OPINION OF ADVOCATE GENERAL
WATHELET
delivered on 11 January 2018 (1)
Case C‑488/16 P
Bundesverband Souvenir — Geschenke — Ehrenpreise eV
v
European Union Intellectual Property Office (EUIPO)
(Appeal — EU trade mark — Invalidity proceedings — Word mark NEUSCHWANSTEIN — Rejection of application for declaration of invalidity — Absolute grounds for refusal — Article 7(1)(b) and (c) of Regulation (EC) No 207/2009 — Descriptive character — Indication of geographical origin — Distinctive character — Article 52(1)(b) of Regulation (EC) No 207/2009 — Bad faith)
I. Introduction
1. By its appeal, the appellant, Bundesverband Souvenir — Geschenke — Ehrenpreise eV (‘BSGE’), asks the Court to set aside the judgment of the General Court of 5 July 2016, Bundesverband Souvenir — Geschenke — Ehrenpreise v EUIPO — Freistaat Bayern(NEUSCHWANSTEIN) (T‑167/15, not published, EU:T:2016:391), which dismissed the action seeking the annulment of the decision of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 22 January 2015 (Case R 28/2014-5), relating to proceedings for a declaration of invalidity between BSGE and Freistaat Bayern (Free State of Bavaria, Germany) (‘the judgment under appeal’).
II. Background to the dispute
2. On 22 July 2011, Freistaat Bayern filed an application for registration of the word sign ‘NEUSCHWANSTEIN’ (‘the contested mark’) as an EU trade mark with 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).
3. The name ‘NEUSCHWANSTEIN’ refers to the famous Neuschwanstein Castle, situated in the municipality of Schwangau (Germany), currently in the ownership of Freistaat Bayern and built, although not completed, between 1869 and 1886, during the reign of King Ludwig II of Bavaria.
4. The goods and services in respect of which registration was sought are in Classes 3, 8, 14 to 16, 18, 21, 25, 28, 30, 32 to 36, 38 and 44 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 (‘the Nice Agreement’).
5. The EU trade mark application was published in Community Trade Marks Bulletin No 166/2011 of 2 September 2011 and the trade mark was registered on 12 December 2011 under number 10144392.
6. On 10 February 2012, BSGE filed an application under Article 52(1)(a), in conjunction with Article 7(1)(b) and (c), of Regulation No 207/2009 for a declaration that registration of the contested mark was invalid in respect of all the goods and services referred to in point 4 above.
7. On 21 October 2013, the Cancellation Division of EUIPO rejected the application for a declaration of invalidity, finding that the contested mark did not consist of indications which may serve to designate the geographical origin or of other characteristics inherent to the goods and services in question and that there was therefore no infringement of Article 7(1)(c) of Regulation No 207/2009. In addition, the Cancellation Division held that, since the mark at issue was distinctive in respect of the goods and services in question, there was no infringement of Article 7(1)(b) of that regulation. Finally, it found that BSGE had not proven that the application for registration of the contested mark had been made in bad faith and that there was therefore no infringement of Article 52(1)(b) of the regulation.
8. On 20 December 2013, BSGE filed a notice of appeal with EUIPO against the Cancellation Division’s decision, pursuant to Articles 58 to 64 of Regulation No 207/2009.
9. By decision of 22 January 2015, the Fifth Board of Appeal of EUIPO confirmed the decision of the Cancellation Division and dismissed the appeal. In particular, the Board of Appeal found that the contested mark was not indicative of geographical origin within the meaning of Article 7(1)(c) of Regulation No 207/2009 and was not devoid of the distinctive character required under Article 7(1)(b) of the same regulation. In addition, the Board of Appeal held that no bad faith on the part of Freistaat Bayern had been established for the purposes of Article 52(1)(b) of that regulation.
III. The action before the General Court and the judgment under appeal
10. By application lodged at the Registry of the General Court on 2 April 2015, BSGE brought an action for annulment of the decision of the Fifth Board of Appeal of EUIPO of 22 January 2015.
11. In support of its action, BSGE put forward three pleas in law, alleging: (i) infringement of Article 7(1)(b) of Regulation No 207/2009; (ii) infringement of Article 7(1)(c) of Regulation No 207/2009; and (iii) infringement of Article 52(1)(b) of that regulation.
12. The General Court first examined the second plea, under which BSGE claimed that the Fifth Board of Appeal of EUIPO had infringed Article 7(1)(c) of Regulation No 207/2009 in finding that the contested mark was not a descriptive indication of the goods and services in question. The General Court dismissed that plea, holding, in essence, in paragraph 27 of the judgment under appeal, that as Neuschwanstein Castle is above all a museum location, it is not as such a place of production of goods or rendering of services and therefore the contested mark could not be indicative of the geographical origin of the goods and services it covered.
13. The General Court also dismissed the first plea, under which BSGE claimed that the Fifth Board of Appeal of EUIPO had infringed Article 7(1)(b) of Regulation No 207/2009 in finding that the contested mark was not devoid of distinctive character. The General Court held, in essence, in paragraphs 41 and 42 of the judgment under appeal, that the goods and services in question were everyday goods and services, distinguishable from souvenir goods and other tourist-related services by their designation alone, and that the word element constituting the contested mark was a fantasy name with no descriptive relationship with the goods sold or services offered.
14. Finally, the General Court dismissed the third plea, under which BSGE claimed that the Fifth Board of Appeal of EUIPO had infringed Article 52(1)(b) of Regulation No 207/2009 in finding that no bad faith had been established on the part of Freistaat Bayern. The General Court held, in paragraph 55 of the judgment under appeal, that BSGE had not provided evidence of the objective circumstances in which Freistaat Bayern was alleged to know that some of the goods and services in question were marketed by BSGE and other third parties.
15. The General Court accordingly dismissed the action in its entirety.
IV. Procedure before the Court
16. By its appeal, BSGE claims that the Court should:
– set aside the judgment under appeal;
– cancel registration of the NEUSCHWANSTEIN trade mark; and
– order EUIPO to pay the costs.
17. EUIPO contends that the Court should dismiss the appeal and order BSGE to pay the costs.
18. Freistaat Bayern contends that the Court should dismiss the appeal and order BSGE to pay the costs, including those incurred by Freistaat Bayern.
19. A hearing was held on 29 November 2017, at which BSGE, EUIPO and Freistaat Bayern were asked to concentrate their submissions on the second part of the first ground of appeal and the first part of the second ground of appeal.
V. The appeal
20. In accordance with the Court’s request, this Opinion concentrates on the second part of the first ground of appeal and the first part of the second ground of appeal.
A. The second part of the first ground of appeal, alleging infringement of Article 7(1)(c) of Regulation No 207/2009
1. Arguments of the parties
21. By the second part of the first ground of appeal, BSGE alleges that the General Court failed to have regard to the public interest underlying Article 7(1)(c) of Regulation No 207/2009 and the case-law stemming from, inter alia, the judgment of 4 May 1999, Windsurfing Chiemsee (C‑108/97 and C‑109/97, EU:C:1999:230), when it held, in paragraph 27 of the judgment under appeal, that Neuschwanstein Castle is not as such a place of production of goods or rendering of services and therefore the contested mark could not be indicative of the geographical origin of the goods and services it covers.
22. According to BSGE, Neuschwanstein Castle is geographically locatable and, therefore, the ‘NEUSCHWANSTEIN’ sign could be indicative of geographical origin for the purposes of Article 7(1)(c) of Regulation No 207/2009 due to the fact that goods and services covered by the contested mark are marketed at that location.
23. EUIPO and Freistaat Bayern agree with the analysis made by the General Court in paragraph 27 of the judgment under appeal.
24. According to EUIPO, there is nothing on the file to show that the contested mark is used to market specific souvenirs or offer particular services, which would lead the relevant public to think that it was an indication of geographical origin. EUIPO considers that the goods and services covered by the contested mark are intended for everyday use, do not have any specific characteristics and only become souvenirs through the affixing of the ‘NEUSCHWANSTEIN’ sign.
25. Freistaat Bayern asserts that Article 7(1)(c) of Regulation No 207/2009 can serve as the basis for excluding the registration as an EU mark of names of objects which are geographically locatable, but only when the sign in question is objectively descriptive in relation to the goods and services claimed, which is not the case for the goods and services covered by the contested mark.
26. According to Freistaat Bayern, the pleasant emotions and positive connotations that the contested mark might evoke for the relevant public and the place of marketing of the goods and services covered by the contested mark are not sufficient for the ‘NEUSCHWANSTEIN’ sign to constitute an indication of geographical origin for the purposes of Article 7(1)(c) of Regulation No 207/2009.
2. Assessment
27. Article 7(1)(c) of Regulation No 207/2009 prevents the registration of EU trade marks which consist exclusively of signs or indications which may serve, in trade, to designate, inter alia, the geographical origin of the goods or of rendering of the service for which registration is sought.
28. According to settled case-law, ‘Article [7](1)(c) [of Regulation No 207/2009] pursues an aim which is in the public interest, namely that descriptive signs or indications relating to the characteristics of goods or services in respect of which registration is applied for may be freely used by all, including as collective marks or as part of complex or graphic marks. [Article 7(1)(c)] therefore prevents such signs and indications from being reserved to one undertaking alone because they have been registered as trade marks’. (2)
29. More particularly, with regard to signs or indications which may serve to designate geographical origin, especially geographical names, the Court has held that ‘it is in the public interest that they remain available, not least because they may be an indication of the quality and other characteristics of the categories of goods concerned, and may also, in various ways, influence consumer tastes by, for instance, associating the goods with a place that may give rise to a favourable response’. (3)
30. On the basis of that public interest consideration, the Court held that an assessment must be made as to whether a geographical name designates a place which is, in the mind of the relevant class of persons, currently or potentially associated with the category of goods or services in question and, if so, registration of that name as an EU trade mark must be refused. (4)
31. The requirement that such an association exists or could be made between the goods or service in question and the geographical name stems from the very concept of ‘geographical origin’. For registration as an EU mark to be refused in respect of a geographical name, that name must be capable of designating an origin, in other words there must be a connection between the goods or the service and the geographical name, (5) since a geographical name does not in itself automatically constitute evidence of the origin. As Advocate General Cosmas illustrated so well, nobody would think that ‘Montblanc’ pens originate from the mountain of that name. (6)
32. However, as the Court has held, the existence of that connection between goods and geographical location does not depend only on the place where those goods were or could be manufactured but might also depend on other ties, such as the location where the goods were conceived or designed. (7)
33. In this respect, the General Court held in paragraph 27 of the judgment under appeal that Neuschwanstein Castle is not a geographical location but a museum location, the principal function of which is the preservation of cultural heritage and not the manufacturing or marketing of souvenirs or rendering of services. In addition, according to the General Court, Neuschwanstein Castle is not known for its souvenirs, which are not manufactured within the castle but merely marketed there to tourists. Therefore, the General Court held that the ‘NEUSCHWANSTEIN’ sign could not be indicative of a geographical origin within the meaning of Article 7(1)(c) of Regulation No 207/2009.
34. At that point in its judgment, the General Court proceeded to make a series of findings of fact which may be contested on appeal only in the event of a distortion of the facts, which is not something claimed by BSGE.
35. Nonetheless, the legal classification of certain facts, such as the designation of geographical origin by means of the ‘NEUSCHWANSTEIN’ sign, may be examined in the context of this appeal.
36. In my opinion, it is not decisive, as BSGE maintains, whether Neuschwanstein Castle is a geographical location or whether it is so famous that, in the eyes of the relevant public, the name ‘Neuschwanstein’ prevails over the name of the place where the castle is situated (namely the municipality of Schwangau). What matters instead is that the signs or indications making up the EU mark may serve as a basis for designating a geographical origin of the goods and services covered by the mark.
37. It is precisely for that reason that BSGE complains that the General Court did not find the place of marketing the souvenirs to be a tie that could connect the goods with the ‘NEUSCHWANSTEIN’ sign and thus indicate a geographical origin within the meaning of paragraph 36 of the judgment of 4 May 1999, Windsurfing Chiemsee (C‑108/97 and C‑109/97, EU:C:1999:230).
38. I disagree with that complaint for the following reasons.
39. First of all, it should be noted that, from a legal perspective, the goods covered by the contested mark are not souvenir items but goods that fall into the classes set out in paragraph 3 of the judgment under appeal, for example, t-shirts, knives, forks, plates, teapots, etc. Under the Nice Agreement, there is no class entitled ‘souvenir items’ since, if such a class existed, it would be so wide-ranging that it would not be capable of designating a specific category of goods. In addition, as souvenirs are items that recall a person, place or event, they are items evoking emotions. Human emotions cannot be covered by an EU trade mark since they do not constitute goods or services for the purposes of Article 7(1)(c) of Regulation No 207/2009. For that reason and despite BSGE’s assertion to the contrary, this appeal does not concern the geographical origin of souvenir items but everyday goods.
40. So far as concerns the place of marketing as a tie connecting goods with a geographical place, it is clear from the wording of paragraph 36 of the judgment of 4 May 1999, Windsurfing Chiemsee (C‑108/97 and C‑109/97, EU:C:1999:230) that the Court did not limit connecting ties to the place of manufacture of the goods in question, since it held that ‘the connection between a category of goods and a geographical location might depend on other ties, such as the fact that the goods were conceived and designed in the geographical location concerned’.
41. However, that does not necessarily imply that the place of marketing can serve as a tie connecting the goods or services with the place concerned, even in the case of souvenir items. As BSGE acknowledges in paragraph 28 of its appeal, it is quite possible that a souvenir item bearing the contested mark could be sold outside the vicinity of Neuschwanstein Castle. The very existence of that possibility supports the argument that the place of marketing of an item bearing the contested mark is not necessarily a tie connecting that article with Neuschwanstein Castle.
42. Finally, the place of marketing is in itself incapable of proving geographical origin, since the place where goods are sold is not descriptive of their properties, qualities or other characteristics (8) and, consequently, the relevant public cannot associate properties, qualities or other characteristics with goods on the basis that they have been purchased in a particular geographical location. By contrast, the relevant public can make such a link between goods and the geographical location in which they were manufactured, conceived or designed if it is thought that the goods have certain properties, qualities or other characteristics (such as a technique, tradition or craft) given that they were manufactured or conceived and designed in a particular geographical location. For example, the relevant public will associate certain qualities with Limoges porcelain so that, in relation to porcelain goods, the ‘Limoges’ sign is descriptive of a geographical origin.
43. In the present case, BSGE is not claiming that the relevant public associates or could associate certain properties, qualities or other characteristics with the goods and services covered by the contested mark on the basis that they were sold on the premises of Neuschwanstein Castle. As the General Court held in paragraph 27 of the judgment under appeal, ‘Neuschwanstein Castle is not known for the souvenirs it sells or the services it offers’.
44. For these reasons, it is my opinion that in holding, in paragraph 27 of the judgment under appeal, that the contested mark cannot be indicative of the geographical origin of the goods and services it covers, the General Court did not make any error of law in the interpretation and application of Article 7(1)(c) of Regulation No 207/2009. Therefore, the second part of the first ground of appeal must be rejected.
B. The first part of the second ground of appeal, alleging infringement of Article 7(1)(b) of Regulation No 207/2009
1. Arguments of the parties
45. By the first part of its second ground of appeal, BSGE alleges, in essence, that in holding, in paragraphs 41 and 42 of the judgment under appeal, that the contested mark possessed a distinctive character, the General Court infringed Article 7(1)(b) of Regulation No 207/2009, since merely affixing the ‘NEUSCHWANSTEIN’ sign to souvenir items is not sufficient to distinguish the goods and services covered by the contested mark from those sold and offered in the vicinity of Neuschwanstein Castle.
46. In addition, BSGE maintains that the General Court used circular reasoning in holding, in paragraph 41 of the judgment under appeal, that the ‘NEUSCHWANSTEIN’ sign not only designates the castle as a museum location but also the contested mark itself. The same goes for paragraph 42 of the judgment under appeal where the General Court held that the contested mark enables products to be marketed and services to be offered under that designation, the quality of which could be controlled by Freistaat Bayern, whereas that is not an indication of the distinctive nature of the ‘NEUSCHWANSTEIN’ sign but a consequence of its registration as an EU trade mark. BSGE claims that, by so doing, the General Court anticipated the decision as to whether or not that sign could constitute an EU trade mark.
47. EUIPO and Freistaat Bayern consider that the first part of the second ground of appeal is inadmissible to the extent that it does not raise any question of law and seeks to obtain from the Court a re-assessment of the distinctive character of the ‘NEUSCHWANSTEIN’ sign. EUIPO comments that, in the business world, it is common for museums and companies operating cultural and tourist sites to market goods under their respective names and that those names are used as trade marks.
48. In the alternative, Freistaat Bayern submits that the first part of the second ground of appeal is unfounded. It states that the General Court established that the relevant class of persons is familiar with the fact that tourist attractions and museums are businesses that not only provide cultural entertainment but nowadays also manufacture and market goods under the name of their establishment as a way of complementing their main service. It maintains that the General Court was also right to find, in paragraph 43 of the judgment under appeal, that the relevant public did not perceive the contested mark only as a reference to the castle, but at least ‘also as an indication of the commercial origin of the goods and services concerned’.
2. Assessment
(a) Admissibility
49. I agree with EUIPO and Freistaat Bayern that, to the extent that BSGE complains that the grounds given by the General Court for finding that the ‘NEUSCHWANSTEIN’ sign had distinctive character were that the sign designated not only the castle as a museum but also the contested mark itself, BSGE is seeking to obtain from the Court a re-assessment of the said sign which, it maintains, does not have distinctive character and would only be perceived by the relevant public as referring to the castle. It is settled case-law of the Court (9) that such an argument may not be the subject of an appeal except where there has been a distortion of the facts or the evidence, which is not something claimed in the present case.
50. However, to the extent that BSGE complains that the General Court provided insufficient grounds for its assertion that the contested mark has a distinctive character, BSGE is raising a question of law which, in itself, may be raised in the context of an appeal. (10)
(b) Substance
51. It has consistently been held that the statement of the reasons on which a judgment of the General Court is based must clearly and unequivocally disclose that Court’s reasoning in such a way as to enable the persons concerned to ascertain the reasons for the decision taken and the Court of Justice to exercise its power of review. (11)
52. In my opinion, paragraphs 41 to 43 of the judgment under appeal do not amount to an insufficient statement of reasons for the following reasons.
53. Paragraph 41 of the judgment under appeal states, in essence, that the goods and services covered by the contested mark are everyday goods and services, distinguishable from souvenir goods and other tourist-related services by their designation alone, inasmuch as it designates not only the castle in its capacity as a museum location but also the contested mark itself. The General Court held that the goods and services covered by that mark were not manufactured but only marketed at Neuschwanstein Castle and the services in question were not all rendered on site.
54. The description of the goods and services in question as goods and services intended for everyday use, distinguishable from other goods (souvenir items) and tourist-related services by their designation alone, is a factual statement against which BSGE may not appeal except in the case of distortion of the facts, which is not something claimed by BSGE. The same goes for the statement that the goods covered by the contested mark were not manufactured at Neuschwanstein Castle but marketed there, and that the services covered by the contested mark were not all rendered on site.
55. Despite BSGE’s assertion to the contrary, the General Court’s reasoning that the ‘NEUSCHWANSTEIN’ sign is simultaneously the contested mark and the name of the castle where the goods and services covered by the mark are marketed is not circular.
56. In the present case, if the ‘NEUSCHWANSTEIN’ sign is not descriptive of the geographical origin of the goods and services it covers, there is in principle nothing to stop Freistaat Bayern from registering the name of the museum location in its ownership as an EU trade mark. In that event, it would be normal for the name of that place and the mark to be identical.
57. In paragraph 42 of the judgment under appeal, the General Court went on to hold that the ‘NEUSCHWANSTEIN’ sign was not descriptive of the goods and services covered by the contested mark because it was only the affixing of the sign to the goods and services in question that enabled them to be distinguished from the goods and services of other undertakings.
58. First of all, as I mentioned in point 39 of this Opinion, the Nice Agreement does not recognise any classes of goods or services called ‘souvenir items’. Accordingly, the General Court was right to consider whether the ‘NEUSCHWANSTEIN’ sign was descriptive of the goods and services covered as intended for everyday use and not for use as souvenirs.
59. According to established case-law, an EU trade mark cannot be descriptive but must ‘serve to identify the product in respect of which registration is applied for as originating from a particular undertaking, and thus to distinguish that product from goods of other undertakings’. (12)
60. The General Court was correct to hold that, as a fantasy name meaning the ‘new stone of the swan’, the ‘NEUSCHWANSTEIN’ sign could not be descriptive of the goods and services covered by the contested mark, as it is not descriptive of their characteristics, as, for example, the word sign ‘ecoDoor’ would be for energy-efficient goods. (13)
61. In the present case, BSGE maintains that the only connection that could exist between the ‘NEUSCHWANSTEIN’ sign and the goods and services covered by the contested mark is their place of marketing in the vicinity of the castle of that name. As I explained in point 42 of this Opinion, the place of marketing is not a characteristic of the goods and services covered by the contested mark. (14)
62. One can easily follow the General Court’s reasoning that it is only the affixing of the non-descriptive ‘NEUSCHWANSTEIN’ sign (which, in the eyes of the relevant class of persons, has no connection with the goods and services in question other than their place of marketing at the castle of the same name) which enables the relevant public to distinguish the goods and services in question from those of other undertakings.
63. In paragraph 43 of the judgment under appeal, the General Court rejected the arguments of BSGE and the Fifth Board of Appeal of EUIPO that the ‘NEUSCHWANSTEIN’ sign was an advertising medium or a slogan. However, the General Court found that the sign allowed the relevant public both to distinguish the commercial origin of the goods and services covered by the contested mark and to make a reference to a visit to the castle. This dual function is the inevitable consequence of the choice by the owner of a museum location to register its name as an EU trade mark, against which there is no prohibition. In that sense, the General Court substantiated the distinctive character of the ‘NEUSCHWANSTEIN’ sign inasmuch as it enables the relevant public to associate the goods and services covered by the contested mark with Freistaat Bayern.
64. For the reasons set out above, I consider that the first part of the second ground of appeal should be rejected.
VI. Conclusions
65. For the above reasons and without prejudice to the examination of the other grounds of appeal, I propose that the Court should reject the second part of the first ground of appeal and the first part of the second ground of appeal.