Several procedural points confirmed in OKATECH decision

European Union
In Okalux GmbH v Office for Harmonization in the Internal Market (OHIM) (Case T-419/07, July 1 2009), the Court of First Instance (CFI) has rejected an appeal against a decision of the Board of Appeal of OHIM in which the latter had partially revoked a Community trademark (CTM) registration on the grounds of non-use. 
In June 1998 Okalux GmbH applied to register the mark OKATECH as a CTM for goods and services in Classes 6, 19 and 42 of the Nice Classification. The mark was registered on December 15 2000. In December 2005 Messe Düsseldorf GmbH applied for revocation, arguing that the mark had not been put to genuine use for a period of five years. On December 21 2006 OHIM accepted Messe’s application, partially revoked Okalux’s registration and ordered the parties to bear their own costs.

However, on February 6 2007, following a further submission by Messe, OHIM announced its intention to overturn its decision partially, stating that it had made a "manifest procedural error" and that Messe should not have had to pay its own costs in the matter. It would correct its decision so that Okalux, as the claimant, was forced to pay Messe’s costs. OHIM formalized this decision on March 21 2007.
Okalux appealed, maintaining that it had demonstrated genuine use of the trademark in respect of the goods and services at issue. In a letter of May 30 2007, it also asked OHIM to reinstate its registration for OKATECH until the proceedings in respect of Messe’s original challenge had been resolved. In two further letters to OHIM, Okalux argued that OHIM had breached Article 62 of the Community Trademark Regulation (207/2009) because a partial revocation was not permitted. OHIM had insisted that a new decision would have to be taken and a decision on costs could not be the subject of a separate appeal.

The Board of Appeal rejected Okalux’s appeal on September 3 2007. It held that the appeal was time barred, having been brought after the two-month period provided for by Article 60 of the regulation had expired. The decision by OHIM to overturn its ruling of December 21 2006 related only to the part that concerned costs, and not the revocation of the registration. Any appeal against the substantive decision should have been made by February 21 2007.

Okalux appealed to the CFI, arguing that the latter should:

  • overturn OHIM’s decision;
  • reject the application for partial revocation of the registration;
  • remit the matter to the Cancellation Division of OHIM for a decision on the appeal of May 16 2007; and
  • order that all costs be paid by OHIM or Messe. 
OHIM and Messe argued that the CFI should reject the appeal and order Okalux to pay the costs. In particular, OHIM submitted that Okalux’s request that the application for partial revocation of the registration be rejected and its other requests should be dismissed under Article 130(1) of the regulation, which provides that the Board of Appeal is competent to hear appeals against OHIM decisions. Okalux did not make any submissions in this regard.

The CFI agreed that Okalux’s application for the rejection of the partial revocation was inadmissible, as the CFI had no power to impose an injunction upon OHIM. Furthermore, although the CFI was able to overturn decisions of the Board of Appeal, it could do so only in situations where there is a Board of Appeal decision concerning the registration itself which can be overturned. As this was not the case here, the CFI would have to assess the relative merits of the matter for the first time, which it was not permitted to do.

Okalux’s appeal was based on five separate grounds, the first of these being that Articles 57 and 77(a) of the regulation had been breached. Article 57 states that appeals against decisions of the Cancellation Division have a suspensory effect, while Article 77(a), which provides for the revocation of decisions, does not expressly provide for partial revocation.

The CFI held that OHIM had not breached Articles 57 and 77(a) of the regulation. The decision of December 21 2006 represented the end of the proceedings in respect of the revocation of Okalux’s mark and it was only this decision that could have been appealed. The letter of February 6 2007 did not alter the fact that the period for bringing an appeal against the revocation of the trademark began on December 21 2006. Equally, although Article 77(a) does not expressly provide for partial revocation, it does not preclude it either.

Okalux’s second ground of appeal concerned alleged breaches of the principles of legitimate expectation and legal certainty. Legitimate expectation is a fundamental principle of EU law that applies where a party has been given specific assurances by the EU administration that leads to a well-founded reliance. These assurances must be unequivocal, unconditional and consistent, arising from authorized and reliable sources.

Okalux argued that an OHIM representative had provided assurances by telephone on February 7 2007 to the effect that since a new decision had been issued regarding costs, a new time limit for bringing an appeal would apply. Okalux produced a handwritten note summarizing the telephone conversation, as well as its letter to OHIM of June 11 2007 which made reference to the conversation. OHIM acknowledged the conversation, but confirmed that it related only to the new decision on costs.

The CFI rejected this ground of appeal. The decision of December 21 2006 set out expressly the applicable time period for an appeal. The letter of February 6 2007 was a precise communication, arising from an authorized and reliable source, which stated clearly that the original decision was being overturned only insofar as costs were concerned. In contrast, the telephone conversation did not constitute unequivocal, unconditional and consistent information that could justify a legitimate expectation of an extension of the time for bringing an appeal. 

Okalux, which did not request a written confirmation of the contents of the telephone conversation, would have had to establish that it had exercised due diligence by bringing - if necessary, on a provisional basis - an appeal within the original time limit. The CFI took into account the importance of time limits for appeals and the public interest requirement that parties should not be able to fix them at their own convenience. Even if the telephone conversation could have caused confusion, it would not prevent Okalux’s appeal from being time barred. Moreover, no evidence was put forward to support the argument that there had been a breach of the principle of legal certainty.

Thirdly, Okalux contended that its right to a hearing had been breached. It argued that the Board of Appeal:

  • did not have regard to its letters of June 11, July 3 and July 10 2007, which argued that it was impossible to adhere to the time limits; and
  • had failed to give due consideration to the legal points raised.
OHIM and Messe contested Okalux’s argument. Under Article 73 of the regulation, OHIM decisions can be based only on the grounds on which the parties have had the opportunity to make submissions. The right to a hearing extends to all the elements of fact or law and evidential matters, but not to the final decision that the authority intends to take.

In the present case, the CFI found that Okalux’s arguments as to the impossibility of respecting the time limits for appeal and the impermissibility of partial revocation, as set out in its letters of July 3 and July 10 2007, had been noted by the Board of Appeal in its summary of the facts. In addition, the Board of Appeal had held that the decision of the Cancellation Division of March 21 2007 related solely to the costs aspect of the original decision. This confirmed, implicitly but necessarily, the permissibility of partial revocation of the decision of December 21 2006 and refuted Okalux’s argument. It followed that Okalux had not demonstrated the violation of its right to a hearing. 

Okalux’s fourth ground of appeal was the existence of procedural irregularities contrary to Article 60(a)(4) of the regulation. Okalux claimed that:
  • there was a lack of transparency in the internal functioning of OHIM; and
  • OHIM had recorded the partial revocation of the OKATECH registration without taking into account the pending appeal, in violation of Article 77, and had notified Okalux directly of the revocation, rather than notifying its representatives. 
In addition, Okalux submitted that if the Board of Appeal regarded the appeal of May 16 2007 as inadmissible, it should have ordered the reimbursement of the appeal fee.

The CFI noted that under Article 63(1) of the regulation, it is able to hear appeals only against decisions of the Board of Appeal, which was not the case here, even if the alleged lack of transparency and unlawful revocation could be established. An appeal to the CFI can have regard to the factual and legal aspects of the matter only as heard before the Board of Appeal, as provided for under Article 135(4) of the Rules of Procedure of the Court of First Instance. Okalux’s complaint in this regard was thus inadmissible. Moreover, the regulation provides for the refund of appeal fees only if these are paid after the time period for the appeal has elapsed. Here, Okalux’s appeal of May 16 2007 was brought within two months of the decision to which it related.

Okalux’s fifth and final argument was that there were no grounds for the partial revocation of the trademark. Okalux argued that:

  • it had provided evidence of genuine use of OKATECH; and
  • the Board of Appeal should have allowed its appeal by annulling the decisions of the Cancellation Division of December 21 2006 and March 21 2007. 
OHIM pleaded that this ground of appeal was inadmissible as only grounds of appeal against decisions of the Board of Appeal could be heard. 

The CFI noted that the Board of Appeal had declared Okalux’s appeal inadmissible and, therefore, did not rule on the substantive issue of the revocation of the trademark. The CFI could not substitute its decision for that of OHIM. Accordingly, Okalux’s final point of appeal was rejected. The action was thus rejected in its entirety and a costs order made against Okalux.
The decision reinforces a number of important points that parties should bear in mind when considering an appeal against an OHIM decision. The CFI set out that it is competent to hear only appeals arising from a decision of the Board of Appeal and does not have the ability to review the substantive aspects of a case for the first time. In addition, the decision confirms the importance of paying close attention to the time limits for bringing an appeal, which will not be extended merely because non-substantive aspects of the decision are subsequently revised. The CFI also confirmed that a party cannot seek to argue that it has a legitimate expectation based solely on a telephone conversation with an OHIM employee where no written confirmation was obtained.

Stephen Mooney and Chris McLeod, Hammonds LLP, London

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