CJEU finds that all absolute grounds for refusal were created equally

The Court of Justice of the EU (‘CJEU’) recently held in its Neoperl decision (C-93/23 P) that there is no order in which absolute grounds for refusal must be assessed and that none of them takes precedence over the other. In particular, the requirement of representation need not be examined prior to the question of distinctiveness.

Background

On 1 September 2016, Neoperl filed an EU trade mark application for the following sign:

The mark was referred to as a ’position tactile mark’ and the application contained a description of the sign. The goods for which registration was sought were ‘sanitary inserts, in particular jet regulators and jet formers’ in class 11.

The European Union Intellectual Property Office (‘EUIPO’) rejected the application because it was not sufficiently precise to be represented on the register in accordance with Art. 4 of Regulation 207/2009 (‘EUTMR 2009’). This constitutes an absolute ground for refusal (Art. 7(1)(a) EUTMR 2009).

The EUIPO’s Board of Appeal (‘BoA’) dismissed Neoperl’s appeal. Instead of reviewing whether the sign was represented in a sufficiently precise manner, it held that the mark lacked distinctiveness (Art. 7(1)(b) EUTMR 2009).

Neoperl’s appeal to the General Court was formally successful (case T‑487/21; IPKat here). The Court annulled the BoA’s decision. Although Neoperl did not challenge the BoA’s decision to examine the sign’s distinctiveness rather than the precision of its graphical representation, the General Court found of its own motion that the BoA should have reviewed the precision of the graphical representation prior to assessing the distinctive character of the trade mark.

The judges also held that the mark applied for did not meet the criteria of Art. 4 EUTMR 2009 because the tactile impression could not be represented graphically.

The EUIPO was discontent with the General Court’s decision and filed an appeal to the CJEU. It argued in a nutshell that the General Court had exceeded its jurisdiction by ruling on Artt. 4, 7(1)(a) EUTMR 2009 instead of Art. 7(1)(b) EUTMR 2009.

The CJEU admitted the appeal (decision here).

Advocate General (‘AG’) Pikamäe was of the opinion that the General Court was right hold that the representation requirement had to be assessed before all other absolute grounds of refusal. Nevertheless, he argued that the General Court had exceeded its jurisdiction by adopting a decision on the representation requirement because this required fact-finding, for which the General Court is not competent.

The CJEU’s decision

The CJEU upheld the EUIPO’s appeal.

1. The judges found that each of the grounds in Art. 7(1) EUTMR 2009 is independent of the others and calls for separate examination.

The CJEU criticized the General Court’s interpretation of this provision. The latter considered that the different use of the words ‘sign’ and ‘trade mark’ in Art. 7(1) EUTMR 2009 necessitated the conclusion that the representation requirement needed to be assessed first. The General Court held that the distinctive character of a sign can only be determined once it had been found that it constituted a trade mark within the meaning of Artt. 4, 7(1)(a) EUTMR 2009.

The CJEU countered that the terms ‘sign’ and ‘trade mark’ were not used consistently in Art. 7(1) EUTMR 2009, which is why they have to be regarded as interchangeable. As a consequence, the wording of the provision does not support the General Court’s decision.

Thus, the BoA was entitled to deny the distinctive character of the trade mark without first assessing whether it was represented appropriately. Consequently, the General Court was wrong to annul the contested decision.

2. The CJEU also upheld the EUIPO’s claim that the General Court was not entitled to alter the BoA’s decision pursuant to Art. 72(3) EUTMR. Even though the General Court merely annulled the decision and did not explicitly state that it was altered, the judges found that the General Court implicitly altered it by finding that Artt. 4, 7(1)(a) EUTMR 2009 took precedence over Art. 7(1)(b) EUTMR 2009 and ruled on the former’s conditions.

According to the CJEU, the power to alter decisions under Art. 72(3) EUTMR does not allow the General Court to carry out an assessment on issues on which the BoA has not yet adopted a position. Rather, the power to alter decisions is limited to situations in which the General Court, after reviewing the assessment made by the BoA, is in a position to determine, on the basis of the matters of fact and law as established, what decision the Board was required to take. Since the BoA had not examined Artt. 4, 7(1)(a) EUTMR 2009, the General Court was not entitled to adopt a position on this provision.

This error constitutes a manifest disregard for the binding institutional framework in which the power to alter decisions in intellectual property matters occurs, as laid down in Art. 72(3) EUTMR, which seeks to ensure effective legal protection for individual parties.

For these reasons, the CJEU annulled the General Court’s decision and referred the case back to assess the pleas raised by Neoperl.

Comment

The CJEU and the AG agreed on the outcome but not on the reasoning. It is interesting to see that the CJEU did not deal with the AG’s (rather convincing) points regarding the precedence of the representation condition over other absolute grounds. If the sign is not sufficiently clear, it may not be possible to assess, for instance, the distinctive character of the sign.

Furthermore, reviewing acquired distinctiveness (Art. 7(3) EUTMR 2009) will be difficult for the EUIPO if the sign is not sufficiently defined.

Unless all possible representations of the trade mark applied for lack distinctive character or fall foul of another absolute ground for refusal, it seems prudent to review the question of representation prior to all other grounds for refusal.