Novar v EUIPO (Judgment) [2017] EUECJ T-726/14 (17 February 2017)

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(Non-contractual liability — Proof of the existence, validity and scope of protection of the earlier mark — International registration designating the European Union — Decision rejecting the opposition in the absence of proof of the earlier right — Rule 19(2)(a) of Regulation (EC) No 2868/95 — Revision of the decision — Article 62(2) of Regulation (EC) No 207/2009 — Damage consisting in the lawyers’ fees — Causal link)

Novar GmbH, established in Albstadt (Germany), represented by R. Weede, lawyer,

European Union Intellectual Property Office (EUIPO), represented by S. Hanne, acting as Agent,

APPLICATION pursuant to Article 268 TFEU seeking compensation for material damage which the applicant allegedly sustained on account of lawyers’ fees that it incurred in an appeal against a decision of the Opposition Division allegedly adopted in breach of Rule 19(2)(a) of Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Council Regulation (EC) No 40/94 on the Community trade mark and of general legal principles,

composed of H. Kanninen (President), E. Buttigieg (Rapporteur) and L. Calvo-Sotelo Ibáñez-Martín, Judges,

having regard to the written part of the procedure and further to the hearing on 30 September 2016,

1 The applicant, Novar GMbH, is the proprietor of an international registration designating the European Union in respect of the trade mark FlexES.

2 On 15 June 2012, the applicant brought opposition proceedings before the European Union Intellectual Property Office (EUIPO) based on that trade mark against the application for the EU trade mark FLEXPS. The language of the opposition proceedings was English.

3 By letter of 22 June 2012, EUIPO informed the applicant that its opposition had been found admissible and fixed a period, pursuant to Article 41(3), second sentence, of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1) and Rule 19 of 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), for it to submit the facts, evidence and arguments in support of its opposition, inter alia, the evidence substantiating the earlier right relied on in support of that opposition.

4 The following information, inter alia, was communicated in that letter concerning proof of the existence, validity and scope of protection of the earlier rights relied on in support of the opposition:

‘As far as an opposition is based on earlier [EU trade mark] applications or registrations, the opponent does not need to submit any evidence concerning these marks as the Office has the relevant information available in its database and will forward a link to that database (CTM-Online) to the other party. Furthermore, please note that the same applies if the earlier mark is an international Registration … designating the [European Union], however only if the language of the proceedings is English, French or Spanish, which are the three official languages of [the World Intellectual Property Organisation] (WIPO) and the data is available in these three languages.’

5 With effect from 1 July 2012, EUIPO changed its practice regarding the application of Rule 19(2)(a) of Regulation No 2868/95, deciding that extracts from the EUIPO database, CTM-Online and TM View were no longer sufficient to prove the existence of an earlier mark where the opposition was based on an international registration designating the European Union. That new practice applied to all opposition proceedings filed after 1 July 2012.

6 On 26 October 2012, the applicant lodged a statement of written observations in support of the opposition without attaching to that statement any supporting documents concerning the existence, validity and scope of protection of the earlier mark.

7 By decision of 14 May 2013, the Opposition Division rejected the opposition on the basis of Rule 20(1) of Regulation No 2868/95 on the ground that the existence, validity and scope of protection of the earlier mark and not been proved by the applicant.

8 On 21 May 2013, the applicant filed a notice of appeal with EUIPO against the decision of the Opposition Division, presenting extracts from the register of EUIPO and the World Intellectual Property Organisation (WIPO). In the alternative, it presented an application for restitutio in integrum in respect of the time limit for adducing evidence concerning the earlier mark.

9 On the 27 June 2013, the Opposition Division informed the applicant and the applicant for the contested EU trade mark, in accordance with Article 62(2) of Regulation No 207/2009, of its intention to allow the appeal on the ground that, contrary to what is stated in the decision of 14 May 2013, it should have been held that facts, evidence and arguments had been presented in support of the opposition.

10 On 27 August 2013, the applicant for the EU trade mark accepted the rectification, in accordance with Article 62(2) of Regulation No 207/2009. On 9 October 2013, the Registry of the Board of Appeal informed the applicant that the Opposition Division had revised its decision of 14 May 2013, that the appeal proceedings were concluded and that the appeal fee would be refunded.

11 The opposition proceedings were resumed and, by decision of 17 October 2013, the Opposition Division upheld the opposition and refused the EU trade mark application. That decision became final in the absence of any appeal by the parties.

12 By letters of 10 February and 24 March 2014, the applicant asked EUIPO to make good damage pursuant to Article 118(3) of Regulation No 207/2009 in the amount of EUR 2 498 in respect of lawyers’ fees in connection with challenging the decision of the Opposition Division of 14 May 2013.

14 By application lodged at the Court Registry on 26 September 2014, the applicant brought the present action.

– order EUIPO to pay EUR 2 498 plus interest at the rate of 5 percentage points above the base rate from the date of filing of the application;

– order EUIPO to pay the costs of the proceedings including the costs of representation by a lawyer.

17 On a proposal from the Judge-Rapporteur, the Court decided to open the oral procedure and, by way of measures of organisation of procedure provided for in Article 89 of the Rules of Procedure, first, asked the parties to lodge certain documents and, second, put written questions to the parties, asking them to answer those questions in part before the hearing and in part at the hearing.

18 The parties presented their oral arguments and gave their replies to the questions put by the Court at the hearing on 30 September 2016.

19 By the present action for damages, the applicant claims compensation in respect of material damage consisting of the lawyers’ fees that it incurred in an appeal against the decision of the Opposition Division of 14 May 2013 (see paragraph 12 above).

20 The applicant claims that the three conditions for establishing the non-contractual liability of EUIPO on the basis of Article 118(3) of Regulation No 207/2009 are met in the present case. First, according to the applicant, the decision of the Opposition Division of 14 May 2013 is an unlawful act constituting a sufficiently serious breach of law, within the meaning of the case-law on non-contractual liability, in so far as it is based on the misapplication of Rule 19(2)(a) of Regulation No 2868/95 and was adopted in breach of the principle of good faith and the audi alteram partem rule. The applicant submits in that respect that, by that decision, its opposition was rejected on the ground that it did not adduce evidence of the existence, validity and scope of protection of the earlier mark, whereas, according to the information which was sent to it by letter of 22 June 2012 (see paragraph 4 above), such evidence was not required in cases such as that in the present proceedings where the opposition was based on the international registration designating the European Union and where the language of the proceedings was English.

21 Secondly, such a misapplication of law by EUIPO obliged the applicant to appeal and led to damage in the form of the lawyers’ fees incurred as a result of that appeal.

22 Thirdly, there was a direct causal connection between those fees and the EUIPO’s unlawful act in that the applicant was obliged to rely on legal representation to review the legality of the Opposition Division’s decision of 14 May 2013.

24 Under the second paragraph of Article 340 TFEU, the Union must, in accordance with the general principles common to the laws of the Member States, make good any damage caused by its institutions or by its servants in the performance of their duties.

25 In that regard, it should be recalled that it is settled case-law that in order for the Union to incur non-contractual liability, within the meaning of the second paragraph of Article 340 TFEU, for the unlawful conduct of its institutions or bodies, a number of conditions must be satisfied, namely, the conduct must be unlawful, actual damage must have been suffered and there must be a causal link between the alleged conduct and the damage pleaded (judgment of 29 September 1982, Oleifici Mediterranei v EEC, 26/81, EU:C:1982:318, paragraph 16; see, also, judgment of 9 November 2006, Agraz and Others v Commission, C‑243/05 P, EU:C:2006:708, paragraph 26 and the case-law cited). Those principles apply mutatis mutandis to the non-contractual liability incurred by the European Union within the meaning of that provision, as a result of the unlawful conduct and damage caused by one of its bodies, such as EUIPO, for which the latter is liable under Article 118(3) of Regulation No 207/2009 (see judgment of 27 April 2016, European Dynamics Luxembourg and Others v EUIPO, T‑556/11, under appeal, EU:T:2016:248, point 264 and the case-law cited).

26 It must also be recalled that given the cumulative nature of those conditions, the action must be dismissed in its entirety where one of those conditions is not fulfilled without it being necessary to examine the other conditions (judgments of 15 September 1994, KYDEP v Council and Commission, C‑146/91, EU:C:1994:329, paragraphs 19 and 81, and of 20 February 2002, Förde-Reederei v Council and Commission, T‑170/00, EU:T:2002:34, paragraph 37). Furthermore, the Court is not obliged to examine those conditions in any particular order (judgment of 9 September 1999 in Lucaccioni v Commission, C‑257/98 P, EU:C:1999:402, paragraph 13).

27 The Court considers that it is necessary to begin with the examination of the existence of a causal link between the alleged unlawful conduct of EUIPO, namely the adoption of the Opposition Division decision of 14 May 2013, and the damage pleaded consisting in the lawyers’ fees incurred by the applicant in bringing an appeal against that decision.

28 In that regard, it is clear from the case-law that the European Union can be held liable only for damage which is a sufficiently direct consequence of the wrongful conduct of the institution concerned (judgment of 4 October 1979, Dumortier and Others v Council, 64/76, 113/76, 167/78, 239/78, 27/79, 28/79 and 45/79, EU:C:1979:223, paragraph 21). The burden of proving the existence of such a link lies with the applicant (judgment of 30 January 1992, Finsider and Others v Commission, C‑363/88 and C‑364/88, EU:C:1992:44, paragraph 25).

29 The applicant maintains, in essence, that there is a direct causal link between the lawyers’ fees incurred as a result of the appeal against the Opposition Division decision of 14 May 2013 and the unlawful conduct of EUIPO consisting in the adoption of that decision, in that it was obliged to have recourse to representation by a lawyer to review the lawfulness of that decision, inter alia for reasons relating to the obligation to minimise the damage.

30 EUIPO points out that, in accordance with Article 92 of Regulation No 207/2009, representation by a lawyer is not mandatory in proceedings before EUIPO. However, where there is such representation, the provisions of Regulation No 207/2009 and of Regulation No 2868/95 regulate the apportionment and fixing of the costs of that representation. Consequently, according to EUIPO, the action under Article 118(3) of Regulation No 207/2009 is not available to enforce the costs of representation in appeal proceedings before the departments of EUIPO since such an action would circumvent the comprehensive rules of Regulation No 207/2009 on the apportionment and fixing of costs.

31 In that respect, it is apparent from settled case-law that where representation by a lawyer or adviser in the pre-litigation procedure is not mandatory, there is no causal link between the alleged damage, namely the cost of such representation, and any exceptionable conduct on the part of the institution or body. Although, it is not possible to prohibit those concerned from seeking legal advice even at that stage, it is their own decision and the institution or agency concerned cannot be held liable for the consequences (see, to that effect, judgments of 9 March 1978, Herpels v Commission, 54/77, EU:C:1978:45, paragraphs 46 to 49; of 28 June 2007, Internationaler Hilfsfonds v Commission, C‑331/05 P, EU:C:2007:390, paragraphs 24 to 29, and of 8 July 2008, Franchet and Byk v Commission, T‑48/05, EU:T:2008:257, paragraphs 415 and 416).

32 In the present case, it is apparent from Article 92 of Regulation No 207/2009 that representation by a lawyer before the departments of EUIPO is not mandatory for a party such as the applicant, which has either its domicile, principal place of business or a real and effective industrial or commercial establishment in the European Union. Consequently, the lawyers’ fees incurred in the present case by the applicant are the result of a choice it has made and may not be directly attributed to EUIPO. There is, therefore, no causal link between the alleged unlawful conduct and the costs of legal representation incurred by the applicant in respect of the appeal proceedings.

33 The argument of the applicant that it was obliged to have recourse to representation by a lawyer to challenge the Opposition Division decision of 14 May 2013 in order to ‘minimise the damage’ is not such as to call that conclusion into question. By such an argument, the applicant asserts that a causal link existed between the conduct of the institution and the damage pleaded and it maintains that it has exercised due care in taking the necessary measures to limit the damage and thus has not broken the causal link by its own conduct (see, to that effect, judgments of 27 March 1990, Grifoni v Commission, C‑308/87, EU:C:1990:134, paragraphs 16 and 17, and of 19 May 1992, Mulder and Others v Council and Commission, C‑104/89 and C‑37/90, EU:C:1992:217, paragraph 33). However, in the present case there is no such causal link. Whether, in having recourse to legal advice, the applicant limited the extent of any possible damage is, therefore, irrelevant in the present case.

34 Having regard to the foregoing and taking into account the cumulative nature of the conditions for incurring the non-contractual liability of the institutions, bodies and offices of the European Union, the action for damages must be dismissed in its entirety since the applicant has not established the existence of a direct causal link between EUIPO’s alleged unlawful conduct and the damage pleaded, without it being necessary to examine the other conditions giving rise to that liability.

35 For the sake of completeness, it should also be noted, as EUIPO has pointed out, that although representation by a lawyer is not mandatory in proceedings before it, Article 85 of Regulation No 207/2009 and Rule 94 of Regulation No 2868/95 lay down rules concerning the apportionment of costs and the limits of the scales concerning the recoverable costs where a party designates a representative. However, as the applicant rightly points out and EUIPO, in essence, accepts, those provisions apply only to opposition proceedings and in respect of the apportionment of costs between the parties to that procedure.

36 In that regard, it should also be noted that, as EUIPO observed, no provision of Regulation No 207/2009 or Regulation No 2868/95 provides for the reimbursement of the costs of legal representation incurred in respect of an appeal where the department which adopted the contested decision decides, as in the present case, to revise it in accordance with Article 62 of Regulation No 207/2009. In particular, no provision of those rules grants the successful party reimbursement by EUIPO of the costs of legal representation in such proceedings. Only the reimbursement of appeal fees is provided for by Rule 51(a) of Regulation No 2868/95, under which the department whose decision has been impugned is to order the reimbursement of appeal fees where it allows the revision in accordance with Article 61 or Article 62 of Regulation No 207/2009. In the present case, the applicant does not dispute that the appeal fee was reimbursed by EUIPO.

37 It follows from the foregoing that to award the applicant compensation for the lawyers’ fees that it incurred in respect of the appeal against the decision of the Opposition Division of 14 May 2013 would amount to a circumvention of the scheme concerning representation expenses provided for in Regulation No 207/2009 and Regulation No 2868/95 (see, by analogy, judgment of 8 November 2011, Idromacchine and Others v Commission, T‑88/09, EU:T:2011:641, paragraph 100 and the case-law cited).

39 Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay costs if the successful party has so requested in its pleadings. Under Article 135(2) of the Court’s Rules of Procedure, the Court may order a party, even if successful, to pay some or all of the costs, if this appears justified by the conduct of that party, including before the proceedings were brought, especially if he has made the opposite party incur costs which the Court holds to be unreasonable or vexatious.

40 According to the case-law, that provision should be applied where the dispute is in part attributable to the conduct of an EU institution or body (see judgment of 8 July 2015, European Dynamics Luxembourg and Others v Commission, T‑536/11, EU:T:2015:476, paragraph 391 (not published) and the case-law cited).

41 In the present case, it is not disputed by EUIPO that the letter of 22 June 2012 to the applicant contained information that if the opposition was based, as in the present case, on an international registration designating the European Union and subject to the language of the procedure having been, inter alia, as in the present case, English, the opposing party did not need to adduce any evidence concerning that earlier right. Furthermore, that information was consistent with the existing practice of EUIPO concerning oppositions lodged, like that of the applicant, before 1 July 2012, which was also not disputed by EUIPO. However, notwithstanding that information and that practice, the Opposition Division rejected the opposition brought by the applicant precisely because the existence, validity and scope of protection of the earlier mark and not been proved by the applicant.

42 Such conduct on the part of EUIPO compelled the applicant to bring an appeal against the decision of the Opposition Division of 14 May 2013. Since the applicant was unable to recover the costs connected with its representation by a lawyer in that appeal under Regulation No 207/2009 and Regulation No 2868/95, as is apparent from paragraphs 35 and 36 above, it was entitled to consider that an action for damages was the only means of obtaining the reimbursement of those costs from EUIPO.

43 The present proceedings, therefore, had their origin in the conduct of EUIPO during the proceedings before it. Thus, even though the present action has been dismissed, it is fair in the circumstances of the case to order that each party is to bear its own costs.

2. Orders Novar GMbH and the European Union Intellectual Property Office each to bear their own costs.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Novar v EUIPO (Judgment) [2017] EUECJ T-726/14 (17 February 2017) URL: http://www.bailii.org/eu/cases/EUECJ/2017/T72614.html Cite as: ECLI:EU:T:2017:99, [2017] EUECJ T-726/14, EU:T:2017:99

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