Gugler France v OHMI - Gugler (GUGLER) (Judgment) [2016] EUECJ T-674/13 (28 January 2016)

Judgment Background to the dispute In the 1930s, the Gugler family established a business manufacturing wooden windows and doors in Maxdorf (Germany). At the beginning of the 1960s, it began to manufacture polyvinyl chloride windows and doors. In 1983, PK Fermetures S. A., a French company established in Alsace (France) was formed. Since that time it has been active in the area of the marketing and installation of, inter alia, windows, doors and shutters. In 1985, Mr K. Gugler, a member of the Gugler family, formed Gugler GmbH (‘Gugler GmbH’), a German company established in Maxdorf with the object of being a ‘carpenter’s workshop with interior work, the production and selling of building elements, in particular of windows and doors’. Gugler GmbH, of which Mr K. Gugler has been the managing director for many years, is active in Germany on the market for, inter alia, windows, doors, gates, shutters and glazings. Mr K. Gugler created the following sign: In 1999, when PK Fermetures had a business relationship with, in particular, a French supplier, a strong increase in its activities meant that it needed to look for a new supplier. It thus contacted Gugler GmbH, which, at that time, was only active in Germany. In 2000, PK Fermetures and Gugler GmbH entered into a business relationship under which the latter supplied, inter alia, windows and doors to the former, with a view to their resale. In January 2002, in the light of the increasing success of its activities in Alsace, PK Fermetures decided, together with several natural persons, some of whom were members of its staff, to form a new company, so as to cover a broader market. Article 3 of the memorandum and articles of association of that new company states that its company name is ‘GUGLER France’. On 7 February 2002, Gugler France, the applicant, was registered in the commercial and companies register of Besançon (France), which states the company name ‘GUGLER FRANCE’ and briefly describes the company’s activities in the following terms: ‘purchasing, trade in, and selling building closing devices (doors, windows, gates, etc.) by any and all means or processes’. The applicant dealt with the sale and installation in France of doors and windows produced and assembled by Gugler GmbH. On 6 July 2002, Gugler GmbH acquired 498 shares in the applicant from PK Fermetures. In 2003, Mr K. Gugler and Gugler GmbH decided, with French partners, some of whom were founders of the applicant, to form a new company, which was called Gugler Europe S. A. and was established in Luxembourg. According to its memorandum and articles of association, the purpose of the latter company was to hold intellectual property rights. On 25 August 2003, Gugler GmbH filed an application for registration of a Community trade mark with the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) pursuant to Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), as amended (replaced by Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1)). Registration as a mark was sought for the following figurative sign: The goods and services in respect of which registration was sought are in Classes 6, 17, 19, 22, 37, 39 and 42 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended, and correspond to the following description: – Class 6: ‘Light protection devices, namely awnings, folding shutters, roller blinds of metal’; – Class 17: ‘Sound-proofing materials, namely rockwool and foam plastic elements’; – Class 19: ‘Windows, roofing, doors, gates, shutters, roller blind boxes of glass and plastic; glazings, namely conservatories, conservatory roofs; light protection devices, namely folding shutters and roller blinds of plastic’; – Class 22: ‘Light protection devices, namely awnings of plastic’; – Class 37: ‘Window construction services, namely fitting of doors, gates and windows’; – Class 39: ‘Transportation’; – Class 42: ‘Window construction services, namely planning of doors, gates and windows’. On 28 August 2003, having obtained the applicant’s authorisation in that regard, Gugler Europe filed, in France, an application for registration of a national trade mark covering goods and services in Classes 19 and 37. That trade mark, which was registered under the number 3243097 in respect of ‘windows, doors, shutters (not of metal), frames for windows, doors and shutters (not of metal)’ and ‘services of fitting, maintenance and repair of windows, doors and shutters (not of metal)’, is the following figurative sign: Gugler Europe granted a licence in respect of the French mark, referred to in paragraph 13 above, to the applicant. On 21 March 2005, the Community trade mark application was published in Community Trade Marks Bulletin No 12/2005. On 31 August 2005, the mark applied for was registered under the number 3324902 (‘the contested mark’). On 7 February 2006, at the request of Gugler Europe, the following international figurative mark covering goods and services in Classes 19 and 37 was registered under the number 881611: On 1 October 2008, the contested mark was transferred free of charge by Gugler GmbH to Mr Alexander Gugler, the other party before the Board of Appeal, who is an employee of that company and the son of its managing director, Mr K. Gugler. The transfer of the contested mark was published in Community Trade Marks Bulletin No 48/2008 of 1 December 2008. On 14 October 2008, Mr Alexander Gugler granted a licence in respect of the contested mark to Gugler GmbH. That licence was recorded and published in Community Trade Marks Bulletin No 64/2009 of 21 December 2009. On 24 August 2010, Gugler GmbH, in its capacity as the first proprietor of the contested mark, its managing director, Mr K. Gugler, and its employee, Mr Alexander Gugler, brought proceedings against the applicant before the tribunal de grande instance de Nancy (Regional Court, Nancy) (France) for infringement of the contested mark and sought damages in the amount of EUR 5 million. On 17 November 2010, the applicant filed with OHIM an application for a declaration that the contested mark was invalid in respect of all the goods and services for which it had been registered. The grounds for invalidity relied on in support of that application were those set out, first, in Article 52(1)(b) of Regulation No 207/2009 and, secondly, in Article 53(1)(c) of Regulation No 207/2009 read in conjunction with Article 8(4) thereof. In support of its application for a declaration of invalidity, the applicant relied on its company name and stated the description of its company object which appears in its memorandum and articles of association (see paragraph 6 above). By decision of 21 December 2011, the Cancellation Division upheld the application for a declaration of invalidity filed by the applicant on the basis of Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof, and declared the contested mark invalid. First of all, as regards the limitation in consequence of acquiescence relied on by Mr Alexander Gugler, pursuant to Article 54(2) of Regulation No 207/2009, the Cancellation Division found that the applicant had not consented to the use of the contested mark. According to the Cancellation Division, that provision did not apply because the use, in France, of the contested mark by its proprietor had not been proved. In that regard, it took the view, in essence, that the proprietor of the contested mark and the applicant were separate entities, with the result that the activities of the applicant could not be attributed to the proprietor of the contested mark. Furthermore, it found that it had not been proved that the applicant was aware of the existence of the contested mark. Next, the Cancellation Division found that the applicant had proved that its company name existed and was used in the course of trade, that that name was of more than mere local significance, that the right in that name was acquired prior to the date of the application for registration of the contested mark and, lastly, that, according to French law, the right acquired in its company name conferred on it the right to prohibit the use of the contested mark. On 16 February 2012, Mr Alexander Gugler filed a notice of appeal with OHIM, pursuant to Articles 58 to 64 of Regulation No 207/2009, against the decision of the Cancellation Division. By decision of 16 October 2013 (‘the contested decision’), the Fourth Board of Appeal of OHIM annulled the Cancellation Division’s decision and dismissed the application for a declaration of invalidity in its entirety. First, the Board of Appeal found that, since the applicant had not proved that it had a prior right which enabled it to prohibit the use of the contested mark, the application for a declaration of invalidity had to be rejected in so far as it was based on Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof. According to the Board of Appeal, at the very least the condition laid down in Article 8(4) of Regulation No 207/2009 as to the existence of a prior right to prohibit the use of the contested mark was not satisfied (paragraphs 25 to 28 of the contested decision). Secondly, the Board of Appeal found that, since Gugler GmbH was not acting in bad faith when it filed the application for registration of the contested mark, the application for a declaration of invalidity had to be rejected in so far as it was based on Article 52(1)(b) of Regulation No 207/2009. It stated that, when that company filed the contested mark, it had had an active business producing, selling and exporting doors and windows under the name ‘GUGLER’ for many years. In the Board of Appeal’s view, filing an application for registration of a Community trade mark was therefore an obvious and completely justified action. According to the Board of Appeal, that conclusion was not altered by the fact that that company had not informed the applicant of the application for registration of the contested mark or of the existence of that mark, that the applicant was not aware of the existence of that mark, that other registrations, including a French one, had been filed afterwards in the name of Gugler Europe, that the latter had, for whatever reason, obtained the applicant’s consent at the time of filing the application for registration of the later French mark, that that latter mark had been licensed to the applicant and, lastly, that Gugler GmbH had invoked the contested mark in a recent court action which had been brought against the applicant as a consequence of the distorted commercial relationship between the parties (paragraphs 30 and 31 of the contested decision). Forms of order sought The applicant claims that the Court should: – annul the contested decision; – declare the contested mark invalid on the basis of Article 52(1)(b) of Regulation No 207/2009 and of Article 53(1)(c) of that regulation; – order OHIM and/or Mr Alexander Gugler to pay the costs incurred by the applicant before OHIM and the General Court. OHIM contends that the Court should: – dismiss the action; – order the applicant to pay the costs. Law In support of the action, the applicant relies on two pleas in law, alleging, first, infringement of Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof, and secondly, infringement of Article 52(1)(b) of Regulation No 207/2009. The alleged infringement of Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof In the first place, the applicant states that it relied on its rights in its company name in order to have the contested mark declared invalid on the basis of Article 53(1) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof. It states that, although it adopted the trade name ‘n|gel&fenêtre’ following the filing of the action by Gugler GmbH and Messrs Alexander Gugler and K. Gugler (see paragraph 19 above), it still uses its company name ‘GUGLER FRANCE’ and, as its trade name, either ‘Gugler France’ or ‘n|gel&fenêtre’, as is attested to by recent invoices which have been produced. After examining, in the present case, the conditions laid down by Article 8(4) of Regulation No 207/2009, both as regards the application of EU law and the application of national law, in the case in point French law, it claims that all the requirements of both French and European law, case-law and practice are fulfilled and that its application for a declaration of invalidity is well founded. In the second place, in the part of the application entitled ‘[c]ontesting the [contested] decision’, the applicant calls into question the merits of the assessment of the Board of Appeal set out in paragraph 26 of the contested decision. It maintains that that assessment is exclusively based on the false arguments of the proprietor of the contested mark and is erroneous. OHIM, after stating that, when applying Article 8(4) of Regulation No 207/2009, it must weigh the facts and apply the law as a national judge would, disputes the merits of the applicant’s arguments. Under Article 53(1)(c) of Regulation No 207/2009, a Community trade mark is to be declared invalid on application to OHIM where there is an earlier right as referred to in Article 8(4) of that regulation and the conditions set out in the latter paragraph are satisfied. It must be borne in mind that, pursuant to those two provisions, the proprietor of a sign other than a trade mark may apply for a declaration that a Community trade mark is invalid if that sign satisfies all of the four following conditions: it must be used in the course of trade in a sufficiently significant manner; it must be of more than mere local significance; the right to that sign must have been acquired in accordance with the law of the Member State in which the sign was used prior to the date of application for registration of the Community trade mark; and, lastly, the sign must confer on its proprietor the right to prohibit the use of a subsequent trade mark. Accordingly, if a sign does not satisfy one of those conditions, an application for a declaration of invalidity based on the existence of a sign other than a trade mark used in the course of trade, for the purposes of Article 8(4) of Regulation No 207/2009, cannot succeed (judgments of 29 March 2011 in Anheuser-Busch v Budějovický Budvar , C‑96/09 P, ECR, EU:C:2011:189 , paragraph 159, and 24 March 2009 in Moreira da Fonseca v OHIM — General Óptica (GENERAL OPTICA) , T‑318/06 to T‑321/06, ECR, EU:T:2009:77, paragraphs 32 and 47). The first two conditions, namely those relating to the use of the sign relied on and its significance, which must be more than merely local, are apparent from the very wording of Article 8(4) of Regulation No 207/2009 and must therefore be interpreted in the light of EU law. Regulation No 207/2009 thus sets out uniform standards, relating to the use of signs and their significance, which are consistent with the principles underlying the system established by that regulation (judgment in GENERAL OPTICA , cited in paragraph 34 above, EU:T:2009:77, paragraph 33). By contrast, it is apparent from the phrase ‘where and to the extent that, pursuant to the Community legislation or the law of the Member State governing that sign’, that the other two conditions, set out subsequently in Article 8(4)(a) and (b) of Regulation No 207/2009, constitute conditions which, unlike the conditions above, must be assessed in the light of the criteria set by the law governing the sign relied on. That reference to the law governing the sign relied on is entirely justified, given that Regulation No 207/2009 makes it possible for signs which fall outside the Community trade mark system to be relied on against a Community trade mark. Therefore, only the law which governs the sign relied on can determine whether that sign predates the Community trade mark and whether it can justify a prohibition of the use of a subsequent trade mark (see, to that effect, judgment in GENERAL OPTICA , cited in paragraph 34 above, EU:T:2009:77, paragraph 34). With regard to the application of the fourth condition set out in Article 8(4) of Regulation No 207/2009, regard must be had, in particular, to the national rules relied on and to the judicial decisions delivered in the Member State concerned. On that basis, the proprietor of the earlier sign must establish that the sign concerned falls within the scope of the law of the Member State relied on and that it would allow the use of a subsequent trade mark to be prohibited (judgments in Anheuser-Busch v Budějovický Budvar , cited in paragraph 34 above, EU:C:2011:189 , paragraph 190, and of 18 April 2013 in Peek & Cloppenburg v OHIM — Peek & Cloppenburg (Peek & Cloppenburg) , T‑507/11, EU:T:2013:198, paragraph 21). It must be pointed out that the proprietor of the earlier sign must establish only that he has the right to prohibit the use of a subsequent trade mark and he cannot be required to establish that that right has been exercised, in the sense that he has actually been able to prohibit such use (judgment in Anheuser-Busch v Budějovický Budvar , cited in paragraph 34 above, EU:C:2011:189 , paragraph 191, and Peek & Cloppenburg , cited in paragraph 37 above, EU:T:2013:198, paragraph 22). It is in the light of those considerations that the legality of the contested decision must be examined inasmuch as the Board of Appeal decided to reject the applicant’s application for a declaration of invalidity based on Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof. In the present case, the Board of Appeal, after referring to the wording of Article 8(4) of Regulation No 207/2009 and the four conditions which it sets out (paragraphs 23 and 24 of the contested decision) found that the fourth condition, referred to in Article 8(4)(b) of Regulation No 207/2009, had not been fulfilled and that the application for a declaration of invalidity had to be rejected (paragraph 28 of the contested decision). In paragraph 26 of the contested decision, first of all, the Board of Appeal stated that Gugler GmbH, which has been registered in the German commercial and companies register since 1985, was trading in France under the name ‘GUGLER’, with the founders of the applicant acting as distributors, before the applicant was formed. It found that the forming of the applicant and the choice of its company name was due solely to the existence of Gugler GmbH and the trade name ‘GUGLER’ and to the fact that the activities of the newly established company would be to sell and install the ‘GUGLER’ products produced by Gugler GmbH. It deduced from that that the applicant’s company name existed, in essence, by the ‘grace’ of Gugler GmbH. Next, the Board of Appeal found that Gugler GmbH had acquired a share in the applicant and had agreed to the use of its company name only because of the commercial relationship between the two companies, in the sense that the applicant was selling and installing the ‘GUGLER’ products produced by Gugler GmbH. In paragraph 27 of the contested decision, the Board of Appeal stated that it had to be concluded that when the applicant was incorporated, it was not established that it had a right to prohibit the use or registration of the contested mark by Gugler GmbH. It pointed out that the situation was no different at the time when the application for that mark was filed and that it remained unchanged. It added that what counted in that regard was the absolute priority in the name ‘GUGLER’ which lay with Gugler GmbH and not with the applicant, the company name of which was only a derivative. It must be pointed out that the Board of Appeal stated that it was ruling only on the fourth condition set out in Article 8(4) of Regulation No 207/2009. In that regard, it must be observed that, since the earlier right being relied on is the company name of the applicant, which is a company registered in the commercial and companies register in France, the fourth condition set out in Article 8(4) of Regulation No 207/2009 implies the application of French law, a point which is not in dispute between the parties. It must be pointed out at the outset that the Board of Appeal did not, in the present case, either refer to the matters which the applicant put forward in order to establish that the earlier sign fell within the scope of the law of the Member State relied on and that it would allow the use of a subsequent trade mark to be prohibited or explain to what extent that evidence served to discharge the burden of proof which the applicant bore in accordance with that case-law. Furthermore, it is important to point out that OHIM has stated that, when applying the provisions of Article 8(4) of Regulation No 207/2009, it must weigh the facts and apply the law as a national judge would. However, in the first place, although, according to the case-law cited in paragraph 36 above, the fourth condition set out in Article 8(4) of Regulation No 207/2009 must be assessed in the light of the criteria set by national law, the fact remains that the Board of Appeal’s analysis in the contested decision does not include any reference to the national law applicable, whether that reference is to legislation or to the case-law. In the second place, it must be pointed out that the Board of Appeal based its reasoning on the existence of an earlier company name and an earlier trade name and on a ‘trade mark “GUGLER”’ belonging to Gugler GmbH, which, in its view, prevented the applicant from acquiring a right in the ‘name “GUGLER”’ (paragraphs 26 and 27 of the contested decision). However, it is not sufficiently clear from the contested decision on what evidence, which may have been discussed in the part of that decision entitled ‘Facts’, the Board of Appeal based its assessment set out in paragraphs 26 and 27 of the contested decision. Furthermore, although OHIM admits in the response that, according to the provisions of French law which are applicable in the present case, the applicant has acquired, as it claims, a right to the protection of its company name, it must be stated that the contested decision does not contain any mention of, or reference to, the right to the protection of a company name conferred by French law, or, a fortiori , the conditions laid down by French law which define the applicant’s rights relating to the protection of its company name. In those circumstances, it must be borne in mind that Article 75 of Regulation No 207/2009 provides that decisions of OHIM must state the reasons on which they are based. That obligation to state reasons, which also derives from Article 296 TFEU, has been the subject of settled case-law according to which the statement of reasons must disclose in a clear and unequivocal manner the reasoning followed by the institution which adopted the measure in question in such a way as to enable, first, the persons concerned to exercise effectively their right to request judicial review of the contested decision and, secondly, the Courts of the European Union to exercise their power to review the legality of the decision (see judgment of 12 February 2015 in Vita Phone v OHIM (LIFEDATA) , T‑318/13, EU:T:2015:96 , paragraph 46 and the case-law cited; see also, to that effect, judgment of 13 December 2011 in Meica v OHIM — Bösinger Fleischwaren (Schinken King) , T‑61/09, EU:T:2011:733, paragraph 17 and the case-law cited). Furthermore, a finding that there is a lack or an insufficiency of reasoning constitutes an infringement of essential procedural requirements for the purposes of Article 263 TFEU and is a matter of public policy which the Courts of the European Union must raise of their own motion (judgment of 2 April 1998 in Commission v Sytraval and Brink’s France , C‑367/95 P, ECR, EU:C:1998:154 , paragraph 67). In that regard, it must be borne in mind that the requirement that the European Union judicature should raise of its own motion a ground involving a question of public policy must be complied with in the light of the rule that the parties should be heard. According to settled case-law, apart from special cases such as those provided for by the Rules of Procedure of the Courts of the European Union, those Courts may not base a decision on a legal ground raised by the Court of its own motion, even if it involves a matter of public policy, without first inviting the parties to submit their observations on that ground (see judgment of 24 June 2015 in Spain v Commission , C‑263/13 P, ECR, EU:C:2015:415 , paragraph 57 and the case-law cited; see also, to that effect, judgments of 27 March 2014 in OHIM v National Lottery Commission , C‑530/12 P, ECR, EU:C:2014:186 , paragraph 54, and 13 December 2013 in Hungary v Commission , T‑240/10, ECR, EU:T:2013:645, paragraph 71). In the present case, since the Court decided to examine of its own motion the Board of Appeal’s compliance with its obligation to state reasons, it requested the parties, in the context of a measure of organisation of procedure provided for by Article 89 of the Rules of Procedure of the General Court, to state their views on that issue at the hearing. In particular, the parties were requested to state whether they were of the opinion that the contested decision made it possible to ascertain the legal grounds on which the Board of Appeal rejected the applicant’s application for a declaration of invalidity based on Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof. At the hearing, OHIM put forward an argument, stating that that argument amplified the reason stated by the Board of Appeal in paragraph 27 of the contested decision. At the Court’s request, OHIM submitted that line of argument in writing, following the hearing, in the observations lodged at the Court Registry on 21 September 2015. Since the applicant did not take part in the hearing, it was given the possibility of making its observations in writing, which it did on 8 October 2015, that is to say, within the prescribed period. In its observations of 21 September 2015, OHIM submits that the relevant point in time at which it had to be examined whether the applicant could prevent the use of the contested mark was the date of filing of that mark, namely 25 August 2003. It states that Article L. 711-4 of the French Intellectual Property Code (Code de la propriété intellectuelle français) protects earlier corporate names and trade names against later trade marks on the condition that ‘there is a risk of confusion in the public’s mind’ (judgment of 21 October 2014 in Szajner v OHIM — Forge de Laguiole (LAGUIOLE) , T‑453/11, ECR, under appeal, EU:T:2014:901 , paragraphs 75 to 80). According to OHIM, in 2003 and until the cessation of the commercial relations between the parties in 2010, a French court could not have upheld an action which was based on the applicant’s company name and was aimed at prohibiting the use by Gugler GmbH of the contested mark. OHIM maintains that, as the national court would have had to examine ex officio whether such an action was in compliance with EU law, that court would have concluded that the applicant could not rely on that article in order to prohibit imports into France of products bearing the contested mark inasmuch as those products were marketed by Gugler GmbH. According to OHIM, bearing in mind that the applicant was the distributor of Gugler GmbH and that both companies were economically linked, allowing the applicant to prohibit the use by Gugler GmbH of the contested mark in France would have been contrary, in 2003, to Article 30 EEC, now Article 34 TFEU (see, as regards the EEC Treaty, judgment of 22 June 1994 in IHT Internationale Heiztechnik and Danzinger , C‑9/93, ECR, EU:C:1994:261, paragraphs 34 to 37). OHIM adds, in conclusion, that, if two entities using identical or similar trade marks are economically linked, then there cannot be a likelihood of confusion because the use of one mark cannot prejudice the essential function of the other mark, since they both identify the same commercial origin. According to OHIM, this reasoning, which was developed in cases of conflicts between two trade marks, is applicable to conflicts between a trade mark and a company name. In that regard, it must be borne in mind that, according to the case-law, the statement of reasons for a decision must appear in the actual body of that decision and may not be made by means of subsequent explanations provided by OHIM, save in exceptional circumstances which, in the absence of any urgency, are not present (see, to that effect, judgments of 20 May 2009 in VIP Car Solutions v Parliament , T‑89/07, ECR, EU:T:2009:163, paragraph 76 and the case-law cited, and 14 January 2015 in Veloss International and Attimedia v Parliament , T‑667/11, EU:T:2015:5 , paragraph 63). It follows that the decision must, in principle, be self-sufficient and that the reasons on which it is based may not be stated in written or oral explanations given subsequently when the decision in question is already the subject of proceedings brought before the European Union judicature (see, to that effect and by analogy, judgments of 15 June 2005 in Corsica Ferries France v Commission , T‑349/03, ECR, EU:T:2005:221 , paragraph 287, and 18 December 2008 in Componenta v Commission , T‑455/05, EU:T:2008:597, paragraph 121). In the present case, as there is no urgency, the exceptional circumstances referred to in paragraph 59 above are not present and OHIM’s explanations cannot be regarded as supplementing a statement of reasons which is already self-sufficient, since they constitute a completely new statement of reasons. It follows from all of the above that, in the present case, it must be held that the Board of Appeal failed to comply with its obligation to state reasons by not stating, first, whether it was applying national law and, as the case may be, which national law and, secondly, the legal provisions, or even one or more lines of decided cases, which made it possible for it to find that the applicant had no right to prohibit the use of the contested mark. What is more, it failed to comply with its obligation to state reasons on account of the absence of any clear indication regarding the basis for its assessment. Accordingly, in the light of the case-law cited in paragraphs 52 and 53 above, the Court cannot determine whether the reasoning of the Board of Appeal is correct and exercise its power to review the legality of the contested decision. Consequently, the contested decision must be annulled, inasmuch as the Board of Appeal infringed the obligation to state reasons imposed upon it by Article 75 of Regulation No 207/2009 when it ruled on the ground for invalidity put forward by the applicant on the basis of Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof. The alleged infringement of Article 52(1)(b) of Regulation No 207/2009 The applicant submits that the Board of Appeal erred in rejecting the application for a declaration that the contested mark is invalid on the basis of Article 52(1)(b) of Regulation No 207/2009. It states that the ‘bad faith’ of a company most often manifests itself through the behaviour and actions of its managing director, that is to say, a natural person. It disputes the Board of Appeal’s assessment in paragraph 30 of the contested decision. It maintains, first, that the Board of Appeal reached the false conclusion that Gugler GmbH made use of the term ‘gugler’, with respect to the relevant goods, in France, prior to the founding of the applicant. It maintains, secondly, that the Board of Appeal erred in finding that the facts referred to in that paragraph did not alter its conclusion, whereas, on the contrary, those facts attested to the bad faith of Gugler GmbH when filing the contested mark. Furthermore, the applicant claims that the contested mark was filed with the dishonest intention of owning rights in European Union territory, so that Gugler GmbH would subsequently be in a position to limit the activities of the applicant and the other shareholders in the event of a change in their respective relationships. Lastly, it states that the contested mark was also assigned by Gugler GmbH to Mr A. Gugler in bad faith. OHIM disputes the merits of the applicant’s arguments. After referring to the case-law, it states that the intentions of the applicant for the contested mark, namely Gugler GmbH, must be examined. It submits that, if account is taken of the circumstances prior to the filing date of the application for that mark, it is clear that Gugler GmbH had a legitimate interest in filing the application for that mark. Furthermore, according to OHIM, the fact that Gugler GmbH knew that the applicant was selling identical or similar goods in France under the same or a similar sign is not, in itself, sufficient for it to be possible to conclude that that company was acting in bad faith. In addition, OHIM submits that the filing of the contested mark did not follow the breakdown of commercial relations with the applicant, but preceded the end of such relations and the subsequent request to stop using the ‘signs “Gugler”’ by seven years. It maintains that, in those circumstances, it cannot be claimed that the sole objective of Gugler GmbH, when filing that mark, was to prevent the applicant from using the ‘name “Gugler”’ or any other sign including that name. Moreover, OHIM takes the view that the fact that Gugler GmbH applied for the contested mark without informing the applicant or requesting its consent is irrelevant, as is the fact that Gugler Europe granted a licence to the applicant in respect of the French trade mark but not in respect of the contested mark. Lastly, in OHIM’s view, even though it is true that Gugler GmbH was a shareholder in the applicant before the date of filing of the application for registration of the contested mark, the filing of that mark did not, contrary to the applicant’s claims, reflect an objective situation of conflict of interest which established Gugler GmbH’s bad faith. It should be borne in mind, first, that the Community trade mark system is based on the principle, laid down in Article 8(2) of Regulation No 207/2009, that an exclusive right is granted to the person who is first to file. In accordance with that principle, a mark may be registered as a Community trade mark only in so far as this is not precluded by an earlier mark, whether that mark is, inter alia, a Community trade mark, a trade mark registered in a Member State or by the Benelux Office for Intellectual Property, a trade mark registered under international arrangements which have effect in a Member State, or a trade mark registered under international arrangements which have effect in the European Union. By contrast, without prejudice to the possible application of Article 8(4) of Regulation No 207/2009, the mere fact that a non-registered mark is used by a third party does not preclude an identical or similar mark from being registered as a Community mark for identical or similar goods or services (judgment of 14 February 2012 in Peeters Landbouwmachines v OHIM — Fors MW (BIGAB) , T‑33/11, ECR, EU:T:2012:77, paragraph 16; see also, judgment of 11 July 2013 in SA. PAR. v OHIM — Salini Costruttori (GRUPPO SALINI) , T‑321/10, ECR, EU:T:2013:372, paragraph 17 and the case-law cited). The application of that principle is qualified, inter alia, by Article 52(1)(b) of Regulation No 207/2009, under which a Community trade mark must be declared invalid on application to OHIM or on the basis of a counterclaim in infringement proceedings where the applicant was acting in bad faith when he filed the application for registration of the trade mark. It is for the applicant for a declaration of invalidity who intends to rely on that ground to establish the circumstances which make it possible to conclude that the proprietor of a Community trade mark was acting in bad faith when he filed the application for registration of that mark (judgment in BIGAB , cited in paragraph 70 above, EU:T:2012:77, paragraph 17; see also, judgment of 26 February 2015 in Pangyrus v OHIM — RSVP Design (COLOURBLIND) , T‑257/11, EU:T:2015:115, paragraph 63 and the case-law cited). The concept of ‘bad faith’ referred to in Article 52(1)(b) of Regulation No 207/2009 is not defined, delimited or even described in any way in the legislation (judgment of 1 February 2012 in Carrols v OHIM — Gambettola (Pollo Tropical CHICKEN ON THE GRILL) , T‑291/09, ECR, EU:T:2012:39, paragraph 44). It must be observed, as stated by OHIM, that, in the judgment of 11 June 2009 in Chocoladefabriken Lindt & Sprüngli (C‑529/07, ECR, EU:C:2009:361 , paragraph 53), the Court of Justice provided some clarification regarding the way in which the concept of bad faith, as referred to in Article 52(1)(b) of Regulation No 207/2009, should be interpreted. According to the Court of Justice, in order to determine whether the applicant for registration is acting in bad faith, within the meaning of that provision, account must be taken of all the relevant factors specific to the particular case which obtained at the time of filing the application for registration of a sign as a Community trade mark, in particular: (i) the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product or service capable of being confused with the sign for which registration is sought; (ii) the applicant’s intention to prevent that third party from continuing to use such a sign; and (iii) the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought (judgment in Chocoladefabriken Lindt & Sprüngli , cited in paragraph 73 above, EU:C:2009:361 , paragraph 53). That being so, it is apparent from the wording used by the Court of Justice in the judgment of 11 June 2009 in Chocoladefabriken Lindt & Sprüngli (cited in paragraph 73 above, paragraph 53) that the factors listed are only examples drawn from a number of factors which can be taken into account in order to decide whether an applicant for registration was acting in bad faith at the time when the trade mark application was filed (judgments in BIGAB , cited in paragraph 70 above, EU:T:2012:77, paragraph 20; of 13 December 2012 in pelicantravel.com v OHIM — Pelikan (Pelikan) , T‑136/11, EU:T:2012:689, paragraph 26; and in COLOURBLIND , cited in paragraph 71 above, EU:T:2015:115, paragraph 67). It must therefore be held that, in the context of the overall analysis undertaken pursuant to Article 52(1)(b) of Regulation No 207/2009, account may also be taken of the origin of the contested sign and its use since its creation, the commercial logic underlying the filing of the application for registration of that sign as a Community trade mark, and the chronology of events leading up to that filing (see judgment in COLOURBLIND , cited in paragraph 7 above, EU:T:2015:115, paragraph 68 and the case-law cited). It is in particular in the light of the foregoing considerations that the legality of the contested decision must be reviewed, inasmuch as the Board of Appeal concluded that there was no bad faith on the part of Gugler GmbH at the time when the application for registration of the contested mark was filed. It must be pointed out that, for the purposes of concluding that there was no bad faith on the part of Gugler GmbH when the application for registration of the contested mark was filed, the Board of Appeal observed, after referring to the wording of Article 52(1)(b) of Regulation No 207/2009, that, when that company filed the application for registration of that mark, it had had an active business producing, selling and exporting doors and windows under the ‘name “Gugler”’ for many years. According to the Board of Appeal, filing an application for registration of a Community trade mark was therefore an ‘obvious and completely justified action’ (paragraphs 29 and 30 of the contested decision). Furthermore, the Board of Appeal took the view that that conclusion was not altered by the fact that Gugler GmbH had not informed the applicant of the application for registration of the contested mark or of the existence of that mark, that the applicant was not aware of the existence of that mark, that other registrations, including a French one, had been filed afterwards in the name of Gugler Europe, that Gugler Europe had, for whatever reason, obtained the applicant’s consent at the time of filing the application for registration of the later French mark, that that latter mark had been licensed to the applicant and, lastly, that Gugler GmbH had invoked the contested mark in a recent court action which had been brought against the applicant as a consequence of the distorted commercial relationship between the parties (paragraph 30 of the contested decision). In the first place, it must be pointed out that the Board of Appeal took the view that commercial logic underlay the filing of the contested mark owing to the use of the ‘name “Gugler”’ by Gugler GmbH. However, it is not apparent from the contested decision to what that reference to the ‘name “Gugler”’ refers (paragraph 30 of the contested decision). Although OHIM seems to maintain that the Board of Appeal relied on paragraphs 11 and 20 of the contested decision, which are in the part of that decision entitled ‘Facts’, and on paragraph 26 of that decision, in which the other ground for invalidity put forward by the applicant was examined, it must be stated that, in the decision in question, there is no reference to any paragraph in that part in which the use of the term ‘Gugler’, by both Gugler GmbH and the applicant, may have been discussed or to any other paragraph of that decision. Furthermore, although, in its written pleadings, the applicant understands that reference as a reference to the ‘“Gugler” products’, OHIM, in its written pleadings, refers to the surname of the founders of Gugler GmbH, or even the company name and trade name of that company or a sign in its business papers. However, it is in no way apparent from the contested decision whether the Board of Appeal intended to refer to the surname Gugler, the company name or trade name of Gugler GmbH, which it referred to in paragraph 26 of that decision, or the ‘“Gugler” products’, which it referred to in paragraphs 11, 20 and 21 of that decision, or even to all of those different elements. Consequently, for the purposes of determining what the Board of Appeal was referring to in mentioning the ‘name “Gugler”’ and which elements it based its reasoning on (paragraph 30 of the contested decision), it is possible only to make assumptions. In the second place, it must pointed out that the Board of Appeal discounted the facts set out in paragraph 30 of the contested decision, which corresponded to the arguments put forward by the applicant, summarised in paragraph 7 of the contested decision, by merely mentioning them and by stating that those arguments did not alter its conclusion. It did not provide any explanation, either expressly or implicitly, as regards the reasons why those arguments did not alter its conclusion inasmuch as it is not apparent from that decision that the arguments in question were examined in any part of that decision. Consequently, for the purposes of responding to the applicant’s argument that the Board of Appeal erred in finding that the facts referred to in paragraph 30 of the contested decision did not alter its conclusion, whereas, on the contrary, those facts attested to the bad faith of Gugler GmbH when filing the application for registration of the contested mark, it is possible only to make assumptions as regards the Board of Appeal’s reasoning. In those circumstances, in accordance with the case-law cited in paragraphs 52 to 54 above, the Court decided to examine of its own motion the Board of Appeal’s compliance with its obligation to state reasons and it requested the parties, in the context of a measure of organisation of procedure provided for by Article 89 of the Rules of Procedure, to state their views on that issue at the hearing. In particular, the parties were requested to state whether they were of the opinion that the contested decision made it possible to ascertain the reasons why the Board of Appeal rejected the arguments, which are referred to in paragraph 7 of the contested decision and reproduced in paragraph 30 of that decision, that the applicant had put forward in support of its application for a declaration of invalidity based on Article 52(1)(b) of Regulation No 207/2009. At the hearing, OHIM maintained that the Board of Appeal had to be regarded as having attached decisive importance to the fact that Gugler GmbH had been using the ‘sign Gugler’ for many years. However, in that regard, it has already been stated that the Board of Appeal did not specify what it intended to refer to in mentioning the ‘name “Gugler”’ (see paragraphs 80 to 83 above). Furthermore, the reasons why, having regard to the case-law referred to in paragraphs 70 to 76 above and the circumstances of the present case, decisive importance had to be attached to such a use of the ‘sign Gugler’ are not sufficiently apparent from the contested decision. It is true that, as OHIM stated at the hearing, the Boards of Appeal cannot be required to provide an account that follows exhaustively and one by one all the lines of reasoning articulated by the parties before them. The reasoning may therefore be implicit, on condition that it enables the persons concerned to know the reasons for the Board of Appeal’s decision and provides the European Union judicature with sufficient material for it to exercise its power of review (judgment of 9 July 2008 in Reber v OHIM — Chocoladefabriken Lindt & Sprüngli (Mozart) , T‑304/06, ECR, EU:T:2008:268, paragraph 55; see also, by analogy, judgment of 8 February 2007 in Groupe Danone v Commission , C‑3/06 P, ECR, EU:C:2007:88, paragraph 46). However, the Board of Appeal’s only explanation, which was to state that ‘[f]iling an application for a Community trade mark application was therefore an obvious and completely justified action’, is not sufficient for it to be understood in what way, given the relations, at least of a business nature, between the applicant and Gugler GmbH, the various arguments put forward by the applicant and referred to by the Board of Appeal (see paragraph 79 above) were irrelevant. Accordingly, it must be held that the Board of Appeal failed to provide an adequate statement of reasons for the contested decision by, first, not specifying what it was referring to in mentioning the ‘name “Gugler”’, as that factor seems to have constituted an essential point in its analysis, and, secondly, not explaining in what way the arguments put forward by the applicant, which were summarised in paragraph 7 of the contested decision and reproduced by the Board of Appeal in paragraph 30 of that decision, did not alter its conclusion that there was no bad faith on the part of the applicant for the contested mark. Consequently, having regard to the case-law cited in paragraphs 52 and 53 above, it must be held that the Court is not able to exercise its power to review the legality of the contested decision. In view of all of the foregoing considerations, the contested decision must be annulled, inasmuch as the Board of Appeal infringed the obligation to state reasons imposed upon it by Article 75 of Regulation No 207/2009 when it ruled on the ground for invalidity put forward by the applicant on the basis of Article 52(1)(b) of Regulation No 207/2009. Conclusions on the outcome of the action In view of all of the foregoing considerations, the applicant’s first head of claim must be allowed and the contested decision must be annulled. OHIM submits that the applicant’s second head of claim, by which it requests the Court to declare the contested registration invalid, is inadmissible. It maintains that the cancellation of the contested registration would not be a necessary consequence of the annulment of the contested decision. Furthermore, OHIM submits that it is for OHIM to draw the appropriate inferences from the Court’s judgment, the Court having no power to give it instructions. In that regard, it must be held that the applicant is, in essence, requesting the Court to adopt the decision which, according to the applicant, OHIM should have taken, namely a decision holding that the conditions for declaring the mark applied for invalid were satisfied, with the result that OHIM would comply with that decision by declaring the contested mark invalid. The applicant is therefore requesting that the contested decision be altered, as provided for in Article 65(3) of Regulation No 207/2009. That is not a request to the Court to require OHIM to do or to refrain from doing something, which would constitute a direction addressed to the latter. On the contrary, it is a request to the Court to decide, on the same basis as the Board of Appeal, whether the mark applied for must be declared invalid in the light of Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof, or in the light of Article 52(1)(b) of that regulation. Such a decision is among the measures which, in principle, may be taken by the Court in the exercise of its power to alter decisions (see, by analogy, judgment of 12 September 2007 in Koipe v OHIM — Aceites del Sur (La Española) , T‑363/04, ECR, EU:T:2007:264 , paragraph 30 and the case-law cited). It follows that the applicant’s second head of claim is admissible. However, it must be borne in mind that the power of the Court to alter decisions pursuant to Article 65(3) of Regulation No 207/2009 does not have the effect of conferring on that Court the power to carry out an assessment on which that Board of Appeal has not yet adopted a position. Exercise of the power to alter decisions must therefore, in principle, be limited to situations in which the Court, after reviewing the assessment made by the Board of Appeal, is in a position to determine, on the basis of the matters of fact and of law as established, what decision the Board of Appeal was required to take (judgment of 5 July 2011 in Edwin v OHIM , C‑263/09 P, ECR, EU:C:2011:452 , paragraph 72). In the present case, it must be held that the conditions for the exercise of the Court’s power to alter decisions are not satisfied. As regards the ground for invalidity based on Article 53(1)(c) of Regulation No 207/2009, read in conjunction with Article 8(4) thereof, the Board of Appeal did not examine whether the first three conditions laid down by Article 8(4) of Regulation No 207/2009 were satisfied and, in view of the failure to state reasons in the contested decision, it cannot be concluded that it examined whether, in accordance with the fourth condition referred to in that provision, the conditions laid down by national law were satisfied. As regards the ground for invalidity based on Article 52(1)(b) of Regulation No 207/2009, the Board of Appeal did not state to the required legal standard what it intended to refer to in mentioning the ‘name “Gugler”’ (paragraph 30 of the contested decision) or in what way the various arguments put forward by the applicant, which are referred to in paragraph 30 of the contested decision, were not such as to enable it to conclude that there was bad faith on the part of Gugler GmbH. Consequently, it cannot be held that it examined those various matters. Accordingly, the Court is not in a position to determine what decision the Board of Appeal was required to take and cannot therefore exercise its power to alter decisions. In view of the foregoing, the applicant’s second head of claim must be rejected. Costs Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since OHIM has been unsuccessful for the main part, it must be ordered to pay the costs incurred in the course of the proceedings before the Court, in accordance with the form of order sought by the applicant, since Mr Alexander Gugler is not a party to the present proceedings. Moreover, the applicant claimed that OHIM and Mr Alexander Gugler should be ordered to pay the costs that it incurred in the course of the proceedings before OHIM. In that regard, it must be borne in mind that, under Article 190(2) of the Rules of Procedure, costs necessarily incurred by the parties for the purposes of the proceedings before the Board of Appeal are to be regarded as recoverable costs. However, that does not apply to costs incurred for the purposes of the proceedings before the Cancellation Division. Consequently, assuming that the applicant’s claim refers to the costs relating to the invalidity proceedings before the Cancellation Division, those costs do not constitute recoverable costs and the applicant’s claim is inadmissible. Furthermore, assuming that the application submitted by the applicant is aimed at obtaining an order requiring the other party before the Board of Appeal to pay the costs of the proceedings before that Board of Appeal, it is for the Board of Appeal to rule on the costs relating to those proceedings in the light of the present judgment. On those grounds, THE GENERAL COURT (Ninth Chamber) hereby: 1. Annuls the decision of the Fourth Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) of 16 October 2013 (Case R 356/2012-4); 2. Dismisses the action as to the remainder; 3. Orders OHIM to bear its own costs and to pay those incurred by Gugler France in the course of the proceedings before the Court. Berardis Czúcz Popescu Delivered in open court in Luxembourg on 28 January 2016. [Signatures] * Language of the case: English. © European Union The source of this judgment is the Europa web site. The information on this site is subject to a information found here: Important legal notice . This electronic version is not authentic and is subject to amendment. BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII