JUDGMENT OF THE GENERAL COURT (Second Chamber)
15 February 2023 (*)
(EU trade mark – Invalidity proceedings – EU word mark MOSTOSTAL – Obligation to state reasons – Article 94(1) of Regulation 2017/1001)
In Case T‑684/21,
Mostostal S.A., established in Warsaw (Poland), represented by C. Saettel and K. Krawczyk, lawyers,
applicant,
v
European Union Intellectual Property Office (EUIPO), represented by J. Crespo Carrillo, acting as Agent,
defendant,
the other party to the proceedings before the Board of Appeal of EUIPO, intervener before the General Court, being
Polimex – Mostostal S.A., established in Warsaw, represented by J. Kubalski, K. Szczudlik and M. Hyży, lawyers,
THE GENERAL COURT (Second Chamber),
composed, at the time of the deliberations, of V. Tomljenović, President, F. Schalin and P. Škvařilová-Pelzl (Rapporteur), Judges,
Registrar: G. Mitrev, Administrator,
having regard to the written part of the procedure,
further to the hearing on 12 September 2022,
gives the following
Judgment
1 By its action under Article 263 TFEU, the applicant, Mostostal S.A., seeks annulment of the decision of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 30 July 2021 (Case R 2508/2019-5) (‘the contested decision’).
Background to the dispute
History of the Mostostal sign
2 The name Mostostal is a combination of the Polish words ‘most’, meaning ‘bridge’, and ‘stal’, meaning ‘steel’, which appeared at the end of the Second World War. It refers to an initiative of the Polish authorities to set up a public entity with the task of rebuilding the bridges destroyed during the war. The entity, then named Mostostal, which was established in 1945 in Krakow (Poland), had 28 offices across Poland, specialised in the construction sector. The first registration of the compound word ‘Mostostal’ as an individual trade mark dates back to 1964. The trade mark was registered with the Urząd Patentowy Rzeczypospolitej Polskiej (Polish Patent Office) on 11 May 1964 under number R 044372 for goods and services in Class 16. In 1973, Wytwórnia Lekkich Konstrukcji Stalowych (‘WLKS’) was set up in Siedlce (Poland); it produced steel and was a former member of Zrzeszenia Mostostal (‘the Mostostal Association’). In 1993, WLKS became a private company called Mostostal Siedlce S.A., which later merged with Polimex Cekop S.A. in 2004.
3 In 1984, the Mostostal Association filed an application for registration of the trade mark MOSTOSTAL (a collective mark registered under number R-300, one of the proprietors of which was WLKS) with the Polish Patent Office. After the fall of the Berlin Wall in 1989, the Mostostal Association was dissolved. The trade mark was therefore not renewed and expired in 1994. Nevertheless, after its expiry, one of the members of that association, named Mostostal Projekt S.A., applied for registration of the following trade marks, one a figurative mark and the other a word mark (‘the Polish trade marks’), with the Polish Patent Office:
– the figurative mark reproduced below, applied for on 25 February 1994 and registered on 25 November 1995 under number R 87887, covering goods and services in Classes 2, 16, 37 and 42;
– the word mark MOSTOSTAL, applied for on 23 March 1994 and registered on 23 September 1997 under number R 97850, covering goods and services in Classes 37 and 42.
4 On 18 October 1996, Mostostal Projekt and 14 former members of the Mostostal Association signed a multilateral agreement governing the use of the Polish trade marks, which allowed them to continue their business activity (‘the Multilateral Agreementʼ).
5 In 2003, Mostostal Projekt went into liquidation.
6 In 2007, the Polish trade marks were acquired by Mostostal Aluminium Sp. Z.o.o. (the applicant’s predecessor) at a public auction organised for the purpose of the liquidation proceedings.
7 On 24 August 2010, the applicant filed an application for registration of the word sign MOSTOSTAL with EUIPO.
8 On 20 May 2011, the word sign MOSTOSTAL was registered as an EU trade mark.
Procedure before EUIPO
9 On 17 February 2018, the intervener, Polimex – Mostostal S.A., filed an application with EUIPO for a declaration of invalidity of the EU word mark MOSTOSTAL.
10 The services covered by the contested trade mark in respect of which a declaration of invalidity was sought were in Classes 36, 37, 42 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, and corresponded, for each of those classes, to the following description:
– Class 36: ‘Real-estate brokerage; Real estate appraisal, appraisal of industrial constructions and buildings; Investment consultancy, namely capital investments; Retail real estate investment; Development services, namely creating and raising capital, brokerage in obtaining real estate for building investments, brokerage in the conclusion of sales and rental contracts in the field of real estate, residential premises, commercial and service premises; Management and administration of residential and office buildings, rental and brokerage in renting residential and office buildings; Administration and rental of commercial premises; Insurance brokerage in the field of real estate; Substitute investor services, namely managing the financial aspects of building investments on behalf of the principal; Holding company services, namely financial management, real estate management, financial management, mutual funds, financial transaction settlement, issuing financial guarantees; Purchase and resale of real estate’;
– Class 37: ‘Development services, namely building construction supervision; Construction supervision services; Building construction, namely construction of new buildings, building installations, rebuilding, renovation, repair, interior cleaning and renovation; construction and repair in relation to buildings and bridges, assembly of scaffolding, building insulation, construction masonry, fitting electrical installations in buildings and structures and electric signalling installations, fitting water and sewage and gas installations; Installation, repair and maintenance of passenger and cargo lifts, lifts and escalators; Construction joinery, plastering, stucco plastering, floor laying, wallpapering, wall surfacing, painting; Building demolition, industrial construction, installation, maintenance and repair of machines and vehicles relating to building construction; Installation and repair of electric apparatus, assembly and repair of heating installations, rustproofing; Road construction and surfacing of roads and sports venues, railway construction, pipeline construction and maintenance, general building construction in the field of power lines, electric traction lines and telecommunication lines – routing and local, water engineering and mining construction, rental of construction machines and equipment, including rental of bulldozers, cranes and diggers, vehicle maintenance and repair; Maintenance of residential and office buildings, namely interior and exterior repair, cleaning and renovation of buildings’;
– Class 42: ‘Scientific and technological services and research and design services relating thereto; Industrial analysis and research services; Design and development of computer hardware and software; Decoration and design of residential, office and commercial interiors; Architectural and construction design, on-site supervision (technical supervision); Construction drafting, building structure design, metal structure design; Building construction consultancy in the field of building construction development; Technical project studies, technical research, engineering, geological surveys and land surveying; Design and installation of computer software; Design, installation, updating, maintenance and duplication of computer software, computer software consultancy; Compilation of computer databases; Computer systems design, rental of computer software, computer rental, creating, maintaining and providing websites for others’;
– Class 44: ‘Site planning, landscape design and design of areas around buildings’.
11 The grounds relied on in support of the application for a declaration of invalidity were those set out in Article 52(1)(b) and Article 53(1)(c) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1), read in conjunction with Article 8(4) thereof, as well as Article 53(2)(a) and (c) of that regulation (now Article 59(1)(b), Article 60(1)(c), Article 8(4) and Article 60(2)(a) and (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)).
12 The Cancellation Division upheld in its entirety the application for a declaration of invalidity, relying on the grounds set out in Article 52(1)(b) of Regulation No 207/2009.
13 On 6 November 2019, the applicant filed a notice of appeal against the decision of the Cancellation Division.
14 By the contested decision, the Board of Appeal dismissed the appeal on the ground that the intervener had adduced evidence of bad faith on the part of the applicant at the time of filing the contested trade mark. It considered, in that regard, that the intervener and several other companies in the Mostostal Association had used the earlier sign Mostostal for many decades, at the very least as part of their company names, and that they had prior rights over that name, that the applicant had knowledge of that prior use and that it had filed the contested trade mark in order to take advantage of the reputation of that ‘historic’ sign.
Forms of order sought
15 The applicant claims that the Court should:
– annul the contested decision;
– declare the contested trade mark valid;
– order EUIPO and the intervener to pay the costs.
16 EUIPO and the intervener contend that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
Law
17 In the light of the date on which the application for registration of the contested trade mark was filed, namely 24 August 2010, which is decisive for the purpose of identifying the substantive law applicable, the facts of the present case are governed by the substantive provisions of Regulation No 207/2009 (see, to that effect, order of 5 October 2004, Alcon v OHIM, C‑192/03 P, EU:C:2004:587, paragraphs 39 and 40, and judgment of 23 April 2020, Gugler France v Gugler and EUIPO, C‑736/18 P, not published, EU:C:2020:308, paragraph 3 and the case-law cited). Furthermore, in so far as, in accordance with settled case-law, procedural rules are generally held to apply on the date on which they enter into force (see judgment of 11 December 2012, Commission v Spain, C‑610/10, EU:C:2012:781, paragraph 45 and the case-law cited), the dispute is governed by the procedural provisions of Regulation 2017/1001.
18 Consequently, in the present case, as regards the substantive rules, the references made by the Board of Appeal in the contested decision and by the parties in their written pleadings to the provisions of Regulation 2017/1001 must be understood as referring to the substantively identical provisions of Regulation No 207/2009.
19 In support of the action, the applicant relies on four pleas in law, alleging, first, infringement of Article 94(1) of Regulation 2017/1001, secondly, infringement of Article 52(1)(b) of Regulation No 207/2009, thirdly, infringement of Article 52(3) of Regulation No 207/2009 and, fourthly, infringement of Article 54 of Regulation No 207/2009. At the hearing, the applicant withdrew the fourth plea in law.
20 The applicant claims in the first plea that the contested decision is vitiated by a failure to state reasons. According to the applicant, by incorrectly concluding that the degree of legal protection of the earlier sign Mostostal was not a controversial issue, the Board of Appeal did not sufficiently justify the degree of that legal protection or the earlier (legitimate) enjoyment of the intervener’s rights. The applicant also submits that it is unable to refute the Board of Appeal’s assessments.
21 EUIPO, supported by the intervener, disputes the applicant’s arguments. It contends that the Board of Appeal explicitly confirmed the reasoning set out in the Cancellation Division’s decision and refers, in that regard, to the reasoning and findings of the Board of Appeal as set out in paragraphs 49 to 59 of the contested decision.
22 In accordance with the first sentence of Article 94(1) of Regulation 2017/1001, decisions of EUIPO are to state the reasons on which they are based. That obligation has the same scope as that which derives from the second paragraph of Article 296 TFEU, which requires that the statement of reasons must disclose in a clear and unequivocal manner the reasoning followed by the institution which adopted the measure in question, without it being necessary for that reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets those requirements must, nonetheless, be assessed with regard not only to its wording, but also to its context and to all the legal rules governing the matter in question. That obligation, which also stems from Article 41(2) of the Charter of Fundamental Rights of the European Union, has the dual purpose of enabling interested parties to know the purported justification for the measure taken so as to be able to defend their rights and of enabling the Courts of the European Union to exercise their jurisdiction to review the legality of the decision in question (see, to that effect, judgment of 28 June 2018, EUIPO v Puma, C‑564/16 P, EU:C:2018:509, paragraphs 64 and 65 and the case-law cited).
23 As regards the undefined concept of ‘bad faith’ referred to in Article 52(1)(b) of Regulation No 207/2009, it is apparent from the case-law that the intention of an applicant for a trade mark is a subjective factor which must, however, be determined objectively by the competent administrative or judicial authorities. Consequently, any claim of bad faith must be the subject of an overall assessment, taking into account all the factual circumstances relevant to the particular case. It is only in this manner that a claim of bad faith can be assessed objectively (see judgment of 12 September 2019, Koton Mağazacilik Tekstil Sanayi ve Ticaret v EUIPO, C‑104/18 P, EU:C:2019:724, paragraphs 44 and 47 and the case-law cited).
24 In the light of the case-law cited in paragraph 23 above, the Board of Appeal examined, in the contested decision, two main factors in order to reach the conclusion that the applicant had acted in bad faith. First, it assessed the legal protection of the earlier sign Mostostal in a section headed ‘Prior use of “MOSTOSTAL” and degree of legal protection of “MOSTOSTAL” in Poland’ (paragraphs 49 to 59 of the contested decision). Secondly, based on that examination, it analysed the actual knowledge of the use and legal protection of the earlier sign Mostostal in a section headed ‘Actual knowledge’ (paragraphs 60 to 63 of that decision) before concluding that there was bad faith in a section headed ‘Intention to compete unfairly’, which contains two subsections headed, respectively, ‘Similarity between the signs’ and ‘Dishonest intention on the [applicant’s] part’ (paragraphs 64 to 100 of the contested decision).
25 As regards the legal protection of the earlier sign Mostostal, the Board of Appeal states that that issue is not a matter of dispute between the parties and summarises the findings of the Cancellation Division. It relies on those findings in the subsequent sections in order to examine actual knowledge of the use and legal protection of that earlier sign and then bad faith on the part of the applicant. It must therefore be found that the prior use and legal protection of the earlier sign, taken together, constitute a decisive factor in the determination that there was bad faith on the part of the applicant and it is therefore necessary to examine the three sections referred to in paragraph 24 above as a whole, in order to determine whether the Board of Appeal failed to fulfil its obligation to state reasons.
26 In that regard, first, it should be noted that the Board of Appeal found that, in the case at hand, it had been demonstrated that the intervener and other former members of the Mostostal Association had been using or had used the earlier sign as part of their company names for many decades (paragraphs 52, 56, 58, 59, 65 and 83 of the contested decision). According to the Board of Appeal, the earlier sign Mostostal is a ‘historic’ sign (paragraph 85 of the contested decision) which has a reputation or is well known (paragraphs 58 and 95 of that decision).
27 Secondly, the Board of Appeal found that the earlier sign Mostostal enjoyed legal protection in Poland, particularly in the fields of construction and industry (paragraph 52 of the contested decision).
28 Thirdly, the Board of Appeal found that the Polish trade marks were owned by one company, namely Mostostal Projekt (until its insolvency), and were used by companies that were members of the Mostostal Association, in accordance with the terms of the Multilateral Agreement, until those marks were transferred to the applicant’s predecessor in 2007. It found that it was not possible to conclude that the use of the earlier sign had become unlawful as a result of the insolvency of Mostostal Projekt, which entailed the termination of that agreement, on the ground that the former members of that association had prior rights (dating back to 1945) over the company name Mostostal ‘irrespective’ of the formal ownership of those marks (paragraphs 55 and 56 of the contested decision). Lastly, it found that those former members enjoyed earlier priorities than those of the applicant (paragraph 82 of that decision).
29 Thus, the Board of Appeal based the contested decision on the fact that the former members of the Mostostal Association had, in the past, enjoyed legal protection as a result of using the earlier sign Mostostal as a company name, as members of the Mostostal Association and as signatories to the Multilateral Agreement. Similarly, the contested decision is based on the premiss that the former members of that association continued to enjoy legal protection irrespective of the insolvency of Mostostal Projekt and the termination of the Multilateral Agreement, which led to the applicant acquiring the Polish trade marks. This follows from the fact that those former members continued to use that earlier sign as a company name after the insolvency and, in that regard, enjoyed an earlier priority than that of the applicant.
30 It should be noted in that regard that, while the use of the earlier sign Mostostal by the former members of the Mostostal Association is explained, inter alia, by the historical account relating to that earlier sign up until the acquisition of the Polish trade marks, the fact remains that the reasons why the Board of Appeal considered that those former members continued to enjoy legal protection following the acquisition of those marks are not disclosed by the contested decision in a clear and unequivocal manner.
31 It should be noted, in that regard, that, on the one hand, in paragraph 44 of the contested decision, the Board of Appeal, in order to conclude that the earlier sign Mostostal enjoyed legal protection, considers the use of that sign in the context of the Multilateral Agreement governing the right to use the Polish trade marks after their registration by Mostostal Projekt to be a relevant factor. On the other hand, it holds, in paragraphs 55 and 56 of that decision, that the insolvency of that undertaking and therefore the termination of that agreement had no effect on the legal protection in question, on the ground that it was independent of the formal ownership of those trade marks. Those findings are contradictory because legal protection in the form of a right of use cannot be inferred from the agreement and, at the same time, be regarded as independent of that agreement. In that regard, it is apparent from the case-law that the statement of reasons for a measure must be logical and contain no internal inconsistency that would prevent a proper understanding of the reasons underlying the measure (judgments of 29 September 2011, Elf Aquitaine v Commission, C‑521/09 P, EU:C:2011:620, paragraph 151, and of 12 December 2012, Electrabel v Commission, T‑332/09, EU:T:2012:672, paragraph 181).
32 Furthermore, as is apparent from paragraph 56 of the contested decision, the only element on which the Board of Appeal bases the legal protection of the earlier sign Mostostal favouring the former members of the Mostostal Association is the fact that those members continued to use that sign as a company name after the applicant acquired the Polish trade marks. The Board of Appeal does not explain in the contested decision on what legal basis it finds that legal protection to exist. It merely states that the issue of that legal protection does not appear to be ‘controversial’.
33 However, contrary to the Board of Appeal’s statement in paragraph 47 of the contested decision, the issue in question is a matter of dispute between the parties. Although the applicant does not dispute before the Board of Appeal that the earlier sign Mostostal has been used as a company name and has a reputation, it disputes that the former members of the Mostostal Association enjoy an earlier right that has priority over its own, even though it has become the proprietor of the Polish trade marks. According to the applicant, if such a right did exist, the Multilateral Agreement which conferred that right on those former members was terminated on the insolvency of Mostostal Projekt.
34 It is thus apparent from EUIPO’s file that the parties have discussed at length the existence of the legal protection of the earlier sign Mostostal favouring the former members of the Mostostal Association and, in that regard, have offered differing interpretations of Polish national law.
35 By way of example, it can be seen that, during the proceedings before EUIPO, the intervener relied on Article 64 of the Polish Constitution, Article 43 of the Polish Civil Code, Article 37(1) and (3) of the Polish Law of 13 July 1990 on the privatisation of State undertakings, a judgment of the Polish Supreme Court of 1924, Article 58 of the Polish Civil Code and a judgment of the Polish Supreme Court of 27 July 2007. The applicant disputed the interpretation of the national provisions relied on by the intervener and, for its part, relied on, inter alia, the following provisions: Article 120 of the Polish Law on Insolvency of 1934 and Article 879 of the Polish Code of Civil Procedure.
36 In the circumstances of the present case, where the parties relied on a number of different legal rules and interpretations concerning the legal protection of the earlier sign Mostostal, the Board of Appeal was required to identify in the contested decision the legal rule or rules applicable. In particular, it was for the Board of Appeal to specify the legal rules on which it had relied and how it had interpreted them in order to reach the conclusion that the earlier sign enjoyed such legal protection. This was all the more necessary given that the issue was – contrary to the Board of Appeal’s finding – controversial, that EUIPO’s file was voluminous in that regard and that a significant amount of evidence adduced by the parties was intended to demonstrate the existence or lack of legal protection.
37 Nevertheless, the contested decision does not set out the national rules in the light of which the issue of the legal protection of the earlier sign Mostostal favouring the former members of the Mostostal Association should have been assessed. In those circumstances, the Court is unable to verify the accuracy of the Board of Appeal’s reasoning and to exercise its jurisdiction to review the legality of the contested decision.
38 It should be pointed out, in that regard, that the Court cannot examine the legality of the contested decision solely based on whether the applicant may have had knowledge of (i) the use of the company name Mostostal by the former members of the Mostostal Association after the acquisition of the Polish trade marks and (ii) the fact that the earlier sign Mostostal had a certain reputation in the construction sector. The determination of the legal rules conferring legal protection on the earlier sign in the form of a company name is a decisive factor in ascertaining, first, whether the applicant had knowledge thereof at the time of filing the contested trade mark and, secondly, whether, when filing that trade mark, the applicant was not, in fact, in possession of all the rights relating to the Polish trade marks of which it is the proprietor, including the reputation of those marks. Thus, in the absence of a more precise explanation as to the legal basis for the legal protection of the earlier sign allegedly enjoyed by those former members, apart from the legal protection conferred by the Multilateral Agreement, it is not possible to ascertain whether the Board of Appeal took account of all the factual circumstances relevant to the particular case, in accordance with the case-law cited in paragraph 23 above.
39 Accordingly, in the absence of such an examination in the contested decision, the Court cannot exercise its jurisdiction to review the legality of the contested decision and the applicant, without any justification being provided as regards the legal protection of the earlier sign Mostostal allegedly enjoyed by the former members of the Mostostal Association, cannot properly defend its rights. It follows that the Board of Appeal failed to provide an adequate statement of reasons for the contested decision.
40 In the light of the foregoing, the action must be upheld and the contested decision annulled, without it being necessary to examine the admissibility of the second head of claim and other pleas relied on by the applicant.
Costs
41 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.
42 Since EUIPO has been unsuccessful, it must be ordered to bear its own costs and to pay those incurred by the applicant, in accordance with the form of order sought by the applicant.
43 Pursuant to Article 138(3) of the Rules of Procedure, the intervener is to bear its own costs.
On those grounds,
THE GENERAL COURT (Second Chamber)
hereby:
1. Annuls the decision of the Fifth Board of Appeal of the European Union Intellectual Property Office (EUIPO) of 30 July 2021 (Case R 2508/2019-5);
2. Orders EUIPO to bear its own costs and to pay those incurred by Mostostal S.A.;
3. Orders Polimex – Mostostal S.A. to bear its own costs.
Tomljenović | Schalin | Škvařilová-Pelzl |
Delivered in open court in Luxembourg on 15 February 2023.
E. Coulon | | M. van der Woude |