CTM for wine held to be invalid due to existence of earlier PGI

In Fürstlich Castell’sches Domänenamt Albrecht Fürst zu Castell-Castell v Office for Harmonisation in the Internal Market (OHIM) (Case T-320/10, September 13 2013), the General Court has annulled the decision of the Second Board of Appeal of OHIM. Unlike the Board of Appeal, the General Court stated that the registered Community word mark CASTEL was invalid under Article 7(1)(c) of the Community Trademark Regulation (207/2009) due to the existence of the earlier protected geographical indication (PGI) 'Castell', which covered wines produced in the German wine-producing municipality of Castell.

On April 29 2002 Castel Frères SAS filed an application for registration of CASTEL (word mark) in Class 33 of the Nice Classification for “alcoholic beverages (except beers)”, which was registered on June 1 2004 as a Community trademark (CTM) under No 2 678 167.

On October 30 2007 Fürstlich Castell’sches Domänenamt Albrecht Fürst zu Castell-Castell (Castell) filed an application for a declaration that the mark was invalid pursuant to Article 51 and Article 7(1) of the Community Trademark Regulation (40/94) (now Article 52 and Article 7(1) of Regulation 207/2009) based on the PGI 'Castell', protected for wines in Germany, as well as in France, Greece, Italy and Spain.

On June 19 2009 the Cancellation Division of OHIM rejected the application for declaration of invalidity. Castell filed a notice of appeal on August 18 2009.

By decision of May 4 2010 the Second Board of Appeal of OHIM dismissed the appeal. The Board of Appeal acknowledged that the term 'castell' was a German indication of geographical provenance for wines, protected in Germany, France, Greece, Spain and Italy, which was perceived as such by the relevant public. However, the disputed mark differed from the earlier geographical indication inasmuch as the former was spelt with a single letter 'L' and the latter was spelt with two letters 'L'. Accordingly, the difference in spelling was likely to create some distance and conceptual difference between the PGI 'Castell' and the disputed mark.

Further, the Board of Appeal stated that, as it was commonly used in the wine sector and meaning 'castle', the disputed mark was perceived by the relevant public as having that meaning, whereas the PGI 'Castell' was perceived by that public as a geographical name, namely that of the German wine-producing municipality of Castell.

Against this background, the board concluded that the disputed mark would not be perceived by the relevant public as designating a place in Germany and, therefore, it was not descriptive of the geographical origin of the goods concerned for the purposes of Article 7(1)(c).

On August 2 2010 Castell filed a notice of appeal with the General Court. With respect to admissibility, Castell claimed that:  

• the Board of Appeal had not drawn the necessary conclusions after finding that the sign CASTEL was commonly used and was therefore customary within the meaning of Article 7(1)(d); and
• the board had not examined the appeal in the light of Article 7(1)(d) and thus infringed the obligation to examine the appeal in full and to exercise any power within the competence of the department responsible for the decision under appeal pursuant to Article 64.

OHIM and Castel Frères submitted that:

• Castell’s plea alleging infringement of Article 7(1)(d) was submitted for the first time before the General Court and, for that reason, it was inadmissible; and
• the Board of Appeal was not required to re-examine all the absolute grounds for refusal, but only those put forward by Castell.

As to admissibility, the General Court stated that the parties’ pleadings could not change the subject matter of the proceedings before the Board of Appeal. The task of the General Court was only to review the legality of the board’s decisions. Therefore, the court’s review was limited to the factual and legal context of the dispute, as it was brought before the Board of Appeal, and Castell did not have the power to alter, before the court, the terms of the dispute as delimited in the respective claims and allegations submitted by itself and Castel Frères.

As the plea alleging infringement of Article 7(1)(d) had not been put forward before the Board of Appeal, it was therefore submitted for the first time before the General Court. Contrary to what Castell claimed, the court concluded that absolute ground for refusal did not have to be examined by the board of its own motion in the context of invalidity proceedings.

The General Court then stated that OHIM examiners and, on appeal, the Board of Appeal, are required – under Article 76(1) when considering absolute grounds for refusal – to examine the facts of their own motion in order to determine whether the mark applied for comes within one of the grounds for refusal of registration specified in Article 7, even if such facts have not been put forward by the applicant for the mark.

In invalidity proceedings, however, OHIM cannot be required to carry out afresh the examination which the examiner conducted, of his own motion, of the relevant facts which could have led him to apply the absolute grounds for refusal. A CTM is regarded as valid until it has been declared invalid by OHIM following invalidity proceedings, which is the logical consequence of the examination carried out by OHIM in the examination of an application for registration.

The General Court stated that it is for the person who has filed the application for a declaration of invalidity to invoke before OHIM the specific facts which call the validity of that mark into question. Against this background, the court stated that the Board of Appeal was not required to examine of its own motion the relevant facts which might have led it to apply the absolute ground for refusal set out in Article 7(1)(d). Accordingly, the present plea was rejected as inadmissible.

As to the substance, the General Court stated that Article 7(1)(c) provides that trademarks which consist exclusively of signs or indications which may serve, in trade, to designate geographical origin of the goods, cannot be registered. However, Article 7(1)(c) does not, in principle, preclude the registration of geographical names which are unknown to the relevant public.

To be caught by Article 7(1)(c), it is sufficient that at least one of the possible meanings of a word sign designates a characteristic of the goods or services concerned. Consequently, it was necessary to establish whether the geographical name in question designated a place which was associated in the minds of the relevant public with the category of goods concerned.

Here, the relevant public by reference to which the absolute ground for refusal must be assessed was the average consumer in the member state in which the place designated by that indication is situated - that is, Germany.

'Castell' was a protected geographical indication for wines, and was also a geographical name, namely that of the wine-producing municipality of Castell, Germany. The term 'castell' was perceived by the relevant public as a geographical indication for wines.

The General Court dismissed the Board of Appeal’s argument that the omission of an 'L' made the disputed mark sufficiently different from the PGI 'Castell', thereby avoiding association between the two in the minds of consumers. Even if the word mark CASTEL did evoke the idea of a castle, it would also evoke the specific wine region of Castell, so that consumers would think that any wine bearing the mark was from Castell, Germany, and thus a reference to the geographical place in which those wines are produced. Consequently, the General Court held that the disputed mark was descriptive for “alcoholic beverages (except beers)” and thus annulled the Board of Appeal’s decision.

Nina Ringen, Rønne & Lundgren, Copenhagen