CJ, 28-11-2019, nr. C-702/18 P

There are significant differences between the various language versions of Article 76(1) of Regulation No 207/2009. Whereas the English language version specifies that, in opposition proceedings, EUIPO can only take into account ‘facts, evidence and arguments’ submitted by the parties and the ‘relief sought’ by them, in other language versions the rule seems to be less strict.

What appears to be unquestionable from all language versions of the regulation is that in opposition proceedings, as in other types of proceedings, the Board of Appeal must remain within the limits of the relief sought by the parties. In other words, the Board of Appeal cannot proceed ultra petita when adjudicating a dispute.

However, when it comes to the detail of the parties' interaction with the Board of Appeal, their arguments of fact and law and the submission of evidence, the text of Article 76(1) of Regulation No 207/2009 is far from consistent.

For example, in some language versions, that provision limits the scope of the Board of Appeal's review to ‘grounds’ and not ‘arguments’. 10. That is a rather significant difference, since obviously different arguments may be put forward in support of a single ground. Moreover, while some versions, like the English one, expressly mention issues of both law and fact, 11. or use terms which may be said to encompass both concepts, 12. in other versions the rule is limited to allegations of fact (and does not mention ‘grounds’ or ‘arguments’) 13. or, vice versa, is limited to ‘grounds’ or ‘arguments’ (without referring explicitly to ‘facts’ or ‘evidence’). 14.

The English version of Article 76(1) of Regulation No 207/2009 thus appears to be among the most restrictive when it comes to the Board of Appeal's scope of review. 15. A number of other language versions are much more open in that regard. Overall, there is a distinct lack of terminological precision as to how exactly the examination should be restricted.

According to settled case-law, where there is a divergence between various language versions, the provision in question must be interpreted by reference to the purpose and general scheme of the rules of which it forms part. 16.

The key to the systemic interpretation of Article 76(1) of Regulation No 207/2009 lies in the distinction between absolute grounds for refusal (provided for in Article 7 of Regulation No 207/2009) and relative grounds for refusal (set out in Article 8 of that regulation). The former are essentially concerned with the protection of public policy interests and the intrinsic registrability of a mark, 17. whereas the latter are concerned with the protection of private commercial interests in disputes between private parties. 18.

EUIPO may (and should) investigate issues pertaining to absolute grounds for refusal, of its own motion where necessary. The protection and enforcement of the interests underlying the absolute grounds for refusal cannot, as a matter of principle, depend on the action of private parties, whose interests in a specific case may or may not coincide with the public interest.

By contrast, where issues concerning the registrability of a mark stem merely from the existence of earlier rights, it is reasonable that EUIPO's assessment is confined to the arguments of law and fact provided by the parties concerned and their requests to EUIPO. Simply put, in those cases a problem of registrability only arises if and to the extent that the proprietor of earlier rights takes issue with the registration.

Against that background, it seems judicious to me to interpret Article 76(1) of Regulation No 207/2009 as, broadly speaking, making clear that in the latter situation it is for the parties to make their case before EUIPO. They are required to put forward all matters of law and fact that they deem relevant to the dispute and, where appropriate, to provide supporting evidence.

However, that then obviously begs the question as to the level of detail and specificity that the parties' arguments of law and fact before EUIPO are required to meet.

In my view, Article 76(1) of Regulation No 207/2009 cannot be read as obliging the Board of Appeal to refrain from examining matters of law or fact that, despite not having been specifically raised by one of the parties, are inextricably linked to those raised by the parties.

For example, once a given matter has been put before it, the Board of Appeal cannot be expected to turn a blind eye to provisions of Regulation No 207/2009 that, although not referred to by the parties, are applicable to the situation. Similarly, the legal reasoning that the Board of Appeal ought to follow to rule on a given question raised by the parties might require it to go through various steps. The fact that the parties might not have discussed one or more of those steps does not mean that the Board of Appeal cannot touch upon them.

This reading of the provision is borne out by the case-law according to which matters of law put forward before the Board of Appeal also include any matters of law which must necessarily be examined for the purpose of assessing the facts and evidence relied on by the parties and for the purpose of allowing or dismissing the arguments, even if the parties have not put forward a view on those matters and even if EUIPO has omitted to rule on that aspect. 19.

That is true, in my view, on one condition: that the Board of Appeal is able to rule on those matters of law or fact. In other words, the Board of Appeal must have all the information required to rule on those matters at its disposal. For this reason, the Board of Appeal may, regardless of the parties' allegations, rule on the basis of facts of common knowledge, provided that the affected party is given the opportunity to prove an error in assessing that common knowledge of those facts. 20. Conversely, EUIPO cannot be expected to raise and adjudicate on, ex officio, issues on which the burden of allegation and proof rests upon the parties.

The above principles are both relevant and important for the delimitation of the scope of the General Court's review, under Article 188 of the Rules of Procedure of the General Court, of arguments of law or fact that the parties put forward for the first time in the course of judicial proceedings.

According to settled case-law, the review of the legality of decisions of the Boards of Appeal which the General Court is required to undertake must be carried out ‘in the light of the factual and legal context of the dispute as it was brought before the Board of Appeal’. 21.

However, that does not mean that the General Court is bound by an incorrect assessment of the facts by that Board, since that assessment is part of the findings the legality of which is being challenged before it. 22. More generally, the EU Courts have held that, although they must rule only on the heads of claim put forward by the parties, whose role it is to define the framework of the dispute, they cannot confine themselves to the arguments put forward by the parties in support of their claims, or they might be forced to base their decisions on erroneous legal considerations. 23.

The logic underlying that case-law is that the EU Courts cannot be forced to ‘wear blinkers’ when reviewing EUIPO's findings. In order to check whether EUIPO has correctly interpreted and applied the relevant provisions of Regulation No 207/2009, the EU Courts may need to deal with certain issues of law or fact that, regardless of the parties' submissions, cannot be overlooked. A different approach could in fact lead those courts to endorse a manifestly incorrect interpretation or application of those provisions.

Against that background, the EU Courts have made clear that there are a number of issues that, despite not having been the subject of the parties' submissions in the context of an opposition procedure, should nonetheless be addressed by EUIPO and, as a consequence, may be raised, even for the first time, before the General Court.

First, alleged breaches of essential procedural requirements by EUIPO form part of the legal framework of the case, regardless of whether or not those issues had been raised and debated by the parties before the Board of Appeal. 24.

Second, and more importantly for the present case, Article 76(1) of Regulation No 207/2009 and Article 188 of the Rules of Procedure of the General Court cannot be interpreted as barring the parties from questioning EUIPO's assessment with regard to elements of law or fact which that office was required to consider (if need be, of its own motion) and was able to adjudicate upon.

That may be the case, inter alia, in relation to questions concerning the distinctiveness of an earlier trade mark by reference to which it is alleged that the mark applied for gives rise to a likelihood of confusion.

It should be recalled that, according to well-established case-law, the likelihood of confusion between two signs must be assessed globally, taking into account all factors relevant to the circumstances of the case. 25. Importantly, those factors include the distinctiveness of the earlier trade mark which — as the Court has stated — ‘determines the extent of protection’ afforded to the earlier mark: the more distinctive that mark, the greater the likelihood of confusion. 26. After all, the distinctive character of the earlier trade mark is a factor that ‘must be taken into account when determining whether the similarity between the goods or services covered by the two trade marks is sufficient to give rise to the likelihood of confusion’. 27.

That being the case, once a party invokes a likelihood of confusion between an earlier mark and a sign for which registration is sought, EUIPO cannot determine the existence of such likelihood without examining the distinctiveness of the earlier mark. However, the fact that issues concerning the distinctiveness of the earlier mark have been duly raised before the Board of Appeal does not mean that any argument in that respect is admissible before the General Court.

It must be borne in mind that the case-law referred to in point 54 above is predicated on the idea that there are certain matters of fact or law the evaluation of which is an inevitable step in the assessment to be carried out by EUIPO. Although the parties may obviously make submissions with respect to those elements, 28. EUIPO is in principle able to assess them of its own motion. A failure to take one of those factors into account, or an evaluation of it made according to incorrect criteria, is an error of law that may be invoked for the first time before the General Court.

On the other hand, there are elements of the analysis that, in the absence of arguments or evidence from the parties, EUIPO would be unable to assess. It is for the parties to make submissions with respect to those elements. EUIPO cannot be reproached for not taking into account matters of fact or law that the parties did not bring to its attention. Failure to raise those issues in a timely manner before EUIPO thus renders them inadmissible before the General Court.

The distinction between those two different types of issues is evident in the Hooligan case, 29. the facts of which are similar to those of the present case. In that case, the Opposition Division had upheld the opposition filed by the proprietor of two earlier trade marks (OLLY GAN), as it concluded that there was a likelihood of confusion with the trade mark applied for (HOOLIGAN). However, following an appeal filed by the applicants for registration, the Board of Appeal annulled the Opposition Division's decision and rejected the opposition. The owner of the earlier marks, who did not participate in the procedure before the Board of Appeal, challenged the latter's decision before the General Court. In that context, it relied on a high degree of distinctiveness of its marks, both inherently and in terms of reputation. For its part, the then Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) requested the General Court to reject those arguments as inadmissible, given that they had not been put forward before the Board of Appeal.

The General Court upheld OHIM's objection only in part.

The General Court observed that ‘reliance on a high degree of distinctiveness constitutes a plea containing a mixture of fact and of law’. In view of that observation, it drew a distinction according to whether or not OHIM was able to rule on the arguments of the parties, having regard to the evidence they had submitted. On that basis, it held that arguments concerning the distinctive character resulting from its reputation were ‘largely a purely conjectural matter’ and it was thus for the parties to provide sufficient information and documents in order to enable OHIM to rule on them. In the absence of arguments and evidence from the parties, OHIM could not be criticised for not having considered that element. The applicant's plea relating to the reputation of its earlier marks and the related evidence was therefore dismissed as inadmissible. 30.

Conversely, the General Court found that the inherent distinctive character of an earlier trade mark was a matter that OHIM was required to examine, if necessary of its own motion, once opposition proceedings had been brought. It pointed out that, unlike reputation, the assessment of intrinsically distinctive character does not presuppose any matter of fact which is for the parties to establish. Indeed, OHIM alone is able to detect and assess the inherent distinctiveness of the earlier mark. For that reason, the General Court held that the inherent distinctive character of the applicant's earlier marks in the assessment of the likelihood of confusion was one of the matters of law which had to be resolved in order to ensure a correct application of the trade mark regulation then in force, having regard to the facts, arguments and evidence put forward by the applicant before OHIM. Consequently, the applicant's argument relating to that issue was examined on its merits. 31.

Those principles have subsequently been confirmed in other judgments of the General Court, in respect of the assessment of the inherent distinctive character of the signs in question, 32. or of other elements that constitute unavoidable steps in the analysis required of EUIPO, and thus cannot be left to the free assessment of the parties and must be raised ex officio where appropriate. 33.

Although, admittedly, the distinction between those two types of arguments may not always be easy to make, for the reasons illustrated above, I do not see any good reason, in the present case, to depart from the General Court's established case-law. Consequently, in paragraphs 87 to 90 of the judgment under appeal, the General Court erred in law in holding Primart's arguments concerning the allegedly weak inherent distinctive character of the earlier mark to be inadmissible.

That finding does not result in an infringement of Article 188 of the Rules of Procedure of the General Court, 34. as argued by Bolton Cile España. The arguments submitted by Primart relating to the intrinsic distinctive character of the earlier mark pertained to an issue that had been addressed by the Board of Appeal and could therefore properly be put before the General Court. In the contested decision, the Board of Appeal found the distinctive character of the earlier mark to be average, taking account of the meaning of the word ‘prima’ and the manner in which that word would be understood by the relevant public (paragraphs 22 and 27 of the contested decision). 35.

As Primart rightly argues, in so far as the Board of Appeal took those aspects into consideration of its own motion, it must have the right to challenge the related findings before the General Court. It is hardly necessary to point out that, under Article 263 TFEU, especially when read in the light of Article 47 of the Charter of Fundamental Rights of the European Union, an applicant must, in principle, be able to contest before the EU Courts each and every issue of fact and law on which an EU body bases its decisions. That is even more the case where, at the appellate administrative level before an EU body, that appellate body is allowed to introduce, of its own motion and for the first time, crucial elements that did not feature previously in the first-instance administrative decision and on which the applicant or parties had no opportunity of being heard.

There is a final relevant, if somewhat subsidiary, consideration of judicial policy. Rigorous application of this principle seems to me to be all the more important now that the Statute of the Court of Justice of the European Union (‘the Statute’) has been amended to introduce a filtering mechanism for appeals brought against decisions of the General Court that in turn review decisions of the independent boards of appeal of certain EU offices and agencies (including, notably, EUIPO). 36. Under the recently introduced Article 58a of the Statute, any such appeal shall not proceed unless the Court of Justice decides that it should be allowed to do so because it raises ‘an issue that is significant with respect to the unity, consistency or development of Union law’.

Therefore, it will be of crucial importance that the General Court maintains the horizontal coherence of its case-law. It of course remains possible for the General Court to depart from lines of case-law previously embraced by it. However, any such departures must be intentional and properly explained and reasoned, ideally by an enlarged formation of that court in order to ensure their visibility and legitimacy.

In conclusion, Primart's ground of appeal, relying on a breach of Article 76(1) of Regulation No 207/2009, is well founded.

Primart considers that because the General Court had not heard its arguments on the distinctive character of the earlier mark, it wrongly assessed that aspect and, as a consequence, the existence of a risk of confusion between the two signs. The judgment under appeal should therefore be set aside. According to Primart, the same fate should befall the contested decision.

For its part, EUIPO considers that, notwithstanding the error of law by the General Court, the judgment under appeal should be upheld. First, it contends that the evidence produced by Primart before the General Court in support of its arguments concerning the meaning of the word ‘prima’ is either irrelevant or inadmissible, thus leaving unsubstantiated its assertion concerning the weak distinctive character of the earlier mark. Second, EUIPO argues that it follows from the contested decision that the allegedly laudatory meaning of the word ‘prima’ in Spanish with regard to the products in question was not a well-known fact and thus escapes review on appeal. Third, EUIPO argues that even if it were accepted that the earlier mark had only a weak distinctive character, this would not affect the conclusion reached in the judgment under appeal. Indeed, there can be a likelihood of confusion even where earlier marks have a weak distinctive character.

The arguments put forward by EUIPO in favour of upholding the judgment under appeal, notwithstanding the error of law identified above, are not convincing.

As mentioned in point 60 above, the Court has consistently stressed that the distinctive character of the earlier mark is an element that must be taken into account in the global assessment required to determine the existence of a likelihood of confusion between two signs. Even if that element is perhaps not always conclusive, it clearly carries significant weight. That being so, the inability of the applicant to challenge before the General Court certain aspects of EUIPO's appraisal of that element is by no means irrelevant to the assessment, as EUIPO seems to imply.

It is true, as EUIPO argues, that the Board of Appeal's findings on this point might ultimately be upheld, even if Primart's arguments were held to be well founded. Indeed, a likelihood of confusion can also arise with regard to marks with a weak distinctive character. 37.

That is, however, immaterial in the present context. The mere possibility that those findings might still stand is not enough to dismiss the appeal. The judgment under appeal could be upheld, despite the error of law identified above, only if that error were shown to be entirely irrelevant for the outcome of the case. In other words, the Board of Appeal's findings with regard to the existence of a likelihood of confusion would have to remain unaffected, regardless of the possible correctness of Primart's argument.

That is not the case in the present proceedings. At this stage, it simply is not known whether Primart's arguments are well founded. More importantly, it is also not known whether, if well founded, the conclusion reached by the Board of Appeal as to the likelihood of confusion would still hold.

The principle of judicial economy, which demands that a decision is not needlessly annulled on a rather ancillary point if the outcome of a fresh assessment would be the same, is certainly important. However, the requirement to conduct a global assessment of the likelihood of confusion makes it impossible to apply that principle to the case at hand. The assessment is like a mix of different ingredients (such as the distinctive character of the earlier mark, the degree of similarity between the signs at issue following a visual, aural and conceptual comparison, the similarity between the goods and services identified, and so on). 38. Depending on the specific circumstances of each case, a change in one of those ingredients may or may not alter the final taste of the mix.

It must also be emphasised that the global assessment is not a simple ‘tick-the-box’ exercise. The various elements that are relevant to the assessment must be evaluated as a whole and, if need be, weighed against each other. The global assessment cannot consist in an examination of each of the various factors taken in isolation, but implies consideration of the interdependence between them. 39.

Therefore, what is crucial in the present case is that if the inherent distinctiveness of the earlier mark is weak (as Primart argues), and not average (as the Board of Appeal found), the conclusion reached on the existence of the likelihood of confusion might, potentially, be different.

As the General Court has recently held, ‘an underestimation of the distinctive character of the earlier mark by the Board of Appeal is likely to vitiate the contested decision with an error as regards the assessment of the likelihood of confusion’. 40. The opposite is, naturally, equally true: an overestimation of the distinctive character of the earlier mark may also have an impact on the assessment of the likelihood of confusion. As EUIPO itself states in its Guidelines, a finding that a trade mark has a low or very low degree of distinctiveness is, in general, ‘an argument against likelihood of confusion’. 41.

In sum, the suggestion appears to be that an appellate court, which is not supposed to engage in factual assessments, would be able to carry out a full and essentially fresh global assessment of the likelihood of confusion in the course of an appeal on a separate point, without having heard any arguments on the likelihood of confusion from the parties, and in so doing could accurately predict the outcome of that exercise if conducted properly by the lower court. That suggestion is reminiscent of an old Czech story about the legendary skill of a blind master clockmaker. 42.

There are two final considerations to be added.

First, it is not for the Court to assess the admissibility, relevance and probative value of the evidence submitted by Primart before the General Court in support of its arguments. In any event, as mentioned in point 67 above, the evaluation of the inherent distinctive character of the earlier mark is not an element which requires the production of evidence from the parties, and may thus be evaluated by EUIPO (and, by extension, by the General Court) of its own motion. EUIPO itself emphasised that aspect in explaining why, in its view, the General Court misapplied Article 76(1) of Regulation No 207/2009. It is therefore not immediately apparent why, in the present context, any such arguments should be relevant.

Second, the General Court's findings in paragraph 91 of the judgment under appeal do not render Primart's ground of appeal ineffective.

In paragraph 91, the General Court notes that, before the Opposition Division, Primart argued that the term ‘prima’ in Spanish means ‘bonus’ (payment) or (female) ‘cousin’, and that those meanings were ultimately accepted by the Board of Appeal in the contested decision. As a result, the General Court ruled that, in the absence of meaning of the earlier mark with regard to the goods concerned, its intrinsic distinctive character was average.

Although it is not entirely clear what the General Court meant by that passage, it seems to me that, whatever the meaning, the General Court's observations do not rectify the error identified above.

That passage could perhaps be understood as meaning that the General Court examined, in the alternative, Primart's arguments on the merits and found them to be unfounded. It thus confirmed what it saw as the correct (and, possibly, only) meanings of the word ‘prima’: bonus and cousin.

If that is so, I agree with EUIPO that, in that part of the judgment under appeal, the General Court made an assessment of fact that, in principle, cannot be reviewed on appeal. However, if that interpretation is correct, the judgment under appeal lacks an adequate statement of reasons for that finding: why did the General Court find Primart's arguments unfounded? Inadequate reasoning is, as is well known, a matter of public policy, which must be raised by the EU judicature of its own motion. 43.

The fact that Primart acknowledged before EUIPO certain meanings of that word can hardly be seen as constituting irrefutable evidence that those are the correct and only possible meanings. In any event, Primart makes a different argument. As far as I understand it, Primart does not dispute the meanings of the word ‘prima’ referred to by EUIPO, and subsequently endorsed by the General Court. What Primart argues is that, having regard to the multiple uses of the word and its etymology (originating from Latin, the language from which modern Spanish largely derives), that word is understood by the relevant public as also having other meanings and, more broadly, as having a laudatory connotation.

No reasons are given in the judgment under appeal to explain why those arguments must be rejected as unfounded. Unlike EUIPO, I fail to see how that assessment of Primart's arguments follows implicitly from the judgment. It is hardly necessary to point out that words can have various meanings. Nor can it automatically be assumed that the relevant public understands only the official language of the Member State(s) in question. 44. In assessing the manner in which a word is understood by the relevant public, the etymology of that word may also be relevant. 45.

At any rate, once it has been concluded that Primart did not need to raise the argument in question during the administrative procedure and could raise it before the General Court for the first time, what Primart did and did not state before EUIPO on the matter becomes of little relevance.

In conclusion, the failure by the General Court to consider whether or not the word ‘prima’ has additional meanings (beyond those identified) and a laudatory connotation and, if so, whether that has an impact on the inherent distinctiveness of the earlier mark constitutes an error that inevitably requires a new assessment of the case. The substance of the arguments on the inherent distinctive character of the earlier mark must be addressed and, where appropriate, a new assessment as to the existence of a likelihood of confusion between the two signs in question must be carried out.

Therefore, pursuant to Article 61 of the Statute, the case should be referred back to the General Court. Indeed, the assessment of Primart's arguments requires an examination of new arguments of law and fact, and of new evidence. Whether or not that assessment can be carried out by the General Court, or whether the case would in fact need to be remitted back to the Board of Appeal, is a decision for the General Court, in view of the arguments presented on the substance of the case by both parties. It is only after having carried out that assessment that the General Court can conclude whether or not the contested decision should stand. For that reason, Primart's request that the contested decision also be annulled should be rejected in the context of the present appeal.