JUDGMENT OF THE COURT OF FIRST INSTANCE (Fourth Chamber)

30 March 2000 (1)

(Community trade mark - The word OPTIONS - Absolute ground for refusal -Lack of distinctive character - Article 7(3) of Regulation (EC) No 40/94 -Acquisition through use in part of the Community)

In Case T-91/99,

Ford Motor Company, established in Dearborn, Michigan, United States ofAmerica, represented by A.J. Tweedale Willoughby and, at the hearing, by B.H.E.Halliday, Solicitors, London, with an address for service in Luxembourg at theChambers of Loeff, Claeys and Verbeke, 58 Rue Charles Martel,

applicant,

v

Office for Harmonisation in the Internal Market (Trade Marks and Designs)(OHIM), represented by F. López de Rego, Head of the Legal Affairs andLitigation Service, and A. Di Carlo, of that service, and, at the hearing, by A. vonMühlendahl, Vice-President responsible for Legal Affairs, acting as Agents, with anaddress for service in Luxembourg at the office of C. Gómez de la Cruz, of theLegal Service of the Commission, Wagner Centre, Kirchberg,

defendant,

APPLICATION for annulment of the decision of the Second Board of Appeal ofthe Office for Harmonisation in the Internal Market (Trade Marks and Designs)of 11 February 1999 (Case R 150/98-2) refusing registration of the word OPTIONSas a Community trade mark,

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Fourth Chamber),

composed of: V. Tiili, President, R.M. Moura Ramos and P. Mengozzi, Judges,

Registrar: G. Herzig, Administrator,

having regard to the application lodged at the Registry of the Court on 15 April1999,

having regard to the response lodged at the Registry of the Court on 13 July 1999,

further to the hearing on 2 December 1999,

gives the following

Judgment

Legal background

1.

    Article 7 of Council Regulation (EC) No 40/94 of 20 December 1993 on theCommunity trade mark, as amended (OJ 1994 L 11, p. 1), provides:

'1. The following shall not be registered:

...

(b)    trade marks which are devoid of any distinctive character;

(c)    trade marks which consist exclusively of signs or indications which mayserve, in trade, to designate the kind, quality, quantity, intended purpose,value, geographical origin or the time of production of the goods or ofrendering of the service, or other characteristics of the goods or service;

(d)    trade marks which consist exclusively of signs or indications which havebecome customary in the current language or in the bona fide andestablished practices of the trade;

...

2. Paragraph 1 shall apply notwithstanding that the grounds of non-registrabilityobtain in only part of the Community.

3. Paragraph 1(b), (c) and (d) shall not apply if the trade mark has becomedistinctive in relation to the goods or services for which registration is requested inconsequence of the use which has been made of it.‘

Background to the dispute

2.

    On 29 March 1996, the applicant filed an application for a Community trade markat the Office for Harmonisation in the Internal Market (Trade Marks and Designs)(hereinafter 'the Office‘).

3.

    The trade mark for which registration was requested is the word OPTIONS. Theservices for which registration was requested were, initially, all services included in'Class 36‘ within the meaning of the Nice Agreement concerning the InternationalClassification of Goods and Services for the Purposes of the Registration of Marksof 15 June 1957, as revised and amended. Subsequently, on 27 August 1996, thespecification was amended to read as follows: 'insurance, warranty, financing, hire-purchase and lease-purchase services‘.

4.

    By decision of 9 July 1998, the examiner refused the application under Article 38of Regulation No 40/94. The examiner based his decision on the fact that the wordOPTIONS was devoid of any distinctive character in English and French.

5.

    On 9 September 1998, the applicant filed at the Office an appeal against theexaminer's decision under Article 59 of Regulation No 40/94. The statement settingout the grounds of appeal was filed on 9 November 1998. In the grounds of itsappeal the applicant produced evidence to show that the trade mark OPTIONShad been used in the supply of the services concerned in Belgium, Denmark, theNetherlands, Portugal, Sweden and the United Kingdom. Use was not, however,claimed in respect of France.

6.

    The appeal was dismissed by decision of 11 February 1999 of the Second Board ofAppeal of the Office (hereinafter 'the contested decision‘), which was notified tothe applicant on 15 February 1999. In its decision the Board of Appeal consideredthat, even if the trade mark OPTIONS had become distinctive through use in theUnited Kingdom, as the applicant was claiming, it would not be inherentlydistinctive in France. The Board thus decided to dismiss the appeal under Article7(2) of Regulation No 40/94 and stated that use of the trade mark in France hadnot been claimed.

Forms of order sought

7.

    The applicant claims that the Court should:

-    annul the contested decision;

-    order the Office to pay the costs;

-    take any further measures which the Court deems appropriate.

8.

    The Office contends that the Court should:

-    dismiss the application;

-    order the applicant to pay the costs.

Law

Arguments of the parties

9.

    In support of its application, the applicant puts forward a single plea based oninfringement of Article 7(3) of Regulation No 40/94. It asserts that that provisionmust prevail over Article 7(2), at least where distinctiveness acquired through usecan be demonstrated in a substantial part of the European Community, includingone 'major country‘ such as, in this case, the United Kingdom.

10.

    First, the applicant accepts that, in the absence of evidence of use of the mark, amark which is descriptive in only part of the Community cannot be registered underArticle 7(1)(b) and (c) in view of the application of Article 7(2). However, itsubmits that Article 7(2) itself does not provide grounds for refusal of registration,but merely clarifies the scope of Article 7(1)(b) and (c).

11.

    Second, it claims that it is sufficient that the trade mark's distinctiveness beacquired through use in only a part of the Community for Article 7(3) to apply.Unlike Article 7(2), Article 7(3) does not merely direct the application of Article7(1)(b) and (c) but, in certain circumstances, overrules those subparagraphs.Consequently, and contrary to what seems to be the Office's practice to date, wherethere is evidence that a mark has acquired distinctiveness through use in asubstantial part of the Community, the mark must be accepted for registration.

12.

    As regards the area over which distinctive character has been acquired through use,the applicant states that neither Article 7(3) nor any other provision of RegulationNo 40/94 states that that distinctiveness must be shown throughout the Community.It is therefore sufficient that that distinctiveness be acquired in a substantial partof the Community. In the present case, that distinctiveness has been shown in theUnited Kingdom and in certain other States of the Community.

13.

    The applicant points out, in this respect, that Ford or its subsidiary companies haveregistered the trade mark OPTIONS in Ireland and the United Kingdom forservices included in 'Class 36‘ within the meaning of the Nice Agreement,mentioned above. Registration in the United Kingdom was obtained on evidenceof distinctiveness acquired in that Member State. Furthermore, a script form of themark is registered in Denmark and the United Kingdom. Finally, the word markOPTIONS is registered in the Benelux.

14.

    The applicant claims that evidence of registration of an identical trade mark in theUnited Kingdom and Ireland is in itself sufficient to overcome the objections toregistration based on Article 7(1)(b) and (c) of Regulation No 40/94.

15.

    The Office states, first, that it shares the applicant's view that Article 7(2) ofRegulation No 40/94 does not itself provide independent grounds for refusal butmerely directs the application of Article 7(1)(b) and (c) and only clarifies the scopeof those subparagraphs. However, it contends that the mere fact that the contesteddecision has cited Article 7(2) does not mean that the Board of Appeal consideredthat that provision alone constituted a ground for refusal.

16.

    The Office points out that the Board of Appeal refused registration of the trademark because of its lack of distinctiveness and its descriptiveness, groundsmentioned in Article 7(1)(b) and (c) of Regulation No 40/94 respectively. On thebasis of those considerations alone, the Board, referring to Article 7(2), concludedthat those absolute grounds for refusal - obtaining in part of the Community,namely France - were sufficient not to allow the registration requested.

17.

    Consequently, the defendant contends that the contested decision was correctlyadopted on the basis of Article 7(1)(b) and (c) of Regulation No 40/94 inconjunction with Article 7(2).

18.

    Second, the defendant contends that where the refusal of registration of aCommunity trade mark is based on the ground of lack of distinctiveness and ondescriptiveness of a trade mark in part of the Community, any challenge to thatrefusal of registration, on the ground of distinctiveness acquired through useprovided for in Article 7(3) of Regulation No 40/94, requires that acquisition ofdistinctiveness through use be demonstrated with regard to the part of theCommunity where distinctiveness was denied. If the ground for refusal existseverywhere in the Community, acquired distinctiveness must be demonstratedeverywhere in the Community.

19.

    The Office submits that otherwise the registration of a mark would amount to asignificant breach of the principle of the unitary character of the Community trademark, as expressly established in Article 1(2) of Regulation No 40/94. Thatprinciple plays a fundamental part in the Community trade mark system which isbased on a legal order which is separate and independent from the national trademark systems. In that regard, the Office also states that there are no exceptions tothe unitary character of Community trade marks in relation to absolute grounds forrefusal.

20.

    In the present case, the defendant contends that the application should bedismissed, on the ground that the applicant, first, has not claimed either acquisitionof distinctiveness or even use of the trade mark in the French-speaking parts of theCommunity and, second, accepts that the mark OPTIONS is non-distinctive and,in any event, descriptive in French and in English.

Findings of the Court

21.

    The applicant claims that where a trade mark's distinctive character has beenacquired through use in accordance with Article 7(3) of Regulation No 40/94,although that acquisition has occurred only in a substantial part of the Community,the Office has an obligation to register that mark, without having the power torefuse that registration on the basis of the rules in Article 7(1)(b), (c) and (d) and(2).

22.

    That argument cannot be accepted.

23.

    In the words of the second recital in the preamble to Regulation No 40/94, theCommunity trade mark arrangements are to enable undertakings by means of oneprocedural system to obtain Community trade marks to which uniform protectionis given and which produce their effects throughout the entire area of theCommunity, and the principle of the unitary character of the Community trademark thus stated is to apply unless otherwise provided for in that regulation. Thesame principle is set down in Article 1(2) of Regulation No 40/94 which providesthat the Community trade mark is to have 'a unitary character‘, which implies that'[i]t shall have equal effect throughout the Community‘.

24.

    Consequently, in order to be accepted for registration, a sign must possess adistinctive character throughout the Community. That requirement, enablingconsumers to distinguish the goods or services of one undertaking from those ofother undertakings in accordance with Article 4 of Regulation No 40/94, is essentialfor that sign to be able to exercise the function of a Community trade mark ineconomic life.

25.

    The principle of the unitary character of the Community trade mark is expresslyapplied in Article 7(2) of Regulation No 40/94 which provides that a trade markis not to be registered 'notwithstanding that the grounds of non-registrability [laiddown in Article 7(1)] obtain in only part of the Community‘.

26.

    Article 7(3) of Regulation No 40/94 must be read in the light of that principle.

27.

    On that basis, in order to have the registration of a trade mark accepted underArticle 7(3) of Regulation No 40/94, the distinctive character acquired through theuse of that trade mark must be demonstrated in the substantial part of theCommunity where it was devoid of any such character under Article 7(1)(b), (c)and (d) of that regulation.

28.

    In the present case, the applicant has not disputed the lack of distinctiveness of theword OPTIONS in the French language. Nor has it claimed that the trade markOPTIONS has been used in such a way that it has acquired a distinctive characterin a substantial part of the Community, in this case in France.

29.

    In those circumstances, the Office cannot be criticised for having refusedregistration of the word OPTIONS as a Community trade mark.

30.

    Accordingly, the application must be dismissed.

Costs

31.

    Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs if they have been applied for in the successful party'spleadings. Since the applicant has been unsuccessful, it must, having regard to theform of order sought by the defendant, be ordered to pay the costs.

On those grounds,

THE COURT OF FIRST INSTANCE (Fourth Chamber)

hereby:

1.    Dismisses the application;

2.    Orders the applicant to pay the costs.

TiiliMoura Ramos Mengozzi

Delivered in open court in Luxembourg on 30 March 2000.

H. Jung

V. Tiili

Registrar

President

1: Language of the case: English.