JUDGMENT OF THE COURT OF FIRST INSTANCE (Seventh Chamber)
10 December 2008 (*)
(Community trade mark – Application for a Community word mark IFS – Absolute grounds for refusal – Not descriptive – Article 7(1)(c) of Regulation (EC) No 40/94)
In Case T‑462/05,
JTEKT Corp., formerly Toyoda Koki Kabushiki Kaisha, established in Aichi-ken (Japan), represented initially by J. Wachinger and M. Zöbisch, and subsequently by M. De Zorti, M. Koch and T. Grimm, lawyers,
applicant,
v
Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by A. Folliard-Monguiral, acting as Agent,
defendant,
ACTION brought against the decision of the First Board of Appeal of OHIM of 14 September 2005 (Case R 1157/2004-1) concerning an application to register the word mark IFS as a Community trade mark,
THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Seventh Chamber),
composed of N.J. Forwood, President, D. Šváby and E. Moavero Milanesi (Rapporteur), Judges,
Registrar: C. Kantza, Administrator,
having regard to the application lodged at the Registry of the Court of First Instance on 30 December 2005,
having regard to the response lodged at the Court Registry on 9 March 2006,
further to the hearing of 13 March 2008,
gives the following
Judgment
Background to the dispute
1 On 7 May 2003, the applicant – JTEKT Corp. – filed an application for 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. The trade mark for which registration is sought is the word sign IFS.
2 The goods in respect of which registration of the mark is sought belong to Class 12 of the Nice Agreement concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks of 15 June 1957, as revised and amended. The list of goods, as set out at the time when the application was filed, corresponded to the following description: ‘Vehicles and parts thereof’. By letter of 12 October 2004, the applicant subsequently limited the list to the following: ‘Steering and power steering, both for vehicles and parts therefor, excluding independent front suspension’.
3 By decision of 23 November 2004, the OHIM examiner rejected the application for registration on the ground that the trade mark applied for was descriptive of the goods concerned for the purposes of Article 7(1)(c) of Regulation No 40/94 and devoid of any distinctive character within the meaning of Article 7(1)(b) thereof.
4 On 13 December 2004, the applicant lodged an appeal with OHIM against the examiner’s decision.
5 By decision of 14 September 2005 (‘the contested decision’), the First Board of Appeal of OHIM dismissed the appeal. It held, in substance, that, having regard to the goods concerned, registration of the word mark IFS should be refused pursuant to Article 7(1)(c) of Regulation No 40/94 on the ground that the relevant public – consisting of specialised English-speaking consumers including vendors or purchasers of motor vehicles, who are well informed and interested in the technical aspects of the construction of a vehicle – would perceive it as an acronym of the expression ‘independent front suspension’, designating an essential characteristic of the goods concerned.
Forms of order sought
6 The applicant claims that the Court should:
– annul the contested decision and allow registration of the trade mark applied for;
– in the alternative, annul the contested decision and refer the case back to the Board of Appeal of OHIM;
– order OHIM to pay the costs.
7 OHIM contends that the Court should:
– dismiss the action;
– order the applicant to pay the costs.
8 At the hearing, the applicant declared that it was withdrawing its claim that the Court should allow registration of the trade mark applied for, and formal note of that withdrawal was recorded in the minutes of the hearing.
Law
Arguments of the parties
9 In support of its action, the applicant relies in substance on two pleas in law, alleging infringement of Article 7(1)(b) of Regulation No 40/94 and Article 7(1)(c) thereof, respectively.
10 As regards infringement of Article 7(1)(c) of Regulation No 40/94, the applicant asserts that the trade mark applied for does not consist exclusively of information describing the characteristics of the goods concerned.
11 In this respect, it maintains, first of all, that there is no technical link between independent front suspension systems and steering systems. Although suspension and steering systems act on the same wheel, they are composed of different parts and have different functions. The suspension controls the vertical movement of the wheel while the steering affects the turning movement of the wheels, that is to say, on a plane perpendicular to that controlled by the suspension. That difference is clear in the minds of the relevant public, who are well aware that independent front suspension systems and steering systems fall within two separate technical fields, for which there are specialist manufacturers and suppliers.
12 The applicant submits that, in the case of the goods concerned, the relevant public is made up of undertakings or persons who purchase and use steering systems separately – for example, for the construction, repair or resale of a vehicle – and not, as the Board of Appeal wrongly found, of specialised consumers consisting of knowledgeable vendors and purchasers of motor vehicles with an interest in the more technical aspects of vehicle construction, including motor vehicle manufacturers in general.
13 Even if the definition of the relevant public formulated by the Board of Appeal were correct, such a public would be able to distinguish between independent front suspension, on the one hand, and steering systems, on the other. Consequently, that public would not perceive the sign at issue as descriptive of the goods in question or as likely to create an association of ideas between the sign and independent front suspension.
14 In addition, the applicant challenges the Board of Appeal’s argument that it is also necessary to consider the possibility that the sign IFS could come to be used to describe steering systems. There is no reason to expect IFS to be used in the future to describe such systems.
15 The applicant also pleads infringement of Article 7(1)(b) of Regulation No 40/94 owing to the fact that the definition of the relevant public and the perception by that public of the trade mark applied for was incorrect, as was the analysis of that trade mark.
16 OHIM contends, first of all, that the applicant’s arguments concerning infringement of Article 7(1)(b) of Regulation No 40/94 are inadmissible or, in the alternative, irrelevant, on the ground that the contested decision was based solely on Article 7(1)(c) of that regulation. OHIM also argues that the limitation of the list of goods covered – which originally comprised vehicles and vehicle parts – is disputable in so far as, first, such a limitation could lead to legal uncertainty as to the extent of the protection afforded by the mark applied for and, secondly, it could render the mark applied for deceptive, because the public could be led to expect the goods covered to have the characteristics of independent front suspension whereas, in actual fact, that is not the case.
17 Next, OHIM contends that the Board of Appeal correctly defined the relevant public as being composed of specialised vendors and purchasers.
18 In addition, OHIM maintains that the sign IFS, which is merely descriptive of vehicle suspension systems, cannot be distinctive for steering systems and power steering systems either, because the presence or absence of independent front suspension in a steering system and in the vehicle equipped with such a system influences the consumer’s decision at the time of purchasing. The functions of steering and power steering systems are complementary to those of independent front suspension systems since they both aim to control the movements of the wheels in order to ensure that the vehicle has safe and efficient traction. Moreover, there can be negative interference between the vertical movement of the wheels (controlled by the suspension) and the directional or lateral movement of the wheels (controlled by the steering). It follows that, for a vehicle to have efficient traction, the suspension system and the steering system must be mutually compatible, so that the movement of the wheel operated by one system is not affected by the movement operated by the other.
19 OHIM concludes that the sign IFS is descriptive of the goods in respect of which the application for registration was made since it ‘designates without ambiguity the compatibility of [steering and power steering] with, and their technical adjustment to, … independent front suspension’.
Findings of the Court
20 The plea alleging failure to comply with Article 7(1)(c) of Regulation No 40/94 should be examined first.
21 Under that provision, ‘trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geographical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service’ are not to be registered. In addition, Article 7(2) of Regulation No 40/94 states that ‘[p]aragraph 1 shall apply notwithstanding that the grounds of non-registrability obtain in only part of the Community’.
22 It is settled case-law that Article 7(1)(c) of Regulation No 40/94 pursues an aim that is in the public interest, which requires that signs or indications descriptive of the characteristics of goods or services in respect of which registration is sought may be freely used by all (see, in relation to Article 3(1)(c) of First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trade marks (OJ 1989 L 40, p. 1), the legislative content of which is essentially identical to that of Article 7(1)(c) of Regulation No 40/94, Joined Cases C‑108/97 and C‑109/97 Windsurfing Chiemsee [1999] ECR I‑2779, paragraph 25, and Case C‑265/00 Campina Melkunie [2004] ECR I‑1699, paragraph 35).
23 The signs and indications referred to in Article 7(1)(c) of Regulation No 40/94 are those which may serve in normal usage from the point of view of the target public to designate, either directly or by reference to one of their essential characteristics, the goods or the service in respect of which registration is sought (Case C‑389/99 P Procter & Gamble v OHIM [2001] ECR I‑6251, paragraph 39, and Case T‑19/04 Metso Paper Automation v OHIM(PAPERLAB) [2005] ECR II‑2383, paragraph 24).
24 It follows that, for a sign to be caught by the prohibition set out in that provision, there must be a sufficiently direct and specific relationship between the sign and the goods and services in question to enable the public concerned immediately to perceive it, without further thought, as a description of the goods and services in question or one of their characteristics (PAPERLAB, paragraph 25; see also, to that effect, Case T‑106/00 Streamserve v OHIM(STREAMSERVE) [2002] ECR II‑723, paragraph 40). A sign’s descriptiveness can only be assessed by reference to the goods or services concerned and to the way in which it is understood by the relevant public (Case T‑322/03 Telefon & Buch v OHIM – Herold Business Data (WEISSE SEITEN) [2006] ECR II‑835, paragraph 90). The average consumer of the category of goods concerned is deemed to be reasonably well informed and reasonably observant and circumspect (see, to that effect, Case C‑342/97 Lloyd Schuhfabrik Meyer [1999] ECR I‑3819, paragraph 26).
25 In the present case, the initials ‘IFS’ are an acronym of the English phrase ‘independent front suspension’, which is commonly used in the car industry to describe a mechanism enabling wheels to be moved vertically, independently of the other wheels, so as to maximise the vehicle’s grip on the road.
26 The parties also agree on the definition of the terms ‘steering’ and ‘power steering’ as mechanical parts whose function is to control the lateral movement of the wheels in such a way that they remain aligned. Thus, although the suspension and steering act on the same wheel, the suspension controls the independent vertical movement of the wheels whereas the steering enables the direction in which the vehicle is travelling to be changed, and therefore acts on a plane perpendicular to the plane of rotation of the wheels which is controlled by the suspension.
27 As OHIM stated at the hearing, it is necessary to ascertain whether, for the relevant public, the trade mark IFS is descriptive of vehicle parts other than independent front suspension goods and, in particular, of parts related to steering or power steering.
The relevant public
28 In paragraphs 20 and 22 of the contested decision, the Board of Appeal defined the relevant public as being made up of specialised English-speaking consumers composed of knowledgeable vendors or purchasers of motor vehicles with an interest in the more technical aspects of the construction of a vehicle.
29 OHIM contends that ‘vendors’ should be understood to mean professionals specialised in the sale of motor vehicles, including both vehicle manufacturers and commercial establishments in which vehicles are repaired, serviced, bought and sold, while ‘purchasers’ are consumers with sufficient semi-professional technical skills to be able to assemble or repair a vehicle themselves.
30 It should be noted that the relevant public must be defined in the light of the list of goods as limited by the applicant in its letter of 12 October 2004. In fact, that limitation of the list of goods covered was accepted by the OHIM examiner and by the Board of Appeal of OHIM and cannot be called into question in this action.
31 Accordingly, having regard to the fact that – as stated in paragraph 2 above – the applicant is no longer seeking registration of the mark at issue in respect of ‘vehicles and parts thereof’, but in respect of ‘steering and power steering, both for vehicles and parts therefor, excluding independent front suspension’, the relevant public must be made up of consumers interested in the purchase of steering and power steering for vehicles and of other vehicle parts (and not the purchase of vehicles as such), and may consist both of vehicle manufacturers, and garage-owners responsible for the repair of vehicles, and, to a lesser extent, of people with sufficient knowledge and technical skills to be capable of repairing their vehicle themselves. The relevant public is, on any view, a public with sound knowledge of technical aspects in the manufacture and repair of vehicles sector.
The descriptive nature of the sign
32 Paragraphs 27 to 29 of the contested decision show that, in order to establish whether the trade mark applied for should be refused registration pursuant to Article 7(1)(c) of Regulation No 40/94, the Board of Appeal first examined whether, from the point of view of the relevant consumer, the sign IFS describes a characteristic which that consumer would take into account when purchasing a steering or power steering system as part of a motor vehicle. The Board of Appeal went on to find that this was indeed the case since the sign IFS is used to describe one of the essential characteristics of the goods covered, namely the existence of an independent front suspension system in a steering system and in the vehicle equipped with that steering system.
33 It is therefore necessary to examine whether, as the applicant claims, the steering system and the independent front suspension system are independent of one another, despite their proximity in the same vehicle, or whether, as OHIM maintains, given that the steering may need to be adapted for independent front suspension, use of the sign IFS in respect of steering and power steering would be perceived by the relevant public as descriptive of an essential characteristic of those goods, namely that they are intended to be assembled on vehicles equipped with independent front suspension.
34 In that second situation, the relevant public would be able to associate the sign IFS with steering and power steering systems designed to be fitted to vehicles with independent front suspension.
35 In that connection, it is for the OHIM examiners and, on appeal, for the Boards of Appeal of OHIM to examine the facts of their own motion in order to determine whether or not the mark applied for is covered by one of the grounds laid down in Article 7 of Regulation No 40/94 for refusal of registration. It is the task of those bodies to establish in their decisions the accuracy of such facts, unless the facts alleged are a matter of common knowledge (Case C‑273/05 P OHIM v Celltech [2007] ECR I‑2883, paragraphs 38 and 39). In addition, the legality of the Board of Appeal’s decision is assessed by the Court in relation to the factual and legal situation existing at the time when the decision was adopted and on which that decision was based.
36 In the contested decision, after referring to all the extracts from internet sites used by the examiner to demonstrate that the sign IFS was descriptive of independent front suspension, the Board of Appeal emphasised the fact that the documents cited included advertisements extolling the benefits of independent front suspension, and went on to infer from this that, since the professionals whom the relevant customer would approach would draw his attention – or are likely to do so – to the existence of an independent front suspension system in a steering or power steering system and in the vehicle equipped with that steering system, the examiner was right to conclude that the word mark IFS might serve to designate an essential characteristic of the goods in respect of which registration is sought.
37 It is to be noted that, as the Board of Appeal indicates in paragraphs 25 and 28 of the contested decision, the documents referred to by the examiner concern only the meaning of the acronym ‘IFS’ or the benefits of independent front suspension. By contrast, none of those documents mention the reasons for which one of the characteristics of the steering or power steering of a vehicle would be its compatibility with independent front suspension.
38 In that regard, OHIM merely stated that it was logical for any specialist in mechanics, aware of the interference caused by divergent movements of the wheels, to assume that a steering or power steering system called ‘IFS’ is designed to achieve specific technical results, namely to be fitted to independent front suspension (also known as ‘IFS’) and to isolate the vibrations and strains caused by the vertical movement of the wheels as opposed to the lateral movement operated by the steering. When requested at the hearing to indicate precisely the paragraphs of the documents relied upon in the contested decision in support of the findings of the Board of Appeal that steering or power steering was designed to be compatible with independent front suspension, OHIM stated that it was unable to refer to a specific document, and referred generally to the series of documents appended to the examiner’s letter of 13 August 2004.
39 Accordingly, it is not possible to identify, from among the documents relied upon by OHIM, those which show that there is a technical link between the goods covered and independent front suspension, in the sense that those goods are designed to be compatible with such suspension. Consequently, the accuracy of that fact has not been established for the purposes of the case-law referred to in paragraph 35 above.
40 It must be concluded, therefore, that the documents on which the Board of Appeal based the contested decision do not prove, per se, that the relevant public, as defined in paragraph 31 above, would perceive the sign IFS as descriptive of one of the characteristics of the goods covered and that, in consequence, registration of the trade mark applied for would be contrary to Article 7(1)(c) of Regulation No 40/94.
41 That conclusion is not affected by OHIM’s argument that affixing the sign IFS to the goods covered – in accordance with the list as limited by the applicant – might mislead the public in so far as it might lead it to suppose that the goods concerned possess certain intrinsic qualities which, in fact, they do not. It is sufficient to note that the Board of Appeal did not in any way base the contested decision on the allegedly deceptive character of the trade mark applied for, as provided for in Article 7(1)(g) of Regulation No 40/94.
42 It follows from the foregoing considerations that the plea relied on by the applicant, alleging infringement of Article 7(1)(c) of Regulation No 40/94, is well founded and that the contested decision falls to be annulled, without it being necessary to examine the plea alleging infringement of Article 7(1)(b) of Regulation No 40/94. It must be stated in this connection that the contested decision was adopted pursuant solely to Article 7(1)(c) of Regulation No 40/94 and that, accordingly, the plea alleging infringement of Article 7(1)(b) of that regulation is inoperative and there is no need to rule on its admissibility, disputed by OHIM.
Costs
43 Under Article 87(2) of the Rules of Procedure of the Court of First Instance, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since OHIM has been unsuccessful, it must be ordered to pay the costs in accordance with the form of order sought by the applicant.
On those grounds,
THE COURT OF FIRST INSTANCE (Seventh Chamber)
hereby:
1. Annuls the decision of the First Board of Appeal of the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) of 14 September 2005 (Case R 1157/2004-1);
2. Orders OHIM to bear its own costs and to pay those incurred by JTEKT Corp.
Forwood | Šváby | Moavero Milanesi |
Delivered in open court in Luxembourg on 10 December 2008.
[Signatures]