Societe des produits Nestle v EUIPO - European Food (FITNESS) (EU trade mark - Judgment) [2019] EUECJ T-536/18 (10 October 2019)

Judgment Background to the dispute On 20 November 2001, the applicant, Société des produits Nestlé SA, filed an application for registration of an EU trade mark with the European Union Intellectual Property Office (EUIPO) pursuant to Council Regulation (EC) No 207/2009 of 26 February 2009 on the European Union trade mark (OJ 2009 L 78, p. 1), as amended (replaced by Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark (OJ 2017 L 154, p. 1)). Registration as a mark was sought for the word sign FITNESS. The goods in respect of which registration was sought are in Classes 29, 30 and 32 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, for each of those classes, to the following description: – Class 29: ‘Milk, cream, butter, cheese, yoghurts and other milk-based food preparations, substitutes for dairy products, eggs, jellies, fruit, vegetables, protein preparations for human consumption’; – Class 30: ‘Cereals and cereal preparations; ready-to-eat cereals; breakfast cereals; foodstuffs based on rice or flour’; – Class 32: ‘Still water, aerated or carbonated water, spring water, mineral water, flavoured water, fruit drinks, fruit juices, nectars, lemonades, sodas and other non-alcoholic drinks, syrups and other preparations for making syrups and other preparations for making beverages’. On 30 May 2005, the mark applied for was registered as an EU trade mark under the number 2470326 in respect of the goods referred to in paragraph 3 above (‘the contested mark’). On 2 September 2011, the intervener, European Food SA, filed an application for a declaration that the contested mark was invalid under Article 52(1)(a) of Regulation No 207/2009 (now Article 59(1)(a) of Regulation 2017/1001), read in conjunction with Article 7(1)(b) and (c) of that regulation (now Article 7(1)(b) and (c) of Regulation 2017/1001). On 18 October 2013, the Cancellation Division rejected the application for a declaration of invalidity in its entirety. On 16 December 2013, the intervener filed a notice of appeal with EUIPO against the decision of the Cancellation Division. During the appeal proceedings, the intervener submitted further evidence in support of its claim that the term ‘fitness’ had a descriptive content. By decision of 19 June 2015 in Case R 2542/2013-4 (‘the earlier decision’), the Fourth Board of Appeal of EUIPO dismissed that appeal. In particular, it rejected as belated, without taking it into consideration, the evidence submitted for the first time before it. By application lodged at the Court Registry on 19 August 2015, the intervener brought an action against the earlier decision. By judgment of 28 September 2016, European Food v EUIPO — Société des produits Nestlé (FITNESS) (T‑476/15, EU:T:2016:568 ) (‘the annulment judgment’), the Court annulled the earlier decision. It held, in particular, that Article 76 of Regulation No 207/2009 (now Article 95 of Regulation 2017/1001), read in conjunction with Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Council Regulation (EC) No 40/94 on the Community trade mark (OJ 1995 L 303, p. 1) (replaced by Commission Delegated Regulation (EU) 2018/625 of 5 March 2018 supplementing Regulation 2017/1001 and repealing Delegated Regulation (EU) 2017/1430 (OJ 2018 L 104, p. 1), and, more specifically, with Rule 37(b)(iv) of Regulation No 2868/95 (now Article 12(4) of Regulation 2018/625), did not imply that evidence submitted for the first time before the Fourth Board of Appeal had to be regarded as belated by that Board of Appeal in invalidity proceedings based on an absolute ground for refusal (annulment judgment, paragraph 58). Consequently, the Court held that the Fourth Board of Appeal had erred in law in that it had decided not to take the evidence produced by the intervener for the first time before it into consideration because of its late submission (annulment judgment, paragraph 66). EUIPO brought an appeal against the annulment judgment. By its judgment of 24 January 2018, EUIPO v European Food (C‑634/16 P, EU:C:2018:30) (‘the judgment on appeal’), the Court of Justice dismissed the appeal. It held that the General Court was correct in holding, in paragraph 58 of the annulment judgment, that the evidence submitted for the first time before the Fourth Board of Appeal did not have to be considered to be out of time by the Board of Appeal in all circumstances (judgment on appeal, paragraph 45). The Court of Justice pointed out that, contrary to what EUIPO claimed, the annulment judgment did not deprive the Board of Appeal of the power conferred on it by Article 76(2) of Regulation No 207/2009 (now Article 95(2) of Regulation 2017/1001) to assess whether the evidence produced for the first time before it could be taken into account. In that regard, the Court of Justice held that paragraph 66 of the annulment judgment did not indicate that EUIPO was not entitled to use its discretion, but rather that, in considering that the evidence submitted by the intervener for the first time before the Fourth Board of Appeal did not have to be taken into consideration because of its late submission, that Board of Appeal had made an error of law (judgment on appeal, paragraph 53). As the earlier decision had been annulled, the Presidium of the Boards of Appeal requested that the Second Board of Appeal take the measures necessary to comply with the judgments. By decision of 6 June 2018 (‘the contested decision’) the Second Board of Appeal annulled the Cancellation Division’s decision of 18 October 2013. In the light, inter alia, of the evidence which had been submitted by the intervener before the Fourth Board of Appeal during the proceedings which led to the earlier decision, evidence which that Board of Appeal had not taken into consideration on the ground that it was belated since it had been submitted for the first time before it, the Second Board of Appeal declared the contested mark invalid pursuant to Article 7(1)(b) and (c) of Regulation No 207/2009. The Second Board of Appeal observed, in paragraph 25 of the contested decision, that it followed from the judgment on appeal and the annulment judgment that it had to examine the appeal before it by this time taking into account the evidence that had been filed for the first time before the Fourth Board of Appeal in the case that had led to the earlier decision. As to the substance, in the first place, it found that, since the term ‘fitness’ was an English word, the relevant public was the English-speaking public in the European Union, and, since the goods at issue were commonplace drinks and foodstuffs, the relevant public comprised average members of the general public, who were deemed to be reasonably well informed and reasonably observant and circumspect. In the second place, pursuant to Article 7(1)(c) of Regulation No 207/2009, it found that the term ‘fitness’ was, as at the relevant date, and still is, a word closely linked to health, well-being and good physical condition. It took the view that consumers link that word to an inherent characteristic of the goods at issue and that the relevant public perceives the term ‘fitness’ not as an indication of the commercial origin of those goods, but as a sign which highlights their health-giving qualities and characteristics. The Board of Appeal found that the term ‘fitness’ is a word that must be kept free so that competitors can legitimately use it in connection with beverages and foodstuffs that are consumed for the purpose of maintaining or achieving a healthy level of fitness. In the third place, pursuant to Article 7(1)(b) of Regulation No 207/2009, the Second Board of Appeal found that the relevant public did not perceive the term ‘fitness’ as an indication of the commercial origin of the goods at issue, but as a mere reminder that those goods were essential for good health or for a good level of fitness. According to the Board of Appeal, that term was therefore a purely informative message, which was immediately understood by the relevant public as a generic message serving to highlight positive aspects of those goods. It therefore found that the contested mark lacked distinctive character. In the fourth place, the Second Board of Appeal found that the contested mark had not, in relation to the goods at issue, acquired distinctive character as a consequence of the use which had been made of it, for the purposes of Article 7(3) of Regulation No 207/2009 (now Article 7(3) of Regulation 2017/1001), because the proprietor of the contested mark had not provided any evidence of acquired distinctiveness with regard to any English-speaking Member State of the European Union, namely Malta, Ireland and the United Kingdom. Forms of order sought The applicant claims that the Court should: – annul the contested decision; – order EUIPO to pay the costs. EUIPO and the intervener contend that the Court should: – dismiss the action; – order the applicant to pay the costs. Law In support of the action, the applicant puts forward four pleas in law alleging, respectively, first, infringement of Article 65(6) of Regulation No 207/2009 (now Article 72(6) of Regulation 2017/1001); secondly, infringement of Article 76(2) of Regulation No 207/2009; thirdly, infringement of Article 7(1)(c) of Regulation No 207/2009 and, fourthly, infringement of Article 7(1)(b) of that regulation. In essence, it submits, first, that EUIPO did not take the measures necessary to comply with the judgment on appeal and the annulment judgment and that, by acting in that way, it failed to exercise its discretion and comply with its obligation to state reasons and, secondly, that the contested mark is not descriptive of the goods at issue and has the requisite distinctive character with regard to those goods. EUIPO and the intervener dispute the applicant’s arguments. It is appropriate to deal with the first and second pleas together as the arguments are closely linked. By its first plea, the applicant claims that, by finding, first, that the Court of Justice had confirmed the annulment judgment in the sense that the Fourth Board of Appeal should have deemed admissible the evidence filed for the first time in the context of the appeal before it, and by concluding, secondly, that it was required to take that evidence into consideration in the context of its re-examination of the Cancellation Division’s decision of 18 October 2013, the Second Board of Appeal misread the judgment on appeal and did not comply with it, thus infringing Article 65(6) of Regulation No 207/2009. By its second plea, the applicant claims that, by acting in that way, the Second Board of Appeal also infringed Article 76(2) of Regulation No 207/2009 in that, first, it considered that it lacked any discretion as to whether or not to take into account the evidence at issue; secondly, it did not, as a result of that error, take due account of all the relevant circumstances and, thirdly, it erroneously failed to state the reasons for its decision. EUIPO submits that, in the present case, the finding in paragraph 66 of the annulment judgment, that the Fourth Board of Appeal had erred in law in holding that the evidence produced by the applicant for the first time before it was not to be taken into consideration because of its late submission, makes it unequivocally clear that the evidence at issue should have been considered admissible and taken into account. It takes the view that that reading of the annulment judgment is borne out by the finding, in paragraph 68 of that judgment, that it is not inconceivable that the evidence which the Fourth Board of Appeal wrongly refused to take into consideration might be such as to modify the substance of the contested decision. EUIPO therefore maintains that the finding that, in this specific case, the evidence produced for the first time before the Fourth Board of Appeal was to be considered admissible and examined on its merits was binding on the Second Board of Appeal pursuant to Article 65(6) of Regulation No 207/2009. Furthermore, EUIPO submits that that finding is not called into question by the judgment on appeal, by which the Court of Justice endorsed the General Court’s conclusions, apart from the finding, in paragraph 56 of the annulment judgment, that Regulation No 207/2009 did not contain any provision fixing a time limit for the submission of evidence. It maintains that the Court of Justice made clear, however, that that error of law did not affect the legality of the annulment judgment, in so far as the General Court had based the annulment of the earlier decision not on the fact that there was no time limit for the submission of evidence, but on the fact that the Fourth Board of Appeal had erred in deciding that the evidence produced by the applicant for the first time before the Board of Appeal did not have to be taken into consideration because of its late submission. It submits that the Court of Justice therefore held the operative part of the annulment judgment to be well founded for other legal reasons given in the annulment judgment itself. According to EUIPO, the Court of Justice detected no error of law in respect of the application of Article 76(2) of Regulation No 207/2009 to the facts of the case and therefore dismissed the appeal. For the sake of completeness, EUIPO adds that, in the light of the considerations set out in the judgment on appeal, the evidence at issue must be deemed admissible. First of all, it submits that that evidence is either evidence supplementary to that submitted in the proceedings before the Cancellation Division or evidence on a new matter which could not be raised during those proceedings. Next, it submits that the intervener is not required to demonstrate that it was unable to provide that evidence at an earlier date. Lastly, it claims that it is indisputable that the evidence at issue was likely to be genuinely relevant within the meaning of paragraph 57 of the judgment on appeal, and that that is substantiated by the fact that, in contrast to the earlier decision, it was found in the contested decision that the contested mark was caught by Article 7(1)(b) and (c) of Regulation No 207/2009. Finally, according to EUIPO, the applicant errs in claiming that the intervener should have justified why that evidence was being submitted at that stage of the proceedings and demonstrated that submission during the proceedings before the Cancellation Division was impossible. It submits that it is clear from previous case-law that a party cannot be required to demonstrate that it was unable to provide the evidence concerned at an earlier stage of the administrative procedure. EUIPO maintains that holding otherwise would deprive Article 76(2) of Regulation No 207/2009 of its ‘effet utile’ and run counter to the considerations set out by the Court of Justice, in paragraphs 55 and 58 of the judgment on appeal, that, first, as a general rule and unless otherwise specified, the submission of facts and evidence by the parties remains possible after the expiry of the periods governing such submission and, secondly, the taking into account of additional evidence is in no way a favour granted to one party or the other. The intervener maintains that the contested decision applied the judgment on appeal. It claims that, since the evidence at issue had been submitted in due time before the Fourth Board of Appeal, the Second Board of Appeal did not have the right to exercise any discretion as regards the admissibility of that evidence. It should be noted at the outset that, in the present case, first, Rule 37(b)(iv) of Regulation No 2868/95 applies pursuant to Article 80 and Article 82(2)(f) of Regulation 2018/625 and, secondly, there is no substantive difference between the relevant provisions of Regulation No 207/2009 and those of Regulation 2017/1001. Next, it should be noted that, in an action before the EU judicature against a decision of a Board of Appeal of EUIPO, EUIPO is required, under Article 266 TFEU and Article 65(6) of Regulation No 207/2009, to take the measures necessary to comply with any judgment ordering annulment that may be delivered by the EU judicature. In order to comply with a judgment annulling a measure and to implement it fully, the institution responsible for adopting that measure is required to have regard not only to the operative part of the judgment but also to the grounds which led to that ruling and constitute its essential basis, in so far as they are necessary for the purposes of determining the exact meaning of what is stated in the operative part. It is those grounds which, on the one hand, identify the precise provision held to be illegal and, on the other, indicate the specific reasons which underlie the finding of illegality contained in the operative part and which the institution concerned must take into account when replacing the annulled measure (judgments of 13 April 2011, Safariland v OHIM — DEF-TEC Defense Technology (FIRST DEFENSE AEROSOL PEPPER PROJECTOR ), T‑262/09, EU:T:2011:171, paragraph 41, and of 8 June 2017, Bundesverband Deutsche Tafel v EUIPO — Tiertafel Deutschland (Tafel) , T‑326/16, not published, EU:T:2017:380, paragraph 19). Furthermore, according to settled case-law, it is not for the General Court to issue directions to EUIPO. It is for the latter, if necessary, to draw the appropriate inferences from the operative part and grounds of the General Court’s judgments (judgments of 31 January 2001, Mitsubishi HiTec Paper Bielefeld v OHIM (Giroform) , T‑331/99, EU:T:2001:33 , paragraph 33; of 13 June 2007, IVG Immobilien v OHIM (I) , T‑441/05, EU:T:2007:178, paragraph 13; and of 6 October 2011, Bang & Olufsen v OHIM (Representation of a loudspeaker) , T‑508/08, EU:T:2011:575 , paragraph 31). It must also be borne in mind that, pursuant to the first sentence of Article 75 of Regulation No 207/2009 (now the first sentence of Article 94(1) of Regulation 2017/1001), decisions of EUIPO must state the reasons on which they are based. According to the case-law, that obligation has the same scope as that laid down in the second paragraph of Article 296 TFEU and its purpose is, first, to allow those concerned to know the reasons for the measure adopted so as to enable them to defend their rights and, secondly, to enable the EU judicature to exercise its power to review the legality of the decision (see judgment of 15 December 2016, Intesa Sanpaolo v EUIPO (START UP INITIATIVE) , T‑529/15, EU:T:2016:747 , paragraph 14 and the case-law cited). Lastly, it must be borne in mind that it is clear from the case-law that, where an institution has a discretion, it must exercise that discretion fully (see, to that effect, judgments of 14 July 2011, Freistaat Sachsen v Commission , T‑357/02 RENV, EU:T:2011:376, paragraph 45, and of 10 July 2012, Smurfit Kappa Group v Commission , T‑304/08, EU:T:2012:351, paragraph 90). Thus, the institution which has adopted the measure must be able to show before the Courts of the European Union that in adopting that measure it actually exercised its discretion, which presupposes the taking into consideration of all the relevant factors and circumstances of the situation the measure was intended to regulate (judgment of 7 September 2006, Spain v Council , C‑310/04, EU:C:2006:521 , paragraph 122). In the present case, it is clear from paragraph 25 of the contested decision that the Second Board of Appeal took the view that it followed from the judgment on appeal and the annulment judgment that the evidence filed for the first time before the Fourth Board of Appeal had to be taken into account. However, it does not follow either from the judgment on appeal or the annulment judgment that the Second Board of Appeal was required to take the evidence at issue into consideration. In the first place, the General Court examined, in paragraphs 53 to 65 of the annulment judgment, whether evidence submitted for the first time before the Board of Appeal in invalidity proceedings based on an absolute ground had to be regarded as not having been submitted in due time and therefore as belated. By its finding, in paragraph 66 of that judgment, the General Court held merely that the Fourth Board of Appeal had erred in law in finding that the evidence produced before it for the first time was not to be taken into consideration because of its late submission. In other words, the mere fact that the evidence was submitted for the first time before the Board of Appeal does not make it either belated or, on that account, inadmissible. In the second place, the General Court examined, in paragraph 67 of the annulment judgment, the conclusions to be drawn from the error of law that had been established in the preceding paragraph, pointing out that, according to settled case-law, a procedural irregularity would entail the annulment of a decision in whole or in part only if it was shown that in the absence of such irregularity the decision might have been substantively different. Next, the General Court held, in paragraph 68 of the annulment judgment, first, that it was not inconceivable that the evidence which the Fourth Board of Appeal had wrongly refused to take into consideration might be such as to modify the substance of the earlier decision and, secondly, that it was not for the General Court to replace EUIPO in assessing that evidence. Contrary to what EUIPO claims, that paragraph does not in any way show that the General Court held that evidence to be admissible in the present case, but merely shows that, in the light of the error that had been established in paragraph 66, it was a possibility which, if it proved to be the case, might make the decision in question substantively different. It is self-evident that, if it does not follow from the annulment judgment that the Second Board of Appeal was required to take the evidence at issue into consideration, then the Court of Justice was not able to uphold the annulment judgment in that regard. The Court of Justice pointed out it was always possible to submit evidence in time for the first time before the Board of Appeal in so far as that evidence was intended to challenge the reasons given by the Cancellation Division in the decision at issue. That evidence is, therefore, either evidence supplementary to that submitted in the proceedings before the Cancellation Division or evidence on a new matter which could not be raised during those proceedings. It is for the party presenting that evidence to justify why that evidence is being submitted at that stage of the proceedings and demonstrate that submission during the proceedings before the Cancellation Division was impossible (judgment on appeal, paragraphs 42 and 43). Consequently, contrary to what the intervener maintains, evidence submitted in due time for the first time before the Board of Appeal in invalidity proceedings which is either evidence supplementary to that submitted in the proceedings before the Cancellation Division or evidence on a new matter which could not be raised during those proceedings is not automatically admissible. It is for the party presenting that evidence to justify why that evidence has been submitted at that stage of the proceedings and demonstrate that submission during the proceedings before the Cancellation Division was impossible (judgment on appeal, paragraph 43). Accordingly, it is for the Board of Appeal to assess the merits of the reasons put forward by the party which has submitted that evidence in order to exercise its discretion as to whether or not it should be taken into account. EUIPO’s argument that Article 76(2) of Regulation No 207/2009 would be denied effectiveness by that interpretation cannot succeed. That provision applies in other circumstances, including those identified below. It must be borne in mind that, according to Article 76(2) of Regulation No 207/2009, EUIPO may disregard facts or evidence which are not submitted in due time by the parties concerned. It is apparent from the wording of that provision and from the annulment judgment that EUIPO has a discretion pursuant to that provision only when certain evidence has been produced late (annulment judgment, paragraphs 51 and 52). That was also held to be the case by the Court of Justice, in particular in paragraph 41 of the judgment on appeal, in opposition proceedings brought against the registration of a mark and, in paragraphs 54 and 55 of that judgment, in situations where evidence was submitted after the expiry of the periods governing such submission provided for in Regulation No 207/2009. It must be held that, in the light of the fact that the Board of Appeal erroneously found that it followed from the judgment on appeal and the annulment judgment that it was required to take the evidence at issue into account, the applicant is right in claiming that the Board of Appeal erred in failing to exercise its discretion and to state the reasons on which its decision as regards the taking into account of that evidence was based, contrary to the case-law cited in paragraphs 37 and 38 above. Furthermore, EUIPO admits that the Second Board of Appeal did not exercise its discretion regarding whether or not the evidence at issue should be taken into account, although, in principle, it has such a discretion. It follows that the Second Board of Appeal erred in law in finding, in paragraph 25 of the contested decision, that it followed from the judgment on appeal and the annulment judgment that the evidence filed for the first time before the Fourth Board of Appeal had to be taken into account. By acting in that way, it infringed Article 65(6) of Regulation No 207/2009 and failed to comply with its obligation to exercise its discretion and its obligation to state reasons. As regards the additional arguments which EUIPO has put forward for the sake of completeness that, in the light of the considerations set out in the judgment on appeal, the evidence at issue must be deemed admissible, it must be held that, since it is common ground that the question of whether the evidence submitted for the first time before the Board of Appeal is admissible or not has not been examined, the General Court is not itself entitled to assess that issue. It must be borne in mind that, in accordance with Article 65(2) of Regulation No 207/2009, the General Court carries out a review of the legality of the decisions of EUIPO (see, to that effect, judgment of 5 July 2011, Edwin v OHIM , C‑263/09 P, EU:C:2011:452 , paragraph 52). It is not for the General Court to put itself in EUIPO’s place in exercising the powers vested in EUIPO by Regulation No 207/2009 (judgment of 15 March 2006, Athinaiki Oikogeniaki Artopoiia v OHIM — Ferrero (FERRÓ) , T‑35/04, EU:T:2006:82, paragraph 22). Consequently, the first and second pleas in law must be upheld and the contested decision must therefore be annulled, without it being necessary to rule on the third and fourth pleas in law. Costs Under Article 134(1) of the Rules of Procedure of the General Court, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since EUIPO has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by the applicant. Since the intervener has been unsuccessful, it must be ordered to bear its own costs. On those grounds, THE GENERAL COURT (Eighth Chamber) hereby: 1. Annuls the decision of the Second Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 6 June 2018 (Case R 755/2018-2); 2. Orders EUIPO to bear its own costs and to pay those incurred by Société des produits Nestlé SA; 3. Orders European Food SA to bear its own costs. Collins Barents Passer Delivered in open court in Luxembourg on 10 October 2019. E. Coulon A. M. Collins Registrar President * 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