Indo European Foods v EUIPO - Chakari (Abresham Super Basmati Selaa Grade One World's Best Rice) (T-254/20 - Judgment) [2021] EUECJ T-342/20 (06 October 2021)

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(EU trade mark – Opposition proceedings – Application for EU figurative mark Abresham Super Basmati Selaa Grade One World’s Best Rice – Earlier non-registered word mark BASMATI – Agreement on the withdrawal of the United Kingdom from the European Union and Euratom – Transition period – Interest in bringing proceedings – Relative ground for refusal – Article 8(4) of Regulation (EC) No 207/2009 (now Article 8(4) of Regulation (EU) 2017/1001) – Rules governing common law actions for passing off – Likelihood of misrepresentation – Likelihood of dilution of the reputation of the earlier mark)

Indo European Foods Ltd, established in Harrow (United Kingdom), represented by A. Norris, Barrister, and N. Welch, Solicitor,

European Union Intellectual Property Office (EUIPO), represented by H. O’Neill and V. Ruzek, acting as Agents,

ACTION brought against the decision of the Fourth Board of Appeal of EUIPO of 2 April 2020 (Case R 1079/2019‑4), relating to opposition proceedings between Indo European Foods and Mr Chakari,

composed of A.M. Collins, President, V. Kreuschitz and G. Steinfatt (Rapporteur), Judges,

1 On 14 June 2017, the other party to the proceedings before the Board of Appeal, Mr Hamid Ahmad Chakari, 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 applied for are, following a partial rejection of the application in parallel opposition proceedings, in Classes 30 and 31 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: ‘Flour of rice; rice-based snack food; rice cakes; rice pulp for culinary purposes; extruded food products made of rice’;

4 The EU trade mark application was published in European Union Trade Marks Bulletin No 169/2017 of 6 September 2017.

5 On 13 October 2017, the applicant, Indo European Foods Ltd, filed a notice of opposition pursuant to Article 46 of Regulation 2017/1001 to registration of the mark applied for in respect of the goods referred to in paragraph 3 above.

6 The opposition brought by the applicant was based on the earlier non-registered word mark in the United Kingdom, BASMATI, used to refer to rice.

7 The ground relied on in support of the opposition was that set out in Article 8(4) of Regulation 2017/1001. The applicant argued, in essence, that it was entitled under the applicable law in the United Kingdom to prevent, by means of the ‘extended’ form of the action of passing off, use of the mark applied for.

8 On 5 April 2019, the Opposition Division rejected the opposition in its entirety. It found that the evidence submitted by the applicant was insufficient to prove that the earlier mark had been used in the course of trade of more than mere local significance before the relevant date and in the relevant territory. Consequently, according to the Opposition Division, one of the conditions set out in Article 8(4) of Regulation 2017/1001 was not satisfied.

9 On 16 May 2019, the applicant filed a notice of appeal with EUIPO, pursuant to Articles 66 to 71 of Regulation 2017/1001, against the decision of the Opposition Division.

10 By decision of 2 April 2020 (‘the contested decision’), the Fourth Board of Appeal of EUIPO dismissed the appeal as unfounded on the ground that the applicant had failed to prove that the name ‘basmati’ would allow it to prohibit the use of the mark applied for in the United Kingdom under the common law tort of the extended form of passing off.

11 According to the evidence submitted by the applicant, in order for an action to be successful under that tort, it must be shown that, first, the name ‘basmati’ denotes a clearly defined class of goods; secondly, that name has a reputation giving rise to goodwill amongst a significant section of the UK public; thirdly, the applicant is one of many traders entitled to rely upon the goodwill associated with that name; fourthly, there is a misrepresentation by the trade mark applicant leading or likely to lead the public to believe that the goods offered under the contested sign are ‘basmati’ rice; and fifthly, the applicant has suffered or is likely to suffer damage as a result of the erroneous belief engendered by that misrepresentation.

12 The Board of Appeal found that the first three conditions of the extended form of passing off were met. By contrast, it found that the applicant had failed to demonstrate that the use of the sign whose registration was disputed could result in a misrepresentation of the reputed name ‘basmati’. Furthermore, the Board of Appeal took the view that, in the present case, use of the mark applied for could not cause a direct loss of sales for the applicant, since the contested goods were goods other than rice, whereas the applicant sold only rice. Likewise, there was no argument to explain how use of the mark applied for could affect the distinctiveness of the name ‘basmati’, taking into account that ‘super basmati’ was a recognised variety of basmati rice.

– annul the contested decision and uphold the opposition for all of the goods;

– order EUIPO to pay the costs, including those incurred before the Board of Appeal and the Opposition Division.

15 In the first place, EUIPO submits that, to the extent that the opposition to registration of the mark applied for is based on an earlier non-registered trade mark in the United Kingdom of Great Britain and Northern Ireland and, in view of the withdrawal of that State from the European Union from 1 February 2020, the expiry of the transition period under the agreement on the withdrawal of that State from the European Union (OJ 2020 L 29, p. 7; ‘the Withdrawal Agreement’) deprives the opposition procedure and the present action of their purpose. From the end of the transition period, references made in Regulation 2017/1001 to Member States and to the law of the Member States no longer refer to the United Kingdom and the law of the United Kingdom. Consequently, with effect from that date, first, the mark applied for no longer has any legal effect in the territory of the United Kingdom; secondly, the right relied on by the applicant no longer constitutes an ‘earlier right’ within the meaning of Article 8(4) of Regulation 2017/1001; and, thirdly, no conflict could arise following registration of the mark applied for, since it will not be protected in the United Kingdom, whereas the earlier right will be exclusively protected in the United Kingdom.

16 The Withdrawal Agreement, which sets out the arrangements for the withdrawal of the United Kingdom from the European Union, entered into force on 1 February 2020. That agreement provides for a transition period from 1 February to 31 December 2020. Article 127 of the Withdrawal Agreement states that, unless otherwise provided, EU law is to be applicable to and in the United Kingdom during the transition period.

17 The subject matter of the present case is the decision of the Board of Appeal of 2 April 2020, in which it ruled on the existence of the ground for opposition relied on by the applicant. The existence of a relative ground for opposition must be assessed, at the latest, at the time that EUIPO gives a decision on the opposition. The Court recently held that the earlier mark on which the opposition is based must be valid not only at the time of the publication of the application for registration of the mark applied for, but also at the time that EUIPO gives a decision on the opposition (judgment of 14 February 2019, Beko v EUIPO – Acer (ALTUS), T‑162/18, not published, EU:T:2019:87, paragraph 41). There is, however, case-law to the contrary according to which, in order to assess whether there exists a relative ground for opposition, it is appropriate to look at the time of filing of the application for an EU trade mark against which a notice of opposition has been filed on the basis of an earlier trade mark (judgments of 17 October 2018, Golden Balls v EUIPO – Les Éditions P. Amaury (GOLDEN BALLS), T‑8/17, not published, EU:T:2018:692, paragraph 76; of 30 January 2020, Grupo Textil Brownie v EUIPO – The Guide Association (BROWNIE), T‑598/18, EU:T:2020:22, paragraph 19; and of 23 September 2020, Bauer Radio v EUIPO – Weinstein (MUSIKISS), T‑421/18, EU:T:2020:433, paragraph 34). According to that case-law, the fact that the earlier sign could lose the status of a non-registered trade mark or of another sign used in the course of trade of more than local significance at a later date, in particular following the possible withdrawal of the Member State in which the mark enjoys protection, is, in principle, irrelevant to the outcome of the opposition (see, by analogy, judgment of 30 January 2020, BROWNIE, T‑598/18, EU:T:2020:22, paragraph 19).

18 In the present case, there is no need to decide that question. Mr Chakari applied for registration of the EU trade mark on 14 June 2017, and therefore at a time when the United Kingdom was a Member State of the European Union. The decision of the Board of Appeal was taken on 2 April 2020, that is to say, after the withdrawal of the United Kingdom from the European Union, but during the transition period. In the absence of provisions to the contrary in the Withdrawal Agreement, Regulation 2017/1001 continues to be applicable to United Kingdom trade marks and to earlier non-registered marks in the United Kingdom used in the course of trade. Therefore, the earlier mark continues to receive the same protection as it would have received had the United Kingdom not withdrawn from the European Union, until the end of the transition period (judgment of 23 September 2020, MUSIKISS, T‑421/18, EU:T:2020:433, paragraph 33).

19 In any event, for the Court to find that the litigation becomes devoid of purpose when, in the course of proceedings, an event occurs as a result of which an earlier mark could lose the status of a non-registered trade mark or of another sign used in the course of trade of more than local significance, in particular following the possible withdrawal of the Member State concerned from the European Union, would amount to taking into account matters arising after the adoption of the contested decision, which are not capable of affecting the merits of that decision (see, by analogy, judgment of 8 October 2014, Fuchs v OHIM – Les Complices (Star within a circle), T‑342/12, EU:T:2014:858, paragraph 24). Since the purpose of the action before the Court is to review the legality of decisions of the Boards of Appeal of EUIPO for the purposes of Article 72 of Regulation 2017/1001, the Court must, in principle, take into account the date of the contested decision when assessing that legality.

20 It follows that, irrespective of the decisive moment to which reference is made (the moment of filing of the trade mark application or the moment of the decision of the Board of Appeal), the trade mark relied on by the applicant in support of the opposition and its appeal is capable of forming the basis of the opposition.

21 That conclusion is not called into question by the arguments put forward by EUIPO. Although it is apparent from the judgment of 14 February 2019, ALTUS (T‑162/18, not published, EU:T:2019:87, paragraphs 41 to 43), relied on by EUIPO, that the earlier mark on which the opposition is based must still be valid at the time when it gives a decision on that opposition, it is not possible to deduce from that fact that an action before the Court becomes devoid of purpose when that mark loses its status under Article 8(4) of Regulation 2017/1001 during the proceedings before the Court.

22 The judgment of 2 June 2021, Style & Taste v EUIPO – The Polo/Lauren Company (Representation of a polo player) (T‑169/19, EU:T:2021:318), to which EUIPO also refers, and which, according to EUIPO, concerns a ‘related’ matter, is in fact not relevant to the present case. First, the case which gave rise to that judgment does not relate to opposition proceedings, but to the question of the date on which an earlier right must be protected to allow an application for a declaration of invalidity to be lodged on the basis of Article 52(2)(d) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1). Secondly, according to the approach adopted in that judgment, in the context of the application of that provision, the proprietor of an earlier industrial property right referred to by that provision must establish that he or she may prohibit the use of the EU trade mark at issue, not only on the filing or priority date of that mark, but also on the date on which EUIPO decides on the application for a declaration of invalidity (judgment of 2 June 2021, Representation of a polo player, T‑169/19, EU:T:2021:318, paragraph 30). That date is not later than those referred to in paragraph 20 above.

23 Therefore, the withdrawal of the United Kingdom from the European Union did not render the present dispute devoid of purpose.

24 In the second place, EUIPO submits that, as the annulment of the contested decision could no longer procure any benefit for the applicant, the latter no longer has any interest in acting in the present proceedings. EUIPO notes that, even if it were to reject the application for registration of the EU trade mark, the trade mark applicant would be able to convert his mark into national trade mark applications in all EU Member States, in accordance with Article 139 of Regulation 2017/1001, conserving the priority of the rejected EU trade mark application. The trade mark applicant would thus obtain trade mark protection in the same territory as if the opposition brought against the application for the EU mark had been dismissed. At the hearing, EUIPO added that, in its view, the lack of interest in bringing proceedings followed, in addition, from the fact that if the contested decision were to be annulled by the Court and the case referred back to the Board of Appeal as a result, the Board of Appeal would have no option other than to dismiss the action, since it follows from the case-law in the cases which gave rise to the judgments of 14 February 2019, ALTUS (T‑162/18, not published, EU:T:2019:87), and of 2 June 2021, Representation of a Polo Player (T‑169/19, EU:T:2021:318), that the protected mark on which the opposition is based must not have lost its validity by the time that EUIPO takes its decision.

25 According to settled case-law, the applicant’s interest in bringing proceedings must, in the light of the purpose of the action, exist at the stage of lodging the action, failing which it will be inadmissible. That purpose must continue, like the interest in bringing proceedings, until the delivery of the legal decision, failing which there will be no need to adjudicate, which presupposes that the action must be liable, if successful, to procure an advantage to the party bringing it (see judgments of 7 June 2007, Wunenburger v Commission, C‑362/05 P, EU:C:2007:322, paragraph 42 and the case-law cited, and of 8 October 2014, Star within a circle, T‑342/12, EU:T:2014:858, paragraph 23 and the case-law cited). If the applicant’s interest in bringing proceedings disappears in the course of proceedings, a decision of the Court on the merits cannot bring him or her any benefit.

26 EUIPO’s argument that the trade mark applicant has no interest in bringing proceedings because he would be able to convert his mark into national trade mark applications in all EU Member States and would thus obtain trademark protection in the same territory as if the opposition brought against the application for the EU mark had been dismissed must be rejected from the outset. Those considerations apply, in principle, to any opposition proceedings.

27 In addition, EUIPO wrongly submits that the Board of Appeal before which the dispute would be referred if the Court were to annul the contested decision would be obliged to dismiss the action in the absence of an earlier trade mark protected by the law of a Member State. EUIPO proceeds on a false premiss by maintaining that the Board of Appeal should place itself, for the purposes of assessing the facts, at the time of its new decision. Following the annulment of a decision of the Board of Appeal, the appeal brought before it by the applicant is again pending (judgment of 8 February 2018, Sony Interactive Entertainment Europe v EUIPO – Marpefa (Vieta), T‑879/16, EU:T:2018:77, paragraph 40). It is therefore for the Board of Appeal to take a new decision on that action by reference to the situation at the time that it was brought, since the action is again pending at the same stage as it was before the contested decision. It follows that the case-law cited by EUIPO in support of its reasoning is irrelevant. That case-law merely confirms that, in any event, the mark on which the opposition is based cannot be required to subsist subsequent to the decision of the Board of Appeal.

28 It follows that the present case has not become devoid of purpose and that the applicant’s interest in bringing proceedings subsists.

29 Account being taken of the date on which the application for registration at issue was filed, namely 14 June 2017, which is decisive for the purpose of identifying the applicable substantive law, the facts of the case are governed by the substantive provisions of Regulation No 207/2009 (see, to that effect, judgment of 8 May 2014, Bimbo v OHIM, C‑591/12 P, EU:C:2014:305, paragraph 12, and of 18 June 2020, Primart v EUIPO, C‑702/18 P, EU:C:2020:489, paragraph 2 and the case-law cited).

30 As a result, in the present case, as regards substantive rules, references made by the Board of Appeal in the contested decision and by the parties in their written pleadings to Article 8(4) of Regulation 2017/1001 should be understood as referring to Article 8(4) of Regulation No 207/2009, which is identical in content.

31 In support of its action, the applicant relies on a single plea in law, alleging infringement of Article 8(4) of Regulation No 207/2009. In particular, it disputes the Board of Appeal’s finding that a likelihood of misrepresentation could not be established on the basis of the contested goods and the Board of Appeal’s assessment that the use of the mark applied for could not cause direct loss to the applicant because it is not likely to cause a direct loss of sales. According to the applicant, the Board of Appeal misunderstood the law on passing off and how an actionable misrepresentation can arise.

32 By virtue of Article 8(4) of Regulation No 207/2009, the proprietor of a non-registered trade mark or of a sign other than a trade mark may oppose the registration of an EU trade mark under the following four conditions: (i) the sign is used in the course of trade; (ii) it is of more than mere local significance; (iii) rights to the sign have been acquired prior to the date of application for registration of the EU trade mark; and (iv) the sign confers on its proprietor the right to prohibit the use of a subsequent trade mark. Those conditions are cumulative; thus, where a non-registered trade mark or a sign does not satisfy one of those conditions, the opposition based on the existence of a non-registered trade mark or of another sign used in the course of trade within the meaning of Article 8(4) of Regulation No 207/2009 cannot succeed (see judgment of 24 October 2018, Bacardi v EUIPO – Palírna U zeleného stromu (42 BELOW), T‑435/12, EU:T:2018:715, paragraph 43 and the case-law cited).

33 The first two conditions, namely those concerning use in the course of trade and the significance of the sign or mark relied on, which must be more than merely local, arise from the very wording of Article 8(4) of Regulation No 207/2009 and must therefore be interpreted in the light of EU law (see judgment of 24 October 2018, 42 BELOW, T‑435/12, EU:T:2018:715, paragraph 44 and the case-law cited).

34 By contrast, it is apparent from the phrase ‘where and to the extent that, pursuant to the law of the Member State governing that sign’ that the two other conditions, set out in Article 8(4)(a) and (b) of Regulation No 207/2009, are conditions which, unlike the conditions above, must be assessed in the light of the criteria set by the law governing the sign relied on. That reference to the law governing the sign relied on is justified, given that Regulation No 207/2009 allows signs which fall outside of the EU trade mark system to be relied on against an EU trade mark. Therefore, only the law which governs the sign relied on can determine whether that sign predates the EU trade mark and whether it can justify the prohibition of the use of a subsequent trade mark (see judgment of 24 October 2018, 42 BELOW, T‑435/12, EU:T:2018:715, paragraph 45 and the case-law cited).

35 In accordance with Article 95(1) of Regulation 2017/1001, the burden of proving that the condition according to which the sign confers on its proprietor the right to prohibit the use of a subsequent trade mark is satisfied lies with the opponent before EUIPO (see judgment of 23 May 2019, Dentsply De Trey v EUIPO – IDS (AQUAPRINT), T‑312/18, not published, EU:T:2019:358, paragraph 100 and the case-law cited). Since the judicial review conducted by the Court must meet the requirements of the principle of effective judicial protection, the examination carried out by the Court under Article 8(4) of Regulation No 207/2009 constitutes a full review of legality (judgment of 5 July 2011, Edwin v OHIM, C‑263/09 P, EU:C:2011:452, paragraph 52).

36 In the present case, it must therefore be ascertained whether the Board of Appeal took into account the relevant national provisions and whether it properly examined the conditions for the application of Article 8(4) of Regulation No 207/2009 in the light of those provisions.

37 The applicant’s opposition is based on the extended form of passing off available under the law applicable in the United Kingdom. Relying on the judgment of 18 January 2012, Tilda Riceland Private v OHIM – Siam Grains (BASmALI) (T‑304/09, EU:T:2012:13, paragraph 18), which applies the relevant national law, the applicant refers to Section 5(4) of the Trade Marks Act 1994, which provides, inter alia, that a trade mark shall not be registered if, or to the extent that, its use in the United Kingdom is liable to be prevented by virtue of any rule of law (in particular, the law of passing off) protecting a non-registered trade mark or other sign used in the course of trade.

38 It is clear from Section 5(4) of the Trade Marks Act 1994, as interpreted by the national courts, that the applicant must prove, in accordance with the rules on passing off under the law applicable in the United Kingdom, that three conditions are satisfied, namely (i) that the sign at issue has acquired goodwill, (ii) that the offering under that sign of the goods designated by the subsequent trade mark constitutes a misrepresentation by the proprietor of that mark, (iii) that damage was caused to the goodwill (see, to that effect, judgments of 4 October 2018, Paice v EUIPO – Blackmore (DEEP PURPLE), T‑328/16, not published, EU:T:2018:649, paragraphs 22 to 25 and the case-law cited, and of 23 May 2019, AQUAPRINT, T‑312/18, not published, EU:T:2019:358, paragraph 102).

39 If misrepresentation by a defendant in an action for passing off, whether or not it is intentional, is a representation which is likely to lead the claimant’s customers to attribute to it the commercial origin of the goods and services offered by the defendant (see judgment of 23 May 2019, AQUAPRINT, T‑312/18, not published, EU:T:2019:358, paragraph 103 and the case-law cited), it is clear from the decisions of the UK courts that a sign used to designate goods or services may have acquired a reputation on the market for the purposes of the law applicable to passing off, even though it is used by several traders in the course of business (Chocosuisse Union des fabricants suisses de chocolat & Ors v Cadbury Ltd. [1999] EWCA Civ 856). That ‘extended’ form of passing off, recognised by the UK courts, accordingly enables several traders to have rights over a sign which has acquired a reputation on the market (see judgment of 30 September 2015, Tilda Riceland Private v OHIM – Siam Grains (BASmALI), T‑136/14, EU:T:2015:734, paragraph 22 and the case-law cited).

40 In the ‘extended’ form of the tort of passing off, the defendant in an action for passing off deceives as to the origin or nature of its goods by misrepresenting that they are the product of a particular region, or that they have a particular character or composition. That misrepresentation may be through the use of a descriptive or generic term which misdescribes the defendant’s goods, inducing the belief that they possess a characteristic or quality which they do not (see, to that effect, judgment of 18 July 2017, Alfonso Egüed v EUIPO – Jackson Family Farms (BYRON), T‑45/16, EU:T:2017:518, paragraph 95).

41 In the present case, the plea relied on by the applicant concerns the second and third conditions referred to in paragraph 38 above, namely those relating to misrepresentation and damage caused to the goodwill acquired by the earlier sign.

42 In the first place, the applicant submits that the Board of Appeal misapplied the legal tests for the extended form of passing off under the law applicable in the United Kingdom by limiting its examination of the likelihood of misrepresentation to the question of whether a substantial number of members of the relevant public would be deceived as to the commercial origin of the product concerned rather than the question of whether the public would be deceived as to the identification of the intrinsic characteristics and qualities of that product.

43 In the second place, the applicant submits that the fact that rice is not part of the goods in question is not decisive. According to the applicant, if the relevant public is led into believing that those goods are made from basmati rice, whereas that is not the case, the test for misrepresentation is met. The goodwill that attaches to the word ‘basmati’ extends not only to basmati rice, but also to products that contain or are made from basmati rice and labelled as such, as was made clear in the decision of 9 August 2016 of the United Kingdom Intellectual Property Office in the opposition proceedings O‑378‑16 (‘the Basmati Bus decision’). The minimum characteristics of basmati rice which make it a clearly defined class remain in both situations. The relevant public would expect, when purchasing a product that is stated to be, contain or be made from basmati rice, that that product does indeed contain that rice, and it is clear from the decision of the Court of Appeal (England & Wales) (Civil Division), Taittinger SA v ALLBEV LTD [1993] F.S.R. 641 (‘the Taittinger decision’) and from the Basmati Bus decision that the test for misrepresentation can be met in relation to products that are different in nature. According to the UK case-law, it is a key feature of the law of passing off that the respective goods do not need to be the same or fall within the same scope of reputation and goodwill for there to be an actionable misrepresentation or to give rise to damage.

44 In the third place, the applicant submits that the Board of Appeal also erroneously based its decision on a finding that the applicant did not claim, let alone prove, that Mr Chakari uses the mark applied for in the United Kingdom and that such use occurs for goods not made from genuine basmati rice. According to the applicant, although it is not necessary to provide concrete evidence in that regard, the likelihood of misrepresentation of the reputed name ‘basmati’ arises from a notional and fair use of that mark. The applicant claims that, as he is one of the owners of the goodwill in the name ‘basmati’ and that name is used in the United Kingdom to describe a specific kind of rice, that likelihood arises from the broad description of the goods covered by the mark applied for which includes goods made from any types of rice. Therefore, according to the applicant, the Court should consider the notional and fair use of the mark applied for in relation to the general description of those goods.

45 In the fourth place, the applicant states that its arguments supporting the prohibition of the use of the mark applied for by Mr Chakari are not based on the quality of the rice-based contested goods but on the fact that nothing in the description of the goods at issue requires that they be made only from genuine basmati rice, meaning that it was possible for those goods not to contain basmati rice at all.

46 EUIPO disputes the applicant’s arguments. It does agree, in the first place, that it is certainly a key feature of the law of passing off that the respective goods do not need to be the same, or to fall within the same scope of reputation and goodwill, to constitute a likelihood of misrepresentation and damage caused to the goodwill. However, that does not undermine the Board of Appeal’s reasoning because it did not find or imply that the contested goods must be the same as those for which the earlier mark enjoys goodwill. In addition, according to EUIPO, the fact that the respective goods do not need to be the same does not mean that a mere link between the goods, for example, at the level of ingredients, is sufficient to induce a misrepresentation. Therefore, the Board of Appeal was right to stress that goodwill for a specific kind of rice, here, basmati rice, does not equate to goodwill acquired for goods containing rice. As goodwill is the attractive force that brings in custom, its scope is defined by the goods and services to which the relevant public associates that attractive force. Since the applicant is one of a group of businesses that use the term ‘basmati’ for a specific kind of rice, rice is the product to which goodwill extends. The findings of the Board of Appeal establish that the starting point was that the term ‘basmati’ enjoyed goodwill for the product ‘rice’ and that it was necessary to determine whether the use of that term for the contested goods traded off that goodwill by inducing a misrepresentation on the part of the consumer. As regards rice flour, rice-based convenience food or rice meal for forage, according to EUIPO, no evidence was produced to show that the kind of rice used is a material factor for consumers when deciding to purchase those products.

47 In the second place, EUIPO considers that the Board of Appeal did not neglect an examination of the notional use of the mark applied for but clearly envisaged such a use, which could include products not made of or containing basmati rice.

48 In addition, EUIPO submits that, even if the applicant could show that the relevant public would perceive the term ‘basmati’ as indicating that the contested goods consist of or contain basmati rice, that would not be sufficient for the opposition to be upheld, since no evidence was adduced to support the position that Mr Chakari intended to use the mark applied for on products other than those consisting of or containing basmati rice. According to EUIPO, the extended form of passing off is a creation of case-law arising out of infringement actions against an actual deceptive use of a mark, and not against a merely hypothetical future use when there is no indication that that use will be deceptive. In the context of the trade mark registration process, in the absence of proof of actual deceit or serious risk of future deceit, the mere possibility that such deceptive use might occur in the future does not suffice to prevent registration of a trade mark where the specification allows for bona fide use. Furthermore, that approach is in line with a long-established practice in relation to broad categories of goods under the absolute ground of deceptiveness under Article 7(1)(g) of Regulation No 207/2009, in the context of which a presumption is applied that applicants will not act in bad faith. According to EUIPO, Article 52(1)(a) of that regulation, which provides that a trade mark must be declared invalid if, in consequence of the use made of it by the proprietor of the trade mark for which it is registered, the mark is liable to mislead the public, particularly as to the nature, quality or geographical origin of those goods, is a sufficient safeguard.

49 In the third place, according to EUIPO, the applicant incorrectly claims that the Board of Appeal erred in its assumption that the applicant’s arguments were based on whether the contested goods might contain a lower or higher quality of basmati rice. That was not the case as the Board of Appeal merely set out the limits of the tort of extended passing off and stated that the applicant did not enjoy the same kind of monopoly rights relating to signs that are distinctive for one commercial source, which are the basis of most of the other relative grounds of opposition under Regulation No 207/2009.

50 Article 8(4) of Regulation No 207/2009 covers non-registered trade marks and any ‘[other] sign’ used in the course of trade. The function of the use of the sign at issue may, in the light of the nature of that sign, lie not only in the identification by the relevant public of the commercial origin of the goods concerned, but also, inter alia, in the identification of their geographical origin and the special qualities inherent in them or of the characteristics on which their reputation is based. The earlier mark at issue, in the light of its nature, may thus be classified as a distinctive element if it serves to identify the goods or services of one undertaking in relation to those of another undertaking, but also, inter alia, if it serves to identify certain goods or services in relation to other similar goods or services (see judgment of 30 September 2015, BASmALI, T‑136/14, EU:T:2015:734, paragraph 29 and the case-law cited).

51 As stated in paragraph 40 above, in the ‘extended’ form of the tort of passing off, on which the present action is based, the defendant deceives as to the origin or nature of its goods by misrepresenting that they are the product of a particular region, or that they have a particular character or composition. That misrepresentation may be through the use of a descriptive or generic term which misdescribes the defendant’s goods, inducing the belief that they possess a characteristic or quality which they do not (judgment of 18 July 2017, BYRON, T‑45/16, EU:T:2017:518, paragraph 95).

52 In the contested decision, the Board of Appeal found that the first conditions for the extended form of passing off were met since the term ‘basmati’ is used in the United Kingdom to describe a class of specific goods and that that term has a reputation in the United Kingdom giving rise to goodwill among a significant section of the public, and that the applicant is one of the owners of that goodwill.

53 As regards the condition for misrepresentation, the Board of Appeal erred in finding that there was nothing in the evidence submitted by the applicant to support the conclusion that the reputation of the word ‘basmati’ and the goodwill arising from that reputation extended beyond the clearly defined class of goods, namely a particular type of rice, to cover products of a different nature but containing rice as an ingredient.

54 First, since the Board of Appeal, in paragraph 20 of the contested decision, based its assessment on the burden of proof on the applicant and on the UK case-law relied on by the applicant, it must be stated that, irrespective of the evidential value of that case-law, the Board of Appeal’s examination should not have been limited to that case-law as submitted by the applicant. Indeed, when EUIPO is called upon to take account of the national law of the Member State in which the earlier sign on which the opposition is based is protected, it must, of its own motion, obtain information about the national law of the Member State concerned, where such information is necessary to assess the applicability of the ground for refusal of registration in question (see judgment of 24 October 2018, 42 BELOW, T‑435/12, EU:T:2018:715, paragraph 85 and the case-law cited).

55 Secondly, it is, admittedly, clear from the UK case-law on the tort of passing off that, where the goodwill in a name has been established for some goods and services and that name is then used for other goods or services, the existence of a likelihood of misrepresentation will be all the more difficult to prove where those goods and services are different. However, the same case-law states that, although the existence of a common field of activity is not determinative, it remains a factor to be taken into account in the analysis of a possible misrepresentation (see, to that effect, judgments of 4 October 2018, DEEP PURPLE, T‑328/16, not published, EU:T:2018:649, paragraphs 30 and 31, and of 2 December 2020, Monster Energy v EUIPO – Nanjing aisiyou Clothing (Representation of a craw-like scratch), T‑35/20, not published, EU:T:2020:579, paragraph 86).

56 As regards, more specifically, the extended form of passing off, the applicant referred to the Taittinger decision, from which it is apparent that a misrepresentation can arise even in the case of goods of a different nature (the Taittinger decision, pages 641, 665 and 667; see also the judgment of the Court of Appeal (England & Wales) (Civil Division), Diageo North America Inc v Intercontinental Brands (ICB) Ltd [2010] EWCA Civ 920, paragraphs 9 and 15). In the Taittinger decision, the Court of Appeal (England & Wales) (Civil Division) held that it was plausible that a non-negligible part of the public might believe that the product in question, entitled ‘Elderflower Champagne’, was not champagne but was associated with it in a certain way. The part of the public which would be aware that it was a non-alcoholic beverage might believe that a non-alcoholic champagne had been created by champagne producers in the same way as with respect to non-alcoholic wine or non-alcoholic beer.

57 It follows that the goods concerned need not be identical and, as EUIPO itself acknowledges, the existence of a likelihood of misrepresentation may also be established in respect of goods that are merely similar. That applies a fortiori to the goods at issue, which are all made from rice and, thus, highly similar to basmati rice.

58 Therefore, even if the goodwill attaching to the name ‘basmati’ relates only to basmati rice, as a variety or class of goods, as stated in paragraph 16 of the contested decision by reference to the Basmati Bus decision, a non-negligible part of the relevant public might believe that the goods referred to by the Board of Appeal, namely flour of rice, rice-based snack food, rice pulp or rice meal for forage, labelled ‘Abresham Super Basmati Selaa Grade One World’s Best Rice’, are in some way associated with basmati rice. Thus, the applicant is correct to claim that the relevant public would expect, when purchasing a product that is stated to be, contain or be made from basmati rice, that that product does indeed contain that rice.

59 The Board of Appeal was also wrong to find, with regard to certain goods, such as flour of rice, rice-based snack food, rice pulp or rice meal for forage, that there was no evidence to indicate that the type of rice used in the manufacture of those goods was relevant to consumers and, therefore, capable of influencing their purchasing decision.

60 There is nothing to support the conclusion that such a requirement can be inferred from the national rule on which the opposition is based in the present case. On the contrary, it is clear from the Basmati Bus decision that the condition of a likelihood of misrepresentation is met when the relevant public may be deceived into believing that the contested goods are made from or contain basmati rice, where that is not the case. The relevant passage of that decision was cited in paragraph 19 of the application:

‘A substantial number of consumers will expect basmati rice to be provided rather than any other type of rice. If the services do not provide basmati rice, which the existing specification currently allows, there is a likelihood of misrepresentation.’

61 As regards the Board of Appeal’s assessment that the mere risk that the goods at issue might be of a quality inferior to that of basmati rice did not entitle the applicant to prohibit the use of the trade mark applied for since the law of passing off was not there to guarantee to the consumer the quality of what he or she was buying, it is sufficient to note that the applicant rightly maintains that its arguments support the prohibition of the use of the mark applied for by Mr Chakari on the ground that, due to the broad description of the goods covered by the mark applied for, it was possible for those goods not to contain basmati rice.

62 Lastly, as regards the Board of Appeal’s finding that the applicant did not claim, let alone prove, that the mark applied for was used in the United Kingdom and that such use occurs for goods not made from genuine basmati rice, it must be noted that the actual use of the mark applied for is not one of the conditions for an action for passing off. It is apparent from the decision of the Court of Appeal (England & Wales) (Civil Division), Maier v ASOS Plc [2015] F.S.R. 20, paragraphs 71 to 85, that a notional and fair use of the trade mark applied for must be presumed. With regard to the extended form of passing off, that result is also confirmed by the Basmati Bus decision, in which the United Kingdom Intellectual Property Office did not require evidence that the mark at issue (Basmati Bus) had actually been used for a standard range rice, but merely stated that ‘if the services [at issue did] not provide basmati rice, which the existing specification [allowed], there is a likelihood of misrepresentation’ (Basmati Bus decision, paragraph 54).

63 Furthermore, the actual use of the mark applied for is not a condition laid down by Article 8(4) of Regulation No 207/2009 either.

64 It follows that the applicant is correct to claim that the likelihood of misrepresentation stems from notional and fair use of the mark applied for in the light of the general description of the goods in question, namely goods made from rice.

65 That conclusion is not called into question by EUIPO’s argument that, in essence, the extended form of passing off is similar to the absolute ground for refusal relating to the deceptive character of the mark under Article 7(1)(g) or under Article 52(1)(a) of Regulation No 207/2009, those provisions applying a presumption that applicants will not act in bad faith, so EUIPO will not object ex officio unless the circumstances presuppose the existence of actual deceit or a sufficiently serious risk that the consumer will be deceived.

66 As observed in paragraphs 32 to 34 above, the condition laid down in Article 8(4)(a) and (b) of Regulation No 207/2009 that the non-registered trade mark or the sign must confer on its proprietor the right to prohibit the use of a subsequent trade mark is a condition which must be assessed in the light of the criteria laid down by the law which governs the sign relied on. It follows that long-established practice in relation to the application of the conditions laid down in Article 7(1)(g) or Article 52(1)(a) of that regulation is not relevant to the interpretation of national law, which is exclusively governed by the national rules advanced in support of the opposition and to the judicial decisions delivered in the Member State concerned (see, to that effect, judgment of 29 March 2011, Anheuser-Busch v Budějovický Budvar, C‑96/09 P, EU:C:2011:189, paragraph 190).

67 The applicant argues that damage to the goodwill in the name ‘basmati’ is liable to arise if foodstuffs thought to be made from basmati rice are in fact made from another type of rice, and submits that the damage arises from the loss of distinctiveness or the ‘very singularity and exclusiveness’ of genuine basmati rice. According to the applicant, the Board of Appeal’s assertion that there is no argument of how use of the mark applied for could affect the distinctiveness of that name, on the basis that ‘super basmati’ is a recognised variety of basmati rice, is not relevant since that assertion presupposes that such mark is used for goods made from basmati rice.

68 First, EUIPO argues that the comments of the Board on damage are not decisive to the outcome of the contested decision. Secondly, according to EUIPO, it is clear that the Board of Appeal acknowledged an effect on distinctiveness as a potential type of damage that can arise under the tort of passing off. The Board of Appeal could validly maintain that no arguments had been adduced by the applicant to show that Mr Chakari was engaged in actual deceit or serious risks of future deceit, namely by representing non-basmati rice as being basmati rice.

69 In that regard, it is true that the Board of Appeal stated that it rejected the plea alleging the extended form of passing off solely on the basis of the absence of misrepresentation of the renowned name ‘basmati’. Nevertheless, the Board of Appeal, in paragraph 24 of the contested decision, adopted a position on the issue of damage, holding that the use of the mark applied for was not likely to cause the applicant commercial harm, on the ground that it ‘[failed] to see a risk that use of [that] sign for [the goods at issue] could cause a direct loss of sales for the appellant who, according to its own submissions, [was] a major supplier of rice only and not of [the aforementioned] goods’. That assessment is incorrect.

70 As is apparent from the national case-law, and as EUIPO itself acknowledges, irrespective of the likelihood of a direct loss of sales for the applicant, the damage arises from the loss of distinctiveness of that sign or the ‘very singularity and exclusiveness’ of genuine basmati rice. In that regard, it is apparent from the judgment of the Court of Appeal (England & Wales) (Civil Division) of 2010 referred to in paragraph 56 above that one of the elements that an applicant must prove in order to establish a case of extended passing off is that he or she has suffered, or is very likely to suffer, damage to his or her property in the goodwill by reason of the defendant selling goods which are falsely described by the trade name to which the goodwill is attached. According to that judgment, damage may arise inter alia through erosion of the distinctiveness of the sign. Furthermore, in the Taittinger decision, it was held that, even in the absence of a likelihood of significant or direct loss of sales, any product which is not champagne but is allowed to describe itself as such must inevitably erode the singularity and exclusiveness of the description ‘champagne’ and so cause damage of an insidious but serious kind (the Taittinger decision, pages 641, 668 to 670 and 678).

71 Furthermore, since the Board of Appeal noted that there was no argument to explain how the use of the mark applied for could affect the distinctiveness of the word ‘basmati’, given that the ‘super basmati’ variety is a recognised variety of basmati rice, that finding proceeds on the false premiss that the use of that mark is limited to goods made from basmati rice or super basmati rice. The likelihood of misrepresentation stems, as stated in paragraph 64 above, from a notional and fair use of that mark in the light of the general description of the contested goods, namely goods based on a wide range of rice varieties.

72 In view of the foregoing, the applicant’s single plea in law must be upheld and, consequently, the contested decision must be annulled.

73 By the second part of the first head of claim, the applicant claims that the Court should uphold the opposition for all the goods.

74 EUIPO considers that application to be inadmissible on the ground that it would involve a new examination of facts, evidence or arguments on which the Board of Appeal did not rule.

75 In that regard, it should be noted that, by the second part of its first head of claim, the applicant requests the Court, in essence, to adopt the decision that, according to the applicant, EUIPO should have taken, namely a decision finding that the conditions for opposition have been met. It thus requests that the contested decision be altered, as provided for in Article 72(3) of Regulation 2017/1001. Accordingly, that request is admissible.

76 However, the power of the Court to alter decisions pursuant to Article 72(3) of Regulation 2017/1001 does not have the effect of conferring on it the power to carry out an assessment on which the 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, paragraph 72; see also judgment of 30 April 2019, Kuota International v EUIPO – Sintema Sport (K), T‑136/18, not published, EU:T:2019:265, paragraph 92 and the case-law cited).

77 In the present case, the conditions for the exercise of the Court’s power to alter the contested decision are not met.

78 The Board of Appeal based the contested decision solely on the fact that the applicant had allegedly failed to demonstrate that use of the mark applied for could result in a misrepresentation of the reputed name ‘basmati’. In particular, it expressly stated that the plea alleging the extended form of passing off could not succeed without it being necessary to examine whether use of the earlier mark in the course of trade within the meaning of Article 8(4) of Regulation No 207/2009 had been demonstrated. Since the Board of Appeal thus carried out an incomplete analysis of the conditions of that provision, the Court is prevented from exercising the power to alter the decision.

79 Accordingly, the second part of the applicant’s first head of claim, seeking alteration of the contested decision, must be rejected.

80 EUIPO submits that the second head of claim, presented as an alternative claim and consisting in requesting the Court to remit the matter to EUIPO, is not an alternative to annulment, given that such a remittal to EUIPO would be the consequence of the first part of the first head of claim if it were accepted.

81 In an action before the EU judicature against a decision of a Board of Appeal of EUIPO, EUIPO is required, under Article 72(6) of Regulation 2017/1001, to take the measures necessary to comply with judgments of that judicature. It is therefore for EUIPO to draw the appropriate inferences from the operative part and grounds of the judgments of the EU judicature (see judgment of 31 January 2019, Pear Technologies v EUIPO – Apple (PEAR), T‑215/17, EU:T:2019:45, paragraph 81 and the case-law cited). Accordingly, the applicant’s second head of claim has no specific purpose, in that it is merely a consequence of the first part of the first head of claim, seeking annulment of the contested decision.

82 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.

83 Since EUIPO has been unsuccessful in the essential aspects of the forms of order sought by it, it must be ordered to bear its own costs and to pay those incurred by the applicant in the proceedings before the General Court and before the Board of Appeal.

84 However, although, under Article 190(2) of the Rules of Procedure, costs necessarily incurred by the parties for the purposes of the proceedings before the Board of Appeal are to be regarded as recoverable costs, that does not apply to costs incurred for the purposes of the proceedings before the Opposition Division. Accordingly, the applicant’s claim concerning those costs must be rejected.

1. Annuls the decision of the Fourth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 2 April 2020 (Case R 1079/2019-4);

3. Orders EUIPO to pay the costs, including the costs necessarily incurred by Indo European Foods Ltd for the purposes of the proceedings before the Board of Appeal of EUIPO.

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> Indo European Foods v EUIPO - Chakari (Abresham Super Basmati Selaa Grade One World's Best Rice) (T-254/20 - Judgment) [2021] EUECJ T-342/20 (06 October 2021) URL: http://www.bailii.org/eu/cases/EUECJ/2021/T34220.html Cite as: [2021] EUECJ T-342/20

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