GERMAN FEDERAL COURT OF JUSTICE, DECISION OF 31 MAY 2012, CASE NO. I ZR 135/10 (ZAPPA)
The German Federal Court of Justice decided that neither the use of the sign "ZAPPA" as part of a domain name ("zappa.com") nor as part of the sign ""Zappa Records" constituted right-preserving genuine use of a trademark under Articles 15 (1) and (2a) EC Regulation 40/94.1
The plaintiff, a U.S.-based trust, manages the assets of the 1993 deceased musician Frank Zappa and is owner of the Community trademark "ZAPPA". Since 1990, the defendant has been hosting an annual music festival and selling records and clothing under the name "Zappanale".
The plaintiff filed for injunctive relief and damages for the use of the sign "Zappanale".
The defendant counterclaimed and sought the annulment of Community trademark "ZAPPA", claiming that the trademark had not been genuinely used within the EU and, therefore, all claims raised on the basis of this Community trademark were unfounded.
Both claims for injunctive relief and damages were dismissed by the District Court of Dusseldorf2. The Court of Appeal of Dusseldorf agreed with the defendant and upheld its counterclaim, annulling the Community trademark "ZAPPA" and dismissing the plaintiff's claim3.
On further appeal, the Federal Court of Justice confirmed these decisions and rejected the plaintiff's claims.
No Genuine Use
The Federal Court of Justice said that the Community trademark "ZAPPA" had not been genuinely used within the EU. The use of the sign as part of the domain name "zappa.com" did not fulfill the requirements of Art. 15 (1) and (2a) EC Regulation 40/94. The relevant public would perceive the domain name solely as an indication for a website providing information about the musician Frank Zappa. Accordingly, the sign "ZAPPA" would be understood in a merely descriptive way and not as an indication of origin. Thus, there would be no genuine use as a trademark.
Equally, the use of the sign "ZAPPA Records" altered the distinctive character of the trademark "ZAPPA" to such extent that there was no right-preserving use of the trademark in terms of Art. 15 (1) and (2a) EC Regulation 40/94.
As the Community trademark "ZAPPA" was, consequently, invalid, the court concluded that the claims raised by the plaintiff were unfounded. As a result, the defendant was allowed to name its music festival "Zappanale".
The details of how a trademark shall be used in order to constitute right-preserving genuine use in terms of Art. 15 EC Reg. 40/94 (207/2009) remain somewhat uncertain.
At least with regard to names of famous artists, the decision gave some guidance: the sign must clearly mark a good or a service; otherwise it is likely that the trademark gets considered as being merely descriptive and, therefore, does not serve as an indication of origin.
Further, the use of a sign as part of a domain name alone is not sufficient to constitute genuine use, provided that it is understood in a descriptive way in relation to the artist, as it is the case here. Additional elements added to a registered trademark can, although being descriptive (e.g. "Records"), alter the distinctive character of a trademark and hinder genuine use as well. Of course, every relevant factor of each individual case has to be taken into account.