Conte v EUIPO (CANNABIS STORE AMSTERDAM) (EU trade mark - Judgment) [2019] EUECJ T-683/18 (12 December 2019)

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(EU trade mark — Application for EU figurative mark CANNABIS STORE AMSTERDAM — Absolute ground for refusal — Trade mark contrary to public policy — Article 7(1)(f) of Regulation (EU) 2017/1001 — Article 7(2) of Regulation 2017/1001)

Santa Conte, established in Naples (Italy), represented by C. Demichelis, E. Ortaglio and G. Iorio Fiorelli, lawyers,

European Union Intellectual Property Office (EUIPO), represented by L. Rampini, acting as Agent,

ACTION brought against the decision of the Second Board of Appeal of EUIPO of 31 August 2018 (Case R 2181/2017-2), concerning an application for registration of the figurative sign CANNABIS STORE AMSTERDAM as an EU trade mark,

composed of V. Tomljenović, President, A. Marcoulli and A. Kornezov (Rapporteur), Judges,

having regard to the application lodged at the Court Registry on 20 November 2018,

1 On 19 December 2016, the applicant, Ms Santa Conte, 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 and services in respect of which registration was sought are in Classes 30, 32 and 43 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 30: ‘Baked goods, confectionery, chocolate and desserts; Salts, seasonings, flavourings and condiments; Ice, ice creams, frozen yoghurts and sorbets; Savoury pastries’;

– Class 32: ‘Soft drinks; Beer and brewery products; Preparations for making beverages’;

4 By decision of 7 September 2017, the examiner rejected the application for registration on the basis of Article 7(1)(b) and (c) and Article 7(2) of Regulation No 207/2009 (now Article 7(1)(b) and (c) and Article 7(2) of Regulation 2017/1001).

5 On 9 October 2017, the applicant brought an appeal before EUIPO, pursuant to Articles 66 to 68 of Regulation 2017/1001, against the examiner’s decision.

6 After explaining, in response to the applicant’s observations, that the Boards of Appeal may raise an absolute ground for refusal not raised in the examiner’s decision, subject to respect for the rights of the defence, the Board of Appeal, by decision of 31 August 2018 (‘the contested decision’), dismissed the appeal on the basis of Article 7(1)(f) of Regulation 2017/1001, considering that the sign which is the subject of the trade mark application was contrary to public policy.

– order EUIPO to pay the costs, including those incurred during the administrative proceedings.

9 In support of the action, the applicant puts forward two pleas in law, alleging, first, infringement of the combined provisions of Article 71(1) and Article 95(1) of Regulation 2017/1001 and, second, infringement of Article 7(1)(f) and Article 7(2) of that regulation.

First plea in law, alleging infringement of the combined provisions of Article 71(1) and Article 95(1) of Regulation 2017/1001

10 According to the applicant, it is apparent from the case-law that, in accordance with the combined provisions of Article 71(1) and the first sentence of Article 95(1) of Regulation 2017/1001, in proceedings for registration of an EU trade mark, EUIPO is required to examine of its own motion the facts relevant to the proceedings, including the assessment of the meaning of the sign for which registration as a trade mark is sought and how it is understood by the relevant public. She argues that that requirement, which is the expression of the duty of due diligence arising from the provision in question, was disregarded by the Board of Appeal.

12 It should be borne in mind, as a preliminary point, that, under Article 71(1) of Regulation 2017/1001, following the examination as to the allowability of the appeal brought against a decision of one of the departments referred to in Article 66(1) of Regulation 2017/1001, the Board of Appeal ‘may either exercise any power within the competence of the department which was responsible for the decision appealed or remit the case to that department for further prosecution’. In accordance with Article 95(1) of Regulation 2017/1001, in proceedings before it, EUIPO is to examine the facts of its own motion.

13 As the applicant correctly states, it is apparent from the case-law, first, that the meaning of the sign for which registration has been sought and how it is understood by the public of the European Union are necessarily among the facts which EUIPO must examine of its own motion (judgment of 25 September 2018, Medisana v EUIPO (happy life), T‑457/17, not published, EU:T:2018:599, paragraph 11) and, second, that Article 95(1) of Regulation 2017/1001 is a statement of the duty of diligence, under which the relevant institution is required to examine carefully and impartially all the relevant factual and legal aspects of the case in question (see judgment of 25 January 2018, SilverTours v EUIPO (billiger-mietwagen.de), T‑866/16, not published, EU:T:2018:32, paragraph 15 and the case-law cited). In so far as, third, the applicant claims that the Board of Appeal did not take into account well-known facts, it should be noted, first, that an applicant is entitled to produce documents before the Court as evidence of the accuracy — or inaccuracy — of a matter of common knowledge (see judgment of 15 January 2013, Gigabyte Technology v OHIM — Haskins (Gigabyte), T‑451/11, not published, EU:T:2013:13, paragraph 22 and the case-law cited) and, second, that well-known facts consist of facts which are likely to be known by anyone or which may be learnt from generally accessible sources (see judgment of 10 February 2015, Boehringer Ingelheim International v OHIM — Lehning entreprise (ANGIPAX), T‑368/13, not published, EU:T:2015:81, paragraph 89 and the case-law cited).

14 The applicant’s arguments must be examined in the light of those principles.

15 In the first place, according to the applicant, the Board of Appeal’s assessment, and in particular that set out in paragraph 29 of the contested decision, is vitiated by an error in so far as the Board of Appeal considered that the sign for which registration was sought refers to ‘the symbol of a marijuana leaf’ and that that symbol refers to the psychotropic substance. It is well known that marijuana is not a plant but a psychoactive substance obtained not from cannabis leaves but from the dried inflorescences of female cannabis flowers. Furthermore, the active substance tetrahydrocannabinol (‘THC’) is only one of 113 cannabinoids present in the inflorescences of the female flowers of the plant Cannabis sativa. Nevertheless, EUIPO did not attach importance to the fact that the psychotropic effects of THC are associated only with the percentage of that active substance in the flowers of Cannabis sativa and not with the content of the leaves of that plant which are represented in the sign applied for. These are therefore well-known facts which the Board of Appeal did not take into consideration, thus infringing the first sentence of Article 95(1) and Article 71(1) of Regulation 2017/1001.

16 It should be noted in that regard that it is true that the contested decision contains, in paragraphs 28 and 29, the expression ‘marijuana leaf’. That expression is inaccurate, as EUIPO accepts in the response, since marijuana is not, stricto sensu, a species of plant and, therefore, cannot have leaves; that expression refers, in reality, to a psychotropic substance extracted from the dried inflorescences of female cannabis flowers.

17 However, the contested decision must be read in its entirety. It is important to note, in that regard, that, in paragraph 27 of the contested decision, the Board of Appeal noted that the sign at issue contains ‘the depiction of 10 cannabis leaves’ and that ‘the particular shape of this leaf is often used as a media symbol for marijuana, understood as the psychoactive substance that is obtained from the dried inflorescences of female cannabis plants’. Furthermore, the applicant does not call into question as such the Board of Appeal’s statement that ‘the particular shape of [the cannabis] leaf is often used as a media symbol for marijuana’. Consequently, in the light of the detailed and thorough explanation provided in paragraph 27 of the contested decision, the inaccuracy identified by the applicant does not mean that the Board of Appeal disregarded its obligation to examine the facts of its own motion and, in particular, the meaning of the sign for which registration is sought, with the result that that inaccuracy has no effect on the lawfulness of that decision.

18 In the second place, according to the applicant, by failing to take into consideration another well-known fact, namely that it is the THC content which determines whether or not products containing cannabis are psychotropic and that marijuana is extracted from cannabis flowers and not from cannabis leaves, the Board of Appeal’s reasoning was vitiated by partiality.

19 That complaint must however be rejected as having no factual basis because the Board of Appeal did state, in paragraph 21 of the contested decision, that it is only above a certain THC content, namely 0.2%, that cannabis becomes an illegal substance in many EU countries and, in paragraph 23 of that decision, that that substance comes from female cannabis flowers. The Board of Appeal therefore clearly disassociated cannabis that has psychotropic effects from cannabis that does not, based precisely on the THC content. Therefore, if there is a well-known fact, the Board of Appeal expressly identified it.

20 In the third place, the applicant argues that the Board of Appeal carried out an assessment, in particular in paragraphs 29 and 30 of the contested decision, which cannot be described as impartial by using only its own understanding of the word element ‘cannabis’ and by associating it, first, with an incorrect perception of the representation of the leaves reproduced in the sign which is the subject of the trade mark application as being the leaves of a plant which does not exist, namely marijuana, and, second, with the geographical indication ‘Amsterdam’.

21 It is important to note, in that regard, that, as EUIPO correctly emphasises in the response, the decisive criterion for the purposes of assessing whether a sign is contrary to public policy is the perception which the relevant public will have of the mark; that perception may be based on inaccurate definitions from a scientific or technical point of view, which means that it is the specific and current perception of that sign that matters, irrespective of whether the consumer has all the information available. Thus, even if it does not correspond, or corresponds only in part to the scientific truth, the fact that the representation of the cannabis leaf is associated, in the mind of the relevant public, with the psychotropic substance does represent what the Board of Appeal must examine in such a situation, namely that public’s perception. That is exactly what the Board of Appeal did, as EUIPO recalled both in the response and at the hearing, stating that ‘the particular shape of a cannabis leaf is often used as a media symbol for marijuana’. Clearly that is not a scientific fact, but the perception of the relevant public, in whose mind that leaf has become a ‘media symbol’ for marijuana. That analysis is not, therefore, partial in any way.

22 In the fourth place, the applicant alleges that paragraph 29 of the contested decision is vitiated by another lack of impartiality and care. The words ‘cannabis’ and ‘hemp’ refer without distinction to the hemp plant. Furthermore, other English words, namely ‘store’ and ‘amsterdam’, are present in the word element of the sign which is the subject of the trade mark application, which expresses a requirement for logical and idiomatic continuity and the need to give the sign at issue the most international scope possible, English being the main language of global trade. Thus, the Board of Appeal carried out an assessment which was far from being impartial when it noted that the applicant could have used a word other than ‘cannabis’, namely the Italian word ‘canapa’ (hemp) or the English word ‘hemp’, to refer to the goods and services at issue.

23 Contrary to the applicant’s assertions, the Board of Appeal cannot be accused of adopting reasoning vitiated by partiality. In that regard, the applicant’s criticism of the second sentence of paragraph 29 of the contested decision cannot succeed. In that sentence, the Board of Appeal suggested that the applicant ‘could have’ added more suitable word elements to the sign in question to highlight the characteristics of food and drink items not containing THC, for example the word ‘canapa’ or ‘hemp’, and that she could have omitted the reference to Amsterdam or the media symbol for marijuana. Irrespective of whether the words ‘cannabis’ and ‘hemp’ are synonyms, as the applicant seems to argue, it must be stated that that suggestion, made by the Board of Appeal, is only an obiter dictum and cannot therefore render the contested decision unlawful (see, to that effect, judgment of 9 March 2018, Recordati Orphan Drugs v EUIPO — Laboratorios Normon (NORMOSANG), T‑103/17, not published, EU:T:2018:126, paragraph 78). The Board of Appeal was under no obligation to indicate to the applicant that there were alternatives which might overcome the objections to the sign at issue. In any event, that obiter does not show any partiality or any lack of care by the Board of Appeal, contrary to the applicant’s assertions.

24 In the fifth and last place, according to the applicant, the choice of the word ‘amsterdam’ merely refers to the origin of the cannabis which she uses and to the style and atmosphere of that city in the Netherlands, which the applicant claims to be using as inspiration for the provision of her own services for providing food and drink and, in particular, for the layout of her sales outlets. The Board of Appeal’s statement that consumers would be led by the sign which is the subject of the trade mark application to associate the goods and services which the applicant sells, which are completely legal, with substances sold in ‘coffee shops’ in Amsterdam shows that the Board of Appeal carried out a partial and inaccurate assessment of the meaning of that sign, especially in view of the significant and ever-growing number of undertakings producing food and drink items from cannabis and shops selling those items.

25 However, the applicant is wrong to perceive a lack of impartiality or care in the Board of Appeal’s statement that the word ‘amsterdam’ would be understood by the relevant public as referring to the city in the Netherlands which tolerates the use of drugs and is known for its ‘coffee shops’ (paragraphs 27 to 29 of the contested decision). On the contrary, the Board of Appeal examined, carefully and impartially, the arguments put forward by the applicant. As regards the fact that the word ‘amsterdam’ could also be associated with other meanings, such as those put forward by the applicant, it is sufficient to note, first, that the applicant does not dispute that the city of Amsterdam is known for its ‘coffee shops’ which are authorised to sell marijuana and ‘space cakes’ and, second, that, according to the case-law, a sign must be refused registration if at least one of its possible meanings characterises the existence of an absolute ground for refusal (see judgment of 2 May 2018, Alpine Welten Die Bergführer v EUIPO (ALPINEWELTEN Die Bergführer), T‑428/17, EU:T:2018:240, paragraph 27 and the case-law cited).

26 Consequently, the Board of Appeal did not infringe the combined provisions of Article 71(1) and of Article 95(1) of Regulation 2017/1001 by adopting the contested decision, so that the first plea in law must be rejected.

Second plea in law, alleging infringement of Article 7(1)(f) and Article 7(2) of Regulation 2017/1001

27 The applicant argues that the Board of Appeal erred in its definition of the relevant public, which, however, it qualified at the hearing (see paragraph 41 below), and in the identification of that public’s perception of the sign at issue, and that the sign for which registration has been sought is not contrary to public policy for the purposes of Article 7(1)(f) and Article 7(2) of Regulation 2017/1001.

29 It should be borne in mind that, according to Article 7(1)(f) of Regulation 2017/1001, trade marks which are contrary to public policy or to accepted principles of morality are not to be registered. According to paragraph 2 of that article, paragraph 1 is to apply notwithstanding that the grounds of non-registrability obtain in only part of the Union. Such a part may comprise a single Member State (see judgment of 20 September 2011, Couture Tech v OHIM (Representation of the Soviet coat of arms), T‑232/10, EU:T:2011:498, paragraph 22 and the case-law cited).

30 It follows from the case-law that the public interest underlying the absolute ground for refusal laid down in Article 7(1)(f) of Regulation 2017/1001 is to ensure that signs which, when used in the European Union, would be contrary to public policy or to accepted principles of morality are not registered (judgments of 20 September 2011, Representation of the Soviet coat of arms, T‑232/10, EU:T:2011:498, paragraph 29, and of 15 March 2018, La Mafia Franchises v EUIPO — Italy (La Mafia SE SIENTA A LA MESA), T‑1/17, EU:T:2018:146, paragraph 25).

31 The assessment of whether a sign is contrary to public policy or to accepted principles of morality must be carried out with reference to the perception of that sign, when being used as a trade mark, by the relevant public within the European Union or part of the Union (judgments of 20 September 2011, Representation of the Soviet coat of arms, T‑232/10, EU:T:2011:498, paragraph 50, and of 9 March 2012, Cortés del Valle López v OHIM (¡Que buenu ye! HIJOPUTA), T‑417/10, not published, EU:T:2012:120, paragraph 12).

32 The assessment of the existence of a ground for refusal under Article 7(1)(f) of Regulation 2017/1001 cannot be based on the perception of the part of the relevant public that does not find anything shocking, nor can it be based on the perception of the part of the public that may be very easily offended, but must be based on the standard of a reasonable person with average sensitivity and tolerance thresholds (judgments of 9 March 2012, ¡Que buenu ye! HIJOPUTA, T‑417/10, not published, EU:T:2012:120, paragraph 21; of 14 November 2013, Efag Trade Mark Company v OHIM (FICKEN LIQUORS), T‑54/13, not published, EU:T:2013:593, paragraph 21; and of 11 October 2017, Osho Lotus Commune v EUIPO — Osho International Foundation (OSHO), T‑670/15, not published, EU:T:2017:716, paragraph 103).

33 Moreover, the relevant public cannot be limited, for the purpose of the examination of the ground for refusal under Article 7(1)(f) of Regulation 2017/1001, to the public to which the goods and services in respect of which registration is sought are directly addressed. Consideration must be given to the fact that the signs caught by that ground for refusal will shock not only the public to which the goods and services designated by the sign are addressed, but also other persons who, without being concerned by those goods and services, will encounter that sign incidentally in their day-to-day lives (judgments of 14 November 2013, FICKEN LIQUORS, T‑54/13, not published, EU:T:2013:593, paragraph 22, and of 11 October 2017, OSHO, T‑670/15, not published, EU:T:2017:716, paragraph 104).

34 It must also be borne in mind that signs likely to be perceived as being contrary to public policy or to accepted principles of morality are not the same in all Member States, inter alia for linguistic, historic, social and cultural reasons (see judgment of 15 March 2018, La Mafia SE SIENTA A LA MESA, T‑1/17, EU:T:2018:146, paragraph 28 and the case-law cited).

35 It follows that, in order to apply the absolute ground for refusal laid down in Article 7(1)(f) of Regulation 2017/1001, it is necessary to take account both of the circumstances common to all Member States of the European Union and of the particular circumstances of individual Member States which are likely to influence the perception of the relevant public within those States (judgments of 20 September 2011, Representation of the Soviet coat of arms, T‑232/10, EU:T:2011:498, paragraph 34, and of 15 March 2018, La Mafia SE SIENTA A LA MESA, T‑1/17, EU:T:2018:146, paragraph 29).

36 In the present case, the sign which is the subject of the application for an EU trade mark, reproduced in paragraph 2 above, comprises a word element, made up of the words ‘cannabis’, ‘store’ and ‘amsterdam’, and a figurative element, namely three rows of stylised green leaves, corresponding to the usual depiction of a cannabis leaf, on a black background with two fluorescent green borders at the top and bottom of the design. The three abovementioned words also contribute to the figurative dimension of the sign at issue in so far as they are in capital letters, with the word ‘cannabis’ depicted in much larger white characters above the other two words in the centre of the sign. In the light of those considerations, it must be held that the Board of Appeal did not err in considering, in paragraph 20 of the contested decision, that the word element ‘cannabis’ is dominant, both because of the space it occupies and because of its central position within the sign which is the subject of the trade mark application. That fact, moreover, is not disputed.

37 It is in the light of those considerations that the two parts put forward by the applicant in her second plea in law should be examined.

First part of the second plea in law, alleging that the Board of Appeal erred when defining the relevant public and the latter’s perception of the sign at issue

38 The applicant argues that the sign at issue is made up of an English expression which will be perceived in all Member States of the European Union and by the relevant public which knows and understands English as referring to a term meaning ‘Amsterdam cannabis shop’. The word ‘cannabis’ does not refer to any illegal narcotic substance, but merely to the everyday term for hemp, both in English and in Italian. The Board of Appeal also failed to attach sufficient importance to the other two English words ‘amsterdam’ and ‘store’.

39 Furthermore, she argues that the Board of Appeal did not rely on the criteria of a reasonable person with average sensitivity and tolerance thresholds, who is reasonably well informed and reasonably observant and circumspect. Consequently, the assessment of that public’s perception of the sign which is the subject of the trade mark application is incorrect and does not reflect the development of the cultural and social view, in the European Union, of cannabis and its use for industrial and lawful purposes, which is now shown in EU legislation. The Board of Appeal also did not analyse the sign at issue in the context of its normal use, namely the legal sale or use, in the applicant’s shops, of food and drink items made from hemp.

40 In the first place, as regards the error supposedly made by the Board of Appeal in its definition of the relevant public and, consequently, its incorrect assessment of how the sign which is the subject of the trade mark application would be perceived by that public, it should be noted that the Board of Appeal, while agreeing with the examiner’s analysis that the sign at issue contains English words, attached particular importance to the dominant presence of the word ‘cannabis’, which comes from Latin and which is widely used and understood in many EU languages other than English, for example Danish, German, Spanish, French, Italian, Hungarian, Polish, Portuguese, Romanian and Swedish, so that that fact, coupled with the presence of stylised cannabis leaves forming part of that sign, supports the conclusion that the relevant public is made up not only of English-speaking consumers, but also all the consumers in the European Union who are able to understand the meaning of the word ‘cannabis’ associated with that figurative element.

41 When asked whether, by the first part of her second plea in law, she was seeking to define the relevant public as being exclusively the English-speaking public, the applicant, at the hearing, responded that she was not seeking to do so and accepted that that public is to be understood more broadly. The applicant also indicated that, in her view, the reference public is to be understood as being that of the whole of the European Union which has a good knowledge of English. In that regard, taking into account all the characteristics of the sign which is the subject of the trade mark application, the Board of Appeal’s assessment must be upheld, since that sign contains at least two words which can be understood far beyond the English-speaking public, namely, as the Board of Appeal pointed out, the word ‘cannabis’, which is of Latin origin, and also the word ‘amsterdam’, referring to a city in the Netherlands which is internationally known, and since the figurative element in that sign may, as the Board of Appeal rightly observed, be recognised as the media portrayal of marijuana.

42 It is therefore with regard to not only the English-speaking public, but more broadly, the public in the European Union, that it is necessary to review the legality of the Board of Appeal’s examination of whether the sign which is the subject of the application for registration is contrary to public policy, bearing in mind that, in accordance with the case-law referred to in paragraph 35 above, it is necessary to take account both of the circumstances common to all Member States of the European Union and of the particular circumstances of individual Member States which are likely to influence the perception of the relevant public within those States.

43 In the second place, it is important to note that, by that first part, the applicant also refers to the composition of the relevant public and its level of attention. When questioned on that point at the hearing, the applicant stated that the relevant public is mostly a young public, between 20 and 30 years old, which is very well informed of all the available knowledge regarding cannabis. The applicant took the view that it is not necessary to draw a distinction, within that public, between the public in the Member States which have legislation prohibiting the psychotropic substance which derives from cannabis and the public in Member States with a less strict approach.

44 In that regard, it is not disputed that the goods and services referred to in the trade mark application are intended for consumers, with the result that the relevant public is made up of the general public of the European Union. It is clear that the general public does not necessarily have accurate scientific or technical knowledge regarding narcotics in general, and in particular the narcotic derived from cannabis, even if that situation is likely to vary according to the Member States within which that public is situated and, in particular, according to the debates which may have led to the adoption of legislation or rules authorising or tolerating the therapeutic or recreational use of products with a sufficient THC content to produce psychotropic effects.

45 Furthermore, since the applicant, in the trade mark application, refers to everyday consumer goods and services, intended for the general public without distinction based on age, there is no valid reason to limit, as the applicant recommended at the hearing, the relevant public to only the young public between 20 and 30 years old. Similarly, it should be added that, as EUIPO was fully entitled to point out, in the particular context of Article 7(1)(f) of Regulation 2017/1001, the relevant public is not only the public to which the goods and services for which registration is sought are directly addressed, but also other persons who, without being concerned by those goods and services, will encounter that sign incidentally in their day-to-day lives (see paragraph 33 above), which refutes, also on that ground, the applicant’s argument, presented at the hearing, that that public is mainly a young public made up of persons who are between 20 and 30 years old.

46 In the third place, as regards the relevant public’s level of attention, although it is true that the contested decision does not contain explicit statements in that regard, it is nonetheless apparent from that decision that the Board of Appeal did not call into question the examiner’s definition to the effect that, with regard to everyday consumer goods such as those referred to in the trade mark application, these are intended mainly for the average consumer, who is reasonably well informed and reasonably observant and circumspect (paragraph 3 of the contested decision), which corresponds, in essence and mutatis mutandis, to a public made up of reasonable persons with average sensitivity and tolerance thresholds, which must be taken into account for the purposes of the application of Article 7(1)(f) of Regulation 2017/1001, in accordance with the case-law cited in paragraph 32 above. In view of the goods and services at issue, the Board of Appeal’s definition of the relevant public and its level of attention therefore appears correct.

47 In the fourth place, the applicant also alleges that Board of Appeal did not take into account the development of the cultural and social view, in the European Union, of cannabis and its use for lawful purposes, with the result that it did not correctly assess the relevant public’s perception (paragraph 40 of the application). In that regard, the applicant cites two agricultural regulations on the cultivation of hemp, namely Commission Delegated Regulation (EU) 2017/1155 of 15 February 2017 amending Delegated Regulation (EU) No 639/2014 as regards the control measures relating to the cultivation of hemp, certain provisions on the greening payment, the payment for young farmers in control of a legal person, the calculation of the per unit amount in the framework of voluntary coupled support, the fractions of payment entitlements and certain notification requirements relating to the single area payment scheme and the voluntary coupled support, and amending Annex X to Regulation (EU) No 1307/2013 of the European Parliament and of the Council (OJ 2017 L 167, p. 1), and Regulation (EU) No 1307/2013 of the European Parliament and of the Council of 17 December 2013 establishing rules for direct payments to farmers under support schemes within the framework of the common agricultural policy and repealing Council Regulation (EC) No 637/2008 and Council Regulation (EC) No 73/2009 (OJ 2013 L 347, p. 608).

48 In that regard, it must be stated that it is true that much thought is currently being given both to the use of products derived from cannabis whose THC content does not make them narcotics, and on their use, where they are narcotics, for therapeutic or even recreational purposes. In that regard, the legislation of some Member States has itself already evolved or is in the process of evolving.

49 The fact remains that, as the Board of Appeal rightly noted in paragraph 21 of the contested decision, ‘in many countries of the European Union (by way of example, but not exhaustively, Bulgaria, Finland, France, Hungary, Ireland, Poland, Slovakia, Sweden and the United Kingdom)’, products derived from cannabis with a THC content exceeding 0.2% are regarded as illegal narcotics.

50 EU law does not govern the use of products derived from cannabis where they are narcotics. The third subparagraph of Article 168(1) TFEU provides that the Union is to complement the Member States’ action in reducing drugs-related health damage, including information and prevention. As regards Regulation No 1307/2013, it states, in Article 32(6) thereof, that areas used for the production of hemp shall be eligible hectares only if the varieties used have a THC content not exceeding 0.2%. By Delegated Regulation 2017/1155, the Commission adopted legislation enabling the implementation of that provision.

51 It follows that, currently, there is no unanimously accepted, or even predominant trend in the European Union regarding the lawfulness of the use or consumption of products derived from cannabis whose THC content exceeds 0.2%.

52 In those circumstances, first, it should be noted, in the present case, that the Board of Appeal took account of the developments described in paragraphs 47 and 48 above, both at the legislative level and at the societal level, by emphasising the recognised possibilities of using cannabis lawfully, subject nevertheless to particularly strict conditions, and by recalling the EU regulatory framework governing the matter (6th and 10th indents of paragraph 11, and paragraph 25 of the contested decision). Second, the Board of Appeal also rightly took into consideration the fact that the legislation of many Member States classifies the consumption of cannabis as illegal when products derived from it contain a THC level exceeding 0.2%. Signs likely to be perceived as being contrary to public policy or to accepted principles of morality are not the same in all Member States, inter alia for linguistic, historic, social and cultural reasons (see judgment of 15 March 2018, La Mafia SE SIENTA A LA MESA, T‑1/17, EU:T:2018:146, paragraph 28 and the case-law cited). It is therefore in accordance with the case-law that the Board of Appeal relied on the legislation of those Member States since, in the context of Article 7(1)(f) of Regulation 2017/1001, those factors were taken into account not because of their normative value, but as evidence of facts which enabled it to assess the perception of the sign at issue by the relevant public within the Member States concerned (see, to that effect, judgment of 20 September 2011, Representation of the Soviet coat of arms, T‑232/10, EU:T:2011:498, paragraph 37).

53 In the fifth and last place, and as EUIPO contends, the question of the actual THC content in the products sold by the applicant is irrelevant because the assessment which the Board of Appeal was required to carry out had to be independent of the applicant’s conduct and based solely on the relevant public’s perception (see, to that effect, judgments of 9 April 2003, Durferrit v OHIM — Kolene (NU-TRIDE), T‑224/01, EU:T:2003:107, paragraph 76, and of 13 September 2005, Sportwetten v OHIM — Intertops Sportwetten (INTERTOPS), T‑140/02, EU:T:2005:312, paragraph 28).

54 Lastly, the question whether the relevant public perceives the sign at issue as referring to the lawful use of hemp, as the applicant submits, or, on the contrary, as referring to cannabis as an illegal narcotic, as is apparent from the contested decision, is the subject of the second part of the second plea in law and shall be examined below.

55 All of those considerations establish that the Board of Appeal did not make the errors which the applicant accuses it of making.

56 The first part of the second plea in law must therefore be rejected as unfounded.

Second part of the second plea in law, alleging that the sign for which registration was sought is not contrary to public policy

57 First, according to the applicant, the sign for which registration is sought does not refer to any illegal narcotic substance. Even if that were the case, that would not be sufficient to justify the refusal to register that sign as an EU trade mark. The mere reference to or direct indication of an illegal substance is not sufficient to declare that a trade mark application is contrary to public policy, because the sign at issue would also have to lead to the encouragement, trivialisation or approval of the use or consumption of the illegal narcotic substance. In the present case, the sign which is the subject of the trade mark application does not contain any name or meaning which, in the context of its normal use for the goods and services covered by that application, encourages, trivialises or conveys approval of the use of an illegal narcotic substance.

58 Second, according to the applicant, the consumption patterns of, first, the goods and services covered by the trade mark application and, second, narcotic substances such as marijuana, which are normally smoked, also clearly show that the absolute ground for refusal which the Board of Appeal relied on against the applicant is unfounded. In that regard, the applicant relies on the decision of the Cancellation Division of 20 March 2009 in Case 2665 C regarding the application for registration of the sign COCAINE as a word mark in respect of goods in Classes 3, 25 and 32, and in particular for beers; in that case it was found, inter alia, that the consumption pattern of the goods at issue was relevant for the purposes of the application of Article 7(1)(f) of Regulation 2017/1001 and that the mere disruptive effect or negative image which might result from the perception of a trade mark were irrelevant for establishing whether it was contrary to public policy.

60 In the first place, it is necessary to examine whether the Board of Appeal was entitled to conclude that the sign for which registration was sought would be perceived in its entirety by the relevant public as referring to an illegal narcotic substance.

61 In that regard, the Board of Appeal noted, in paragraph 23 of the contested decision, that, in accordance with the case-law of the General Court (judgment of 19 November 2009, Torresan v OHIM — Klosterbrauerei Weissenohe (CANNABIS), T‑234/06, EU:T:2009:448, paragraph 19), the word ‘cannabis’ has three possible meanings. In the first place, it refers to a textile plant, for which the common organisation of the market is regulated within the European Union, and the production of which is subject to very strict legislation as regards the THC content, which may not exceed the threshold of 0.2%. In the second place, the word ‘cannabis’ refers to a narcotic substance which is prohibited in a large number of Member States, to date in the majority of them. In the third place, it refers to a substance the possible therapeutic use of which is under discussion.

62 The Board of Appeal inferred from this, in paragraph 24 of the contested decision, that, in accordance with the applicant’s view, that word should not automatically be understood as referring to a narcotic unless there are ‘further indications’ to that effect. The Board of Appeal therefore fully took account of the fact that the illegal substance reflects only one of the meanings of the word ‘cannabis’ and therefore the applicant is not justified in claiming that the Board of Appeal disregarded, in that respect, the existence of the ‘well-known fact’ that THC, that is to say, the psychoactive substance, is only one of the cannabinoids present in cannabis and the fact that that substance becomes illegal only above a certain threshold.

63 It is therefore necessary to determine, in order to respond to the applicant’s first argument, whether, by considering that there are ‘further indications’ showing that the relevant public would associate the sign applied for with an illegal substance, which the applicant disputes, namely the words ‘amsterdam’ and ‘store’ and the stylised depiction of cannabis leaves, the Board of Appeal made an error of assessment.

64 The Board of Appeal was fully entitled to consider that it was necessary, in particular, to define how the relevant public would perceive all the elements forming the sign which is the subject of the trade mark application (paragraphs 26 and 27 of the contested decision). It considered that the combined presence, in the sign at issue, of the stylised representation of the cannabis leaf, the media symbol for marijuana, and the word ‘amsterdam’, referring to the fact that the city of Amsterdam has many points of sale for the narcotic derived from cannabis, due to the sale of cannabis being tolerated under certain conditions in the Netherlands, made it very likely that the consumer, in the circumstances of the present case, would interpret the word ‘cannabis’ as referring to the narcotic substance which is illegal in ‘many countries of the European Union’ (see paragraph 49 above).

65 That interpretation must be upheld, particularly in view of the inclusion, in the sign which is the subject of the trade mark application, of the word ‘store’, which normally means ‘shop’, with the result that that sign, the dominant element of which is the word ‘cannabis’ (see paragraph 36 above), will be perceived by the relevant English-speaking public as meaning ‘cannabis shop in Amsterdam’ and by the relevant non-English-speaking public as ‘cannabis in Amsterdam’, which, in both cases, coupled with the image of the cannabis leaves, the media symbol for marijuana, is a clear and unequivocal reference to the narcotic substance which is sold there. That public could therefore expect the goods and services sold by the applicant to correspond to those which would be sold in such a shop.

66 The applicant’s explanations that the fact that the word ‘amsterdam’ refers to the origin of the cannabis which she uses in the manufacture of her products and to the lifestyle and atmosphere characterising the city of Amsterdam cannot invalidate that analysis. That will not be the relevant public’s first perception when it sees the words ‘amsterdam’ and ‘cannabis’ associated with the media symbol for marijuana, when the Netherlands, and that city in particular, are known for having adopted legislation tolerating, under certain conditions, the use of that narcotic.

67 Equally unconvincing are the arguments that the stylised design representing the cannabis leaf is also used by all the industrial sectors, in particular the textile and pharmaceutical sectors, which use cannabis. The Board of Appeal did not base its conclusion on the relevant public’s perception of the stylised design representing the cannabis leaf viewed in isolation, but on the combination of the different elements forming the sign in question, which indeed leads to the conclusion, noted by the Board of Appeal in paragraph 29 of the contested decision, that the applicant has drawn attention, albeit inadvertently, to the concept of cannabis as a narcotic substance.

68 Although the applicant argues, nevertheless, that the goods and services covered by the trade mark application have nothing to do with ‘coffee shop’ type establishments in Amsterdam (paragraph 31 of the application) and that the consumption patterns of the products which she sells differ from the consumption patterns of narcotics, which are normally smoked (paragraph 53 of the application), it should be borne in mind again that it follows from a combined reading of the various subparagraphs of Article 7(1) of Regulation 2017/1001 that they refer to the intrinsic qualities of the sign which is the subject of the trade mark application and not to circumstances relating to the conduct of the person applying for the trade mark (judgments of 9 April 2003, NU-TRIDE, T‑224/01, EU:T:2003:107, paragraph 76; of 13 September 2005, INTERTOPS, T‑140/02, EU:T:2005:312, paragraph 28; and of 15 March 2018, La Mafia SE SIENTA A LA MESA, T‑1/17, EU:T:2018:146, paragraph 40). In any event, it is not disputed that cannabis, as a narcotic, can also be ingested, through drink items or food items, for example in cakes, which reflects some of the goods covered by the trade mark application.

69 It follows from the foregoing that the Board of Appeal was fully entitled to consider that the sign at issue would be perceived as a whole by the relevant public as referring to a narcotic substance which is prohibited in a large number of Member States.

70 In the second place, it is necessary to examine whether the sign for which registration is sought is contrary to public policy for the purposes of Article 7(1)(f) of Regulation 2017/1001, read in conjunction with Article 7(2) of that regulation, given that the Board of Appeal selected that absolute ground for refusal.

71 In that regard, it should be noted that Regulation 2017/1001 does not contain a definition of the concept of ‘public policy’. In those circumstances and in view of EU law as it now stands, described in paragraph 50 above, and the wording of Article 7(2) of that regulation, according to which paragraph 1 of that article is to apply notwithstanding that the grounds of non-registrability obtain in only part of the Union, it must be concluded that EU law does not impose a uniform scale of values and acknowledges that the requirements of public policy may vary from one country to another and from one era to another. Member States essentially retain the freedom to determine what constitutes those requirements in accordance with their national needs. Thus, although the requirements of public policy do not cover economic interests or the mere prevention of disturbance of the social order which any infringement of the law involves, they may cover protection of the various interests that the Member State concerned considers to be fundamental interests in accordance with its own system of values (see, by analogy, Opinion of Advocate General Saugmandsgaard Øe in Joined Cases K. and H. (Right of residence and allegations of war crimes), C‑331/16 and C‑366/16, EU:C:2017:973, points 60 and 63 and the case-law cited).

72 As regards, more specifically, the interpretation of that concept in the context of Article 7(1)(f) of Regulation 2017/1001, Advocate General Bobek, in point 76 of his Opinion in the case Constantin Film Produktion v EUIPO (C‑240/18 P, EU:C:2019:553), stressed that public policy is a normative vision of values and goals, defined by the relevant public authority, to be pursued now and in the future, that is, prospectively. Public policy, he continued, thus expresses the public regulator’s wishes as to the norms to be respected in society.

73 In view of the foregoing, the applicant is justified in submitting that, in essence, something being against the law is not always necessarily the equivalent of its being contrary to public policy for the purposes of Article 7(1)(f) of Regulation 2017/1001, read in conjunction with Article 7(2) of that regulation. It is also necessary that the fact of that thing being against the law affects an interest which the Member State or States concerned consider to be fundamental in accordance with their own systems of values.

74 In the present case, it must be noted that, in the Member States where the consumption and use of the narcotic substance derived from cannabis remain prohibited, tackling the spread of cannabis is particularly sensitive, which meets a public health objective aimed at combating the harmful effects of that substance. That prohibition thus seeks to protect an interest which those Member States consider to be fundamental in accordance with their own systems of values, with the result that the rules applicable to the consumption and use of that substance are a matter of ‘public policy’ for the purposes of Article 7(1)(f) of Regulation 2017/1001, read in conjunction with Article 7(2) of that regulation.

75 Furthermore, the importance of the protection of that fundamental interest is further emphasised by Article 83 TFEU, according to which illicit drug trafficking is one of the areas of particularly serious crime with a cross-border dimension, in which the EU legislature may intervene, and by the third subparagraph of Article 168(1) TFEU, according to which the Union is to complement the Member States’ action in reducing drugs-related health damage, including information and prevention.

76 Therefore, the Board of Appeal rightly considered, when examining whether the sign at issue is contrary to public policy in relation to all the consumers in the European Union who can understand its meaning, and given that their perception necessarily forms part of the context referred to in paragraphs 74 and 75 above, that the sign at issue, which would be perceived by the relevant public as an indication that the food and drink items referred to by the applicant in the trade mark application, and the related services, contain narcotic substances which are illegal in many Member States, is contrary to public policy for the purposes of Article 7(1)(f) of Regulation 2017/1001, read in conjunction with Article 7(2) of that regulation.

77 The applicant cannot rebut that conclusion by arguing that the Board of Appeal failed to examine whether, in addition, the sign at issue encourages, trivialises or conveys approval of the use of an illegal narcotic substance. The fact that that sign will be perceived by the relevant public as an indication that the food and drink items referred to by the applicant in the trade mark application, and the related services, contain narcotic substances which are illegal in many Member States is sufficient to conclude that it is contrary to public policy for the purposes of Article 7(1)(f) of Regulation 2017/1001, read in conjunction with Article 7(2) of that regulation, as the Board of Appeal rightly stated, in view of the fundamental interest highlighted in paragraphs 74 and 75 above. In any event, since one of the functions of a trade mark consists of identifying the commercial origin of the goods or services, thus enabling the consumer who acquired them to repeat the experience, if it proves to be positive, or to avoid it, if it proves to be negative, on the occasion of a subsequent purchase (see judgment of 5 March 2003, Alcon v OHIM — Dr. Robert Winzer Pharma (BSS), T‑237/01, EU:T:2003:54, paragraph 48 and the case-law cited), that sign, in so far as it will be perceived as described above, encourages, implicitly but necessarily, the purchase of such goods and services or, at the very least, trivialises their consumption.

78 Lastly, the applicant also cannot rebut that conclusion by arguing that there are EU trade marks containing words such as ‘cannabis’ or ‘cocaine’.

79 In that regard, the applicant relies on the decision of the Cancellation Division of 20 March 2009 regarding the application for registration of the sign COCAINE as a word mark (see paragraph 58 above) and, at the hearing, she also referred to her application for the trade mark CANNABIS STORE AMSTERDAM ORIGINAL AMSTERDAM, in respect of which the examiner recently raised objections. However, it is apparent from the case-law that the references to the decisions adopted at first instance by EUIPO are not binding either on the Boards of Appeal of EUIPO or, a fortiori, on the Courts of the European Union (judgment of 25 January 2018, Brunner v EUIPO — CBM (H HOLY HAFERL HAFERL SHOE COUTURE), T‑367/16, not published, EU:T:2018:28, paragraph 103). In particular, it would be contrary to the Board of Appeal’s task as a review body, as defined in recital 30 and in Articles 66 to 71 of Regulation 2017/1001, for its competence to be limited to complying with the decisions of the first-instance adjudicating bodies of EUIPO (see judgment of 8 May 2019, Battelle Memorial Institute v EUIPO (HEATCOAT), T‑469/18, not published, EU:T:2019:302, paragraph 52 and the case-law cited), so that the applicant cannot successfully rely on those decisions.

80 It follows from the foregoing that the Board of Appeal did not infringe the combined provisions of Article 7(1)(f) and Article 7(2) of Regulation 2017/1001. The second plea in law must therefore be rejected and, consequently, the action must be dismissed in its entirety.

81 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 the applicant has been unsuccessful, she must be ordered to pay the costs, in accordance with the form of order sought by EUIPO.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Conte v EUIPO (CANNABIS STORE AMSTERDAM) (EU trade mark - Judgment) [2019] EUECJ T-683/18 (12 December 2019) URL: http://www.bailii.org/eu/cases/EUECJ/2019/T68318.html Cite as: ECLI:EU:T:2019:855, EU:T:2019:855, [2020] ETMR 16, [2019] EUECJ T-683/18

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