JUDGMENT OF THE COURT OF FIRST INSTANCE (Second Chamber)

19 November 2009 (*)

(Community trade mark – International registration designating the European Community – Word mark CLEARWIFI – Absolute ground for refusal – Descriptive character – Article 7(1)(c) of Regulation (EC) No 40/94 (now Article 7(1)(c) of Regulation (EC) No 207/2009))

In Case T‑399/08,

Clearwire Corp., established in Kirkland, Washington (United States), represented by G. Konrad, lawyer,

applicant,

v

Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM), represented by J. Crespo Carrillo, acting as Agent,

defendant,

ACTION brought against the decision of the First Board of Appeal of OHIM of 30 June 2008 (R 706/2008‑1) concerning the international registration, designating the European Community, of the sign CLEARWIFI,

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Second Chamber),

composed of I. Pelikánová, President, K. Jürimäe (Rapporteur) and S. Soldevila Fragoso, Judges,

Registrar: N. Rosner, Administrator,

having regard to the application lodged at the Registry of the Court of First Instance on 18 September 2008,

having regard to the response lodged at the Registry of the Court of First Instance on 15 January 2009,

having regard to the fact that no application for a hearing was submitted by the parties within the period of one month from notification of closure of the written procedure, and having therefore decided, acting upon a report of the Judge-Rapporteur, to give a ruling without an oral procedure, pursuant to Article 135a of the Rules of Procedure of the Court of First Instance,

gives the following

Judgment

 Background to the case

1        On 14 August 2007, the applicant – Clearwire Corp. – obtained from the World Intellectual Property Organisation (WIPO), in respect of the word mark CLEARWIFI, an international registration designating the European Community.

2        On 27 September 2007, the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) received notification from WIPO of the international registration of that mark.

3        The services in respect of which protection of that mark was sought in the Community fall within Class 38 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, and correspond to the following description: ‘Telecommunications services, namely, providing hi-speed access to computer and communication networks, and the electronic transmission of voice, video and data via computer and communication networks’.

4        By decision of 29 February 2008, the Examiner refused protection of the mark at issue in the Community, pursuant to Article 7(1)(b) and (c) of Council Regulation (EC) No 40/94 of 20 December 1993 on the Community trade mark (OJ 1994 L 11, p. 1), as amended (now Article 7(1)(b) and (c) of Council Regulation (EC) No 207/2009 of 26 February 2009 on the Community trade mark (OJ 2009 L 78, p. 1)).

5        On 29 April 2008, the applicant lodged an appeal with OHIM under Articles 57 to 62 of Regulation No 40/94 (now Articles 58 to 64 of Regulation No 207/2009) against the Examiner’s decision. The applicant requested the Board of Appeal, first, to limit the list of services in respect of which protection of the mark was sought so as to include only services having a digital form; secondly, to annul the Examiner’s decision; and, thirdly, to grant the protection sought in respect of the list of services thus limited.

6        By decision of 30 June 2008 (‘the contested decision’), the First Board of Appeal of OHIM held that the mark at issue was lacking in distinctive character and that it was descriptive of the services in respect of which protection was sought. It therefore dismissed the appeal. First, with regard more specifically to the descriptive character of the mark at issue, the Board of Appeal held that it lacked jurisdiction to limit the list of services covered by an international registration and that, in any event, the fact that the services in respect of which protection was sought were digital was of no relevance to the case before it. Secondly, the Board of Appeal held that the mark at issue will be understood, by individuals or businesses in the Community needing to access computer and communications networks such as the Internet, as describing the purpose of the services concerned, that is to say, the offering of wireless connections, and the quality of those services, that is to say, free from disturbance.

 Forms of order sought by the parties

7        The applicant claims that the Court should:

–        annul the contested decision;

–        order OHIM to pay the costs.

8        OHIM contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

9        The applicant puts forward two pleas in law in support of its action, alleging (i) infringement of Article 7(1)(c) of Regulation No 40/94 and (ii) infringement of Article 7(1)(b) of that regulation.

 Arguments of the parties concerning the first plea, alleging infringement of Article 7(1)(c) of Regulation No 40/94

10      First, the applicant claims that, contrary to the assertions of the Board of Appeal, it is unlikely that the relevant public would be the broadest possible public in all Member States and that, since the sign at issue is made up of components taken from the English language, the relevant public has to be an English-speaking public. Moreover, the applicant claims that the relevant public is used to offers for the services at issue which include the term ‘wifi’ and that it is therefore able to distinguish between the indication of the commercial origins of those services, on the one hand, and the description of those services, on the other.

11      Secondly, the applicant disputes the meaning attributed by the Board of Appeal to the sign CLEARWIFI – namely, wireless access to the Internet free from ‘contamination’ or disturbance – since it is based on an incorrect definition of the terms ‘wifi’ and ‘clear’. The sign CLEARWIFI does not have a clear meaning: it is a vague neologism implying, for example, a network service that is easy to use. Moreover, contrary to the assertions of the Board of Appeal, the presence or absence of disturbance is not a quality of the services in question but of the hardware enabling the wifi technology to be used.

12      Thirdly, the applicant claims that there is not a sufficiently direct and specific link between the sign at issue and the services in question. Thus, the Board of Appeal did not explain why consumers should, without further thought, immediately perceive CLEARWIFI as meaning ‘Internet access free from contamination’ and not anything else. Moreover, the sign CLEARWIFI does not enable potential customers to identify immediately and precisely the ‘details’ of a specific telecommunications service or a particular characteristic of that service.

13      Fourthly, the applicant claims that the use of the word elements ‘clear’ and ‘wifi’ to express the idea of ‘uncontaminated’ Internet access does not represent normal usage from the point of view of the relevant public, with regard to the services in question. In that regard, the applicant claims that, according to the case-law of the Court of Justice, the Board of Appeal should have determined whether the sign in question represented, in the mind of the relevant class of persons, a description of the characteristics of the services concerned or whether it was reasonable to assume that that might be the case in the future.

14      OHIM contests the applicant’s arguments.

 Findings of the Court concerning the first plea, alleging infringement of Article 7(1)(c) of Regulation No 40/94

15      Article 146(1) of Regulation No 40/94 (now Article 151(1) of Regulation No 207/2009) provides that, from the date of its registration pursuant to Article 3(4) of the Protocol relating to the Madrid Agreement concerning the international registration of marks, adopted at Madrid on 27 June 1989 (OJ 2003 L 296, p. 22), an international registration designating the Community is to have the same effect as an application for a Community trade mark. Article 149(1) of Regulation No 40/94 (now Article 154(1) of Regulation No 207/2009) provides that international registrations designating the Community are to be subject to examination as to absolute grounds for refusal in the same way as applications for Community trade marks.

16      Under Article 7(1)(c) of Regulation No 40/94, 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.

17      That provision prevents the signs or indications specified therein from being reserved to one undertaking alone merely because they have been registered as trade marks. It thus pursues an aim which is in the public interest, namely that such signs or indications may be freely used by all (Case C‑191/01 P OHIM v Wrigley [2003] ECR I‑12447, paragraph 31; Case T‑219/00 Ellos v OHIM (ELLOS) [2002] ECR II‑753, paragraph 27; and the judgment of 22 May 2008 in Case T‑254/06 Radio Regenbogen Hörfunk in Baden v OHIM (RadioCom), paragraph 26).

18      Furthermore, signs or indications which may serve in trade to designate the characteristics of the goods or service in respect of which registration is sought are, by virtue of Article 7(1)(c) of Regulation No 40/94, deemed incapable of fulfilling the function of a trade mark (OHIM v Wrigley, paragraph 17 above, paragraph 30), namely that of identifying the commercial origin of the goods or service, thus enabling the consumer who acquired the product or service covered by the mark applied for to repeat the experience subsequently if it proves to be positive, or to avoid it if it proves to be negative (ELLOS, paragraph 17 above, paragraph 28, and RadioCom, paragraph 17 above, paragraph 27).

19      The signs and indications specified 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 relevant public to designate, either directly or by reference to one of their essential characteristics, the goods or service in respect of which registration is sought (Case C‑383/99 P Procter & Gamble v OHIM [2001] ECR I‑6251, paragraph 39; Case T‑19/04 Metso Paper Automation v OHIM (PAPERLAB) [2005] ECR II‑2383, paragraph 24; and RadioCom, paragraph 17 above, paragraph 28).

20      It follows that, for a sign to be caught by the prohibition set out in Article 7(1)(c) of Regulation No 40/94, there must be a sufficiently direct and specific link between the sign and those goods or services to enable the public concerned immediately to perceive, without further thought, a description of the goods and services in question or one of their characteristics (PAPERLAB, paragraph 19 above, paragraph 25, and RadioCom, paragraph 17 above, paragraph 29).

21      It is not necessary that the signs or indications composing the mark that are specified in Article 7(1)(c) of Regulation No 40/94 actually be in use at the time of the application for registration in a way that is descriptive of goods or services such as those in relation to which the application is filed, or of their characteristics. It is sufficient, as the wording of that provision itself indicates, that such signs and indications could be used for such purposes. A sign must therefore be refused registration under that provision if at least one of its possible meanings designates a characteristic of the goods or services concerned (see, to that effect, OHIM v Wrigley, paragraph 17 above, paragraph 32; Case T‑311/02 Lissotschenko and Hentze v OHIM(LIMO) [2004] ECR II‑2957, paragraph 32; and RadioCom, paragraph 17 above, paragraph 32).

22      Moreover, in order for a mark consisting of a neologism or a word produced by a combination of elements to be regarded as descriptive for the purposes of that provision, it is not sufficient that each of its components may be found to be descriptive. The neologism or the word itself must be found to be descriptive. Such a mark is descriptive of the characteristics of those goods or services unless there is a perceptible difference between the neologism or the word and the mere sum of its parts. That assumes that, because of the unusual nature of the combination in relation to the goods or services, the neologism or word creates an impression which is sufficiently far removed from that produced by the mere combination of meanings lent by the elements of which it is composed, with the result that the word is more than the sum of its parts. In that connection, an analysis of the term in question in the light of the relevant lexical and grammatical rules is also useful ( see, to that effect, Case C‑273/05 P OHIM v Celltech [2007] ECR I‑2883, paragraphs 76 to 79, and judgment of 2 April 2008 in Case T‑181/07 Eurocopter v OHIM (STEADYCONTROL), paragraphs 36 and 37).

23      Lastly, the descriptive character of a mark must be assessed, first, in relation to the goods or services in respect of which registration is sought and, second, in relation to the perception of the mark by the relevant public (Case T‑316/03 Münchener Rückversicherungs-Gesellschaft v OHIM (MunichFinancialServices) [2005] ECR II‑1951, paragraph 26, and RadioCom, paragraph 17 above, paragraph 33).

24      It is in the light of those principles that this plea should be considered.

–       Definition of the relevant public

25      It is necessary to determine whether the Board of Appeal correctly defined the relevant public in the present case, a point which is disputed by the applicant.

26      In that regard, it should be observed that services falling within Class 38, in respect of which protection of the sign CLEARWIFI was sought, relate, on the one hand, to high-speed access to computer and communication networks and, on the other hand, to the electronic transmission of voice, video and data via such networks. Use of such services has become a normal activity for a very large majority of European businesses and consumers, irrespective of their knowledge of languages.

27      None the less, given that the word sign CLEARWIFI is composed of two terms originating from English, the word ‘clear’ and the abbreviation ‘wifi’, and that English expressions are frequently used in the fields of electronics and telecommunications, which the services in question come under, it is necessary to take into account in particular average English-speaking consumers, or those with a basic knowledge of English, who are reasonably well informed and reasonably circumspect (see, to that effect, Case C‑342/97 Lloyd Schuhfabrik Meyer [1999] ECR I‑3819, paragraph 26, and ELLOS, paragraph 17 above, paragraph 30).

28      Thus, although the Board of Appeal correctly held in paragraph 11 of the contested decision that ‘[i]n the case under review the services are intended for individuals or businesses in the Community who need to access computer and communication networks such as the Internet’, it was wrong simply to infer from this that ‘the broadest possible public in all Member States’ must be considered as the yardstick for measuring the distinctiveness of the mark, without explaining that the services in question are intended for an English-speaking public or a public with a basic knowledge of English. However, in order to ascertain the consequences of that unclear definition of the relevant public as regards the lawfulness of the contested decision, it is necessary to determine whether the Board of Appeal’s assessment of the descriptive character of the mark at issue was sound.

–       The perception of the word sign CLEARWIFI by the relevant public

29      A preliminary observation is that the word sign CLEARWIFI, which is composed of a noun (‘wifi’) and an adjective (‘clear’), is not unusual in its structure. It does not diverge from English rules of syntax or word composition; on the contrary, it complies with those rules. It will not therefore be perceived as unusual by the relevant consumer (see, to that effect, Case T‑356/00 DaimlerChrysler v OHIM (CARCARD) [2002] ECR II‑1963, paragraph 29).

30      With regard to the meaning of the term ‘wifi’, that term is commonly used to designate technology enabling the wireless connection of computers and various items of electronic equipment, not only between each other but also to Internet access points.

31      With regard to the term ‘clear’, it is agreed between the parties that it has various meanings in English, in particular the meanings given in paragraph 12 of the contested decision, that is to say, as an adjective, ‘pure’, ‘free from complication’, ‘without defect’, ‘not coded’, ‘obvious’ or, as an adverb, ‘plainly’ or ‘wholly’.

32      It is therefore necessary, with regard to the meaning of the mark at issue viewed as a whole, to consider whether the fact that the noun ‘wifi’ is qualified by the adjective ‘clear’ is likely, as the Board of Appeal states in paragraph 13 of the contested decision, to be perceived by the relevant public as a reference to wireless technology which is ‘free of contamination’, that is to say, offering clear, disturbance-free access to, for example, the Internet, having ‘the ability to withstand outside interference, or even [possessing] a favourable noise to signal ratio’.

33      In that regard, the applicant disputes the meaning attributed by the Board of Appeal to the term ‘clear’, on the ground that neither the phrase ‘free from disturbance’ nor the phrase ‘free of contamination’ is applicable to wifi wireless connections, in particular as regards data transmission in digital form. The former expression cannot be used in the context of normal usage as meaning ‘clear’. The latter expression applies only in the presence of substances, which excludes any application to radio waves, on which the operation of wifi technology is based.

34      However, it should be noted first of all that, regarding the use of the expression ‘free of contamination’, the Board of Appeal did indeed state, in paragraph 13 of the contested decision, that that expression should not be interpreted as applying solely to air to indicate its purity, or to water to indicate that it is not polluted, but should be interpreted in a ‘slightly metaphorical’ sense, indicating more broadly the absence of any disturbance.

35      Next, as regards the use of the expression ‘free from disturbance’ in respect of a wifi wireless connection, it should be pointed out that such connections are made using radio waves that are likely to be affected by interference owing to the presence of other radio waves. It is common ground that, in the case of wifi technology, the effect of such interference is a weak or intermittent signal that may lead to unintended disconnection. It follows that a wifi connection affected by such interference is likely to be perceived by the relevant public – which, as is apparent from paragraph 26 above, is not made up exclusively of specialists in wifi wireless connections – as experiencing disturbance.

36      Accordingly, ‘free from disturbance’ denotes a quality of that connection. This means that, contrary to the assertions of the applicant, the word sign CLEARWIFI does not have a merely vague or evocative meaning but can be perceived by the relevant public as designating a form of technology – wifi technology – which enables the wireless connection of computers and various items of electronic equipment, either with each other or to Internet access points, and which is resistant to external interference.

37      That conclusion is not affected by the applicant’s argument that since, for technical reasons, a digital signal carried by radio waves cannot itself be disturbed, the change from analogue to digital transmission means that it cannot reasonably be assumed that in the future the term ‘clear’ will be used in association with the term ‘wifi’. Even supposing for the sake of argument that information will in future be transmitted exclusively in digital form, the fact remains that the wifi connection is likely to be disturbed by interference causing unintended disconnection, which will be perceived by the relevant public as an indication of a disturbed connection (see paragraph 36 above). That argument must therefore be rejected as unfounded.

38      Moreover, with regard to the applicant’s argument that, according to the case-law of the Court, OHIM should have established whether the sign in question represented, in the mind of the relevant class of persons, a description of the characteristics of the services concerned or whether it was reasonable to assume that that might be the case in the future, it should be noted that, according to the case-law cited in paragraph 20 above, a word sign must be refused registration pursuant to Article 7(1)(c) of Regulation No 40/94 if at least one of its possible meanings designates a characteristic of the goods or services concerned. It must be concluded, however, that, as is apparent from paragraph 36 above, the Board of Appeal was correct in holding that the sign CLEARWIFI is likely to be perceived by the relevant public as a description of the purpose and quality of the services concerned.

39      With regard to the applicant’s argument that the notion of disturbance-free access does not describe the services in respect of which protection of the trade mark is sought – on the ground that the existence or absence of such disturbance must be determined not in relation to the services in question, but in relation to the hardware enabling the wifi technology to be used – it is clear in the light of the conclusion drawn in paragraph 36 above that that argument is based on a false premiss. It must therefore be rejected as unfounded.

40      It remains to be determined whether, from the point of view of the relevant public, there is a sufficiently direct and specific link between the sign at issue and the services in question.

–       The existence of a sufficiently direct and specific link with the services in question

41      It should be noted that the Board of Appeal held, in paragraph 15 of the contested decision, that ‘the mark therefore describes the purpose of the services, i.e. offering wireless connections, and the quality, i.e. free from disturbance’.

42      In that regard, first, the applicant claims that OHIM did not explain why the only meaning of the sign CLEARWIFI likely to be perceived immediately, without further thought, by consumers would be ‘Internet access free from contamination’, despite the fact that that sign has no direct meaning and that, as OHIM recognises, the word ‘clear’ has several meanings. Secondly, the applicant claims that the sign CLEARWIFI does not enable potential customers to identify immediately and precisely the elements of a specific telecommunications service or one of its characteristics. It follows, according to the applicant, that the link between the mark and the services capable of being provided by a wireless access provider is too vague and indeterminate to confer a descriptive character on that mark in relation to those services.

43      As regards, first of all, the perception of the sign by the relevant public, it is apparent from paragraph 36 above that the Board of Appeal was right in holding that the relevant public is likely to perceive the sign CLEARWIFI as designating wireless technology that offers clear, disturbance-free access, to the Internet for example.

44      The applicant is correct in stating that the Board of Appeal did not explain why that meaning would take precedence over any other meaning in the mind of the relevant public. However, it is settled case-law (see paragraph 21 above) that, under Article 7(1)(c) of Regulation No 40/94, a word sign must be refused registration if at least one of its possible meanings designates, as in the present case, a characteristic of the goods or services concerned. The applicant’s argument must therefore be rejected as unfounded.

45      As regards, secondly, the link between the word sign CLEARWIFI and the services in respect of which protection of the trademark is sought, it should be noted that reference is made in the list of those services, on the one hand, to provision of high-speed access to computer and communication networks and, on the other hand, to the electronic transmission of voice, video and data via computer and communications networks. It should also be noted that the sign CLEARWIFI may be perceived by the relevant public as designating wireless disturbance-free connection, to the Internet for example (see paragraph 43 above).

46      In that regard, it should be pointed out that the relevant public will have no difficulty in making a link between the sign CLEARWIFI and a specific telecommunications service, namely Internet access, and between that sign and one of its characteristics, namely, the fact that it is disturbance-free. Indeed, from the point of view of the relevant public, the Internet is the main computer and communications network enabling the electronic transmission of voice, video and data. The fact that access to that service is wireless – or not, as the case may be – has no effect on the direct and specific character of the link likely to be made by the relevant public between the sign in question and the services in respect of which trade mark protection is sought.

47      It should be noted, however, that the relevant public, which is not made up exclusively of computer specialists, will be inclined to equate Internet access via a wifi connection with high-speed access to that network. Yet it is clear from the list of services in respect of which the protection of the sign at issue is sought that those services relate not only to high-speed access to computer and communications networks but also to the electronic transmission of voice, video and data via computer and communications networks, which do not necessarily involve high-speed access.

48      That is not sufficient, however, to affect the lawfulness of the contested decision in so far as the fact that a word sign is descriptive in relation to only some of the goods or services within a category listed as such in the application for registration does not preclude that word sign being refused registration (Case T‑458/05 Tegometall International v OHIM – Wuppermann (TEK) [2007] ECR II‑4721, paragraph 94).

49      As regards the applicant’s assertion that the relevant public is used to promotional offers relating to those services which include the term ‘wifi’, it should be noted that, even if that were truly the case, it would not weaken the link likely to be made by the relevant public between the sign CLEARWIFI and the services in question, in so far as the term ‘wifi’ is specifically used in such promotional offers to describe the purpose of those services.

50      Accordingly, the Board of Appeal was right to find that the mark CLEARWIFI is likely to be perceived by the relevant public as an indication of the quality and purpose of the services in question.

51      In the light of all the above considerations, it must be concluded that the Board of Appeal was fully entitled to find that the mark CLEARWIFI is descriptive of the characteristics of the goods and services covered, for the purposes of Article 7(1)(c) of Regulation No 40/94.

52      The first plea must therefore be rejected as unfounded.

53      In those circumstances, there is no need to examine the second plea, alleging infringement of Article 7(1)(b) of Regulation No 40/94. According to well-established case-law, for a sign not to be registrable as a Community trade mark, it is sufficient that one of the absolute grounds for refusal listed in Article 7(1)(b) of Regulation No 40/94 applies (Case C-104/00 P DKV v OHIM [2002] ECR I-7561, paragraph 29, and Case T‑28/06 RheinfelsQuellen H. Hövelmann v OHIM (VOM URSPRUNG HER VOLLKOMMEN) [2007] ECR II‑4413, paragraph 43).

54      The action must therefore be dismissed.

 Costs

55      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.

56      Since the applicant has been unsuccessful, it should be ordered to pay the costs, as applied for by OHIM.

On those grounds,

THE COURT OF FIRST INSTANCE (Second Chamber)

hereby:

1.      Dismisses the action;

2.      Orders Clearwire Corp. to pay the costs.

Pelikánová

Jürimäe

Soldevila Fragoso

Delivered in open court in Luxembourg on 19 November 2009.

[Signatures]