OHIM rebuked by ECJ in single-letter case

European Union

In Office for Harmonisation in the Internal Market v BORCO-Marken-Import Matthiesen GmbH & Co KG (Case C-265/09, September 9 2010), the Court of Justice of the European Union (ECJ) has dismissed an appeal by the Office for Harmonisation in the Internal Market (OHIM) against a judgment of the General Court.

In September 2005 BORCO-Marken-Import Matthiesen GmbH & Co KG filed an application for the registration of the Greek letter 'α' as a Community trademark (CTM) for goods in Class 33 of the Nice Classification, namely "alcoholic beverages (except beers), wines, sparkling wines and beverages containing wine".

In May 2006 OHIM refused the application on the basis of Article 7(1)(b) of the Community Trademark Regulation (40/94). The examiner found that the mark applied for was the Greek lower-case letter 'α' (alpha), without any modifications, and that Greek-speaking purchasers would not be able to determine the commercial origin of the goods. BORCO appealed, but the Fourth Board of Appeal of OHIM dismissed the appeal on the grounds that the mark was devoid of distinctive character.

In February 2007 BORCO brought an action before the General Court, alleging infringement of Articles 7(1)(b), 7(1)(c) and 12. BORCO claimed that the mark was distinctive and capable of identifying the goods in question. BORCO also claimed that, under Article 4, marks consisting of letters could not be regarded as non-distinctive.

The General Court noted that the Board of Appeal believed that the relevant public may view the letter ‘α’ as a reference to quality (‘A’ quality), an indication of size, or of a type or kind of alcoholic beverage, such as those covered by the application. The General Court found that OHIM could not claim that, in making such a finding, the Board of Appeal had carried out an examination as to whether, on the facts, the sign in question had distinctive character. As well as being unfounded, that basis did not refer to any specific fact to substantiate the finding that the mark at issue would be perceived by the relevant public as a reference to quality, an indication of size, or of a type or kind, in respect of the goods covered by the application. The General Court concluded that the Board of Appeal had failed to establish that the mark at issue lacked distinctive character, upheld the first plea and annulled the contested decision, without examining the other two pleas (for further details please see "Greek letter 'α' may have distinctive character, says CFI").

OHIM appealed. In an opinion issued on May 6 2010, the advocate general recommended that the ECJ dismiss OHIM’s appeal (for further details please see "Advocate general backs General Court in single-letter showdown").

Before the ECJ, OHIM relied on case law in relation to three-dimensional signs, marks consisting of colours, advertising slogans and domain names to show that, for certain categories of signs, the examination of distinctive character is based on the facts for the purposes of Article 7(1)(b), relying on general assertions concerning the consumer’s insight and how that insight is perceived, and often omitting a detailed examination of the goods and services referred to in the trademark application.

The ECJ first noted that, according to Article 4, letters are among the categories of signs which are registrable as a CTM, provided that they are capable of distinguishing the goods or services of one undertaking from those of others. The ECJ then held that, under settled case law, distinctive character must be assessed, first, by reference to the goods or services in respect of which registration is sought and, second, by reference to the perception of the relevant public. In addition, the ECJ agreed with OHIM’s view on the assessment of distinctiveness. However, the ECJ found that the relevant public’s perception can be different with respect to different categories of marks due to their very nature.

The ECJ also agreed with the advocate general’s opinion that, as letters are registrable under Article 4, the assessment of their distinctive character, within the meaning of Article 7(1)(b), must be carried out within the context of each specific case, taking into consideration the nature and particular characteristics of the goods covered by the application.

In addition, the ECJ was of the opinion that, although the mark at issue consisted of a single letter with no graphic modifications, registration of a sign as a trademark was not subject to a finding of a specific level of linguistic or artistic creativity or imaginativeness on the part of the proprietor of the mark (see P SAT.1 v OHIM (Case C-329/02), Paragraph 41). As such, the ECJ found that it was necessary for OHIM to assess whether the sign was capable of distinguishing the goods by means of examination, based on the facts, focusing on those goods. As the General Court had come to the same conclusion, OHIM's initial plea was dismissed.

OHIM also alleged that the General Court had disregarded the fact that the examination of the distinctive character of a sign is an a priori examination and that, therefore, there is always an element of conjecture in the decision taken after that examination. OHIM contended that the 'average consumer' was a legal concept and that the examination of the distinctive character of a sign must be carried out independently of any actual use of that sign on the market.

BORCO contended that mere conjecture was not a sufficient basis for a finding that a sign is devoid of any distinctive character. If that were the case, OHIM could, without specific reasons, refuse any trademark application for lack of distinctive character, relying solely on the conjecture that the mark at issue could be devoid of the required distinctive character. However, that would not be consistent with the case law, according to which OHIM must, in the context of its examination of the absolute grounds for refusal, carry out a full and complete examination of all the relevant facts and circumstances.

The ECJ found that, as indicated in the case law of the court, the examination of trademark applications must not be minimal, but must be strict and full, in order to prevent marks from being improperly registered and to ensure that marks whose use could be successfully challenged before the courts are not registered (see Libertel (Case C-104/01), Paragraph 59, and OHIM v Erpo Möbelwerk (Case C-64/02 P), Paragraph 45). The ECJ held that a priori review would be almost pointless if OHIM was allowed, without relevant justification, to rely on conjecture or mere doubts. As a result, the ECJ was again in agreement with the General Court and found that the Board of Appeal, by relying on a ground of conjecture, was not able to satisfy the requirements applicable to the examination of the distinctive character of a sign. The second part of OHIM's single plea was thus rejected.

OHIM further claimed that the General Court had misjudged the burden of proof in the context of the examination carried out on the basis of Article 7(1)(b), insofar as it had held that OHIM must always establish the lack of distinctive character of the mark for which registration is sought by reference to specific facts. It argued that the registration procedure was an administrative procedure, not an adversarial one in which OHIM was obliged to prove the obstacles to registration to the applicant. Where an applicant claims that, in contrast to the assessment made by OHIM, a mark applied for has distinctive character, it is for the applicant to prove, by means of specific and well-founded information, that the mark applied for has distinctive character by nature or has acquired it in consequence of use. OHIM claimed that it was not obliged to give examples of when a sign applied for was lacking in distinctive character.

The General Court had disregarded this argument due to lack of facts, and BORCO claimed that OHIM’s arguments were legally incorrect.

The ECJ concurred with the advocate general that OHIM must give full reasons as to why it believes a mark to lack distinctiveness, and must observe the rules relating to the assessment of the distinctive character of signs under Article 7(1).

The ECJ found that, in accordance with Article 74(1), when examining absolute grounds for refusal, OHIM must examine the relevant facts which might lead it to apply such a ground. In addition, the ECJ held that, contrary to OHIM’s claim, that requirement cannot be made relative or reversed, to the detriment of the applicant. As a result, the ECJ found that, if an applicant claims that a trademark is distinctive, it is for that applicant to provide specific and substantiated information to show that the mark has distinctive character (see Develey v OHIM (Case C-238/06 P), Paragraph 50).

As the analysis by the Board of Appeal did not comply with the requirements set out in Article 7, the third part of OHIM's single plea was rejected. Therefore, all three parts of the single plea were dismissed.

Although the mark in question appeared to lack distinctiveness because it consisted of a single letter in an EU language, the case illustrates that OHIM must substantiate its decisions at both first and second instance, failing which the ECJ will overrule it.

Triona Desmond, Hammonds LLP, London

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