smart things solutions v EUIPO (EU trade mark - Order) [2021] EUECJ C-681/20P

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(Appeal – EU trade mark – Determination as to whether appeals should be allowed to proceed – Article 170b of the Rules of Procedure of the Court of Justice – Request failing to demonstrate that an issue is significant with respect to the unity, consistency or development of EU law – Appeal not allowed to proceed)

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 16 December 2020,

smart things solutions GmbH, established in Gauting (Germany), represented by R. Dissmann, Rechtsanwalt,

Samsung Electronics GmbH, established in Schwalbach/Taunus (Germany), represented by T. Schmitz, I. Dimitrov and M. Breuer, Rechtsanwälte,

composed of R. Silva de Lapuerta, Vice-President of the Court, L. Bay Larsen and C. Toader (Rapporteure), Judges,

1 By its appeal, smart things solutions GmbH seeks the setting aside of the judgment of the General Court of the European Union of 15 October 2020, smart things solutions v EUIPO – Samsung Electronics (smart:)things), (T‑48/19, ‘the judgment under appeal’, not published, EU:T:2020:483), by which the General Court dismissed its action seeking annulment of the decision of the Fourth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 20 November 2018 (Case R 835/2018‑4), relating to invalidity proceedings between Samsung Electronics and smart things solutions.

2 Pursuant to the first paragraph of Article 58a of the Statute of the Court of Justice of the European Union, an appeal brought against a decision of the General Court concerning a decision of an independent Board of Appeal of EUIPO is not to proceed unless the Court of Justice first decides that it should be allowed to do so.

3 In accordance with the third paragraph of Article 58a of that statute, an appeal is to be allowed to proceed, wholly or in part, in accordance with the detailed rules set out in the Rules of Procedure of the Court, where it raises an issue that is significant with respect to the unity, consistency or development of EU law.

4 Under Article 170a(1) of the Rules of Procedure, in the situations referred to in the first paragraph of Article 58a of that statute, the appellant is required to annex to the appeal a request that the appeal be allowed to proceed, setting out the issue raised by the appeal that is significant with respect to the unity, consistency or development of EU law and containing all the information necessary to enable the Court of Justice to rule on that request.

5 In accordance with Article 170b(1) and (3) of those rules, the Court is to rule on the request that the appeal be allowed to proceed, as soon as possible, in the form of a reasoned order.

6 In support of its request that the appeal be allowed to proceed, the appellant submits that the four grounds of its appeal, alleging, in essence, (i) infringement of Article 7(1)(c) of 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), (ii) infringement of Article 7(1)(b) of that regulation, (iii) infringement of the principles of equal treatment and sound administration, and (iv) infringement of the last sentence of Article 95(1) of that regulation, raise issues that are significant with respect to the unity, consistency or development of EU law.

7 Thus, as regards the first ground of appeal, the appellant submits that, for the purposes of the unity and development of EU law, it is important to define the descriptive character of marks composed of generic terms, such as ‘thing’ and ‘smart’, or of a combination of both verbal and figurative elements, including descriptive elements, which may potentially be perceived differently by the relevant public. In that context, it criticises the General Court on the ground that it erred in finding that the contested mark had descriptive character, first, by carrying out a broad assessment of that character and, second, by applying a lower threshold than that normally required in order to establish the descriptive character of a mark.

8 By its second ground of appeal, the appellant criticises the General Court on the ground that it erred in concluding that the contested mark lacked distinctive character, while finding the figurative element of which it is composed not to be descriptive. In that regard, the appellant states that, according to the case-law of the Court of Justice resulting from the judgment of 21 January 2010, Audi v OHIM, (C‑398/08 P, EU:C:2010:29, paragraph 39), in order to establish the distinctive character of a mark, it is sufficient for a sign to have a minimum level of distinctiveness in order for the required threshold to be achieved. Thus, it considers that the determination of the minimum or maximum threshold required for establishing the distinctive character of a trade mark, in accordance with Article 7(1)(b) of Regulation 2017/1001, has an impact on all trade marks and is therefore of great significance both from a legal point of view, in that it re-establishes the consistency of the case-law relating to that provision, and from a practical point of view.

9 By its third ground of appeal, the appellant criticises the General Court on the ground that it found that EUIPO did not infringe the principles of equal treatment and sound administration, in disregard of the case-law of the Court of Justice resulting from the judgments of 28 June 2018, EUIPO v Puma, (C‑564/16 P, EU:C:2018:509, paragraph 60), and of 10 March 2011, Agencja Wydawnicza Technopol v OHIM, (C‑51/10 P, EU:C:2011:139, paragraph 73), which places EUIPO under an obligation to take into account its previous decisions on similar applications. More specifically, the appellant criticises the General Court on the ground that it failed to hold that the Board of Appeal of EUIPO had infringed that obligation, in that it had not stated sufficient reasons for its decision and had not, in particular, explained the treatment reserved for the accepted registration of other marks similar to the contested mark. In that regard, the appellant submits that the scope of EUIPO’s obligation to state reasons raises an issue that is significant with respect to the unity and development of EU law, since the two abovementioned principles influence the development of EU law and the scope of that obligation has an impact on all invalidity proceedings.

10 By its fourth and final ground of appeal, the appellant criticises the General Court for having infringed the principle of the burden of proof, under which the burden of proof rests on the intervener at first instance on the basis of the last sentence of Article 95(1) of Regulation 2017/1001, by accepting that the Board of Appeal may base its decision on well-known facts, such as the fact that word elements of the contested mark were perceived as descriptive by the public at the time when the application for registration of that mark was filed. The appellant maintains that the question of whether the relevant public perceives a sign as being descriptive may constitute a fact the evidence for which is based exclusively on the well-known character of that perception, in accordance with the case-law of the General Court deriving from the judgment of 15 January 2013, Welte-Wenu v OHIM – Commission (EUROPEAN DRIVESHAFT SERVICES) (T‑413/11, not published, EU:T:2013:12, paragraph 24) and from the order of 23 November 2015, Actega Terra v OHIM – Heidelberger Druckmaschinen (FoodSafe) (T‑766/14, not published, EU:T:2015:913, paragraph 34), is significant with respect to the unity and development of EU law. The appellant takes the view in this regard that, given that the perception of a sign as being descriptive is the basis of any application for a declaration of invalidity or of any refusal to register a mark based on Article 7(1)(c) of Regulation 2017/1001, it is necessary to specify the evidence which supports such a perception on the part of the public.

11 First, it must be recalled that it is for the appellant to demonstrate that the issues raised by its appeal are significant with respect to the unity, consistency or development of EU law (order of 24 October 2019, Porsche v EUIPO, C‑613/19 P, EU:C:2019:905, paragraph 13 and the case-law cited).

12 Furthermore, as is clear from the third paragraph of Article 58a of the Statute of the Court of Justice of the European Union, read in conjunction with Article 170a(1) and Article 170b(4) of the Rules of Procedure of the Court, the request that an appeal be allowed to proceed must contain all of the information necessary to enable the Court to give a ruling on whether the appeal should be allowed to proceed and to specify, where the appeal is allowed to proceed in part, the pleas in law or parts of the appeal to which the response must relate. Given that the objective of the mechanism provided for in Article 58a of that statute, whereby the Court first determines whether an appeal should be allowed to proceed, is to restrict review by the Court to issues that are significant with respect to the unity, consistency and development of EU law, only grounds of appeal that raise such issues and that are established by the appellant are to be examined by the Court in an appeal (order of 3 September 2020, Gamma-A v EUIPO, C‑199/20 P, not published, EU:C:2020:662, paragraph 10 and the case-law cited).

13 Accordingly, a request that an appeal be allowed to proceed must, in any event, set out clearly and in detail the grounds on which the appeal is based, identify with equal clarity and detail the issue of law raised by each ground of appeal, specify whether that issue is significant with respect to the unity, consistency or development of EU law, and set out the specific reasons why that issue is significant according to that criterion. As regards, in particular, the grounds of appeal, the request that an appeal be allowed to proceed must specify the provision of EU law or the case-law that has been infringed by the judgment or order under appeal, explain succinctly the nature of the error of law allegedly committed by the General Court, and indicate to what extent that error had an effect on the outcome of the judgment or order under appeal. Where the error of law relied on results from an infringement of the case-law, the request that the appeal be allowed to proceed must explain, in a succinct but clear and precise manner, first, where the alleged contradiction lies, by identifying the paragraphs of the judgment or order under appeal which the appellant is calling into question as well as those of the ruling of the Court of Justice or the General Court alleged to have been infringed, and secondly, the concrete reasons why such a contradiction raises an issue that is significant with respect to the unity, consistency or development of EU law (order of 24 October 2019, Porsche v EUIPO, C‑613/19 P, EU:C:2019:905, paragraph 15 and the case-law cited).

14 Therefore, a request that an appeal be allowed to proceed which does not contain the information mentioned above cannot, from the outset, be capable of demonstrating that the appeal raises an issue that is significant with respect to the unity, consistency or development of EU law such as to justify the appeal being allowed to proceed (order of 24 October 2019, Porsche v EUIPO, C‑613/19 P, EU:C:2019:905, paragraph 16 and the case-law cited).

15 In the present case, as regards, in the first place, the argument set out in paragraph 7 of the present order, in support of the first ground of appeal, it should be noted that the appellant seeks, in essence, to call into question the factual assessment made by the General Court when assessing the descriptive character of the contested mark. Such an argument, however, cannot raise an issue that is significant with respect to the development of EU law (see, to that effect, order of 4 June 2020, Refan Bulgaria v EUIPO, C‑72/20 P, not published, EU:C:2020:443, paragraph 14 and the case-law cited).

16 In the second place, as regards the argument set out in paragraph 8 of the present order, it is important to note that, although the appellant identifies the issue of law that that argument raises, it does not claim that, and, a fortiori, does not show how, that issue is significant with respect to the unity, consistency or development of EU law. The appellant merely alleges that the issue of the minimum or maximum threshold required for establishing the distinctive character of a mark is of great legal and practical significance. Such an argument, however, does not satisfy the requirements set out in paragraph 13 of the present order.

17 In any event, it should be noted that, by that argument, the appellant seeks, in essence, to call into question the factual assessment made by the General Court as regards the assessment of the distinctive character of the contested mark. However, as is apparent from the case-law cited in paragraph 15 of the present order, such an argument cannot demonstrate that the appeal raises an issue that is significant with respect to the unity, consistency or development of EU law.

18 As regards, in the third place, the argument set out in paragraph 9 of the present order, to the effect that the General Court departed from the case-law of the Court of Justice concerning the interpretation of the principles of equal treatment and sound administration, it should be noted that such an argument is not, in itself, sufficient to establish, in accordance with the burden of proof which rests on the appellant requesting that an appeal be allowed to proceed, that that appeal raises an issue that is significant with respect to the unity, consistency or development of EU law, the appellant having to comply to that end with all of the requirements set out in paragraph 13 of the present order (see, to that effect, order of 13 October 2020, Abarca v EUIPO, C‑313/20 P, EU:C:2020:821, paragraph 17 and the case-law cited).

19 It should be noted, first of all, that the appellant does not identify precisely the paragraphs of the judgment under appeal which it intends to call into question by that ground of appeal. Next, the appellant does not provide any information on the similarity of the situations referred to in the judgments of the Court of Justice allegedly infringed which are capable of establishing the existence of the contradiction invoked (see, to that effect, order of 13 February 2020, Conféderation nationale du Crédit Mutuel v Crédit Mutuel Arkéa, C‑867/19 P, not published, EU:C:2020:103, paragraph 18). Lastly, the appellant does not specify, to the requisite legal standard, how such a contradiction, assuming it to be established, raises an issue that is significant with respect to the unity, consistency or development of EU law. In that regard, it merely sets out general arguments, such as the alleged fact that that contradiction has an impact on the scope of EUIPO’s obligation to state reasons in all invalidity proceedings and that the principles of sound administration and equal treatment influence the development of EU law, without, however, providing concrete arguments specific to the present case in order to prove how such a contradiction raises an issue that is significant in the light of those criteria. Accordingly, it must be held that the appellant has not complied with all of the requirements set out in paragraph 13 of the present order.

20 In any event, in so far as, by the argument set out in paragraph 9 of the present order, the appellant criticises the General Court on the ground that it failed to have regard to the case-law of the Court of Justice relating to the interpretation of the principles of equal treatment and sound administration and, in particular, to EUIPO’s obligation to take into account its earlier decisions on marks similar to the contested mark, it must be held that that argument appears to be based on a truncated reading of that case-law. It follows from that case-law, as the General Court stated in paragraph 54 of the judgment under appeal, that, having regard to the principles of sound administration and equal treatment, EUIPO must not only take into account the decisions which it has already taken in respect of similar applications and consider with especial care whether it should decide in the same way or not, but it must also apply those principles in a way that is consistent with respect for the principles of legality and legal certainty, which means that the examination of any trade mark application must be stringent and full, and must be undertaken in each individual case (judgments of 10 March 2011, Agencja Wydawnicza Technopol v OHIM, C‑51/10 P, EU:C:2011:139, paragraphs 74 to 77, and of 28 June 2018, EUIPO v Puma, C‑564/16 P, EU:C:2018:509, paragraph 61).

21 In the fourth and last place, as regards the argument set out in paragraph 10 of the present order, it must be noted that, although the appellant identifies clearly the issue of law which it raises, the fact remains that it merely submits, in a generic manner, that that issue is significant with respect to the unity and development of EU law. The appellant relies solely on the fact that the perception of a sign as being descriptive forms the basis for any application for a declaration of invalidity or for any refusal of registration based on Article 7(1)(c) of Regulation 2017/1001 in order to justify the significance of that issue in the light of those criteria. Accordingly, that argument cannot satisfy the requirements relating to the burden of proof which rests on the appellant requesting that an appeal be allowed to proceed.

22 It should be recalled that, in accordance with the burden of proof which rests on the appellant requesting that an appeal be allowed to proceed, that appellant must demonstrate that, independently of the issues of law invoked in its appeal, that appeal raises one or more issues that are significant with respect to the unity, consistency or development of EU law, the scope of that criterion going beyond the judgment or order under appeal and, ultimately, its appeal. In order to demonstrate that that is the case, it is necessary to establish both the existence and the significance of such issues by means of concrete evidence specific to the particular case, and not simply by means of arguments of a general nature (order of 12 March 2020, Roxtec v EUIPO, C‑893/19 P, not published, EU:C:2020:209, paragraph 19 and the case-law cited).

23 In those circumstances, it must be concluded that the request submitted by the appellant is not capable of establishing that the appeal raises an issue that is significant with respect to the unity, consistency or development of EU law.

24 In the light of all the foregoing considerations, the appeal should not be allowed to proceed.

25 Under Article 137 of the Rules of Procedure, applicable to appeal proceedings by virtue of Article 184(1) of those rules, a decision as to costs is to be given in the order which closes the proceedings.

26 Since the present order was adopted before the appeal was served on the other parties to the proceedings and, therefore, before they could have incurred costs, it is appropriate to decide that the appellant is to bear its own costs.

On those grounds, the Court (Chamber determining whether appeals may proceed) hereby orders:

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You are here: BAILII >> Databases >> Court of Justice of the European Communities (including Court of First Instance Decisions) >> smart things solutions v EUIPO (EU trade mark - Order) [2021] EUECJ C-681/20P_CO (24 March 2021) URL: http://www.bailii.org/eu/cases/EUECJ/2021/C68120P_CO.html Cite as: [2021] EUECJ C-681/20P_CO

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