Philip Morris Brands v EUIPO - Explosal (Superior Quality Cigarettes FILTER CIGARETTES Raquel) (EU trade mark - Invalidity proceedings : Judgment) [2018] EUECJ T-105/16 (01 February 2018)

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(EU trade mark — Invalidity proceedings — EU figurative mark Superior Quality Cigarettes FILTER CIGARETTES Raquel — Earlier international figurative mark Marlboro — Relative ground for refusal — Reputation — Production of evidence for the first time before the Board of Appeal — Discretion of the Board of Appeal — Article 76(2) of Regulation (EC) No 207/2009 (now Article 95(2) of Regulation (EU) 2017/1001) — Rule 50(1) of Regulation (EC) No 2868/95)

Philip Morris Brands Sàrl, established in Neuchâtel (Switzerland), represented by L. Alonso Domingo, lawyer,

European Union Intellectual Property Office (EUIPO), represented by A. Folliard-Monguiral and M. Simandlova, acting as Agents,

the other party to the proceedings before the Board of Appeal of EUIPO, intervener before the General Court, being

Explosal Ltd, established in Larnaca (Cyprus), represented by D. McFarland, Barrister,

APPEAL against the decision of the First Board of Appeal of EUIPO of 4 January 2016 (Case R 2775/2014-1) concerning invalidity proceedings between Philip Morris and Explosal,

composed of S. Frimodt Nielsen, I. S. Forrester (Rapporteur) and E. Perillo, Judges,

having regard to the response of EUIPO lodged at the Court Registry on 26 May 2016,

having regard to the response of the intervener lodged at the Court Registry on 15 June 2016,

1 On 1 July 2011, the intervener, Explosal Ltd, 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)).

3 The goods in respect of which registration was sought are in Class 34 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: ‘Tobacco pouches; tobacco; smoking tobacco; tobacco, cigars and cigarettes; manufactured tobacco’.

4 On 28 May 2013, the figurative mark shown in paragraph 2 above was registered as an EU trade mark.

5 On 15 January 2014, the applicant, Philip Morris Brands Sàrl, filed an application for a declaration of invalidity of the mark at issue pursuant to Article 53(1)(a) of Regulation No 207/2009 (now Article 60(1)(a) of Regulation No 2017/1001), read in conjunction with Article 8(1)(b) of Regulation No 207/2009) (now Article 8(1)(b) of Regulation 2017/1001) and Article 8(5) of the regulation (now Article 8(5) of Regulation 2017/1001).

6 The application for a declaration of invalidity was founded on 13 earlier figurative marks.

7 By decision of 8 September 2014, the Cancellation Division rejected the application for a declaration of invalidity, having first, for reasons of procedural economy, compared the contested trade mark and the following earlier international trade mark registered under No 1064851 (‘the earlier trade mark’):

8 The Cancellation Division found, first, that the low similarity between the signs did not lead to a likelihood of confusion within the meaning of Article 8(1)(b) of Regulation No 207/2009 and, secondly, as regards Article 8(5) of Regulation No 207/2009, that the applicant had not submitted any evidence to establish the reputation of the earlier mark.

9 On 29 October 2014, the applicant filed a notice of appeal against the decision of the Cancellation Division. On 10 November 2014, it also submitted a request for restitutio in integrum on the ground that it had not been given the opportunity to file evidence of the reputation of the earlier mark before the Cancellation Division.

10 On 5 December 2014, the Cancellation Division rejected the request for restitutio in integrum, considering that the applicant had not shown all due care in complying with the time limit for submitting the documents in support of its application for a declaration of invalidity. The applicant did not appeal against that decision.

11 By decision of 4 January 2016 (‘the contested decision’), the Board of Appeal dismissed the appeal against the decision of the Cancellation Division.

12 First, the Board of Appeal rejected the applicant’s arguments alleging infringement of Article 8(1)(b) of Regulation No 207/2009. The Board of Appeal found that the dominant elements of the figurative signs at issue were the word elements (‘Marlboro’ and ‘Raquel’), whereas the dark-coloured geometric shape in the top part of the marks, the (‘roof top’) claimed by the applicant, was a decoration rather than a distinctive element. The Board of Appeal considered that, therefore, notwithstanding the identity of the goods concerned, the figurative signs in question were dissimilar or similar to an extremely low degree, which would exclude any likelihood of confusion.

13 Secondly, the Board of Appeal rejected the evidence submitted for the first time before it concerning the highly distinctive character acquired through use of the earlier mark, in particular its (‘roof top’) graphic element. The Board of Appeal relied in that regard on Article 76(2) of Regulation No 207/2009 (now Article 95(2) of Regulation No 2017/1001) which gave it a wide discretion to decide whether to take account of facts and evidence which are submitted out of time. Furthermore, pursuant to Rule 50(1) 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), evidence examined during appeal proceedings is restricted to evidence submitted at first instance. Consequently, the admissibility of new evidence is subject to the condition that it is additional, which, according to the Board of Appeal, is not the case here.

14 The Board of Appeal examined the factors which, according to the applicant, explained why no evidence was produced before the Cancellation Division, in particular the applicant’s contention that its intention was to produce that evidence after receipt of the intervener’s observations; however, as the intervener did not reply within the period set, the adversarial part of the proceedings had been closed. The Board of Appeal took the view that that explanation was not convincing for the following reasons. First, Rule 37(b)(iv) of Regulation No 2868/95 should be interpreted as requiring the applicants for a declaration of invalidity to submit their arguments and evidence at the time of filing the application for a declaration of invalidity. Secondly, Rule 40(2) of Regulation No 2868/95 (now Article 17(2) of Commission Delegated Regulation (EU) 2017/1430 of 18 May 2017 supplementing Council Regulation (EC) No 207/2009 on the European Union trade mark and repealing Commission Regulations (EC) No 2868/95 and (EC) No 216/96) (OJ 2017 L 205, p. 1) allows the Cancellation Division to rule on the application for a declaration of invalidity on the basis of the evidence before it, without the intervener’s observations. Thirdly, given that there was no time limit for filing an application for a declaration of invalidity, the applicant would have had enough time to gather the evidence that it deemed necessary to annex to its application.

15 Having regard to all those considerations, the Board of Appeal decided not to take into account the evidence submitted for the first time before it by the applicant.

16 Thirdly, the Board of Appeal rejected the applicant’s arguments alleging infringement of Article 8(5) of Regulation No 207/2009, inasmuch as the evidence of the reputation of the earlier mark had been adduced for the first time before the Board of Appeal and, therefore, could not be taken into account. Furthermore, the Board of Appeal considered that, even if that reputation had been proved, the very low degree of similarity between the marks at issue was insufficient for a link between those marks to be created in the mind of the public.

– declare the contested mark invalid, or, in the alternative, refer the case back to the Board of Appeal for further consideration in light of the evidence submitted concerning the reputation and enhanced distinctiveness of the earlier trade mark;

20 In support of its application, the applicant raises three pleas in law alleging, first, infringement of Article 76(2) of Regulation No 207/2009, secondly, infringement of Article 8(1)(b) of Regulation No 207/2009 and of Article 76(1) of that regulation (now Article 95(1) of Regulation 2017/1001), and, thirdly, infringement of Article 8(5) of Regulation No 207/2009.

21 By its first plea the applicant criticises, in essence, the Board of Appeal for having refused to take into account the evidence of the reputation and enhanced distinctiveness of the earlier trade mark which it had adduced for the first time before the Board of Appeal. In doing so, the Board of Appeal vitiated the contested decision by infringing Article 76 of Regulation No 207/2009.

22 The applicant’s second plea is divided into two parts. In the first part, the applicant complains that the Board of Appeal erred in its global assessment of the likelihood of confusion between the contested mark and the earlier mark. In the second part, the applicant complains that the Board of Appeal did not take into account the highly distinctive character of the earlier mark, infringing Article 76(1) of Regulation No 207/2009 and Article 8(1)(b) of that regulation.

23 By its third plea, the applicant submits, in essence, that the Board of Appeal made an error of assessment in finding that, even if the evidence of reputation of the earlier mark had been taken into account, the degree of similarity between the signs at issue would have been insufficient to establish a link in the minds of consumers.

24 For the purposes of this judgment, the Court will begin by examining together the first plea and the second part of the second plea, in so far as they both concern the interpretation of Article 76 of Regulation No 207/2009.

25 The applicant complains that EUIPO incorrectly applied Article 76(2) of Regulation No 207/2009, read together with Rule 50(1) of Regulation No 2868/95, in that the Board of Appeal rejected the evidence of the earlier mark’s reputation and enhanced distinctiveness on the ground that that evidence had been submitted for the first time before it.

26 In essence, the applicant maintains, on the basis of the English version of Regulation No 2868/95, that Rule 50(1) of that regulation does not exclude the acceptance of additional evidence, the terms ‘additional’ and ‘supplementary’ both appearing in the wording of that provision, which means that the Board of Appeal could have taken into account the additional facts and evidence submitted before it for the first time. The applicant points out the clear relevance of the new evidence which it adduced before the Board of Appeal, the fact that the other party to the proceedings, that is the intervener, was able to challenge that evidence, and the clear contradiction between the contested decision and a previous decision of the Board of Appeal, issued a few months before the contested decision, which concerned the earlier mark and its roof top graphic element.

27 Without disputing the Board of Appeal’s discretion to take into account facts and evidence submitted out of time, the applicant submits that that discretion must not become arbitrary when such new evidence may be highly relevant to the outcome of proceedings. The applicant refers, in that regard, to the judgment of the Court of 13 March 2007, OHIM v Kaul (C‑29/05 P, EU:C:2007:162) in order to maintain that EUIPO is in no way prohibited from taking account of facts and evidence which are submitted late. On the contrary, reasons of legal certainty and sound administration militate in favour of accepting this kind of evidence.

28 Furthermore, the applicant relies on the earlier decision of the First Board of Appeal of EUIPO of 27 February 2015 in Case R 1585/2013-1, against the proprietor of the EU figurative mark SUPER ROLL (‘the decision in SUPER ROLL’), in which it was acknowledged that the Marlboro brand and its roof top graphic element had acquired a substantial reputation throughout Europe for the relevant public.

29 The applicant argues that in the proceedings before the Board of Appeal it submitted a copy of the decision in SUPER ROLL, together with the evidence establishing the reputation of the earlier mark. However, the Board of Appeal disregarded both the evidence and the content of the decision in SUPER ROLL, taking the view, unlike in that decision, that the dark-coloured geometric shape would be perceived as a mere ‘decoration’ which consumers would not remember.

30 It follows, according to the applicant, that the Board of Appeal infringed Article 76(1) of Regulation No 207/2009 by failing to take into account ‘well-known facts’, namely the reputation and enhanced distinctiveness of the roof top graphic element and the trade dress of the earlier mark. The applicant argues, in essence, that Article 76(1) of Regulation No 207/2009 cannot be interpreted as requiring EUIPO to adopt decisions on the basis of factual hypotheses which are manifestly incomplete or ‘contrary to reality’, all the more so when they are contrary to the content of previous decisions made in the same context.

31 EUIPO submits that Article 76(2) of Regulation No 207/2009 grants it a discretion to decide, while giving reasons for its decision in that regard, whether or not to take information submitted outside the prescribed time limits into account (judgment of 13 March 2007, OHIM v Kaul, C‑29/05 P, EU:C:2007:162, paragraph 43). However, the evidence submitted by the applicant for the first time before the Board of Appeal was not supplementary but wholly new which, in light of settled case-law, rendered it inadmissible given that it was not submitted within the period initially prescribed (judgments of 26 September 2013, Centrotherm Systemtechnik v OHIM, C‑610/11 P, EU:C:2013:593, paragraphs 86 to 88 and 117, and of 21 November 2013, Recaro v OHIM — Certino Mode (RECARO), T‑524/12, not published, EU:T:2013:604, paragraphs 62 to 66).

32 EUIPO submits that the Board of Appeal nevertheless examined whether specific circumstances justified taking into account evidence produced late by the applicant, before concluding that this was not the case, in particular, owing to the fact that there was no time limit for filing an application for a declaration of invalidity and, in the present case, the applicant had deliberately not submitted evidence during the proceedings at first instance.

33 EUIPO contends that, in view of the principles of equality of arms and sound administration as well as the necessity of ensuring the proper conduct and efficiency of proceedings, the Board of Appeal was right not to confer an unjustified advantage on one party to the detriment of the other. The fact that the applicant ‘naïvely’ presumed that it could file evidence late cannot be regarded as a legitimate reason for doing so. On the contrary, such conduct should be regarded as negligent.

34 As regards the supposedly world-renowned character of the earlier mark’s ‘roof top’ graphic element being more than merely decorative, EUIPO maintains that the applicant did not adduce any evidence that that element should be recognised as an indication of origin. It is a basic geometric shape, a pentagon, of which three sides out of five are determined by the shape of the cigarette packet. There is no reason to believe that consumers will pay more attention to this simple figurative element than to the distinctive word element, ‘Marlboro’.

35 As regards the applicant’s reference to the decision in SUPER ROLL recognising the highly distinctive character of the earlier mark, EUIPO considers that it is in no way binding on the Board of Appeal, in so far as that recognition is circumscribed by the context of each set of proceedings (see judgment of 23 October 2015, T‑597/13, Calida v OHIM — Quanzhou Green Garments (dadida), T‑597/13, not published, EU:T:2015:804, paragraphs 42 to 48). A contrary conclusion would infringe the rights of the defence of the other party to the proceedings and would wrongly extend the principle of res judicata to an administrative decision.

36 As for the intervener, it also contends that the action should be dismissed and submits, in essence, that the application does not identify the pleas in law and the alleged errors of law made by the Board of Appeal in the contested decision, but is limited to expressions of disappointment and dislike and to general exhortations. The intervener maintains that the contested decision is ‘sound’ and is not based on any legal or factual error. The Board of Appeal’s analytical assessment of the marks at issue is correct, properly reasoned and in accordance with the requirements of Article 8(1)(b) and (5) of Regulation No 207/2009.

37 It should be noted, first of all, that Rule 50(1), third subparagraph, of Regulation No 2868/95, applicable by analogy to cancellation proceedings, provides, in essence, that the Board of Appeal is to limit its examination of the appeal to facts and evidence presented before the Opposition Division, unless the Board of Appeal considers that additional or supplementary facts and evidence should be taken into account, in accordance with Article 76(2) of Regulation No 207/2009. That article provides that EUIPO may disregard facts or evidence which are not submitted in due time by the parties concerned.

38 Regulation No 207/2009 therefore expressly provides that the Board of Appeal enjoys, when examining an appeal directed against a decision of the Cancellation Division, the discretion deriving from the third subparagraph of Rule 50(1) of Regulation No 2868/95 and from Article 76(2) of Regulation No 207/2009 to decide whether or not to take into account additional or supplementary facts and evidence which were not presented within the time limits set or specified by the Cancellation Division (see judgments of 3 October 2013, Rintisch v OHIM, C‑122/12 P, EU:C:2013:628, paragraph 33, and of 24 October 2014, Grau Ferrer v OHIM — Rubio Ferrer (Bugui va), T‑543/12, not published, EU:T:2014:911, paragraph 23 and the case-law cited).

39 In that context, the Court of Justice has already had occasion to note that the French version of the third subparagraph of Rule 50(1) of Regulation No 2868/95 is different from the Spanish, German and English versions in one fundamental respect. Whereas the latter versions provide that the Board of Appeal may take into consideration only ‘additional or supplementary’ facts and evidence, the French version describes that evidence as ‘new or supplementary’ (‘nouveaux ou supplémentaires’).

40 Based on the purpose and general scheme of the rules, of which Rule 50(1) of Regulation No 2868/95 forms part, and, in particular, Article 76(2) of Regulation No 207/2009, which constitutes the legal basis for that rule, the Court of Justice concluded that, with regard to proof of use of a mark, when no proof of use is submitted within the time limit set by EUIPO, the opposition must automatically be rejected by it. However, when evidence is produced within the time limit set by EUIPO, the production of supplementary evidence remains possible (see judgment of 21 July 2016, EUIPO v Grau Ferrer, C-597/14 P, EU:C:2016:579, paragraphs 24 to 26 and the case-law cited).

41 The Court of Justice has pointed out that Article 76(2) of Regulation No 207/2009 should be interpreted in the same way in relation to proof of the existence, validity and scope of protection of a trade mark, since that provision contains a rule which applies horizontally within the scheme of that regulation, inasmuch as it applies irrespective of the nature of the proceedings concerned. It follows that Rule 50 of Regulation No 2868/95 cannot be interpreted as meaning that it extends the discretion of the Boards of Appeal to new evidence (judgment of 21 July 2016, EUIPO v Grau Ferrer, C-597/14 P, EU:C:2016:579, paragraph 27), but only to evidence ‘additional’ or ‘supplementary’ to relevant evidence which was lodged within the time limit set (see judgment of 11 December 2014, CEDC International v OHIM — Underberg (Shape of a blade of grass in a bottle), T-235/12, EU:T:2014:1058, paragraph 89 and the case-law cited).

42 Therefore, it must be determined whether the evidence submitted for the first time before the Board of Appeal could be regarded as ‘additional’ or ‘supplementary’ within the meaning of the third subparagraph of Rule 50(1) of Regulation No 2868/95.

43 It is not disputed that the applicant did not submit any evidence of the reputation of the earlier mark pursuant to Rule 37(b)(iv) of Regulation No 2868/95, that is at the time of filing the application for a declaration of invalidity, or, moreover, at any time during the proceedings before the Cancellation Division, and even though it had stated, in the letter accompanying the application for a declaration of invalidity of 15 January 2014, that it would submit evidence of the reputation of the earlier mark, with the related arguments, ‘at the appropriate time’.

44 It is not disputed in the present case that that intention was not acted upon before the closure of the procedure by the Cancellation Division more than six months later, namely on 21 July 2014.

45 As regards the applicant’s argument put forward at the hearing that it was for the Cancellation Division to ask it to supplement its file by submitting, inter alia, evidence of the reputation of the earlier mark, it should be noted that the legislature drew a fundamental distinction between, on the one hand, the conditions which an application for a declaration of invalidity must fulfil in order to be admissible and, on the other hand, the conditions concerning the submission of facts, evidence and arguments and of the documents in support of the application, which fall within the scope of the examination of that application. Only in respect of the admissibility criteria for an application for a declaration of invalidity did the legislature provide, in Rule 38(1) of Regulation No 2868/95 (now Article 146(7) of Regulation 2017/1001) and Rule 39(3) of that regulation (now Article 15(4) of Delegated Regulation 2017/1430), that the Cancellation Division was obliged to allow the party concerned to remedy deficiencies in its application for a declaration of invalidity which may lead to the rejection of that application as being inadmissible, whereas no similar obligation exists in respect of the conditions required for an application for a declaration of invalidity to be declared well founded (see, by analogy, judgment of 13 June 2002, Chef Revival USA v OHIM — Massagué Marín (Chef), T‑232/00, EU:T:2002:157, paragraph 54, and, to that effect and by analogy, judgment of 17 June 2008, El Corte Inglés v OHIM — Abril Sánchez and Ricote Saugar (BoomerangTV), T‑420/03, EU:T:2008:203, paragraph 66 and the case-law cited).

46 Therefore, contrary to the applicant’s submission, no provision of Regulation No 2868/95 required the Cancellation Division to inform the applicant that its application for a declaration of invalidity was not supported by evidence concerning the reputation of the earlier mark.

47 Accordingly, since the claim that the earlier mark had a reputation, set out in the letter accompanying the application for a declaration of invalidity of 15 January 2014, was a mere assertion unsupported by concrete evidence, the evidence submitted before the Board of Appeal cannot be considered to be ‘additional’ or ‘supplementary’ evidence to be added to the evidence already submitted by the applicant.

48 In those circumstances, the Board of Appeal was, in principle, required not to take that evidence into account, in accordance with Rule 50(1) of Regulation No 2868/95 and Article 76(2) of Regulation No 207/2009.

49 However, it is necessary to examine the applicant’s argument that, in essence, the failure to take account of the decision in ‘SUPER ROLL’ is contrary to the interests of sound administration.

50 It is apparent from the documents in the case file that the decision in ‘SUPER ROLL’ concerned the opposition filed by the applicant against registration of the EU figurative mark SUPER ROLL on the basis of its EU trade mark No 4179801.

51 It is apparent from the findings made by the Board of Appeal in the decision in ‘SUPER ROLL’ that ‘Marlboro has reputation and the well-known packaging including the triangular element enjoys enhanced distinctiveness’ and ‘the Marlboro brand and the Marlboro Rooftop itself, being part of the Marlboro brand, have acquired substantial reputation throughout Europe for the relevant public’.

52 When the applicant relied on the relevance of the decision in ‘SUPER ROLL’ before the Board of Appeal, its submission was rejected, in paragraph 51 of the contested decision, on the ground that the earlier decision concerned a different situation, a different and later EU trademark and the evidence of the earlier marks’ reputation had been fully submitted before the Opposition Division.

53 In contrast to that assessment, the applicant argues, in essence, that the existence of the decision in ‘SUPER ROLL’ should have been sufficient for the Board of Appeal to recognise the earlier mark’s reputation as a ‘well-known fact’ and to avoid adopting a decision contrary to its previous findings made in the same context.

54 That argument cannot succeed in so far as the applicant seeks, in essence, automatic recognition of the earlier mark’s reputation only on the basis of EUIPO’s previous decision-making practice.

55 According to established case-law, the decisions which the Boards of Appeal are called on to take under Regulation No 207/2009 are adopted in the exercise of circumscribed powers and are not a matter of discretion. Accordingly, the legality of those decisions must be assessed solely on the basis of that regulation as interpreted by the EU judicature and not on the basis of a previous decision-making practice (see order of 14 April 2016, KS Sports v EUIPO, C‑480/15 P, not published, EU:C:2016:266, paragraph 36 and the case-law cited). It follows that the recognition of any reputation of the earlier mark by the Board of Appeal cannot depend on the recognition of that reputation in separate proceedings concerning different legal and factual elements (see, by analogy, judgment of 23 October 2015, dadida, T‑597/13, not published, EU:T:2015:804, paragraph 43).

56 It is therefore for any party relying on the reputation of its earlier mark to establish, in the circumscribed context of each set of proceedings to which it is a party and on the basis of facts which it considers most appropriate, that that mark has acquired such reputation; it cannot merely claim to adduce that evidence by virtue of the recognition of such a reputation, including for the same mark, in a separate administrative procedure (see, by analogy, judgment of 23 October 2015, dadida, T‑597/13, not published, EU:T:2015:804, paragraph 45).

57 If it were sufficient for the applicant to rely on a previous decision of the Board of Appeal to demonstrate the reputation of its earlier mark, that, first, would infringe the intervener’s rights of the defence, to the extent that it could not examine, assess and challenge the facts on which the Board of Appeal had relied, and, secondly, would extend, in error, the principle of res judicata to an administrative decision which concerned parties other than the parties to the proceedings, thereby impeding the review of the legality of an administrative decision by a judicial authority, which would be clearly contrary to the principle of legality (see, by analogy, judgment of 23 October 2015, dadida, T‑597/13, not published, EU:T:2015:804, paragraph 46).

58 It follows from those considerations that, contrary to the applicant’s claims, EUIPO was not under any obligation automatically to recognise the reputation of the earlier mark solely on the basis of findings made in other proceedings giving rise to another decision, here the decision in ‘SUPER ROLL’.

59 Again as regards the applicant’s complaint that the reputation of the earlier mark should have been recognised automatically on the basis of Article 76(1) of Regulation No 207/2009, that complaint must also be rejected in so far as it is apparent from that provision that the obligation for EUIPO to examine facts of its own motion is restricted to relevant facts that could lead to it applying absolute grounds for refusal to the examination of an EU trade mark application carried out by the examiners and, on appeal, by the Boards of Appeal during the procedure for the registration of that mark. However, in the context of proceedings such as those at issue in the present case, it is for the proprietor of the earlier trade mark to prove the existence, validity and scope of protection of that mark (see, in respect of opposition proceedings, judgment of 28 September 2016, Pinto Eliseu Baptista Lopes Canhoto v EUIPO — University College London (CITRUS SATURDAY), T‑400/15, not published, EU:T:2016:569, point 38).

60 It follows from all the foregoing that the reputation of an earlier mark cannot be established by suppositions, but must be based on solid and objective evidence which proves its existence.

61 The evidence adduced by the applicant for the first time before the Board of Appeal had precisely that objective. The applicant submits, in essence, that the interests of legal certainty and sound administration militated in favour of accepting the evidence produced out of time.

62 In that regard, it must be noted that EUIPO is under a duty to exercise its powers in accordance with the general principles of EU law, such as the principle of sound administration (judgment of 10 March 2011, Agencja Wydawnicza Technopol v OHIM, C‑51/10 P, EU:C:2011:139, paragraph 73). According to Article 41(1) of the Charter of Fundamental Rights of the European Union the right to good administration includes the right of every person to have his or her affairs handled fairly.

63 It is clearly in the interests of the sound administration of justice that the Board of Appeal is able to make a fully informed decision when ruling in proceedings brought before it. Therefore, it is for the Board to examine with care and impartiality all the factual and legal information necessary for the exercise of its discretion.

64 In the present case, it is not disputed that the content of the decision in ‘SUPER ROLL’, adopted only 11 months before the contested decision, had been brought to the Board of Appeal’s attention and that, therefore, it was aware of the findings made in that decision regarding the ‘substantial reputation’ of the Marlboro brand and its ‘Marlboro Rooftop’, which is an integral part of the earlier mark at issue in the present case.

65 As a result, in the light of the case-law requiring EUIPO to take into account decisions already taken and to consider with particular care whether it should decide in the same way or not (see, to that effect, judgment of 10 March 2011, Agencja Wydawnicza Technopol v OHIM, C‑51/10 P, EU:C:2011:139, point 74), the decision in ‘SUPER ROLL’ was clearly an indication that the earlier mark might have a reputation within the meaning of Article 8(5) of Regulation No 207/2009.

66 Accordingly, the evidence adduced by the applicant before the Board of Appeal was clearly likely to be genuinely relevant to the outcome of the proceedings, in so far it was intended to prove the reputation of the earlier mark within the meaning of Article 8(5) of Regulation No 207/2009. Therefore, by refusing to examine the evidence on the ground that it was submitted out of time, the Board of Appeal failed to examine a potentially relevant factor in the application of that provision.

67 Notwithstanding the interpretation of Rule 50 of Regulation No 2868/95 and Article 76(2) of Regulation No 207/2009, as set out in paragraphs 40 to 42 above, and the conclusion in paragraph 50 above, the broad discretion enjoyed by EUIPO in the performance of its duties cannot exempt it from its duty to assemble all the elements of fact and law necessary for the exercise of its discretion in cases where the refusal to take account of certain evidence submitted late would breach the principle of sound administration.

68 Therefore, in the particular circumstances of the present case, the Board of Appeal should, in accordance with its duty of sound administration, have accepted the evidence of the earlier mark’s reputation submitted for the first time before it, if only to refute that evidence.

69 That conclusion cannot be called into question by EUIPO’s argument that if the evidence in question had been accepted as admissible by the Board of Appeal that would have resulted in breach of the principle of equality of arms.

70 In that regard, it should be noted that, under the second sentence of Article 75(1) of Regulation No 207/2009 (now the second sentence of Article 94(1) of Regulation No 2017/1001), decisions of EUIPO may be based only on reasons or evidence on which the parties concerned have had an opportunity to present their comments. That provision relates to both factual and legal reasons and to evidence (judgment of 4 October 2006, Freixenet v OHIM(Shape of a frosted matt black bottle), T‑190/04, not published, EU:T:2006:291, paragraph 28).

71 Here, it is apparent from the material in the file that the evidence of the earlier mark’s reputation, submitted at the stage of the proceedings before the Board of Appeal, and the intervener’s observations on that evidence were all subject to an exchange of arguments. In particular, it is apparent from the file that the statement of grounds of appeal of 8 January 2015, lodged by the applicant before the Board of Appeal, containing evidence of the reputation of the earlier mark was indeed communicated to the intervener, thus respecting its procedural rights and offering it the opportunity to make its views known in that regard. It is also apparent from the file that the intervener even benefited from an extension of the time limit before submitting its observations on 14 May 2015. Furthermore, it is important to state that in its observations the intervener did indeed adopt a position on the evidence submitted by the applicant in support of the reputation of the earlier mark, denying its relevance and deeming it insufficient.

72 Accordingly, it is undisputed that the intervener had every opportunity and all the time necessary to assert its views and to examine, assess and challenge the evidence submitted by the applicant. Consequently, if the Board of Appeal had exercised its discretion in accordance with the requirements of sound administration, agreeing, in the light of the particular circumstances of the present case, to take into account that evidence, no breach of the principle of equality of arms could have been imputed to it.

73 The conclusion in paragraph 67 above also cannot be undermined by the Board of Appeal’s position, in paragraph 50 of the contested decision, that, even if the reputation of the earlier mark had been proved, the degree of similarity between the marks at issue was, in any event, insufficient for the purposes of the application of Article 8(5) of Regulation No 207/2009 for a link between those marks to be created in the mind of the public.

74 It should be noted in that connection that, as the applicant submitted in the context of its third plea, that position is contrary to the settled case-law, according to which the existence of a link between the earlier mark and the contested mark for the purposes of Article 8(5) of Regulation No 207/2009, must be assessed globally, account being taken of all factors relevant to the circumstances of the case, which include inter alia the degree of similarity between the marks at issue and the goods covered by those marks and also the strength of the earlier mark’s reputation and its degree of distinctive character (judgment of 24 March 2011, Ferrero v OHIM, C‑552/09 P, EU:C:2011:177, paragraph 64).

75 Furthermore, since Article 8(5) of Regulation No 207/2009 merely requires the similarity which exists to be capable of leading the relevant public to make a connection between the signs at issue, that is to say, to establish a link between them, but does not require that similarity to be capable of leading that public to confuse those signs, the protection which that provision lays down in favour of marks with a reputation may apply even if there is a lower degree of similarity between the signs at issue (judgment of 10 December 2015, El Corte Inglés v OHIM, C‑603/14 P, EU:C:2015:807, paragraph 42).

76 It follows that, even if the marks at issue were similar only to a low degree, it cannot be inferred from this, contrary to the Board of Appeal’s conclusion, that the application of Article 8(5) of Regulation No 207/2009 was necessarily precluded. Consequently, the possible admission of the evidence submitted by the applicant for the first time before the Board of Appeal and its examination could have had an effect on the outcome of the proceedings as regards the application of Article 8(5) of Regulation No 207/2009.

77 Having regard to all the foregoing, it must be held that the Board of Appeal made a procedural error in breach of the principle of sound administration, by holding that the evidence produced by the applicant for the first time before it should not be taken into consideration because of its late submission.

78 However, a procedural irregularity will entail the annulment of a decision in whole or in part only if it is shown that had it not been for the irregularity the contested decision might have been substantively different (see, to that effect, judgment of 8 June 2005, Wilfer v OHIM (ROCKBASS), T‑315/03, EU:T:2005:211, paragraph 33).

79 In the present case, as has already been observed in paragraphs 65 and 66 above, the possibility remains that the evidence which the Board of Appeal wrongly refused to take into consideration may be such as to modify the substance of the contested decision, specifically as regards the application of Article 8(5) of Regulation No 207/2009. Accordingly, the lack of examination of that evidence by the Board of Appeal entails the annulment of that decision. Consequently, the first plea and the second part of the second plea must be upheld and the contested decision must be annulled, without it being necessary to examine the other pleas in the action.

80 As regards, the applicant’s second head of claim that the Court declare the trade mark at issue invalid or, in the alternative, refer the case before the Board of Appeal for further consideration, it must be recalled that the power to alter decisions pursuant to Article 65(3) of Regulation No 207/2009 (now Article 72(3) of Regulation 2017/1001) does not have the effect of conferring on the Court the power to substitute its own assessment for that of a Board of Appeal of EUIPO, or 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, Edwin v OHIM, C‑263/09 P, EU:C:2011:452, paragraphs 71 and 72 and the case-law cited).

81 That is not the case here. In so far as the contested decision is annulled on the ground that the Board of Appeal erred in refusing to take into account the evidence of the earlier mark’s reputation, and where the Board of Appeal has to therefore rule again on the probative value of that evidence, it is not for the Court to rule on the invalidity of the contested mark.

82 Therefore, the applicant’s second head of claim must be dismissed in so far as the Court is requested to declare the contested mark invalid.

83 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. Moreover, under Article 134(2) of the Rules of Procedure, where there is more than one unsuccessful party the Court is to decide how the costs are to be shared.

84 In the present case, as EUIPO and the intervener have been largely unsuccessful, they must be ordered to pay the applicant’s costs, in accordance with the form of order sought by the applicant.

1. Annuls the decision of the First Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 4 January 2016 (Case R 2775/2014-1);

3. Orders EUIPO and Explosal Ltd to bear, in addition to their own costs, those incurred by Philip Morris Brands Sàrl.

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	Court of Justice of the European Communities (including Court of First Instance Decisions)
You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Philip Morris Brands v EUIPO - Explosal (Superior Quality Cigarettes FILTER CIGARETTES Raquel) (EU trade mark - Invalidity proceedings : Judgment) [2018] EUECJ T-105/16 (01 February 2018) URL: http://www.bailii.org/eu/cases/EUECJ/2018/T10516.html Cite as: EU:T:2018:51, ECLI:EU:T:2018:51, [2018] EUECJ T-105/16

Court of Justice of the European Communities (including Court of First Instance Decisions)