IP case law Court of Justice

Order of 7 Sep 2017, C-218/17 (Natural Instinct v M. I Industries)


Procedure before the Office and the Court > Procedure before the General Court > Obligation to state reasons


ORDER OF THE COURT (Sixth Chamber)

7 September 2017 (*)

(Appeal — Article 181 of the Rules of Procedure of the Court of Justice — EU trade mark — Application for registration of the figurative mark Natural Instinct Dog and Cat food as nature intended — Opposition proceedings — Genuine use of the earlier mark)

In Case C-218/17 P,

APPEAL under Article 56 of the Statute of the Court of Justice of the European Union, brought on 26 April 2017,

Natural Instinct Ltd, established in Camberley (United Kingdom), represented by C. Spintig and S. Pietzcker, Rechtsanwälte, and by B. Brandreth, Barrister,

appellant,

the other parties to the proceedings being:

M. I. Industries, Inc., established in Lincoln (United States),

applicant at first instance,

European Union Intellectual Property Office (EUIPO),

defendant at first instance,

THE COURT (Sixth Chamber),

composed of E. Regan, President of the Chamber, J.-C. Bonichot (Rapporteur) and C.G. Fernlund, Judges,

Advocate General: P. Mengozzi,

Registrar: A. Calot Escobar,

having decided, after hearing the Advocate General, to give a decision by reasoned order, in accordance with Article 181 of the Rules of Procedure of the Court of Justice,

makes the following

Order

1        By its appeal, Natural Instinct Ltd asks the Court to set aside in part the judgment of the General Court of the European Union of 15 February 2017, M. I. Industries v EUIPO — Natural Instinct (Natural Instinct Dog and Cat food as nature intended) (T-30/16, not published, EU:T:2017:77) (‘the judgment under appeal’) in so far as that judgment annulled the decision of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 26 November 2015 (Case R 2944/2014-5), relating to opposition proceedings between M. I. Industries and Natural Instinct (‘the contested decision’), to the extent to which that decision found that there had been no genuine use of the earlier word mark INSTINCT (‘the earlier mark’).

2        In support of its appeal, Natural Instinct puts forward two grounds of appeal alleging, first, misinterpretation of the contested decision and, secondly, errors in the assessment of the evidence and a failure to state reasons.

 The appeal

3        Pursuant to Article 181 of its Rules of Procedure, where the appeal is, in whole or in part, manifestly inadmissible or manifestly unfounded, the Court may at any time, acting on a proposal from the Judge-Rapporteur and after hearing the Advocate General, decide by reasoned order to dismiss that appeal in whole or in part.

4        On 10 July 2017, the Advocate General took the following position:

‘1.      For the reasons which I will set out below, I propose that the Court dismiss the appeal in the present case, pursuant to Article 181 of the Rules of Procedure, as being in part manifestly inadmissible and in part manifestly unfounded, and rule that Natural Instinct should be ordered to bear its own costs, in accordance with Article 137 of those rules, applicable to the procedure on appeal pursuant to Article 184(1) thereof.

2.      By its first ground of appeal, directed against paragraphs 29 and 31 of the judgment under appeal, Natural Instinct alleges that the General Court misconstrued the Board of Appeal’s reasoning in the contested decision. That ground of appeal is, in my view, manifestly unfounded.

3.      First of all, contrary to Natural Instinct’s assertion, the Board of Appeal did not confirm, even implicitly, the finding of the Opposition Division, set out in paragraph 33 of the contested decision, that the evidence submitted by M. I. Industries (“the opponent”) in order to demonstrate genuine use of the earlier mark did not provide sufficient information as to the commercial volume, territorial scope, duration and frequency of the use of that mark in the European Union.

4.      Next, it follows from paragraph 34 of the contested decision that, as the General Court pointed out in paragraph 29 of the judgment under appeal, the Board of Appeal focused on the nature of the use of the earlier mark and, inter alia, on whether it had been used publicly and outwardly. In that context, the Board of Appeal noted, again in paragraph 34 of the contested decision, that “[no] evidence” had been produced, either before the Board of Appeal or the Opposition Division, that the goods delivered by the opponent to its distributor in Germany, the company Cats’ Country, had actually made their way onto the German market. In paragraph 36 of that decision, the Board of Appeal reiterated that no example of “sales or further distribution to other locations in Germany or elsewhere” had been provided by the opponent, although such evidence “should have been easy to provide, given the extent of claimed sales under [the earlier mark] to final German consumers”.

5.      Therefore, the General Court did not misconstrue the contested decision when it took the view, in paragraph 31 of the judgment under appeal, that the Board of Appeal had based its reasoning, implicitly, but necessarily, on the premiss that the use of a mark can be classified as genuine only if its proprietor adduces evidence that the goods covered by that mark have been marketed to end consumers. Nor did the General Court distort or misinterpret the Board of Appeal’s reasoning when it stated, in paragraphs 57 and 58 of the judgment under appeal, that the Board had ruled out as a matter of principle that the use of a mark shown by commercial measures addressed solely to professionals in the sector concerned could be regarded as a use consistent with the essential function of the trade mark.

6.      By its second ground of appeal, Natural Instinct raises two complaints against the judgment under appeal. First, it submits, primarily, that the General Court erred in law in criticising the Board of Appeal for having given insufficient weight to the affidavit provided by Ms S., owner of the company Cats’ Country, and, in the alternative, that the General Court approached the question of evidential weight “in a binary manner”, that is to say, by making the evidential value to be given to a sworn statement dependent solely on whether or not it had been made by a “third party”. Secondly, Natural Instinct maintains that the judgment under appeal is vitiated, in its assessment of the evidential value of the affidavit of Ms. S., by a failure to state reasons.

7.      With regard to the first complaint, the argument of Natural Instinct is based in part on an incorrect reading of the judgment under appeal. Contrary to what Natural Instinct states, the General Court did not intend to prevent the possible existence of links between the person making the sworn statement adduced as proof of the use of a mark and the proprietor of that mark from being taken into account as relevant to the assessment of the credibility and probative force of such a statement. On the contrary, it simply criticised the Board of Appeal for having wrongly held that the mere existence of contractual links between two distinct entities, in the present case the opponent and the company Cats’ Country, suffices for a finding that the affidavit provided by one of those entities is not that of a third party, with the result that such an affidavit has less probative value (see paragraph 42 of the judgment under appeal).

8.      Furthermore, contrary to the apparent criticism of Natural Instinct, the General Court did indeed take into consideration the fact that the company Cats’ Country was the opponent’s sole importer and distributor. In paragraph 46 of the judgment under appeal, in rejecting the argument put forward by EUIPO and Natural Instinct, the General Court held that that situation did not in any event allow the inference to be drawn that the links of that company to the opponent, as a client of the latter, were comparable to those of an external consultant to its employer, which were considered in the judgment of 18 March 2015, Naazneen Investments v OHIM — Energy Brands (SMART WATER) (T-250/13, not published, EU:T:2015:160), to be sufficiently close to exclude the affidavit of such a consultant from being regarded as coming from a third party.

9.      Finally, it is clear that, by conducting an overall assessment of all the evidence at its disposal, the General Court found, in paragraph 55 of the judgment under appeal, that the Board of Appeal had made an error of assessment in finding that that evidence was not sufficient to prove that the goods delivered to Cats’ Country “had actually entered the German market”. In that context, the General Court criticised the Board of Appeal for having made a partial assessment of that evidence, in that the Board of Appeal regarded as relevant only that evidence which proved a use of the earlier mark aimed at end consumers (see paragraphs 56 to 58).

10.      The remaining part of the argument put forward by Natural Instinct, in the context of this first complaint in its second ground of appeal, can be construed as calling into question the General Court’s assessment of the probative value of the affidavit provided by Ms S. However, according to settled case-law, the General Court has exclusive jurisdiction to find and assess the facts and, in principle, to examine the evidence that it accepts in support of those facts. Provided that that evidence has been properly obtained and that the general principles of law and the rules of procedure in relation to the burden of proof and the taking of evidence have been observed, it is for the General Court alone to assess the value which should be attached to the evidence adduced before it. That assessment does not, therefore, save where the clear sense of that evidence has been distorted, constitute a point of law which is subject, as such, to review by the Court of Justice (judgment of 16 June 2016, Evonik Degussa and AlzChem v Commission, C-155/14 P, EU:C:2016:446, paragraph 23). As Natural Instinct has not proven, or even alleged, that the General Court distorted the affidavit of Ms S., that part of its argument must be rejected as inadmissible.

11.      As regards the second complaint in the second ground of appeal, alleging a failure to state reasons, I note that, contrary to what is argued by Natural Instinct, the General Court explained why it held that the company Cats’ Country, in its capacity as the opponent’s client and although being its sole importer and distributor, could not be regarded as having “close links” with the opponent such as to preclude its independence in relation to the latter. In paragraph 47 of the judgment under appeal, the General Court stated, with reference to the judgments of 18 March 2015, Naazneen Investments v OHIM — Energy Brands (SMART WATER) (T-250/13, not published, EU:T:2015:160), and of 16 June 2015, H.P. Gauff Ingenieure v OHIM — Gauff (Gauff JBG Ingenieure) (T-585/13, not published, EU:T:2015:386), and the case-law cited in paragraph 28 of that judgment, that the expression “a person with close links to the party concerned” had to be regarded as referring, in essence, “to employees of the party concerned, to employees of its subsidiary or to an external service provider which, in that regard, may be treated in the same way as an employee of the party concerned”. Also in paragraph 47 of the judgment under appeal, the General Court concluded that, as Cats’ Country did not come within any of those categories, it could not be regarded as having “close links”, within the meaning of the case-law cited, to the opponent and had, therefore, to be regarded as being independent of the opponent. In that regard, it must be pointed out that Natural Instinct does not dispute that that conclusion is well founded − or that the interpretation on which it is based is well founded −, but disputes only the adequacy of the reasons given for it.

12.      For the reasons which I have just set out, the second ground of appeal must, in my view, be rejected as being in part manifestly inadmissible and in part manifestly unfounded.

13.      In the light of all of the foregoing considerations, the appeal must be dismissed in its entirety.’

5        For the same reasons as those given by the Advocate General, the appeal must be dismissed as being in part manifestly inadmissible and in part manifestly unfounded.

 Costs

6        Under Article 137 of the Rules of Procedure of the Court of Justice, applicable to the procedure on appeal pursuant to Article 184(1) of those rules, a decision as to costs is to be given in the order which closes the proceedings. In the present case, since this order has been adopted before service of the appeal on M. I. Industries and EUIPO and, therefore, before they could have incurred costs, Natural Instinct must be ordered to bear its own costs.

On those grounds, the Court (Sixth Chamber) hereby orders:

1.      The appeal is dismissed.

2.      Natural Instinct Ltd shall bear its own costs.


Luxembourg, 7 September 2017.


A. Calot Escobar

 

E. Regan

Registrar

 

President of the Sixth Chamber

*      Language of the case: English.