ORDER OF THE GENERAL COURT (Fifth Chamber)
2 December 2010 (*)
(Procedure – Taxation of costs)
In Case T‑270/06 DEP,
Lego Juris A/S, established in Billund (Denmark), represented by V. von Bomhard, A. Renck and T. Dolde, lawyers,
applicant,
v
Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by D. Botis, acting as Agent,
defendant,
the other party to the proceedings before the Board of Appeal of OHIM, intervener before the Court of First Instance, being
Mega Brands, Inc., established in Montreal (Canada), represented initially by P. Cappuyns and C. De Meyer, and subsequently by P. Cappuyns, lawyers,
APPLICATION for taxation of the costs to be recovered from the applicant by the intervening party following the judgment of the Court of First Instance (now the General Court) of 12 November 2008 in Case T‑270/06 Lego Juris v OHIM–Mega Brands (Red Lego brick) [2008] ECR II‑3117,
THE GENERAL COURT (Fifth Chamber),
composed of S. Papasavvas (Rapporteur), President, V. Vadapalas and K. O’Higgins, Judges,
Registrar: E. Coulon,
makes the following
Order
Facts, procedure and forms of order sought
1 By application lodged at the Registry of the General Court on 25 September 2006, the applicant, Lego Juris A/S, brought an action for the annulment of the decision of the Grand Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) of 10 July 2006 in Case R 856/2004-G, relating to an application for a declaration of invalidity lodged by Mega Brands Inc. against the registration of a red three-dimensional sign as a Community trade mark (‘the decision’).
2 By judgment of 12 November 2008 in Case T‑270/06 Lego Juris v OHIM – Mega Brands (Red Lego brick) [2008] ECR II‑3117, the General Court dismissed the action and ordered the applicant to pay the costs, in accordance with Article 87(2) of the Rules of Procedure of the General Court (‘the judgment of the General Court’).
3 By application lodged at the Registry of the Court of Justice on 2 February 2009, the applicant brought an appeal against the judgment of the General Court registered as Case C‑48/09 P.
4 By letter of 2 December 2009, the intervener, Mega Brands Inc., requested the applicant to pay its costs, estimated at EUR 282 000. That amount included the costs of legal representation by the intervener’s lawyers, of two outside counsel, the expert’s fees and the travel costs incurred by an employee of the intervener in the context of the proceedings before OHIM.
5 In order to avoid the necessity for taxation of costs proceedings, the applicant, by letter of 10 December 2009, offered to pay the amount of EUR 20 550 to the intervener. Following the rejection of its offer by the intervener, the applicant, by letter of 18 December 2009, offered to pay it an amount of EUR 25 550.
6 By letter of 18 January 2010, the intervener refused the second offer made by the applicant and stated that, in the absence of agreement between the parties, it intended to apply for taxation of costs before the General Court.
7 By application lodged at the Registry of the General Court on 8 February 2010, the intervener applied, under Article 92(1) of the Rules of Procedure, for the taxation of costs and requested the General Court to fix the costs to be recovered from the applicant at EUR 293 885.31. It claims that that amount corresponds to the costs relating to the proceedings before the Grand Board of Appeal of OHIM, assessed at EUR 99 890.57, to the proceedings before the General Court, assessed at EUR 173 994.74 and, finally, to the present taxation of costs proceedings, estimated at EUR 20 000.
8 By written pleading lodged at the Registry of the General Court on 26 March 2010, the applicant presented its observations on that request. It claimed that the General Court should fix the amount of recoverable costs at between EUR 6 000 and EUR 13 000.
9 By decision of the Eighth Chamber of 25 June 2010, the parties were questioned about a possible stay of the proceedings under Article 77(d) of the Rules of Procedure, pending the judgment of the Court of Justice in Case C‑48/09 P. They presented their observations within the prescribed period.
10 By judgment in Case C‑48/09 P Lego Juris v OHIM [2010] ECR I‑0000, the Court of Justice dismissed the appeal against the judgment of the General Court.
11 Following the modification of the composition of the Chambers of the General Court, the Judge-Rapporteur was assigned to the Fifth Chamber, to which this case was therefore assigned.
Law
Arguments of the parties
12 The intervener contends that the amount of the costs claimed is justified on the basis of the subject-matter of the proceedings, their significance for Community law, the difficulties presented by the case, the amount of work carried out by its representatives and the economic interests which the dispute represents for the parties.
13 With regard, first, to the subject-matter of the proceedings, it states that its position seeking the annulment on the basis of Article 7(1)(e)(ii) of Regulation (EC) No 40/94 (now Article 7(1)(e)(ii) of Regulation (EC) No 207/2009), of the registration of the three-dimensional Community trade mark obtained by the applicant for ‘construction games’ in Class 28, was confirmed by the Cancellation Division, the Grand Board of Appeal of OHIM, the General Court, and by the Opinion of Advocate General Mengozzi in Case C‑48/09 P.
14 With regard, secondly, to the significance of the case for Community law, it contends that it sets an important precedent for all three-dimensional trade mark applications and registrations. Furthermore, it contends that the judgment in Case C‑48/09 P is highly significant for Community case-law, in the same way as the judgment in Case C‑299/99 Philips [2002] ECR I‑5475 (‘the Philips judgment’). The judgment of the General Court is, moreover, currently taught in numerous European universities and is of interest to the press.
15 With regard, thirdly, to the amount of work relating to that case, it notes that, although, according to the case-law of the General Court, it is not necessary to rule on the costs incurred in proceedings before OHIM since they have already being fixed by the decision of the Board of Appeal, the amount which was granted to it on the basis of OHIM’s fixed fee-scales would not adequately compensate for the costs actually incurred, having regard to the fact that a significant amount of the factual and technical analysis relating to the present case was carried out in those proceedings.
16 Furthermore, the intervener considers that the work carried out by its lawyers greatly influenced the proceedings and decision of the Grand Board, and the judgment of the General Court. In that regard, it contends that the Grand Board of Appeal of OHIM took into consideration, in its decision, the argument developed by the intervener’s lawyers in the context of observations submitted on 15 June 2008 concerning the relevance of patents previously held by the applicant; that it based its decision on the evidence of an expert of the intervener, and that it referred to national decisions delivered in the context of litigation between the parties. Likewise, the General Court relied on the earlier patents, the expert’s report, the national decisions and the arguments put forward by the intervener concerning the interpretation of Article 7(1)(e)(ii) of Regulation No 40/94 and the role of the consumer in the functionality analysis.
17 Fourthly, having regard to the financial interests that the litigation represents for the intervener, it contends that the proceedings at issue are crucial for the commercial development of the construction brick within the European Union and that it achieves an annual turnover in the construction brick business of at least EUR 50 million.
18 The applicant claims that, taking into account the purpose of the action, and in the light of the criteria for the fair assessment of the recoverable costs developed by the case-law and relied upon by the applicant, the amount of costs claimed by the intervener is excessive and disproportionate. It suggests that the amount of recoverable costs be fixed in accordance with the settled case-law relating to recoverable costs concerning Community trade marks, at an amount between EUR 6 000 and EUR 13 000.
19 First, regarding the costs incurred in the proceedings before OHIM, the applicant maintains that since the amount thereof has already been fixed by the decision of the Grand Board, in accordance with Rule 94(7)(d) of Commission Regulation (EC) No 2868/95 of 13 December 1995 implementing Council Regulation (EC) No 40/94 on the Community trade mark, as amended (OJ 1995 L 303, p. 1), there is no need for the General Court to rule on that amount. It disputes, furthermore, the intervener’s argument that the amount of those costs should be increased in the light of the fact that the factual analysis carried out during the proceedings before OHIM is said to have been used in the proceedings before the General Court. In that regard, the applicant notes that, given the fact that it is not possible to present new evidence before the General Court, the analysis carried out during the administrative procedure would always be used before the General Court. However, that does not justify the costs relating to the administrative procedure being added to the costs necessary for the proceedings before the General Court.
20 Secondly, the applicant contends that the main proceedings were not particularly complex in their purpose and nature but that they concerned normal trade mark litigation.
21 Thirdly, it claims that, contrary to the intervener’s contentions in its application for taxation, the case is of no particular importance for the purposes of Community law. It states, moreover, that in the proceedings before OHIM, the intervener maintained that the case in question was not so complex as to justify being referred to the Grand Board and that the legal questions raised by the intervener had been clarified by the Philips judgment.
22 Fourthly, the applicant states that even if the present case has a financial interest for the parties, it cannot be regarded as unusual.
23 The applicant maintains firstly, that the amount of work carried out by the representatives of the intervener is less than that of a main party because it is made easier by the submissions of the party which it supports. Secondly, it is reduced because the representatives of the intervener already have extensive knowledge of the case as they represented it in the administrative proceedings before OHIM. It asserts, moreover, that the 456.75 hours billed by the intervener’s representatives are excessive and that six lawyers and two co-counsel are not justified. That number of hours for the preparation of the action before the General Court seems to result from the fact that the intervener claims recovery of costs indirectly connected with the proceedings before the General Court, such as those for research into the procedure of the General Court, internal conferences, email correspondence, telephone conferences and research regarding the scope of review by the General Court, which are not necessary for those proceedings.
24 Finally, the applicant claims that in accordance with settled case-law there is no need to rule on the costs connected with the present proceedings and that in any event, the number of hours dedicated and the amount claimed on that basis are excessive.
Findings of the Court
25 Under Article 92(1) of the Rules of Procedure, if there is a dispute concerning the costs to be recovered, the General Court is, on application by the party concerned and after hearing the opposite party, to make an order, from which there is no appeal.
26 According to Article 91(b) of the Rules of Procedure, ‘expenses necessarily incurred by the parties for the purpose of the proceedings, in particular the travel and subsistence expenses and the remuneration of agents, advisers or lawyers’ are regarded as recoverable costs. It follows from that provision that the recoverable costs are limited, first, to those incurred for the purpose of the proceedings before the General Court and, second, which are necessary for that purpose (see Order of 25 January 2007 in Case T‑214/04 DEP The Royal County of Berkshire Polo Club v OHIM–Polo/Laurent (ROYAL COUNTY OF BERKSHIRE POLO CLUB), not published in the ECR, paragraph 13, and the case-law cited).
27 With regard to the proceedings relating to intellectual property rights, Article 136(2) of the Rules of Procedure states that ‘costs necessarily incurred by the parties for the purposes of the proceedings before the Board of Appeal and costs incurred for the purposes of the production, prescribed by the second subparagraph of Article 131(4), of translations of pleadings or other documents into the language of the case’ are also regarded as recoverable costs.
28 Furthermore, it should be noted that the Community Courts are not empowered to tax the fees payable by the parties to their own lawyers, but may determine the amount of those fees to be recovered from the party ordered to pay the costs. When ruling on an application for taxation of costs, the General Court is not obliged to take account of any national scale of lawyers’ fees or any agreement in that regard between the party concerned and his agents or advisers (see Order of the General Court in Case T‑342/99 DEP Airtours v Commission [2004] ECR II‑1785, paragraph 17, and the case-law cited).
29 It has also consistently been held that, in the absence of Community provisions laying down fee-scales, the Community Courts must make an unfettered assessment of the facts of the case, taking into account the purpose and nature of the proceedings, their significance from the point of view of Community law as well as the difficulties presented by the case, the amount of work generated by the proceedings for the agents and advisers involved and the financial interests which the parties had in the proceedings (see Order of the General Court in Airtours v Commission, paragraph 18 and Order of 17 July 2007 in Case T‑8/03 DEP El Corte Inglés v OHIM PUCCI (EMILIO PUCCI), not published in the ECR, paragraph 15).
30 Furthermore, it must be borne in mind that the primary consideration of the Court is the total number of hours of work which may appear to be objectively necessary for the purpose of the proceedings before the Court, irrespective of the number of lawyers who may have provided the services in question. In that regard, the ability of the Court to assess the value of work carried out is dependent on the accuracy of the information provided (see Order in Airtours v Commission, paragraph 30, and the case-law cited).
31 The amount of the recoverable costs in the present case must be assessed in the light of those considerations.
32 It follows from the detailed breakdown of the costs incurred by the intervener set out as a table in Annex 1 to its application for taxation, that they include: the fees of three lawyers for the proceedings before OHIM and five lawyers for the proceedings before the General Court, to which are added the fees of two outside counsel, Mr C. of the law firm Bennett Jones, established in Canada, and Mr N. of the law firm Boehmert & Boehmert, established in Germany, the fees of an expert, intervening in the proceedings before OHIM, the travelling costs of an employee of the intervener in the proceedings before OHIM, and the costs relating to the present taxation of costs proceedings. The intervener also annexed 44 invoices and fee notes to the abovementioned table, dated from 16 September 2004 to 31 January 2009.
The costs relating to the proceedings before the Grand Board of Appeal of OHIM
33 With regard to the intervener’s request that the applicant be ordered to pay the costs which it incurred before the Grand Board of Appeal, it should be noted that the Board of Appeal fixed, in paragraph 2 of the operative part of its decision, the amount of those costs. It thus ordered the applicant to bear the costs of the intervener’s representation in the appeal in the sum of EUR 550 and fixed at EUR 1 000 the amount that the applicant should pay in the form of taxes and fees of the cancellation proceedings.
34 Following the General Court’s rejection of the action brought by the applicant, which was confirmed by the Court of Justice, the decision became final.
35 However, it follows from the wording of Article 86 of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1) that ‘any final decision of the Office fixing the amount of costs shall be enforceable’.
36 It follows that there is no need to rule on the costs before OHIM since they have already been fixed in the decision, which is enforceable and which the intervener can therefore have enforced against the applicant (Order of 9 November 2009 in Case T‑325/06 DEP Boston Scientific v OHIM–Terumo (CAPIO), not published in the ECR, paragraphs 21 to 24).
The costs relating to the proceedings before the General Court
37 With regard to the costs relating to the proceedings before the General Court, it should be noted that the lawyers principally involved are two partners and three assistants whose tasks include the consideration and drafting of written pleadings, the drafting of letters on behalf of the intervener, correspondence with the Registry of the General Court, the client and in-house, factual and legal research and the preparation for and participation at the hearing. The costs have been estimated at EUR 148 149.
38 It is necessary to examine, in the light of the purpose and nature of the litigation, its significance for Community law, the complexity and problems of the case, the financial interest that it represents, and the amount of work carried out, whether the assessment of the costs claimed is justified.
39 First, with regard to the purpose and nature of the main litigation, it should be noted that that litigation concerned the registration of a three-dimensional trade mark and, in particular, the interpretation of Article 7(1)(e)(ii) of Regulation (EC) No 40/94 relating to absolute grounds for refusal to register signs which consist exclusively of the shape of a product which is necessary to obtain a technical result.
40 In that regard, it should be noted that the Court of Justice had to interpret, in the Philips judgment, the second indent of Article 3(1)(e) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (OJ 1988 L 40, p. 1), whose legislative content is identical with that of Article 7(1)(e)(ii) of Regulation (EC) No 40/94. The interpretation of the second indent of Article 3(1)(e) of First Directive 89/104/EEC by the Philips judgment could therefore be applied, by analogy, to the present case, both by the Grand Board of Appeal of OHIM and by the General Court, which relied on the criteria set out in that judgment to answer the technical and legal questions raised by the present litigation.
41 It follows that it is necessary to qualify the significance for Community law, as well as the difficulties encountered in the present case, invoked by the intervener.
42 It should be noted in that regard that the intervener does not invoke any specific argument concerning the complexity of the case. It emphasises essentially the importance of the case as a precedent as far as concerns applications for registration of three-dimensional trade marks and states that the judgment of the General Court is taught in several European universities. Such a fact cannot suffice in order to grant the amount claimed, in the light of the considerations set out in paragraphs 40 and 41 of this order.
43 Secondly, with regard to the amount of work the litigation proceedings were able to generate for the intervener’s representatives, it is for the Community Court to take into account the work objectively required for the whole of the judicial proceedings (see Order in Airtours v Commission, paragraph 30, and the case-law cited).
44 In the present case, the fee notes produced as Annexes 1.21 to 1.40 to the application for taxation, in which the intervener’s lawyers assessed their own fees, are not by themselves essential for the calculation of the recoverable costs (see, to that effect, Order in EMILIO PUCCI, paragraph 20).
45 Moreover, the intervener’s representatives already had extensive knowledge of the case as they had represented it throughout the administrative procedure. That factor, in part, facilitated the work of those representatives and reduced the time which had to be devoted to preparation of the application (see, to that effect, Order in Airtours v Commission, paragraph 29, and the case-law cited).
46 It follows from the case-law that the work carried out in the context of the proceedings before the Board of Appeal reduces the amount of work carried out before the General Court and, consequently, the amount which can be recovered for that purpose (see, to that effect, Order of 19 April 2004 in Case T‑321/01 DEP InternationalerHilfsfonds v Commission, not published in the ECR, paragraph 29; and Order in ROYAL COUNTY BERKSHIRE POLO CLUB, paragraph 20).
47 On the other hand, the argument relied upon by the applicant that an intervener’s workload is lighter than that of a main party is not relevant, where it is not disputed, concerning cases relating to Community trade mark proceedings, that the interveners have not merely supported the form of order sought by OHIM, but fully participated in the proceedings by submitting various written pleadings and by taking part in the hearing (Order of 28 September 2009 in Case T‑420/03 DEP El Corte Inglés v OHIM-Abril Sánchez and Ricote Saugar (BOOMERANG), not published in the ECR, paragraph 20).
48 In the present case, in the main proceedings, the intervener lodged at the Court Registry on 7 November 2006 observations concerning the language of the case, on 29 January 2007 a response of 48 pages and, on 11 June 2007 an order of the German Federal Trade Mark Court and the translation thereof into the language of the case. It was also requested to lodge observations on the order of the Regional Court of Budapest of 12 July 2007 produced by the applicant. Finally, it participated in the hearing before the General Court.
49 In that respect, the intervener’s representatives, in particular, undertook research relating to the procedure and scope of review by the General Court, held telephone and internal conferences and entered into email correspondence, both with their client and between themselves and the intervener’s outside counsel. In that regard, it should be noted that the abovementioned activities essentially concerned the drafting of the response and identifying the relevant case-law concerning three-dimensional trade marks. Therefore, the applicant’s argument that the fees relating thereto are not necessary, in the light of the fact that they are not directly connected with the proceedings before the General Court, cannot succeed. Such fees can be regarded as necessary to the preparation of the written pleadings and the hearing before the General Court, on condition that they are clearly connected with the proceedings (see, to that effect, Order of 12 December 2008 in Case T‑417/05 DEP Endesa v Commission, not published in the ECR, paragraph 48).
50 It should be noted, moreover, that although the rate of fees invoiced by the intervener’s lawyers seems rather reasonable, the number of hours billed seems disproportionate. Taking a high rate of fees into account appears appropriate only in order to pay for the services of professionals who are able to work quickly and efficiently and must have, as a counterpart, a strict assessment of the total number of work hours necessary for the proceedings before the Court (see, to that effect, Order of 17 October 2008 in Case T‑33/01 DEP Infront WM v Commission, not published in the ECR, paragraph 31, and the case-law cited; and Order of 22 March 2010 in Case T‑93/06 Mülhens v OHIM–Spa Monopole (MINERAL SPA), not published in the ECR, paragraph 22).
51 In the present case, and as claimed by the applicant, the number of hours dedicated to the proceedings before the General Court, namely 456.75 hours, including, in particular, 211.75 hours for the drafting of the pleadings submitted by the intervener and 129.75 hours for the preparation of the hearing, is almost twice the number of hours dedicated to the proceedings before OHIM, namely 237 hours, which cannot be justified by the necessity to respond to the application, which raises only one plea. Furthermore, even though the documents annexed to the application were particularly long, essentially they consisted of observations submitted by the applicant in the context of the invalidity proceedings before OHIM, which the intervener was able to consult during those proceedings. Finally, it should be noted that in its response, which, admittedly, is long, the intervener repeats the arguments presented in the proceedings before OHIM.
52 It must be concluded that for a case relating to intellectual property litigation, involving only one set of pleadings, such an invoice seems clearly excessive. Although it cannot be excluded that the interpretation of the contested provision in the light of the Philips judgment involved a certain legal difficulty, it is nevertheless the case, as was noted in paragraph 45 of this order, that the work of the intervener’s representatives in the context of the proceedings before the General Court was made easier by that carried out during the proceedings before OHIM.
53 Next, with regard to the question as to whether the use of several lawyers and counsel can be justified, it should be noted that, in principle, the remuneration of only one lawyer is recoverable unless, depending on the individual circumstances of the case, and most importantly, its complexity, the involvement of several lawyers proves to be necessary (Order in Case C‑104/89 DEP Mulder and Others v Council and Commission [2004] ECR I‑1, paragraph 62 and the case-law cited; and Order of 9 January 2008 in Case C‑04/05 P-DEP Pucci v El Corte Inglés, not published in the ECR, paragraph 18).
54 In the present case, the complexity of the case does not justify the use of five representatives, assisted by two outside counsel. Furthermore, the fact that two partners performing identical functions were involved, assisted therein by three colleagues, gave rise to not only excessive costs, in the light of the higher level of fees charged by the partners, but also led to a duplication of the tasks and work carried out (see, to that effect, Order of 25 November 2009 in Case T‑383/03 DEP Hynix Semiconductor v Council, not published in the ECR, paragraph 49 and the case-law cited).
55 Likewise, the use of two outside counsel is not justified, given that they seem to have simply assisted the intervener’s representatives in carrying out their tasks. Furthermore, although the fee notes submitted by those lawyers include an indication of the documents drafted and the steps taken, they do not indicate the time spent or the hourly rate for each item referred to and do not allow for an effective assessment of the amount of work actually carried out. However, the lack of more detailed information on that point makes it especially difficult to verify precisely the costs incurred for the proceedings before the Court and those which were necessary for that purpose, and requires the Court to apply a strict test when assessing the fees recoverable in this case (see Order of 19 March 2009 in Joined Cases T‑333/04 and T‑334/04 House of Donuts v OHIM–Panrico (House of donuts), not published in the ECR, paragraph 20, and the case-law cited).
56 In any event, in the light of the nature and lack of difficulties raised by that case at the stage of the proceedings before the General Court, the costs claimed as fees of representation, and various fees and expenses incurred by the intervener’s outside counsel, cannot in any event be regarded as necessary for the purposes of those proceedings.
57 The recovery from the applicant of costs relating to the period after the oral procedure must also be refused. It should be noted that no step in the procedure was taken after 11 June 2008, the date of the hearing, since the judgment was reserved. In those circumstances, the costs incurred by the intervener after that date do not appear to be directly connected with its intervention before the General Court and cannot, consequently, be regarded as fees necessary for the purposes of the proceedings within the meaning of Article 91 of the Rules of Procedure (see, to that effect, Order in Endesa v Commission, paragraph 38).
58 Finally, the fees and expenses of the intervener’s representatives include the costs of photocopies and reproduction, telephone calls, the sending of letters and parcels to the Registry of the General Court and to the client, and the costs of travelling to Luxembourg and amount to EUR 4 631.50. In the light of the fact that the majority of those costs relate to photocopies and the reproduction in colour of several documents the nature of which is not specified, it must be held that the amount thereof is excessive. Consequently, those costs should be reduced to EUR 1 000.
59 Thirdly, it should be noted that, although the intervener has a certain financial interest in the present case, in the absence of concrete evidence adduced by the intervener, that financial interest cannot be considered to be unusually significant (see Order in CAPIO, paragraph 14).
60 Accordingly, the fees recoverable by the intervener’s representatives as fees of representation can be assessed on an equitable basis at EUR 30 000.
61 It is necessary to add to that amount the various costs and expenses of the intervener’s lawyers fixed at EUR 1 000.
62 In the light of all the foregoing considerations and without needing to rule on the costs incurred for the purposes of the present procedure (see, to that effect, Order in Mulder and Others v Council and Commission, paragraph 87; and Order in Endesa v Commission, paragraph 54), the General Court considers that the fees recoverable by the intervener in respect of the proceedings before the General Court can be assessed on an equitable basis at EUR 31 000, which takes into account all the circumstances of the case up to the adoption of the present order.
On those grounds,
THE GENERAL COURT (Fifth Chamber)
hereby orders:
The total amount of costs to be paid by Lego Juris A/S to Mega Brands Inc. is fixed at EUR 31 000.
Luxembourg, 2 December 2010.