant’s claims in that the Board of Appeal wrongly confused the place of provision of the service with the place of use of the mark.
25      Nevertheless, EUIPO considers that the Board of Appeal’s error is not sufficient to lead to the annulment of the contested decision, as it has no bearing on its outcome in so far as the applicant would not succeed, in any event, in proving genuine use of the contested mark in the European Union. The evidence submitted by the applicant does not demonstrate that consumers were exposed to the contested mark in the territory of the European Union. EUIPO asserts that the applicant merely demonstrates that EU customers reserved and used its hotel services in the United States, which is insufficient to establish genuine use of the contested mark in the territory of the European Union.
26      EUIPO considers that the use of a mark for hotel services available outside the European Union requires a more sustained effort on the part of the applicant, from the point of view both of the actual use of its mark in the territory of the European Union and of the provision of evidence and explanations to EUIPO as to why such a use of the mark in the European Union should be regarded as genuine.
27      In that regard, as a preliminary point, it should be noted that, since the application for revocation of the contested mark was filed on 10 October 2018, the relevant period of five years referred to in Article 58(1)(a) of Regulation 2017/1001 runs from 10 October 2013 to 9 October 2018.
28      Next, it is necessary to examine the reasons why the Board of Appeal excluded from the examination of genuine use of the contested mark
the evidence relating to the hotel and ancillary services offered in the United States.
29      In the present case, it is apparent from the contested decision that the Board of Appeal excluded evidence referring to advertisements and offers for sale targeted at consumers in the European Union, for two reasons in particular. In the first place, it considered that, since the services were provided outside the territory of the European Union, those advertisements and the offers for sale relating thereto could not be relevant for the purposes of establishing genuine use of the contested mark. Consequently, it considered that the case-law of the Court, referred to in paragraph 23 above, concerning the concept of advertising and offers for sale targeted at consumers in the European Union, could not usefully be relied upon in order to establish the place of use of a mark in the European Union. In the second place, it pointed out that, in any event, since the contested mark was not registered for ‘advertising’, ‘booking’, ‘travel agency’ or ‘sale[s]’ services, its proprietor could not usefully adduce evidence referring to advertisements or offers for sale.
30      As a preliminary point, it should be noted that, according to Article 18(1) of Regulation 2017/1001, ‘if, within a period of five years following registration, the proprietor has not put the EU trade mark to genuine use in the Union in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the EU trade mark shall be subject to the sanctions provided for in this Regulation, unless there are proper reasons for non-use’.
31      There is ‘genuine use’ of a trade mark where the mark is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services; genuine use does not include token use for the sole purpose of preserving the rights conferred by the mark (see judgment of 31 January 2019, Pandalis v EUIPO, C‑194/17 P, EU:C:2019:80, paragraph 83 and the case-law cited).
32      It should be pointed out that, first, the expression ‘genuine use in the Union’, within the meaning of Article 58(1)(a) of Regulation 2017/1001, must be interpreted as meaning that the territorial scope of the use is not a separate condition for genuine use but one of the factors determining that use, which must be included in the overall analysis and examined at the same time as other such factors, and that the words ‘in the Union’ are intended to define the geographical market serving as the reference point for any analysis as to whether an
EU trade mark has been put to ‘genuine use’.
Secondly, the phrase ‘genuine use in the Union’, within the meaning of
Article 18(1) of Regulation 2017/1001, means that use of the EU trade mark in third States cannot be taken into account (see, to that effect, judgements of 19 December 2012, Leno Merken, C‑149/11, EU:C:2012:816, paragraphs 36 to 38 and 58, and of 7 November 2019,
Intas Pharmaceuticals v EUIPO – Laboratorios Indas (INTAS), T‑380/18, EU:T:2019:782, paragraph 74).
33      In the present case, in the first instance, it is necessary to examine the assessment that, since the services covered by the contested mark are, in any event, provided outside the territory of the European Union, the evidence relating to those services cannot be relevant for the purposes of establishing genuine use of that mark.
34      In that regard, first, it must be held that the Board of Appeal erred in finding that the contested mark could not immediately be put to genuine use in the European Union, because the applicant’s hotel and ancillary services are provided in the United States.
As the parties note, the Board of Appeal erred in not distinguishing between the place of those provisions of services and the place of use of the mark. Only the latter is relevant to examination of the genuine use of an EU trade mark.
35      As, in essence, the applicant is claiming, the use of a trade mark is demonstrated by multiple types of acts and those relevant for the purposes of establishing its genuine use cannot be limited solely to the acts of provision of the goods or services it covers.
In particular, it is apparent from Article 9(3)(b) and (e) of Regulation 2017/1001 that, under the conditions set out in paragraph 2 thereof, the proprietor of an EU trade mark may prohibit a third party from using a sign in the course of trade in order to offer goods, put them on the market or stock them for those purposes under the sign, or from offering or supplying services under the sign, as well as from using the sign on business papers and in advertising. Taking account of the acts of use of a trade mark recognised by Regulation 2017/1001, such as the acts of advertising and of offering for sale, on which the applicant is relying in the present case, those acts are therefore relevant for the purposes of establishing genuine use of the contested mark in so far as they occur in the relevant territory.
36      Secondly, indeed as the Board of Appeal noted in the contested decision, it follows from the case-law that, since the concept of genuine use in the European Union involves use of the mark in the European Union, the use of that mark in third States cannot be taken into account for the purposes of establishing genuine use of that mark (judgment of 19 December 2012, Leno Merken, C‑149/11, EU:C:2012:816, paragraph 38).
37      However, it cannot be inferred from that case-law that, given the fact that the services at issue are provided outside the relevant territory of the European Union, the acts of use of the contested mark seeking to promote and to offer for sale such services are necessarily taking place outside that territory.
38      As is apparent from the case-law referred to in paragraph 31 above, it is sufficient to state that there is genuine use of a trade mark where that mark is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods and services for which it has been registered, in order to create or preserve an outlet for those goods or services. Even if the applicant were to supply goods or services outside the European Union, it is conceivable that the applicant would make use of that mark in order to create or preserve an outlet for those goods and services in the European Union.
39      Moreover, such an interpretation is supported by EUIPO guidelines. Those state that, where the goods or services covered by the contested mark are provided abroad, such as holiday accommodation or particular products, advertising alone may be sufficient to amount to genuine use (EUIPO Guidelines for examination of European Union trade marks, Part C Opposition, Section 6 Proof of use, paragraph 2.3.3.3 (use in advertising)).
40      Therefore, as the parties submit, the Court must hold that the Board of Appeal’s finding by which it excluded all the evidence concerning the applicant’s hotel and ancillary services in the United States was based on a false premiss.
41      Secondly, it is necessary to examine the Board of Appeal’s assessment that, in any event, since the contested mark is not registered for ‘advertising’, ‘booking’, ‘travel agency’ or ‘sale[s]’ services, its proprietor cannot usefully adduce evidence referring to advertisements or to offers for sale.
42      In that regard, it is sufficient to note that it follows from paragraph 35 above that advertisements and offers for sale constitute acts of use of a trade mark. Therefore, those are relevant in order to demonstrate use in respect of the services or goods for which the contested mark is registered, in so far as those services or goods are the subject of advertisements and offers for sale.
43      In the present case, it is common ground that the evidence adduced by the applicant is intended to demonstrate use of the contested mark for the services for which it was registered, namely hotel and ancillary services, in particular by means of advertisements and offers for sale.
44      Therefore, the Board of Appeal’s assessment set out in paragraph 41 above is clearly incorrect.
45      Thus it must be held that none of the grounds contained in the contested decision support the conclusion that the evidence of genuine use of the contested mark referring to advertisements and offers for sale of the applicant’s hotel and ancillary services in the United States and targeted at consumers in the European Union is excluded.
46      Therefore it follows from the foregoing that the contested decision is unlawful.
47      In accordance with the case-law stemming from the judgment of 15 January 2003, Mystery Drinks v OHIM – Karlsberg Brauerei (MYSTERY) (T‑99/01, EU:T:2003:7, paragraph 36), EUIPO submits that the Board of Appeal’s error is not sufficient to lead to annulment of the contested decision in so far as it has no bearing on its outcome, since the evidence adduced by the applicant is not sufficient to establish genuine use of the contested mark.
48      As has been stated in paragraph 29 above, the Board of Appeal indicated that its assessment excluded evidence intended to demonstrate the place of genuine use of the contested mark in the European Union in order to promote and to offer for sale the services provided by the applicant outside the territory of the European Union.
49      It follows from the foregoing that the contested decision is vitiated by an error of assessment, since the evidence in question was improperly excluded from the review carried out by the Board of Appeal of the establishment of the place of genuine use.
Such an error calls into question any possible alternative assessment of that evidence made by the Board of Appeal when assessing all the relevant evidence.
50      Consequently, EUIPO’s argument that the Board of Appeal’s error is not sufficient to lead to annulment of the contested decision cannot succeed.
51      Accordingly, it is not for the Court to assess those same arguments and that same evidence in the context of the application for annulment of the contested decision. In the context of such an application, the Court cannot, in exercising its review of legality, assume the role of the Board of Appeal in order to undertake a factual assessment that the Board failed to carry out.
In the context of an action for annulment, as in the present case, if the Court holds that a decision of the Board of Appeal, called into question in an action brought before it, is vitiated by illegality, it must annul it. It may not dismiss the action while substituting its own reasoning for that of the competent EUIPO body, which is the author of the contested act (see, to that effect, judgment of 9 September 2010, Axis v OHIM – Etra Investigación y Desarrollo (ETRAX), T‑70/08, EU:T:2010:375, paragraph 29).
52      Similarly, effect cannot be given to EUIPO’s claim that, due to the alleged absence of any argument by the applicant before the Court as regards services ‘other than hotel services’ – which the applicant refers to as ‘ancillary services’ – included in Classes 38, 39, 41, 43 and 44, the revocation of the mark at issue, in so far as it covers such services, should be confirmed.
53      The applicant submits, in essence, that the errors in law it alleges render the whole of the contested decision unlawful, except, as has been noted in paragraph 17 above, as regards the goods in Classes 18 and 25.
It cannot therefore be inferred, either from its heads of claim or from its application, that the applicant intended not to challenge the Board of Appeal’s assessment concerning such services.
54      Accordingly, having regard to the foregoing considerations, the first complaint in the first part of the applicant’s single plea in law must be upheld and the contested decision must be annulled in respect of the services at issue, without it being necessary to examine the second complaint in the first part, and the second part of the single plea in law.
Costs
55      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.
56      The applicant has claimed that EUIPO should be ordered to pay the costs incurred by the applicant before the Court and ‘below’.
57      As regards the expenses necessarily incurred ‘below’ whilst it may be understood from those terms that the applicant is referring to the entire proceedings before EUIPO, such an application cannot be granted in so far as would cover the proceedings before the Cancellation Division. Under Article 190(2) of the Rules of Procedure, costs necessarily incurred by the parties for the purposes of the proceedings before the Board of Appeal are to be regarded as recoverable costs. The same does not, however, apply to costs incurred for the purposes of proceedings before the Cancellation Division (see, by analogy, judgment of 7 December 2017, Coca-Cola v EUIPO – Mitico (Master), T‑61/16, EU:T:2017:877, paragraph 126
and the case-law cited).
58      Accordingly, the applicant’s request that EUIPO, having been unsuccessful, be ordered to pay the costs, can be allowed only as regards the costs necessarily incurred by the applicant for the purposes of the proceedings before the Court and the Board of Appeal.
On those grounds,
THE GENERAL COURT (Ninth Chamber)
hereby:
1.      Annuls the decision of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 27 November 2020 (Case R 828/2020-5) as regards the services in Classes 38, 39, 41, 43 and 44;
2.      Orders EUIPO to bear, in addition to its own costs, those incurred by Standard International Management LLC, including those incurred for the purposes of the proceedings before the Board of Appeal.
Costeira
Kancheva
Perišin
Delivered in open court in Luxembourg on 13 July 2022.
E. Coulon
S. Papasavvas
Registrar
President
*      Language of the case: English.