C-104/00

The judgment in Case C-383/99P Proctor & Gamble v OHIM, 3 better known as the BABY-DRY case, has paved the way in this 4. Although this is strictly speaking the first 1 — Original language: Spanish. case to be decided in accordance with 2 — [2000] ECR II-1, hereinafter the 'contested decision'. BABY-DRY, many of the issues have 3 — [2001] ECR I-6251. already been raised by the reference for a

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preliminary ruling in the case of Konink- Applicable legislation lijke KPN Nederland (hereinafter 'the Post- kantoor case', after the sign in respect of which registration was claimed in the main proceedings),4 in which I delivered my Opinion on 31 January 2002. The fact that the provisions analysed in that case came from the Trade Mark Directive5 rather The Community Trade Mark Regulation than their equivalents in the Community Trade Mark Regulation6 is immaterial, given that both instruments are intended to be applied uniformly. 6. The Regulation provides that the Com- munity trade mark is to have a unitary character and to have equal effect through- out the Community (Article 1). It creates a Community trade mark office — with the puzzling title of Office for Harmonisation in the Internal Market (Trade Marks and Designs) — hereinafter 'the Office' (Ar- ticle 2). A Community trade mark is acquired by registration (Article 6), not by use alone, and the examiners are respon- It is therefore natural that my reasoning sible for taking decisions on behalf of the here should in many respects follow what I Office in relation to applications (Ar- said in the Postkantoor case. ticle 126). Appeals from decisions of the examiners lie to the Boards of Appeal, which are made up of independent members (Articles 130 and 131). Actions may be brought before the Court of First Instance against decisions of the Boards of Appeal (Article 63); decisions of the Court of First Instance may be appealed to the Court of Justice.

(b) trade marks which are devoid of any distinctive character;

(b) indications concerning the kind, (c) trade marks which consist exclusively quality, quantity, intended purpose, of signs or indications which may value, geographical origin, the time of serve, in trade, to designate the kind, production of the goods or of rendering quality, quantity, intended purpose, of the service, or other characteristics value, geographical origin or the time of the goods or service; of production of the goods or of rendering of the service, or other char- acteristics of the goods or service;

2. Paragraph 1 shall apply notwithstanding provided he uses them in accordance with that the grounds of non-registrability honest practices in industrial or commercial obtain in only part of the Community.' matters.'

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10. Article 38 of the Regulation, on exam- the provisions in Article 7(1)(a) to (d) of ination as to absolute grounds for refusal, the Regulation exactly mirror those in provides as follows: Article 3(1 )(a) to (d) of the Directive, so that a sign is excluded from registration as a Community trade mark on the same grounds as those pertaining to registration thereof as a national mark in the Member « States.

definition of a trade mark such as that in erty rights (the TRIPS Agreement)7 pro- Article 4 of the Regulation. vides as follows:

15. Article 6 quinquies B of the Paris Con- vention provides as follows: 'Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark.' 'Trademarks covered by this Article may be neither denied registration nor invalidated except in the following cases:

Background to this appeal

17. On 23 July 1996 the appellant sub- 2. when they are devoid of any distinctive mitted an application for a Community character, or consist exclusively of trade mark to the Office for Harmonisation signs or indications which may serve, in the Internal Market. The mark in respect in trade, to designate the kind, quality, of which registration was sought was the quantity, intended purpose, value, word 'Companyline'. place of origin, of the goods, or the time of production, or have become customary in the current language or in the bona fide and established practices of the trade of the country where protection is claimed; 18. The services in respect of which regis- tration was sought were 'insurance and financial affairs' in Class 36. 8

7 — Annex to the Agreement establishing the World Trade Organization signed in Marrakesh on 15 April 1994 and approved by Council Decision 94/800/EC of 22 December 1994 concerning the conclusion on behalf of the European Community, as regards matters within its competence, of the agreements reached in the Uruguay Round multilateral negotiations (1986-1994) (OJ 1994 L 336, p. 1). 8 — According to the international classification of goods and services in the Nice Agreement for the Purposes of the 16. Article 15(1) of the Agreement on Registration of Marks of 15 June 1957, as revised and trade-related aspects of intellectual prop- amended.

22. In the context of the measure of organisation of procedure of 15 June 1999, the appellant indicated that it was amend- ing its principal claim and requested the It therefore found that they were two court to alter the contested decision by generic words and that coupling them ordering the Office to publish the sign together without any graphic or semantic 'Companyline' in the Community Trade modification did not imbue them with any Marks Bulletin as a Community trade mark additional characteristic such as to render for services in Class 36 (insurance and the sign, taken as a whole, capable of financial affairs), with a statement by the distinguishing the appellant's services from appellant that it disclaimed any exclusive those of other undertakings. The refusal to right in the words 'company' and 'line'. At register was justified since the world 'Com- the hearing the appellant withdrew its panyline' was not eligible for protection in principal claim. the English-speaking world. I - 7568

DKV v OHIM

25. The Court of First Instance found that differences between that concept and it was not necessary to rule on the second that of 'sufficiently distinctive char- plea because for a sign to be ineligible for acter', and did not assess the overall registration as a Community trade mark, it impression conveyed by the sign (first is sufficient that one of the absolute ground); grounds for refusal applies.

26. Finally, as regards the allegation of misuse of powers, the Court of First — did not consider the absolute ground Instance found that there was no specific for refusal under Article 7(1 )(c) of the and objective evidence to suggest that the Regulation (second ground); contested decision was adopted in pursuit of objectives other than those advanced.

Analysis of the grounds of appeal 31. In addition, the appellant claims that the contested decision contains no reference to the overall effect produced by the sign, which is the criterion by reference to which, it says, a composite sign should be assessed, and accordingly concluded that 'Company- line', far from clearly describing a specific service in the relevant economic sectors, First ground: misapplication of the require- admits of a number of different associ- ment of distinctive character ations and interpretations.

29. By this ground of appeal the appellant is essentially claiming that in the contested 32. The Office objects that the appellant's decision the Court of First Instance was arguments are essentially factual assess- excessively restrictive in applying the ments that are not relevant in the context requirement that a sign be 'devoid of any of an appeal. distinctive character', within the meaning of Article 7(1)(b) of the Regulation, and failed to consider the sign as a whole in assessing its distinctiveness.

33. In any case the sign at issue comprises two descriptive words that are simply juxtaposed without any additional fanciful element and accordingly it is immediately descriptive. In so holding the judgment of 30. It considers that Article 7(1)(b) the Court of First Instance could not be at requires only evidence of a minimal level fault in its application of Article 7(1)(b) of of distinctiveness. Only that interpretation the Regulation. can ensure uniformity of registration prac- tice throughout the Community.

34. It must be recognised at the outset that European trade mark law and, in particu- lar, the interpretation of the Regulation, The word sign, according to the appellant, are at a delicate initial stage. Since the consists of abbreviated descriptive indi- legislature has tended not to lay down clear cations, whose meaning is masked because pointers, it is for the courts, and in they are abbreviated. By taking a different particular the Court of Justice in this case, view, the Court of First Instance wrongly to supplement that legislation by laying required a very high level of distinctiveness. down guiding principles. I - 7570

38. The Court of First Instance, when 36. Since it is not in issue in this case I will seised of the consequent action for annul- not go into the question of the validity, in ment, upheld the Office's conclusion as to Community trade mark law, of the prop- the sign's descriptiveness (Article 7(1)(c) of osition that, in addition to the obstacles the Regulation) but undertook no analysis relating to possible lack of distinctiveness, of its distinctiveness (Article 7(1)(b)), on there are other considerations of public the basis that it was sufficient that an interest that militate in favour of limiting absolute ground for refusal applied in order the registrability of certain signs to enable for registration to be refused. them to be freely used by all traders (the need to keep free). Whilst the judgment in Windsurfing Chiemsee 9 recognised the existence of this principle, the fact that the BABY-DRY judgment is silent on the point has left the matter in a state of 39. In determining the appeal, the Court of uncertainty, which it is for the Court of Justice referred to Article 7(1)(b) and (c) Justice to clarify. and — albeit somewhat unclearly — Article 12 of the Regulation. But it annulled the judgment of the Court of First Instance on the basis of Article 7(1)(c) alone. Classification within the absolute grounds for refusal

37. In the BABY-DRY judgment the Court 40. It is, however, to my mind preferable of Justice was asked to rule on a refusal to that the Community courts apply the grounds for refusal with the same rigour as that employed by the registration auth- 9 —Joined Cases C-108/97 and C-109/97 [1999] ECR I-2779. orities. Each of the conditions for regis-

41. It follows from the fact that each of The Court of First Instance for its part took these criteria must be evaluated separately the view that the sign is composed exclus- that lack of descriptiveness, for example, is ively of the words 'company' and 'line', not sufficient to render a sign suitable for both of which are customary in English- registration as a trade mark. Since the speaking countries. Whereas the first con- BABY-DRY judgment simply annulled the veys that the service is aimed at companies judgment of the Court of First Instance and or firms, the second denotes a branch of the decision of the Office's Board of insurance or a line or group of products. Appeal, on the sole ground that both were The mere fact that the two words are based on an erroneous interpretation of coupled together is irrelevant because Article 7(1)(c), 11 the question arises 'Companyline' lacks distinctiveness. whether the ground of refusal for lack of distinctive character in Article 7(1)(b), on which the Office relied in its decision, continues to subsist.

43. In my view, having regard to the line of 42. This case also raises issues of classifi- argument followed both by the Office and cation. The decision of the Board of Appeal by the Court of First Instance, the sign of 18 November 1998 refusing registration could in principle be refused registration on the basis of Article 7(1)(c), and only once it is clear that it is purely descriptive can 10 — This clarification is necessary because of the legislature's unfortunate lack of precision whereby the 'capacity to Article 7(1)(b) be pleaded. In other words, distinguish' or potential distinctive character (Article 4 of lack of distinctive character is assumed the Regulation) is considered alongside actual distinctive- ness (Article 7(1)(b)) and distinctiveness as a category (Article 7(3)). 1 1 — Seeparagraphs 1 and 2 of the operative part of the judgment. 12 — Paragraph 19 of the decision.

47. A combination of elements, each of which is in itself devoid of distinctive character (in the broad sense of being eligible for registration), may be distinctive when taken together, provided that the 44. As regards the fundamental question of whole constitutes more than just the sum of how to apply Article 7(1) of the Regu- its parts. Everything therefore turns on lation, that is, the conditions for registering when in trade mark law a number of a sign, the Office, and now the Community components together constitute a sign courts, are, despite the relative simplicity of which is distinct from the mere sum of its the terms in which they are framed, faced parts. with a complex set of alternatives. Either those conditions may be met, albeit to a minimal degree, or qualified compliance is required having regard to the various inter- ests at stake. If the latter, then additional principles for application also need to be set out.

48. In the BABY-DRY case, the Court of Justice held that in regard to composite word marks, descriptiveness must be deter- mined not only in relation to each word taken separately, but also in relation to the whole which they form. Any perceptible 45. The question under Article 7(1)(b) and difference between the combination of (c) of the Regulation — as with the cor- words submitted for registration and the responding provisions of the Directive — terms used in the common parlance of the was essentially the degree of distinctiveness relevant class of consumers to designate the or descriptiveness necessary to attract a goods or services or their essential char- refusal to register. acteristics is apt to confer distinctive char-

As regards the intended meaning, if the difference is to be perceptible, the con- notation of the composite sign must not be 50. The adjective 'perceptible' (erkennbar identical to the sum of the semantic import in the German version) is not unambiguous of the individual descriptive parts. in meaning. It is a relative term. What may be perceptible from one point of view may not be from another. It must not in any event be confused with 'minimal'. If the Community legislature had meant 'mini- mal', it would have used that word, or none 52. I have proposed a solution based on the same approach in relation to the prohib- 13 —Judgment in BABY-DRY, cited above, paragraph 40. ition on registering functional shapes in the 14 — Ibid, paragraphs 42 to 44. context of Article 3(1 )(e) of the Directive I - 7574

DKV v OHLM

and the corresponding provision of the Definition of the class of persons targeted Regulation, Article 7(1)(e). 15

55. It is true that the Court noted in Whilst those articles provide that 'signs BABY-DRY that Article 7(2) of the Regu- which consist exclusively of [certain lation states that Article 7(1) is to apply shapes]' are to be refused registration, notwithstanding that the grounds of non- subparagraph (c) provides that 'marks registrability obtain in only part of the which consist exclusively of signs or indi- Community. That means that, if a com- cations which may serve... to designate...' bination of words is purely descriptive in are to be refused registration. The parallels one of the languages used in trade within between the two texts suggest that the same the Community, that is sufficient to render solution should be applied in both cases. it ineligible for registration as a Commu- nity trade mark.

If an examiner considers that a particular interpretative guidelines applied by the sign is descriptive for speakers of a par- Court of First Instance were correct in law, ticular language, it is logical — or at least but reached a specific decision on the possible — that he should refuse regis- contested sign's ability to overcome the tration without further examination. If he obstacle to registration. Whilst the objec- reaches the opposite view, the objective of tive presumably pursued (procedural effi- unitary protection which Community trade ciency) is laudable, I am not convinced that marks are intended to ensure should lead it justifies the solution arrived at. him to examine whether the same is true for the entire potential target market. In order to do so, he must put himself in the shoes of those targeted and make his decision not on the basis of formal prem- isses but of the whole gamut of possible ways in which such consumers might be expected to respond. 17 59. In the field of Community trade marks, the Court of Justice is the highest inter- preter of the law. Its function as such must be to lay down principles of general application for the Court of First Instance 57. Accordingly, the requirement to assess and the Office, as well as for all relevant distinctiveness must be understood from traders, leaving it to those bodies to the point of view of average consumers of implement those principles in practice. Its that category of goods or services, 18 who overriding power of review must be per- are deemed to be 'reasonably well-in- formed exclusively and solely in regard to formed and reasonably observant and cir- questions of law. In this way not only is the cumspect'. 19 true nature of the power to overturn a decision on appeal preserved, but the scope of decisions taken by the Court of First Instance and the Office are also respected.

It is true that the contested judgment contains no decision on the descriptiveness of the sign taken as a whole. None the less, 62. As regards the composition of the term for the purposes of assessing its descrip- 'Companyline', there are two factors at tiveness, as I am doing here, there is play: first, the use of two words each with nothing to suggest that taking the its own meaning, and secondly their jux- expression 'company line' as a whole taposition. invalidates the Court of First Instance's view — rather the reverse is true.

63. The Court of First Instance found that the sign was composed exclusively of two words that are customary in the English- speaking world; while 'company' qualifies 65. The Court of First Instance further held that merely coupling two generic words together without any graphic or semantic 20 — Whilst it might have been possible for the case of modification does not imbue them with any BABY-DRY to be resolved on the basis of the presumed additional characteristic such as to render proficiency of the members of the Court of Justice in English, that is unlikely to be true or marks expressed, for the sign, taken as a whole, capable of example, in Finnish. And it would be aberrant for the type distinguishing the appellant's services from of appellate review to vary according to the language of the sign. those of other undertakings.

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68. None the less I should still like to add a number of comments with a view to clarifying my reasoning. Only in that way may the requirement that a sign's distinctiveness be assessed from the point of view of the average consumer of the relevant goods and services be satisfied. The average consumer of insurance (for 69. From a logical and didactic point of companies), who is deemed to be reason- view the Court of First Instance's election ably well-informed, observant and circum- to make its assessment pursuant to spect, is very likely to have some knowl- Article 7(1)(b) of the Regulation appears edge of English, even if he is not a native to me not to be apposite. It would have speaker, which is a factor that must be been appropriate to begin by finding that weighed in the balance when assessing the significant components of the mark distinctiveness. claimed were wholly descriptive, and on that basis to declare the mark devoid of any distinctive character.

71. I conclude from all of the foregoing That flaw in logic cannot lead to annul- that the first ground of appeal should be ment of the contested decision, since the dismissed.

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sign, mitigates the strictness with which 82. It is certainly true, as I indicated earlier, Article 7(1)(b) is to be applied. In other that in BABY-DRY the Court alluded to words, registration of the sign would not Article 12 of the Regulation when stating have prevented the appellant's competitors the legal basis for its subsequent reasoning. from continuing to use the words 'com- But it did not go on to draw any practical pany' and 'line' for descriptive purposes in consequence from that provision what- regard to goods and services in the class soever. claimed.

83. The appellant argues that Article 12 describes the minimum level of analysis to 79. That is confirmed by the appellant's which the Regulation subjects the absolute express disclaimer under Article 38(2) and conditions for registrability as a trade (3) of the Regulation. mark. The risk that certain traders might monopolise particular descriptive indi- cations for themselves is mitigated by the limitations on the effects of a mark imposed by Article 12.

80. In the Office's estimation, the appel- lant's submissions are not capable of sup- porting an allegation of infringement of the 84. That argument essentially transfers the rules on trade mark registration. First of task of assessing a mark's descriptiveness all, the purpose of Article 12(b) is to from the Office at the time of registration delimit the protection afforded by a mark to the courts responsible for ensuring that that has already been registered, not to the rights conferred by the mark are determine the conditions for registration. exercised in practice. Secondly, no disclaimer made under Article 38 can affect a sign's distinctiveness or descriptiveness.

Fourth ground: failure to consider the approach adopted by trade mark offices in the Member States 91. Firstly, nothing in the Regulation requires the Office to reach the same result as the registration authorities in the 88. The appellant claims that the Court of Member States, still less to apply the same First Instance failed correctly to define the principles of interpretation. The practice in class of persons potentially interested in the a given Member State, in so far as it may be services in respect of which the sign was relevant for the purposes of assessment at sought to be registered. In particular, in Community level, is no more than a helpful applying Article 7(2) of the Regulation it indication to which the Office may have failed to take into account the approach regard when assessing a sign's distinctive- adopted by the authorities in the Member ness. States in regard to registration of the sign.

89. In the view of DKV, English is spoken 92. Secondly, Article 7(2) of the Regu- by a large number of European consumers lation provides that a sign is to be refused and the trade mark offices of the Member registration even where the grounds for States accordingly assess a sign's eligibility refusal obtain in only part of the Commu-

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nity. If the Court of First Instance has approach adopted by the equivalent determined with certainty that the pro- national authorities, still less where it has posed sign is descriptive in part of the already determined that the sign is not Community at least — as it did following registrable in one Community country. its consideration of the first plea — no purpose is served by considering the impression conveyed by that sign to speakers of other Community languages.

93. There is no basis in the Regulation for Furthermore, none of the signs to which requiring the Office to take account of the the appellant refers is comparable to the

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contested sign because none is as descrip- 97. The fifth ground of appeal must there- tive. fore be dismissed along with the appeal as a whole.

96. Suffice it to observe that the appellant's Costs claims cannot alter the finding by the Court of First Instance at paragraph 33 of the contested judgment that there is no specific and objective evidence to suggest that the 98. Under Article 69(2) of the Rules of contested decision was adopted in pursuit Procedure, which apply to the appeal by of objectives other than those advanced. virtue of Article 118, the unsuccessful party The mere fact that the Office treated other is to be ordered to pay the costs. Accord- signs ending in the suffix 'line' differently, ingly, if all of the appellant's grounds of if indeed it did, is no reason to assume that appeal are dismissed, as I propose, the it was exercising a power arbitrarily or to appellant should be ordered to pay the support an allegation of misuse of powers. costs.

Conclusion