M/S. Indeutsch International v EUIPO - 135 Kirkstall (Representation de chevrons entre deux lignes parallèles) (EU trade mark - Judgment) [2021] EUECJ T-124/20 (06 October 2021)

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(EU trade mark – Invalidity proceedings – EU figurative mark representing chevrons between two parallel lines – Absolute ground for refusal – Sign of which an EU trade mark may consist – Article 7(1)(a) of Regulation (EC) No 207/2009 (now Article 7(1)(a) of Regulation (EU) 2017/1001) – Distinctive character – Article 7(1)(b) of Regulation No 207/2009 (now Article 7(1)(b) of Regulation 2017/1001) – Obligation to rule on the action – Article 71(1) of Regulation 2017/1001 – Cross-claim)

M/S. Indeutsch International, established in Noida (India), represented by G. Glas, lawyer, D. Stone, A. Dykes, A. Leonelli, K. Hughes, Solicitors, and S. Malynicz QC,

European Union Intellectual Property Office (EUIPO), represented by D. Gája, acting as Agent,

the other party to the proceedings before the Board of Appeal of EUIPO, intervener before the General Court, being

135 Kirkstall, Inc., formerly Crafts Americana Group, Inc., established in Vancouver, Washington (United States), represented by M. Edenborough QC, and J. Fish, Solicitor,

ACTION brought against the decision of the Grand Board of Appeal of EUIPO of 13 December 2019 (Case R 2672/2017-G), relating to invalidity proceedings between Crafts Americana Group and M/S. Indeutsch International,

composed of M.J. Costeira, President, D. Gratsias (Rapporteur) and T. Perišin, Judges,

having regard to the application lodged at the Court Registry on 25 February 2020,

having regard to the response of EUIPO lodged at the Court Registry on 8 July 2020,

having regard to the response of the intervener lodged at the Court Registry on 10 July 2020,

having regard to the cross-claim of the intervener lodged at the Court Registry on 10 July 2020,

having regard to the order of 16 November 2020 rejecting the application of Crafts Group, LLC to replace 135 Kirkstall,

having regard to the pleas of inadmissibility raised by EUIPO against the cross-claim by document lodged at the Court Registry on 9 December 2020,

having regard to the intervener’s observations on the pleas of inadmissibility lodged at the Court Registry on 16 February 2021,

having regard to the order of 8 April 2021 reserving the pleas of inadmissibility for the final judgment,

having regard to the response of EUIPO to the cross-claim lodged at the Court Registry on 23 April 2021,

1 On 15 February 2010, the applicant, M/S. Indeutsch International, 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)).

4 Registration of that mark was sought in respect of ‘knitting needles’ and ‘crochet hooks’ in Class 26 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.

5 That mark was registered on 10 August 2010 and published in Community Trade Marks Bulletin No 74/2010 of 26 April 2010.

6 On 9 January 2013, Crafts Americana Group, Inc., the former name of the intervener 135 Kirkstall, Inc., filed an application for a declaration of invalidity with EUIPO in respect of that mark pursuant to Article 52(1)(a) of Regulation No 207/2009, read in conjunction with Article 7(1)(a) and (b) of that regulation (now, respectively, Article 59(1)(a) and Article 7(1)(a) and (b) of Regulation 2017/1001).

7 By decision of 7 May 2014, the Cancellation Division rejected the application for a declaration of invalidity. The Cancellation Division considered, in particular, that the graphic representation of the mark at issue was clear, precise, self-contained, easily accessible, intelligible, durable and objective, so that it satisfied the requirements of Article 7(1)(a) of Regulation No 207/2009. In addition, with regard to the application of Article 7(1)(b) of Regulation No 207/2009, the Cancellation Division found that the mark at issue had distinctive character. In that regard, the Cancellation Division emphasised that the mark at issue was not a three-dimensional mark and did not represent the appearance of the goods covered by its registration.

8 On 14 July 2014, the intervener filed a notice of appeal with EUIPO, pursuant to Articles 58 to 64 of Regulation No 207/2009 (now Articles 66 to 71 of Regulation 2017/1001), against the decision of the Cancellation Division. In support of its appeal, the intervener raised grounds of appeal relating both to the application of Article 7(1)(a) of Regulation No 207/2009 and to the application of Article 7(1)(b) of that regulation. Accordingly, the intervener claimed that the mark at issue should be declared invalid pursuant to Article 7(1)(a) of Regulation No 207/2009 and, in the alternative, pursuant to Article 7(1)(b) of that regulation.

9 By decision of 5 November 2015 (‘the Board of Appeal’s first decision’), the Board of Appeal annulled the decision of the Cancellation Division on the ground that the mark at issue lacked distinctive character within the meaning of Article 7(1)(b) of Regulation No 207/2009.

10 The Board of Appeal considered, in particular, that the mark at issue, referred to by its proprietor as the ‘chevron mark’, represented a pattern placed on part of the goods or covering the whole of their surface. On the basis of that finding, the Board of Appeal took into account photographs and samples of the goods marketed by the applicant at the time of filing the trade mark application, in order to identify its essential characteristics. In that context, the Board of Appeal found that the ornamental appearance of the mark at issue led the relevant public, composed of average consumers of knitting needles and crochet hooks, to perceive that mark as a decoration of those goods. Moreover, the Board of Appeal took the view that the relevant public would perceive that mark as having the appearance of wood grain, the material from which the goods concerned are made, and not as an indication of commercial origin. According to the Board of Appeal, it follows that the mark at issue did not have the distinctive character required by Article 7(1)(b) of Regulation No 207/2009 in order to fulfil the function of a trade mark.

11 Furthermore, the Board of Appeal stated that it was not necessary to rule on the other ground for invalidity based on Article 7(1)(a) of Regulation No 207/2009. In addition, since the applicant had argued before the Cancellation Division that the mark at issue had, in any event, acquired distinctive character as a consequence of the use that had been made of it, in accordance with Article 7(3) and Article 52(2) of that regulation (now, respectively, Article 7(3) and Article 59(2) of Regulation 2017/1001), the Board of Appeal remitted the case to the Cancellation Division to allow the latter to decide on that issue.

12 By application lodged at the Court Registry on 21 January 2016, the applicant brought an action for annulment of the Board of Appeal’s first decision.

13 By judgment of 21 June 2017, M/S. Indeutsch International v EUIPO – Crafts Americana Group (Representation of chevrons between two parallel lines) (T‑20/16, EU:T:2017:410), the Court annulled the Board of Appeal’s first decision. It is apparent from paragraphs 29 to 47 of that judgment that the Court found that, by relying on the fact that a pattern in the form of multicoloured chevrons appears on the surface of the applicant’s goods in order to examine the distinctive character of the appearance of those goods instead of basing that examination on the mark at issue as registered, the Board of Appeal took account of substantially altered characteristics of that mark. The Court took the view that that fact constituted an infringement of Article 7(1)(b) of Regulation No 207/2009.

14 Following the judgment of 21 June 2017, Representation of chevrons between two parallel lines (T‑20/16, EU:T:2017:410), the case was assigned to the Grand Board of Appeal of EUIPO.

15 By decision of 13 December 2019 (‘the contested decision’), the Grand Board of Appeal again annulled the decision of the Cancellation Division and declared the mark at issue to be invalid on the ground that it lacked distinctive character within the meaning of Article 7(1)(b) of Regulation 2017/1001.

16 In particular, the Grand Board of Appeal found, first of all, that the relevant public is composed of average end consumers of the goods covered by the mark at issue, who are reasonably well informed and reasonably observant and circumspect, and that it was necessary to assess the distinctive character of the mark at issue, in the light of that public, in the form in which it was applied for and registered (paragraphs 26 and 34 of the contested decision). In that regard, the Grand Board of Appeal observed, first, that the comparison between the form in which the mark at issue was registered and the form in which it was used has no place in the assessment of the distinctive character of the mark at issue under Article 7(1)(b) of Regulation 2017/1001 (paragraph 31 of the contested decision). Second, the assessment of distinctiveness of a mark must be based on the perception of the consumer when he or she sees the sign with the goods it covers (paragraph 32 of the contested decision). Thus, the Grand Board of Appeal took account of the fact that the mark at issue may, as applied for and registered, be applied to the surface of the goods it covers, such that it constitutes a mark corresponding to the appearance of those goods. However, account should be taken of the registered form of marks and not other forms resulting from different horizontal or vertical representations of the repetition of chevrons (paragraphs 35 to 46 of the contested decision).

17 Next, the Board of Appeal found that the mark at issue lacks distinctive character as a simple geometrical shape, but also as a decorative element on a knitting needle or a crochet hook. Accordingly, the Grand Board of Appeal took the view that the repetition of chevrons between two lines comprising the mark at issue does not remove the simplicity which characterises that mark and deprives it of any distinctive character. The fact that the applicant is the first undertaking to market knitting needles with an ornamental surface does not alter that assessment. The same is true of the application of the mark at issue to the surface of the goods which it covers, in the black and white version in which it was applied for and registered, without the convexities and concavities characterising the appearance of those goods. The application of the mark at issue to the surface of knitting needles or crochet hooks is perceived as purely ornamental, since ornamentation cannot be perceived as being a characteristic specific only to the applicant’s goods. The distinctive character of the mark at issue must be examined in the form in which it was registered, and not in the form in which it is currently or will potentially be used. The examination in question confirms the simplicity of the geometric pattern which constitutes the mark at issue and its lack of any distinctive character within the meaning of Article 7(1)(b) of Regulation 2017/1001 (paragraphs 47 to 58 of the contested decision).

18 Against that background, the Grand Board of Appeal annulled the decision of the Cancellation Division, stating that there was no need to examine whether the mark at issue fell within the scope of Article 7(1)(a) of Regulation 2017/1001 (paragraphs 62 and 63 of the contested decision).

19 Lastly, since the applicant had argued before the Cancellation Division that the mark at issue had, in any event, acquired distinctive character as a consequence of the use that had been made of it, in accordance with Article 7(3) of that regulation, the Board of Appeal remitted the case to the Cancellation Division for a ruling on that matter (paragraphs 59 to 61 and 64 of the contested decision).

– dismiss the cross-claim as inadmissible or, in the alternative, as partly unfounded;

– order the applicant to pay the costs relating to the main action and order the intervener to pay the costs relating to the cross-claim.

22 In the response to the main action and in the cross-claim, the intervener contends that the Court should:

– declare that the mark at issue has been registered in infringement of Article 7(1)(a) of Regulation No 207/2009;

– in the alternative, alter the contested decision and remit the case to the Cancellation Division for a ruling on the ground for annulment under Article 7(1)(a) of Regulation No 207/2009;

– order the applicant and EUIPO to pay the costs relating to the main action and the cross-claim, including those incurred before the Grand Board of Appeal.

23 Given the date on which the application for registration at issue was filed, namely 15 February 2010, which is decisive for the purposes of identifying the applicable substantive law, the facts of the case are governed by the substantive provisions of Regulation No 207/2009 (see, to that effect, judgment of 23 April 2020, Gugler France v Gugler and EUIPO, C‑736/18 P, not published, EU:C:2020:308, paragraph 3 and the case-law cited).

24 Consequently, in the present case, as regards the substantive rules, the references made by the Grand Board of Appeal in the contested decision and by the parties to the provisions of Regulation 2017/1001 must be understood as referring to the corresponding provisions of Regulation No 207/2009.

25 In addition, since procedural rules are generally held to apply on the date on which they enter 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 2017/1001.

26 In support of the main action, the applicant raises three pleas in law, alleging infringement of Article 7(1)(b) of Regulation No 207/2009 and relating to the assessment of the distinctive character of the mark at issue.

27 The intervener, for its part, submits, in support of the cross-claim, a plea in law alleging infringement of Article 7(1)(a) of Regulation No 207/2009.

28 It should be noted in that regard that the words used in the response and in the cross-claim, according to which the ‘proposed intervener’ sets out the forms of order detailed in paragraph 22 above must be read in the light of the fact that on 10 July 2020, the date on which the response and the cross-claim were lodged, an application for replacement of the intervener was also made by Crafts Group, LLC, which acquired the intervener’s assets and was represented by the same lawyers as the intervener. That application for replacement was rejected by order of the President of the Ninth Chamber of the General Court of 16 November 2020, in accordance with Article 174 of the Rules of Procedure. It follows that those words cannot be read as precluding the lawyers who were informed as representatives in the response and the cross-claim from lodging those pleadings also on behalf of the intervener, which, moreover, duly authorised them for the purposes of the present case. A reading of the words at issue according to which the lawyers in question also acted on behalf of the intervener is additionally apparent from paragraph 8 of the response and of the cross-claim as well as from paragraph 12 of the order of 16 November 2020, without the applicant or EUIPO having submitted observations to the contrary at any stage of the proceedings.

30 In support of the cross-claim, the intervener submits that it is not clear from paragraphs 43, 44 and 62 of the contested decision whether the Grand Board of Appeal rejected the application for a declaration of invalidity of the mark at issue in so far as it is based on Article 7(1)(a) of Regulation No 207/2009.

31 According to the intervener, if it were found that the Board of Appeal had rejected the application for a declaration of invalidity in so far as it is based on that provision, that decision would be incorrect on account of the imprecision of the mark at issue, assessed in the light of the description accompanying it, referred to in paragraph 3 above. The registration at issue leaves open as to whether the ‘mark’, which comprises a repeated design, consists of one or several chevrons, so that the spacing between chevrons – a crucial element – is uncertain. On the other hand, if it were considered that the Grand Board of Appeal had not ruled on the application for a declaration of invalidity in so far as it is based on Article 7(1)(a) of Regulation No 207/2009, the contested decision would be vitiated by an infringement of essential procedural requirements or a misuse of powers, since it would eliminate one of the two grounds on which the application for a declaration of invalidity is based without examining it and without instructing the Cancellation Division to examine it.

32 Moreover, the intervener claims, first, that it could not bring an action against the Board of Appeal’s first decision and, second, that, despite the fact that the ground for invalidity under Article 7(1)(a) of Regulation No 207/2009 had been brought before the Grand Board of Appeal, there is currently no decision from the Board of Appeal ruling on that ground and none of the decisions adopted so far can be regarded as giving a definitive answer on that matter.

33 EUIPO contends that the first three heads of claim contained in the cross-claim are inadmissible.

34 At the hearing, the applicant, which, having failed to lodge a response to the cross-claim, was invited by the Court to submit its observations on it, disputed its admissibility. In particular, the applicant submits that none of the first three heads of claim contained in that cross-claim is admissible.

35 As regards the first head of claim contained in the cross-claim, seeking dismissal of the main action, it must be held that it is inadmissible. In accordance with Article 184(1) of the Rules of Procedure of the General Court, the form of order sought in the cross-claim may seek only the annulment or alteration of the contested decision.

36 As regards the second and third heads of claim contained in the cross-claim, it should be recalled that an application for the Court to adopt the decision which, according to one party, the Board of Appeal should have taken is within the scope of the power to alter decisions of the Board of Appeal provided for under Article 72(3) of Regulation 2017/1001 (see judgment of 9 September 2011, Deutsche Bahn v OHIM – DSB (IC4), T‑274/09, not published, EU:T:2011:451, paragraph 22 and the case-law cited). According to Article 64(5) of that regulation, if the examination of the application for a declaration of invalidity reveals that the EU trade mark should not have been registered in respect of some or all of the goods or services for which it is registered, it is to be declared invalid in respect of those goods or services. Since the Board of Appeal may exercise any power within the competence of the Cancellation Division, in accordance with Article 71(1) of Regulation 2017/1001, it may also declare the mark at issue invalid.

37 It follows that the intervener’s head of claim by which it requests the Court to declare that the mark at issue has been registered in infringement of Article 7(1)(a) of Regulation No 207/2009 seeks alteration to that effect of the contested decision and, thus, is among the forms of order which may be made in accordance with Article 72(3) of Regulation 2017/1001. That said, the question whether, in the circumstances of the present case, the Court may grant that request will be examined in paragraph 76 below.

38 The same is true of the third head of claim contained in the cross-claim, seeking, in the alternative, that the Court alter the contested decision and remit the case to the Cancellation Division for a ruling on the ground for annulment under Article 7(1)(a) of Regulation No 207/2009. The Board of Appeal also has that power under Article 71(1) of Regulation 2017/1001.

39 EUIPO further submits that the complaint alleging failure to examine the ground for invalidity based on Article 7(1)(a) of Regulation No 207/2009 is also inadmissible. In that regard, EUIPO states that, as the Board of Appeal’s first decision annulled the decision of the Cancellation Division on the basis of Article 7(1)(b) of Regulation No 207/2009 without expressly examining the ground for invalidity based on Article 7(1)(a) of that regulation, but by remitting the case to it for that division to examine whether the mark at issue had acquired distinctive character through use, in accordance with Article 7(3) of that regulation, the Board of Appeal had, by its first decision, implicitly but necessarily rejected that ground for invalidity.

40 In those circumstances, the fact that the intervener did not bring an action, either main or in the form of a cross-claim, against the Board of Appeal’s first decision, in so far as it is affected by it, means that the rejection of the ground for invalidity based on Article 7(1)(a) of Regulation No 207/2009 has become final. It follows, according to EUIPO, that the second and third heads of claim contained in the cross-claim are also inadmissible.

41 In that regard, it must be borne in mind that Article 4 of Regulation No 207/2009 (now, after amendment, Article 4 of Regulation 2017/1001) provides:

‘An EU trade mark may consist of any signs capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.’

3. Paragraph 1(b), (c) and (d) shall not apply if the trade mark has become distinctive in relation to the goods or services for which registration is requested in consequence of the use which has been made of it.’

43 It is apparent from Article 4 of Regulation No 207/2009 that a sign may constitute an EU trade mark if it fulfils the conditions set out in that provision, including that of being capable of being represented graphically. The graphic representation of a mark must be clear, precise, self-contained, easily accessible, intelligible, durable and objective (judgment of 6 June 2019, Deichmann v EUIPO, C‑223/18 P, not published, EU:C:2019:471, paragraph 44).

44 If a sign is capable of being represented graphically within the meaning set out in paragraph 43 above, it may constitute an EU trade mark on the additional condition that it is capable of distinguishing the goods or services of one undertaking from those of other undertakings, that is to say, it may have distinctive character.

45 Thus, according to Article 7(1)(b) of Regulation No 207/2009, ‘trade marks’ which are devoid of any distinctive character are not to be registered.

46 It follows that the distinctive character of a sign can be assessed, for the purposes of its registration as an EU trade mark, only once it has been found that it constitutes a trade mark within the meaning of Article 4 of that regulation, that is to say, from the time when it has been found that it is capable of being represented graphically within the meaning set out in paragraph 43 above.

47 That conclusion is confirmed by the fact that, under Article 7(3) of Regulation No 207/2009, a mark may acquire distinctive character in consequence of the use which has been made of it, whereas this is not possible for a sign which is not capable of being represented graphically within the meaning of Article 4 of that regulation and which is, consequently, refused registration in accordance with Article 7(1)(a) of that regulation.

48 As a result, where an application for a declaration of invalidity is based on the fact that the sign at issue has been registered, first, contrary to the provisions of Article 7(1)(a) of Regulation No 207/2009 and, second, in the alternative, contrary to the provisions of Article 7(1)(b) of that regulation, it is essential to examine, first and foremost, the first of those grounds before assessing, where appropriate, whether the mark has inherent distinctive character or, as the case may be, has acquired such distinctive character through use.

49 It is in the light of those considerations that the admissibility of the cross-claim must be assessed, having regard to EUIPO’s arguments set out, in essence, in paragraphs 39 and 40 above.

50 As stated in paragraph 2 of the contested decision, the intervener submitted, as the first ground for invalidity, that the mark at issue had been registered in infringement of Article 7(1)(a) of Regulation No 207/2009 (see paragraph 6 above). In that regard, the intervener submitted that the image illustrating the mark at issue does not consist of a repeated geometric design, contrary to what was stated in the textual description accompanying it in the application for registration, and that, if that description were to be taken into account in its literal meaning, it could result in a multitude of different geometric designs. According to the intervener, it follows that the graphic representation of the mark at issue does not enable the competent authorities or the operators concerned to perceive with certainty the subject of the protection afforded by the registration of the mark at issue. In the alternative, the intervener claimed that the mark at issue was devoid of any distinctive character and that it had therefore been registered in infringement of Article 7(1)(b) of Regulation No 207/2009.

51 In its decision of 7 May 2014, the Cancellation Division rejected the two grounds put forward in support of the application for a declaration of invalidity (see paragraph 7 above).

52 On 14 July 2014, the intervener filed a notice of appeal with EUIPO calling into question the Cancellation Division’s assessment relating to the application of both Article 7(1)(a) and Article 7(1)(b) of Regulation No 207/2009. In that context, the intervener requested the Board of Appeal to declare the mark at issue invalid on the basis, first, of Article 7(1)(a) of Regulation No 207/2009 and, second, in the alternative, of Article 7(1)(b) of that regulation (see paragraph 8 above).

53 The Board of Appeal examined only the second ground for invalidity relied on in that appeal and upheld that ground. It then annulled the decision of the Cancellation Division and referred the case back to it for the purposes of examining the distinctive character of the mark at issue under Article 7(3) of Regulation No 207/2009, stating that there was no need to examine the ground for invalidity alleging infringement of Article 7(1)(a) of that regulation (see paragraphs 9 to 11 above).

54 As EUIPO submits, the intervener did not bring any action, either main or in the form of cross-claim, against the Board of Appeal’s first decision as regards the ground for invalidity alleging infringement of Article 7(1)(a) of Regulation No 207/2009. In that regard, contrary to the intervener’s submissions (see paragraph 32 above), the Board of Appeal’s first decision adversely affected it in that the Board of Appeal had failed to rule on that ground and referred the case back to the Cancellation Division for the Cancellation Division to examine whether the mark at issue had acquired distinctive character following the use which had been made of that mark.

55 However, the fact that the intervener did not bring an appeal against the Board of Appeal’s first decision is irrelevant, since it cannot be held that that decision definitively settled the issue of whether the mark at issue was registered in infringement of Article 7(1)(a) of Regulation No 207/2009.

56 First, it was the Board of Appeal itself which stated, in paragraph 37 of that decision, that, having regard to the outcome of the second ground for invalidity, alleging infringement of Article 7(1)(b) of Regulation No 207/2009, it was not necessary to rule on the first ground for invalidity, alleging infringement of Article 7(1)(a) of that regulation. Although it is true that, as EUIPO submits, the examination of the ground for invalidity alleging lack of distinctive character presupposes that the mark at issue satisfies the conditions laid down in Article 4 of Regulation No 207/2009, it cannot, however, be inferred from this that the Board of Appeal ruled on the main plea of the application for a declaration of invalidity of the mark at issue, based on Article 7(1)(a) of Regulation No 207/2009. The Board of Appeal did not dedicate any part of the reasoning or the operative part of its decision to that issue, but, on the contrary, expressly decided not to rule on it.

57 Second, the Board of Appeal’s first decision was annulled in its entirety by the judgment of 21 June 2017, Representation of chevrons between two parallel lines (T‑20/16, EU:T:2017:410), with the result that no issue forming part of the subject matter of the application for a declaration of invalidity brought before EUIPO can, in any event, be regarded as having been definitively resolved by that decision of the Board of Appeal.

58 Those assessments were, indirectly but clearly, shared by the Grand Board of Appeal, to the extent that it did not find that the issue of whether the mark at issue had been registered in infringement of Article 7(1)(a) of Regulation No 207/2009 had been definitively settled. On the contrary, as will be explained in more detail in paragraph 63 below, the Grand Board of Appeal found that that issue had been referred to it, but that, it too, also expressly concluded that it was not necessary to rule thereon.

59 It follows that, contrary to EUIPO’s assertions, the intervener is entitled to submit, in support of the cross-claim, a plea alleging failure of the Grand Board of Appeal to rule on the ground for invalidity alleging infringement of Article 7(1)(a) of Regulation No 207/2009.

60 Furthermore, since the applicant has not raised any plea concerning the ground for invalidity alleging infringement of Article 7(1)(a) of Regulation No 207/2009, it must be held that that ground for invalidity constitutes ‘a point not raised in the application’ within the meaning of Article 184(1) of the Rules of Procedure. Consequently, that point may be the subject of a cross-claim.

61 As regards the substance of the cross-claim, EUIPO submits that, as is apparent from paragraph 43 of the contested decision, the Grand Board of Appeal in fact confirmed the Cancellation Division’s decision of 7 May 2014 in so far as it had found that the mark at issue satisfied the requirements of Article 7(1)(a) of Regulation No 207/2009. Moreover, that assessment is correct, given the clear and precise nature of the mark at issue.

62 At the hearing, the applicant, for its part, submitted, in essence, that the cross-claim must be dismissed due to the fact that the mark at issue satisfies the conditions laid down in Article 4 of Regulation No 207/2009.

63 It should be noted at the outset that paragraph 62 of the contested decision is worded as follows:

‘The mark is not distinctive; the ground for a declaration of invalidity applies to the whole of the [European Union], … As a consequence the mark must be found liable to a declaration of invalidity under Article [52](1)(a), in conjunction with Article 7(1)(b) of [Regulation No 207/2009]. The examination of the ground for a declaration of invalidity under Article 7(1)(a) of [Regulation No 207/2009] is dispensable, as one of the grounds suffices and as both grounds entail the same legal sanction with ex [t]unc effect, (Article [55](2) of [Regulation No 207/2009]).’

64 It is apparent from that paragraph of the contested decision that, contrary to EUIPO’s submissions, the Grand Board of Appeal did not rule on the ground for invalidity alleging infringement of Article 7(1)(a) of Regulation No 207/2009. Moreover, contrary to EUIPO’s submissions, no paragraph of the contested decision deals with the examination of that ground for invalidity.

65 It is true that, in paragraph 43 of the contested decision, the Grand Board of Appeal referred to the arguments put forward by the intervener in the ground for invalidity alleging infringement of Article 7(1)(a) of Regulation No 207/2009, according to which the direction in which the chevrons comprising the mark at issue are repeated was not clearly determined. However, that paragraph of the contested decision forms part of a series of assessments set out in paragraphs 35 to 46 of that decision, which deal with the analysis of the distinctive character of that mark in so far as it had to be applied to the surface of the goods which it covers (see paragraph 16 above). It follows that the analysis relating thereto concerns the second ground for invalidity, alleging infringement of Article 7(1)(b) of Regulation No 207/2009, as is also apparent from the heading preceding paragraph 17 of the contested decision.

66 Thus, in paragraph 43 of the contested decision, the Grand Board of Appeal merely found that the mark at issue could be applied such as registered on the goods covered by the registration and that it was not permissible for it to take into consideration additional chevrons in relation to the representation of that mark when assessing its distinctive character as a mark applied to the surface of the goods concerned.

67 It follows that that reference was made solely in order to clarify the appearance of the mark at issue when it is applied to the surface of the goods it covers, all with the aim of examining whether that appearance has distinctive character within the meaning of Article 7(1)(b) of Regulation No 207/2009.

68 Consequently, the Grand Board of Appeal did not rule on the first ground for invalidity, alleging infringement of Article 7(1)(a) of Regulation No 207/2009, which was relied on before it (see paragraph 52 above).

69 It is thus clear that, as the intervener claims (see paragraph 32 above), the Grand Board of Appeal failed to rule on one of the two grounds on which the application for a declaration of invalidity at issue is based. In the light of the relationship between Article 4 and Article 7(1)(a) of Regulation No 207/2009, first, and Article 7(1)(b) thereof, second (see paragraphs 44 to 48 above), the Grand Board of Appeal could not dispense with the examination of the ground for invalidity under Article 7(1)(a) of that regulation and refer the case back to the Cancellation Division for a decision on the possible acquisition of distinctive character by the mark at issue following the use which had been made of it, in accordance with Article 7(3) and Article 52(2) of Regulation No 207/2009. Indeed, had the Grand Board of Appeal examined and upheld the first ground for invalidity, based on Article 7(1)(a) of that regulation, it should, consequently, have declared the mark at issue invalid, without it being possible to refer the case back to the Cancellation Division for the purposes of examining the possible acquisition of distinctive character through use.

70 The Grand Board of Appeal therefore failed to rule on the appeal brought against the decision of the Cancellation Division pending before it following the annulment of the Board of Appeal’s first decision, in so far as that appeal sought a declaration of invalidity of the mark at issue on the basis of Article 7(1)(a) of Regulation No 207/2009.

71 The Grand Board of Appeal has thus infringed its obligation under Article 71(1) of Regulation 2017/1001, the procedural provision applicable ratione temporis, according to which, ‘following the examination as to the allowability of the appeal, the Board of Appeal shall decide on the appeal’.

72 Since Article 7(3) of Regulation No 207/2009 is not applicable to a sign covered by Article 7(1)(a) thereof, failure to meet that obligation may affect the content of the decision of the Board of Appeal and constitutes an infringement of essential procedural requirements (see, to that effect, judgment of 6 April 2017, Nanu-Nana Joachim Hoepp v EUIPO – Fink (NANA FINK), T‑39/16, EU:T:2017:263, paragraph 37).

73 As regards the conclusions to be drawn from the illegality found, it is true that the cross-claim contains only claims for the alteration of the contested decision. It must be stated, however, that the intervener seeks, implicitly but necessarily, not only alteration, but also, in the absence of alteration, annulment of that decision. That finding follows, moreover, from the very nature of the plea relied on in support of the cross-claim, by which the intervener, relying on an infringement of Article 7(1)(a) of Regulation No 207/2009, claims that that infringement constitutes both an infringement of essential procedural requirements and a misuse of powers (see, by analogy, judgment of 27 February 2014, Advance Magazine Publishers v OHIM – Nanso Group (TEEN VOGUE), T‑509/12, EU:T:2014:89, paragraph 16 and the case-law cited).

74 In particular, as is apparent from Article 72(1) and (2) of Regulation 2017/1001, actions may be brought before the Court against decisions of the Boards of Appeal in relation to appeals on grounds of lack of competence, infringement of an essential procedural requirement, infringement of the FEU Treaty, infringement of that regulation or of any rule of law relating to their application or misuse of power. According to Article 72(3), after examining such an action brought before it, the Court has jurisdiction to annul or to alter the contested decision. The power to alter the contested decision before the Court therefore presupposes that at least one plea in law examined and upheld in the context of the action is capable of giving rise not only to the annulment of that decision but also to the adoption, by the Court, of the decision which the Board of Appeal should have taken.

75 In the present case, the illegality found in paragraphs 69 to 72 above in the plea submitted in support of the cross-claim, in principle, vitiates the contested decision in its entirety. That illegality has the effect of invalidating the Grand Board of Appeal’s decision to examine the ground for invalidity under Article 7(1)(b) of Regulation No 207/2009 without first assessing the merits of the ground for invalidity under Article 7(1)(a).

76 In that context, contrary to the intervener’s claims, it is not for the Court itself to rule directly, in the exercise of its power to alter decisions, on the ground for invalidity under Article 7(1)(a) of Regulation No 207/2009. Indeed, although Article 72(3) of Regulation 2017/1001, procedural provision applicable ratione temporis, enables the Court to alter the decisions of the Boards of Appeal, that possibility is, in principle, limited to situations in which the case has reached a stage appropriate for judicial adjudication. The fact that the Board of Appeal failed to rule on a head of claim which it should have examined means that that stage had not been reached. In that respect, alteration of the contested decision would in effect imply that the Court was deciding for the first time on the substance, the applicability in the present case of the ground for invalidity on which the Board of Appeal had failed to rule. Such a determination does not, however, fall within the jurisdiction of the Court as laid down in Article 72(2) and (3) of Regulation 2017/1001 (judgment of 10 June 2008, Gabel Industria Tessile v OHIM – Creaciones Garel (GABEL), T‑85/07, EU:T:2008:186, paragraph 28).

77 The contested decision must therefore be annulled, without it being possible to exempt from that annulment point 2 of its operative part, finding infringement of Article 7(1)(b) of Regulation No 207/2009, as suggested by the intervener at the hearing.

78 It is also necessary to reject as unfounded the third head of claim contained in the cross-claim, requesting that the Court alter the contested decision so that the case may be referred back to the Cancellation Division for it to rule on the ground for annulment based on Article 7(1)(a) of Regulation No 207/2009. The failure of the Grand Board of Appeal to rule on that ground for invalidity means that it is for that Board, and not for the Cancellation Division, to carry out, after annulment of the contested decision by the Court, the relevant examination thereof and to rule in that regard in the action brought before it again, in so far as that action concerns, inter alia, the decision of the Cancellation division as regards that ground for invalidity.

79 It is clear that the annulment of the contested decision following the cross-claim removes the subject matter of the dispute as defined in the main action.

80 As has been stated in paragraph 26 above, in support of the main action, the applicant raises three pleas in law, all alleging infringement of Article 7(1)(b) of Regulation No 207/2009 and relating to the assessment of the distinctive character of the mark at issue.

81 However, in the light of the relationship between Article 4 and Article 7(1)(a) of Regulation No 207/2009, first, and Article 7(1)(b) of that regulation, second (see paragraphs 44 to 48 above), the annulment of the contested decision due to the failure of the Grand Board of Appeal to rule on the first ground for invalidity of the mark at issue entails annulment of that decision as regards application of the second ground for invalidity of that mark, based on the lack of distinctive character of that mark (see paragraphs 75 to 77 above). Therefore, after examining the first ground for invalidity relied on by the intervener, it is, as the case may be, for the Board of Appeal, depending on the decision which it will have adopted in respect of that ground, also to rule on the second ground for invalidity.

83 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.

84 Since the applicant and EUIPO have been unsuccessful as regards the cross-claim, they must be ordered to pay the intervener’s costs relating to that action, in accordance with the form of order sought by the intervener.

85 In addition, the intervener has claimed that EUIPO and the applicant should be ordered to pay the costs incurred by the intervener in the proceedings before the Grand Board of Appeal. In that regard, it should be observed that 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. Accordingly, the intervener’s request that EUIPO and the applicant be ordered to pay the costs of the proceedings before the Grand Board of Appeal must be accepted as regards the costs necessarily incurred by the intervener for the purposes of those proceedings.

86 Under Article 137 of the Rules of Procedure, where a case does not proceed to judgment, the costs are to be in the discretion of the Court. Having regard to the circumstances of the present case, it must be observed that each party is to bear its own costs relating to the main action.

1. Annuls the decision of the Grand Board of Appeal of EUIPO of 13 December 2019 (Case R 2672/2017-G);

3. Orders M/S. Indeutsch International and the European Union Intellectual Property Office (EUIPO) to pay, in addition to their own costs, those incurred by 135 Kirkstall, Inc., formerly Crafts Americana Group, Inc., in relation to the cross-claim and the proceedings before the Board of Appeal;

4. Orders 135 Kirkstall, formerly Crafts Americana Group, to bear its own costs relating to the main action.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> M/S. Indeutsch International v EUIPO - 135 Kirkstall (Representation de chevrons entre deux lignes parallèles) (EU trade mark - Judgment) [2021] EUECJ T-124/20 (06 October 2021) URL: http://www.bailii.org/eu/cases/EUECJ/2021/T12420.html Cite as: [2021] EUECJ T-124/20

Court of Justice of the European Communities (including Court of First Instance Decisions)