Scope of First Trademark Directive clarified by ECJ

In BVBA Management, Training en Consultancy v Benelux-Merkenbureau, the European Court of Justice (ECJ) has, following a reference by the Brussels Court of Appeal, issued a ruling clarifying the interpretation of the First Trademark Directive.

In 2000 BVBA Management, Training en Consultancy (MT & C), filed with the Benelux Trademark Office (TO) an application for registration of THE KITCHEN COMPANY as a word mark for certain goods in Classes 11, 20 and 21, and for services in Classes 37 and 42 of the Nice Classification. As to Class 21, the application covered kitchen utensils and kitchen equipment. The TO notified MT & C that it was provisionally refusing registration because the word mark lacked distinctive character and in 2002 it gave notice of its definitive refusal. The TO did not formulate separate conclusions in respect of each of the individual goods and services for which protection was sought, but decided as a whole.

MT & C challenged that refusal before the Brussels Court of Appeal, seeking an order that the TO register its application for, primarily, all of the classes sought or for the classes in respect of which the court should consider that the mark had a distinctive character. The court upheld the TO's decision, with the exception of certain goods in Class 21. Contrary to the opinion of the TO, the court took the view that since the mark was not descriptive and no other grounds for refusal to register were raised by the TO, the mark was indeed distinctive with regard to those goods.

The TO argued that the court could not consider MT & C's subsidiary application since the latter did not seek registration only of certain goods either in its initial application or in the objection it lodged with the TO, and that the court could not examine applications which went beyond the decision of the TO or which had not been made before that body. The court considered that the competent authority, namely the TO, must examine the application for registration in respect of each of the goods and services for which protection is sought, and that the authority must state its conclusions in each case. It noted that under national law a practice on the part of the competent authority of deciding, as in the case in the main proceedings, in respect of the protection sought as a whole, that the sign applied for lacks any distinctive character, without formulating separate conclusions in respect of each of the products or services individually, may preclude the court reviewing such a decision from taking account of all the relevant facts and circumstances. The fact that no grounds of refusal are provided in respect of one product but may be given for other products specified in the application for registration may be a relevant fact in the assessment of that application. However, if the decision does not set out definitive conclusions for each product or service individually, the court reviewing that decision cannot exercise its powers fully where national legislation prescribes that that court may adjudicate only in respect of matters which were before the competent authority and which come within its decision.
Therefore, the court decided to stay proceedings and to refer the following questions to the ECJ for a preliminary ruling:

• Is the trademark authority required, after its examination of all relevant facts and circumstances concerning absolute grounds of refusal, to state in its provisional and in its definitive decision on the application [for registration of a trademark] its conclusion in regard to each of the goods and services separately in respect of which trademark protection is sought?
  
  
• May the relevant facts and circumstances to be taken into account by the adjudicating authority (here, the court) in the event of an appeal against the decision of the trademark authority be different as a result of a lapse of time between the two decisions or must the adjudicating authority take into account only such facts and circumstances as were available at the moment when the trademark authority made its decision?
  
  
• Does the interpretation by the ECJ in Koninklijke KPN Nederland preclude national legislation in regard to the competence of the adjudicating authority from being construed as meaning that that authority is prevented from taking account of any alteration in the relevant facts and circumstances or from ruling on the distinctive character of the mark for each of the goods and services individually?
  

With regard to the first question, the ECJ primarily referred to Articles 3 and 13 of the directive but also to Koninklijke KPN Nederland and Heylens (Case 222/86). Regarding the second part of the third question, the ECJ refers to the third recital of the preamble to the directive, noting that the directive is not intended to bring about full-scale approximation of the trademark laws of the member states, but confines itself to approximating those national provisions of law which most directly affect the functioning of the internal market. Moreover, the ECJ referred to the Fifth Recital, whereby the directive gives the member states extensive freedom to fix the provisions of procedure concerning, among other things, the registration of trademarks. Further, the ECJ explained that a corresponding limitation on the court's powers cannot be regarded as being contrary to the principle of effectiveness, especially since the party concerned may, following a decision that is wholly or partially unfavourable to that party, make a fresh application for registration of the mark. Concerning the second question and the first part of the third question, the ECJ pointed out that it has already held, firstly, that the competent authority must have regard to all the relevant facts and circumstances before adopting a final decision on an application to register a trademark and, secondly, that a court asked to review such a decision must also have regard to all the relevant facts and circumstances, subject to the limits on the exercise of its powers as defined by the relevant national legislation (Koninklijke KPN Nederland). The ECJ stated that in such proceedings, the national courts must rule on the lawfulness of a given decision of the competent authority. That decision could have been taken on the basis of only the facts and circumstances of which the authority was aware at the time it reached its decision.

Accordingly, the directive is to be interpreted as meaning that:

• when refusing registration of a trademark, the competent authority is required to state in its decision its conclusion for each of the individual goods and services specified in the application for registration, regardless of the manner in which that application was formulated. However, where the same ground of refusal is given for a category or group of goods or services, the competent authority may use only general reasoning for all of the goods or services concerned;
  
  
• it does not preclude national legislation which prevents the court reviewing the decision of the competent authority from ruling on the distinctive character of the mark separately for each of the individual goods and services specified in the trademark application, where neither that decision nor that application related to categories of goods or services, or goods or services considered separately; and
  
  
• it does not preclude the application of national legislation which prevents the court reviewing a decision of the competent authority from taking account of facts and circumstances which arose after that decision had been taken.

Marcus R Danisch, Bardehle Pagenberg Dost Altenburg Geissler, Munich