JUDGMENT OF THE GENERAL COURT (Sixth Chamber)
28 June 2012 (*)
(Community trade mark – Word mark COOK’S – Failure to apply for renewal of the mark – Cancellation of the mark upon expiry of the registration – Application for restitutio in integrum – Article 81 of Regulation (EC) No 207/2009)
In Case T‑314/10,
Constellation Brands, Inc., established in Fairport (United States of America), represented by B. Brandreth, Barrister,
applicant,
v
Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by D. Botis and V. Melgar, acting as Agents,
defendant,
ACTION brought against the decision of the First Board of Appeal of OHIM of 29 April 2010 (Case R 1048/2009-1) in so far as it dismissed the application for restitutio in integrum,
THE GENERAL COURT (Sixth Chamber),
composed of H. Kanninen (Rapporteur), President, N. Wahl and S. Soldevila Fragoso, Judges,
Registrar: T. Weiler, Administrator,
having regard to the application lodged at the Registry of the General Court on 19 July 2010,
having regard to the response lodged at the Registry of the General Court on 19 October 2010,
further to the hearing on 19 April 2012,
gives the following
Judgment
Background to the dispute
1 Following an application on 22 September 1998 by the applicant for the registration of a Community trade mark at the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) under Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), as amended (replaced by Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1)), OHIM registered the word mark COOK’S (‘the trade mark’) on 22 December 1999.
2 On 25 February 2008, OHIM notified the firm Boult Wade Tennant (‘BWT’), the applicant’s representative before OHIM, that the trade mark was due for renewal on 22 September 2008, that the request for the renewal of the trade mark had to be made and the renewal fee paid by 30 September 2008 and that upon payment of an additional fee, that deadline could be extended to 31 March 2009.
3 In letters dated 1 May, 1 July and 1 August 2008, BWT informed the applicant of the imminent expiry of the registration of the trade mark.
4 On 12 August 2008, the applicant’s American agent wrote to BWT to inform himself of the costs and documentation required to effect renewal of the trade mark. BWT responded by email on 13 August 2008. On the same day, also by email, the applicant’s American agent instructed BWT to renew the trade mark.
5 On 21 April 2009, OHIM informed BWT of the expiry of the relevant deadline and of the subsequent removal of the trade mark from the Community trade mark register, which had become effective as of 22 September 2008.
6 On 27 April 2009, the applicant’s American agent inquired with BWT about the renewal of the trade mark.
7 On 22 June 2009, BWT filed a request for restitutio in integrum in accordance with Article 81 of Regulation No 207/2009.
8 On 8 July 2009, the Trade Marks and Register Department of OHIM rejected the application for restitutio in integrum and confirmed the cancellation of the trade mark, on the ground that BWT had failed to show that it had exercised all due care required by the circumstances.
9 On 7 September 2009, the applicant filed an appeal before OHIM against the decision of the Trade Marks and Register Department of 8 July 2009.
10 In a decision of 29 April 2010 (the ‘contested decision’), the First Board of Appeal of OHIM rejected the appeal, finding that BWT had failed to show that it had exercised ‘all due care required by the circumstances’ within the meaning of Article 81(1) of Regulation No 207/2009. It stated first that the provisions of Article 81(1) of Regulation No 207/2009 ‘must be strictly construed since the observance of a time-limit is a matter of public policy’. Therefore, according to the Board of Appeal, ‘even though absolute impossibility is not required, that provision does require abnormal difficulties which are independent of the will of the person concerned and which are apparently inevitable even if all due care is taken’. According to the Board of Appeal, the circumstances invoked by BWT, namely a human error and a corruption in the back-up computer system, cannot be regarded as abnormal and inevitable within the meaning of Article 81(1) of Regulation No 207/2009. In that regard, the Board of Appeal stated, first, that, in spite of the applicant’s instructions to BWT to renew the registration of the mark, the manager of BWT’s ‘Renewals’ department failed to acknowledge receipt of those instructions and to give instructions to its administrative staff for the purpose of that renewal. The Board of Appeal stated, secondly, that the applicant only reacted eight months later, namely on 27 April 2009, when it found out on the OHIM website that the trade mark had not been renewed. Given that it had given instructions to BWT for the renewal of the registration of the trade mark and that it had received neither acknowledgement of receipt of those instructions, nor confirmation that the renewal had been made, nor any invoice, the Board of Appeal took the view that it ‘should have reacted earlier’. It found, thirdly, that BWT did not explain how emails are managed in its office or why nobody noticed that the applicant’s email of 13 August 2008 remained unanswered. The Board of Appeal found, fourthly, that BWT relied only on one computer system, supplied by the company CPA, and that this was not ‘an isolated or inexplicable case of errors by CPA but rather a severe internal problem’. The Board of Appeal considered, fifthly, that BWT had ignored OHIM’s letter of 25 February 2008. However, according to the Board of Appeal, if the deadline of 30 September 2008 stipulated in that letter had been entered into the computer system, the omission of BWT’s Renewals Manager would have been noticed, despite the corruption of the computer system.
Forms of order sought
11 The applicant claims that the General Court should:
– annul the contested decision;
– refer the case back to OHIM, asking it to grant the request for restitutio in integrum;
– order OHIM to pay the costs incurred by the applicant before the Board of Appeal and before the General Court.
12 OHIM contends that the General Court should:
– dismiss the action;
– order the applicant to pay the costs.
Law
13 The applicant relies on a single plea alleging infringement of Article 81 of Regulation No 207/2009. That plea is in two parts. In the first part, the applicant claims that the Board of Appeal incorrectly interpreted Article 81 of Regulation No 207/2009. In the second part, the applicant claims that the Board of Appeal made an error in its assessment of the facts of the case by finding that the applicant and BWT had failed to show that they had exercised all due care required by the circumstances within the meaning of Article 81(1) of Regulation No 207/2009.
Regarding the first part alleging an error made in the interpretation of Article 81 of Regulation No 207/2009
14 The applicant states, first, that, according to Article 81(1) of Regulation No 207/2009, restitutio in integrum is subject inter alia to the condition that the party acted with all due care required by the circumstances. However, by referring, in paragraph 12 of the contested decision, to ‘abnormal difficulties’ ‘independent of the will’ and ‘apparently inevitable’ the Board of Appeal gave a strict interpretation of the words ‘due care required by the circumstances’ in Article 81 of Regulation No 207/2009, which that provision does not require. According to the applicant, such an interpretation is incorrect in so far as it borrows from the wording used by the Court in order to define the concept of force majeure (Case 284/82 Acciaierie e Ferriere Busseni v Commission [1984] ECR 557).
15 OHIM disputes the applicant’s arguments.
16 In the words of Article 81(1) of Regulation No 207/2009, ‘the applicant for or proprietor of a Community trade mark or any other party to proceedings before [OHIM] who, in spite of all due care required by the circumstances having been taken, was unable to comply with a time limit vis-à-vis [OHIM] shall, upon application, have his rights re-established if the obstacle to compliance has the direct consequence, by virtue of the provisions of this Regulation, of causing the loss of any right or means of redress.’
17 It is apparent from that provision that restitutio in integrum is subject to two requirements, the first being that the party has exercised all due care required by the circumstances, and the second that the non-observance by the party has the direct consequence of causing the loss of any right or means of redress (Judgment of 20 April 2010 in Case T-187/08 Rodd & Gunn Australia v OHIM (Representation of a dog), not published in the ECR, paragraph 28; and Case T‑271/09 Prinz Sobieski zu Schwarzenberg v OHIM – British-American Tobacco Polska (Romuald Prinz Sobieski zu Schwarzenberg) [2011] ECR II-0000, paragraph 53).
18 It is also apparent from Article 81(1) of Regulation No 207/2009 that the obligation to exercise due care falls in the first instance on the applicant or the proprietor of a Community trade mark or on any other party to a procedure before OHIM. However, if those persons are represented, the representative is subject to the requirement to exercise due care just as much as those persons. Since that person acts on behalf of and in the name of the applicant or proprietor of a Community trade mark or any other party to a procedure before OHIM, its actions must be regarded as being the actions of those people (see, to that effect, Case T‑136/08 Aurelia Finance v OHIM (AURELIA) [2009] ECR II-1361, paragraphs 14 and 15; and Romuald Prinz Sobieski zu Schwarzenberg, paragraph 54).
19 It must then be observed that the words ‘all due care required by the circumstances’ require a system of internal control and monitoring of time-limits to be put in place that generally excludes the involuntary non-observance of time‑limits, as laid down in the OHIM guidelines. It follows that restitutio in integrum may be granted only in the case of exceptional events, which cannot therefore be predicted from experience (see, to that effect, AURELIA, paragraph 26; and Romuald Prinz Sobieski zu Schwarzenberg, paragraph 61).
20 Therefore, the fact that the Board of Appeal stated in paragraph 12 of the contested decision that, ‘even though absolute impossibility is not required, that provision does require abnormal difficulties which are independent of the will of the person concerned and which are apparently inevitable even if all due care is taken’ does not permit the inference that the Board of Appeal committed an error in the present case in its interpretation of Article 81 of Regulation No 207/2009.
21 In that regard, as OHIM rightly states, paragraph 12 of the contested decision cannot be read separately from the other paragraphs of the contested decision. However, it is relevant that the Board of Appeal held in paragraph 18 of the contested decision that ‘restitutio in integrum can be grounded if in spite of all due diligence, the representative himself or his clerical staff commits an excusable error or if unforeseeable events occur’.
22 It must also be noted that the applicant confines itself to abstract considerations without stating in what way the Board of Appeal in the present case actually gave a strict interpretation of Article 81(1) of Regulation No 207/2009 which was inconsistent with the case-law. In particular, the applicant does not state how the use of the expression ‘exceptional events’ rather than ‘abnormal difficulties’ or of the expression ‘unforeseeable events’ rather than ‘difficulties which are independent of the will of the person concerned and which are apparently inevitable’ show that the Board of Appeal departed from the correct interpretation of Article 81(1) of Regulation No 207/2009.
23 In light of the above, the mere statement made by the applicant that the Board of Appeal used the same wording in the contested decision as that in the judgment of the Court of Justice of 9 February 1984, cited in paragraph 14 above, in the part relating to the definition of force majeure is irrelevant.
24 The first part of the plea must therefore be rejected.
The second part alleging an erroneous assessment of the facts
25 The applicant is essentially claiming that the Board of Appeal made an error in its assessment of the facts of the case by finding that it and BWT had failed to show that they had exercised all due care required by the circumstances within the meaning of Article 81(1) of Regulation No 207/2009.
26 OHIM disputes the applicant’s arguments.
27 It must firstly be stated that it is apparent from the documents in the case that the non-observance of the time-limit for renewing the trade mark was the result of both a human error and a corruption in the Inprotech computer system. That finding is not disputed between the parties.
28 As regards firstly the error made by BWT’s renewals manager, it must be observed that human errors made during the technical management of renewals cannot be regarded as exceptional events which cannot be predicted from experience (see, to that effect, AURELIA, paragraph 28). Therefore, the error made by BWT’s renewals manager constitutes a failure to comply with the obligation to exercise due care which lay with BWT. In that connection, the applicant states in its application that ‘the failure of the renewals manager to pass on the instructions for renewal was part of the chain of events that lead to the failure to renew’.
29 Next, as regards the corruption in the Inprotech computer system, the General Court has already held that, where the renewal of trade marks is entrusted to a specialist firm which uses a computerised renewal reminder system, the due care required by the circumstances demands, first, that the overall design of the system should ensure that time-limits are adhered to; second, that the system should be capable of detecting and correcting any foreseeable error in both the performance of the tasks of the specialist firm’s staff and the functioning of the computerised system; and third, that the staff of the specialist firm responsible for inputting the required data and using the system should be adequately trained, required to check their operations and supervised (see, to that effect, AURELIA, paragraph 27).
30 However, in the present case, it must be noted that, as an explanation for the corruption in the computer system used by BWT, the applicant states in the application that that system ‘had become corrupted creating a programming error that prevented the reminder emails from being generated’ and classifies that corruption of the computer system as being ‘unforeseeable’ and ‘exceptional’. The applicant gives no more explanations in that regard to clarify whether or not the corruption in question constitutes a foreseeable risk which is inherent in any computer system.
31 As a consequence, it must be held that the applicant has not shown that BWT exercised all due care required by the circumstances within the meaning of Article 81(1) of Regulation No 207/2009.
32 That conclusion cannot be affected by the alleged manifest errors of assessment made by the Board of Appeal in paragraphs 24 to 27 of the contested decision.
33 As regards, firstly, paragraph 24 of the contested decision, the applicant disputes the allegation that the applicant’s American agent ‘should have reacted’ before 27 April 2009.
34 It must be noted, first, that the applicant’s American agent asked BWT by email on 13 August 2008 to renew the registration of the trade mark and that he only inquired with BWT about the renewal of that trade mark on 27 April 2009, that is to say, more than eight months later. It must then be noted that the applicant did not give convincing explanations in its pleadings or at the hearing as to the failure of the applicant’s agent to act for several months. However, having received from BWT, following his application to renew the trade mark, neither any acknowledgement of receipt of his application nor confirmation that the renewal of the trade mark had been made, as the Board of Appeal correctly states in paragraph 24 of the contested decision, the applicant’s American agent could have made enquiries at an earlier stage about the state of progress of the procedure to renew the trade mark.
35 In addition, the applicant claims that it exercised all due care required in so far as it entrusted a reputable and experienced firm of Trade Mark Attorneys with the the renewal of its trade mark and in so far as the American agent addressed the application for renewal of the trade mark to BWT’s renewals manager. Those considerations are not, however, capable of explaining why the applicant or its agent waited until 27 April 2009 to inquire with BWT about the renewal of the trade mark.
36 Secondly, as regards paragraph 25 of the contested decision, the applicant disputes the observation of the Board of Appeal that it is not clear how emails, and in particular the email of 13 August 2008 in which the applicant applied for the renewal of the trade mark, are treated within BWT. According to the applicant, a procedure to renew trade marks was created within BWT, as is apparent from the written witness statement of Mr J. W., a member of BWT.
37 It must firstly be stated that it is not apparent from paragraph 25 of the contested decision that the Board of Appeal is complaining about the lack of clarity in the renewal procedure created within BWT. Rather, it is apparent from paragraph 25 of the contested decision that BWT ‘does not explain how the emails are managed in his office and the fact that the email [from the applicant on 13 August 2008] was left without response’.
38 However, in that regard, the applicant confines itself to stating in its application that, while it did not give an explanation regarding the management of emails by BWT and in particular regarding the error made by BWT’s renewals manager who disregarded the renewal application made by the applicant’s agent, that was because the ultimate cause of the failure to renew the trade mark was not the human error of BWT’s renewals manager but the corruption in the computer system. The applicant does not thereby prove that the statement of the Board of Appeal in paragraph 25 of the contested decision is incorrect.
39 As for the applicant’s argument that BWT cannot be blamed for not having checked with OHIM whether the trade mark had been renewed since there was no expectation within BWT that the trade mark should be renewed, it must be held that the applicant cannot rely on the error of BWT’s renewals manager to infer that BWT did not know that the trade mark should be renewed.
40 Thirdly, as regards paragraph 27 of the contested decision, the applicant disputes the observation of the Board of Appeal that BWT ‘ignored the … letter [of OHIM] sent on 25 February 2008 giving him a deadline to submit the request and pay the fees’ since, ‘should this important deadline ha[ve] been entered into the computer system of [BWT], … the omission of the Renewals Manager would have been noticed, even with the computer system … corrupted’.
41 According to the applicant, the date of 30 September 2008 mentioned in OHIM’s letter of 25 February 2008 was entered into BWT’s computer system, as shown by the sending of warning letters on 1 May, 1 July and 1 August 2008 by BWT to the applicant.
42 However, even supposing that the Board of Appeal made an error of assessment in paragraph 27 of the contested decision in stating that the date of 30 September 2008 had not been entered into BWT’s computer system, it cannot be considered that the finding in paragraph 31 above that BWT did not exercise all due care required by the circumstances is thereby called into question. The applicant does not adduce evidence to show how the entering of the date of 30 September 2008 into BWT’s computer system would be capable of casting doubt upon the failure of BWT’s renewals manager to comply with the requirement to exercise due care or of proving the exceptional nature of the corruption in the computer system.
43 Finally, the applicant disputes the statement of the Board of Appeal in paragraph 26 of the contested decision that ‘it seems that [BWT] relies only on one system, Inprotech, tailored partly by CPA and partly in house’ and that ‘this is not an isolated or inexplicable case of errors by CPA but rather a severe internal problem’.
44 As a preliminary point, it must be observed that BWT uses a computerised Renewals system called Inprotech and supplied by CPA.
45 The applicant is essentially claiming that the decisions of the Boards of Appeal cited in paragraph 26 of the contested decision provide no ground for inferring that CPA has a ‘severe internal problem’. The applicant relies on several arguments in that regard.
46 First, the applicant claims that the failure of the computer system is not in its design but is the result of its subsequent and unforeseeable corruption. However, it does not substantiate that argument with specific facts capable of establishing the truth of its statement. As OHIM rightly points out, the lack of detailed explanations as to what exactly the computer error consisted of cannot exclude the possibility that the system had inherent design flaws.
47 The applicant also claims that the mere fact that CPA lodged applications for restitutio in integrum in the past does not demonstrate the existence of a ‘severe internal problem’. The applicant states that the errors made by CPA were not linked to the Inprotech computer system in the decisions of the Boards of Appeal cited in the contested decision.
48 It must be held, however, that, regardless of the question of whether the corruptions in the Inprotech computer system were also mentioned in the decisions of the Boards of Appeal, the applicant does not succeed in refuting the statement of the Board of Appeal that the applicant has not established how the corruption in the computer system in the present case ought to be regarded as exceptional.
49 It follows from the above that the second part of the plea must be dismissed and therefore the action as a whole must be dismissed without it being necessary to rule on the second head of claim.
Costs
50 Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, it must be ordered to pay the costs, in accordance with the form of order sought by OHIM.
On those grounds,
THE GENERAL COURT (Sixth Chamber)
hereby:
1. Dismisses the action;
2. Orders Constellation Brands, Inc., to pay the costs.
Kanninen | Wahl | Soldevila Fragoso |
Delivered in open court in Luxembourg on 28 June 2012.
[Signatures]