Thursday, 23 June 2011

Trade Marks: Insulate for life: how not to be appealing

Author: Andrew Clay (Squire Sanders LLP)


Paroc Oy AB v OHIM Case T-157/08, General Court, 8 February 2011 (unreported)

Journal of Intellectual Property Law & Practice (2011), doi: 10.1093/jiplp/jpr088, first published online: June 9, 2011

The General Court has held that an earlier unappealed OHIM Board of Appeal decision bars the General Court from reviewing a subsequent OHIM Board of Appeal decision, relating to a later filed application for a trade mark, identical to the mark the subject of the first OHIM Board of Appeal decision.

Legal context

Article 65(1) of the Community Trade Mark Regulation (EC 207/2009) provides a right of appeal against decisions of the OHIM Boards of Appeal to the General Court and then to the Court of Justice on points of law only—see Article 58 of Protocol (No 3) on the Statute of the Court of Justice of the European Union.

It is common for trade mark attorneys, whose clients have had their trade mark applications rejected, to advise their clients to wait until there has been a material change of circumstances and then to file a fresh application. The question arises as to what happens when the first application is not abandoned until the Board of Appeal level within OHIM and the second refiled application goes to the General Court. How should the General Court approach the second application? Should it ignore what has gone before or is it bound by the earlier OHIM Board of Appeal decision?

Facts

Paroc Oy AB had filed a first application for registration, as a Community trade mark, the mark INSULATE FOR LIFE, in respect of goods in classes 6, 17, and 19, for common metals and their alloys, rubber, and non-metallic building materials.

The examiner rejected the application in respect of all the goods applied for on the grounds that the mark applied for was devoid of any distinctive character and was descriptive under Articles 7(1)(b) and (c) of the CTM Regulation.

OHIM's Second Board of Appeal upheld that decision on the same grounds, stating that the relevant public would clearly, immediately, directly, and unambiguously understand INSULATE FOR LIFE to mean that Paroc supplied durable insulation which could last a lifetime. The Board held that, because there was no unusual juxtaposition of the elements in the word mark to create a different syntactical, grammatical, phonetic, and/or semantic view from that produced by merely combining the words, the resultant word mark described the characteristics of the goods at issue and thus lacked distinctiveness.

Paroc did not appeal the decision of OHIM's Second Board of Appeal to the General Court. Instead, it filed a second application for registration of the same mark in respect of the same goods, but with the addition of services in class 37 relating to building construction, repair, and installation services. The examiner rejected this application on the same grounds as before and Paroc appealed.

Referring to the reasons set out in the first decision, the Board dismissed the appeal, saying with regard to classes 6, 17, and 19 that Paroc had not put forward any evidence to support a change in the settled case law or in the markets at issue to persuade it to reconsider the ruling in the first decision. With regard to the services in class 37, the Board found that the relevant public would still immediately, and without further analytical effort, understand the mark to refer to a characteristic of the services and not as an indication of their origin; it was irrelevant that the mark had been registered in Finland and the UK as the CTM regime is autonomous with its own rules, and the fact that the examiner's approach to previous similar cases was less strict did not infringe the principle of equality before the law.

Paroc applied to the General Court to annul the second OHIM Board of Appeal decision and remit the case to OHIM for registration of its mark.

Admissibility
The Court held that the subject matter of the first and second cases was practically identical, the only difference being the inclusion of class 37 services in the second application.

Based on settled case law, the General Court held that appeals against decisions, which were confirmatory of an earlier decision, which were not challenged in due time (as was the case here in relation to OHIM's Second Board of Appeal's decision in relation to the first trade mark application), must be declared inadmissible. The OHIM Board of Appeal's (confirmatory) decision accordingly became final, with regard to both the operative part of the decision and the grounds on which it was made, and could no longer be challenged before the Court. Such a challenge would only be permissible if there were new factors, as compared with the first decision, which would necessitate a re-examination of Paroc's situation. Paroc had provided no further information in this regard that could have undermined the confirmatory decision.

In the Court's opinion, Paroc had merely reiterated the arguments it had put forward in the first application, only adding (a) that the mark had been registered in Finland and the UK and (b) that the examiner had erred in the application of Article 7(2) by failing to decide in which Member State the word mark had been refused registration.

The Court observed that the autonomous nature of the CTM system meant that OHIM was not bound by national office decisions to register, although the grounds on which such registrations had succeeded at the national level could have been taken into account if Paroc submitted them to the Court (which it did not).

As to the alleged misapplication of Article 7(2), the Court stated that this did not add any new factual element, and ‘was manifestly unfounded in law’, as Article 7(2) merely provided that the grounds for non-registrability set out in Article 7(1) could apply notwithstanding that they existed in only a part of the Community: Article 7(2) did not create any specific obligation on OHIM to give reasons for its decision. With regard to OHIM's previous decisions about similar word marks, the Court rejected Paroc's repeated inequality arguments as these decisions, with the exception of one, were already in existence at the time of the first decision.

The Court thus held that the appeal, save in relation to the inclusion of the class 37 services, was inadmissible as it was directed against those parts of the OHIM Board of Appeal second decision that merely confirmed the first OHIM Board of Appeal first decision.

New services
The scope of the Court's consideration of Paroc's appeal was thus limited to the question of the correctness of refusing to register the mark in relation to the class 37 services.

After establishing that the relevant consumer was the general or specialist public in the construction sector, who has a command of English, the Court considered whether the Board correctly analysed the meanings of the different word elements of the mark and the mark as a whole. It noted that Paroc did not dispute that the word element ‘insulate’ had no meaning other than to insulate. The Court dismissed Paroc's argument that the element ‘for life’ would not immediately be understood by the relevant public to mean ‘lasts for a lifetime’ or ‘for a lifetime period’ as Paroc did not submit any other possible meaning for the words but merely asserted that ‘the combination of the words has various connotations and was likely to give rise to multiple associations and suggestions’. The Court concluded that the mark did not have an unusual or ambiguous character in light of the rules of the English language and that the relevant public would immediately and directly take the sign to refer to very long lasting services related to the use of a particularly durable insulation material, and not as an indication of origin of those services. Consequently, the Board did not err in its judgment that the mark was devoid of distinctive character under Article 7(1)(b), which made it unnecessary to assess whether the mark was descriptive of the services under Article 7(1)(c).

Analysis

The dismissal of this appeal emphasizes the principle that decisions which are merely confirmatory of earlier unappealed decisions are not to be challenged by the General Court, unless there has been a material change in the facts leading up to the first and second decisions.

Given how overworked the General Court is in relation to trade mark matters it is perhaps unsurprising that it used this case to send a signal that it will not rehear issues that have already been lost before earlier Boards of Appeal, where those defeats were not themselves appealed.

Paroc's decision to abandon its first application and refile a new application for an additional class of services lost it any chance of appealing the OHIM Board of Appeal's first decision, which first decision then proved largely fatal to its outing in front of the General Court in relation to its second trade mark application. In Paroc's case, this was probably of little significance as its mark was so devoid of distinctive character, but it is easy to imagine cases where a Board of Appeal has genuinely erred, in which case following Paroc's strategy could matter greatly.

Practical significance

The message for those seeking to register trade marks, which may lack distinctiveness, is clear: if an OHIM Board of Appeal upholds the decision to refuse registration and that decision is not to become an insurmountable road block, the only course of action is to appeal the Board of Appeal's decision to the General Court within the requisite time frame (two months from the date of the decision to be appealed).

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