General Court reminds that in invalidity proceedings EUIPO Boards of Appeal can only review arguments submitted by parties (failing to do so also breaches EU Charter of Fundamental Rights)

In contrast to proceedings related to relative grounds for refusal, invalidity proceedings are different in that the examination by the Cancellation Division and the EUIPO Boards of Appeal are limited to the grounds and arguments submitted by the parties (Article 95 (1) of Regulation 2017/1001 (EUTMR)). The now said was made abundantly clear in an interesting judgment (Case T-486/20) from October this year in which the General Court considered that the Cancellation Division and the EUIPO Fifth Board of Appeal had exceeded their competence by declaring the contested mark invalid on the basis of its alleged lack of distinctive character.

Background

In 2003, Swisse Vitamins Pty Ltd (the predecessor to the applicant) successfully registered the following figurative mark as an EU trade mark (EUTM):

Registration was obtained for goods in Class 5 (vitamins, vitamin preparations, herbal formulations, mineral supplements and nutritive elements including vitamins, minerals, nutritive elements and herbal formulations in capsule, tablet and liquid form) of the Nice Classification.

In 2018, Giuliani SpA (the intervener) filed a declaration of invalidity against the applicant’s EUTM, pursuant to 59 (1)(b) EUTMR. The intervener selected Article 7(1)(b), (g), (h) and (i) EUTMR as grounds for invalidity from the drop-down menu on EUIPO’s standard application form. The intervener did not put forward any argument regarding the registered mark’s alleged lack of distinctive character.

In 2019, the Cancellation Division decelerated the applicant’s mark invalid and found, in essence, that the mark was devoid of any distinctive character. The applicant appealed to the EUIPO Fifth Board of Appeal (the board) which subsequently dismissed the appeal. It considered that it was clear from the arguments and evidence submitted by the intervener, that the contested mark could not be regarded as indicative of a commercial origin, but rather as an indication that the goods came from Switzerland.

The applicant appealed to the General Court. First, it submitted that the intervener addressed only the misleading nature of the contested mark and bad faith. It argued (amongst other things) that by declaring its mark invalid on account of its lack of distinctive character and by putting forward on their own initiative arguments on which the applicant had never been in a position to comment, the two adjudicating bodies of EUIPO had infringed Articles 94(1) and 95(1) EUTMR and Articles 41(1) and 41(2)(a) of the Charter of Fundamental Rights of the European Union (the Charter).

The General Court’s judgment

The General Court acknowledged that the intervener did not refer to Article 7(1)(b) EUTMR and also did not claim, and even less provided reasoning, that that mark would not be capable of performing the essential function of a trade mark according to that regulation, namely that of designating the commercial origin of the goods at issue.

The detailed statement exclusively focused on the grounds for refusal in Article 7(1)(g), (h) and (i) EUTMR and on bad faith. Furthermore, the intervener, before the Cancellation Division, did also not refer to the lack of distinctive character of the contested mark or the corresponding provision, but claimed solely that the contested mark was deceptive and had been registered in bad faith.

It is settled case law that pleas must be interpreted in terms of their substance rather than of their classification (Torrefazione Caffè Michele Battista v EUIPO (T-221/18) EU:T:2019:382). That rule is of general application and is therefore also relevant to applications for a declaration of invalidity submitted before EUIPO. In spite of the selection of Article 7(1)(b) EUTMR from the drop-down menu on the form, the substance of the arguments submitted by the intervener showed that it did not rely on the alleged lack of distinctive character of the contested mark, because the lack of distinctive character of the contested mark is not one of those arguments.

Furthermore, it is apparent from case law that, in order to determine the grounds on which an application for a declaration of invalidity is based, it is necessary to examine all of the application, especially in the light of the detailed statement of reasons in support of it (Karl-May-Verlag v OHIM – Constantin Film Produktion (T-501/13) EU:T:2016:161).

Nevertheless, the intervener’s selection of the ground of Article 7(1)(b) EUTMR from the drop-down menu on the form was inconsistent with the explanation of grounds on the same form, the detailed statement of reasons in support of the application, and the conclusion to that detailed statement.

Moreover, the ground for invalidity based on bad faith was not among one of those which were selected from the drop-down menu, which did not, however, preclude the Cancellation Division, from taking it into account, because it had been mentioned in the explanation of grounds and substantiated both in the detailed statement of reasons and in the conclusion.

In invalidity proceedings based on an absolute ground for refusal, since the registered EUTM is presumed to be valid, it is for the person who has filed the application for a declaration of invalidity to invoke before EUIPO the specific facts which call the validity of that trade mark into question.

Since the present case was part of invalidity proceedings based on absolute grounds for invalidity, both the Cancellation Division and the Board of Appeal were required to carry out an examination limited to the grounds and arguments of the parties, without prejudice to the possibility of taking well-known facts into account. Therefore, it followed that Cancellation Division and the board had infringed Article 95(1) ETMR and the right to good administration under Article 41 of the Charter.

Comment

The case stresses the importance of EUIPO bodies to adhere correctly to their own examination competence. One may wonder whether the outcome would have been different if the intervener had, in its application for a declaration of invalidity, provided reasoning with regard to the lack of distinctive character of the contested mark.