In Silberquelle v Maselli (C-495/07) Advocate General Damaso Ruiz-Jarabo Colomer (AG) has provided useful guidance on what constitutes "genuine use" of a trade mark, particularly in relation to advertising and promotional use.
As to "genuine use" generally, use of a registered trade mark must fulfil two criteria. First, it must be used for the purposes of creating or maintaining a market in those goods or services in respect of which it is registered. Second, it must be use to identify the origin of those goods or services (i.e. use in accordance with the "essential function").
When considering advertising and promotional use, the AG concluded that use on goods which were serving as an advertising medium (here bottled water given free of charge to purchasers of clothing post-sale) was not use of the trade mark as a trade mark in relation to such promotional goods (i.e. bottled water).
Therefore, in the AG's opinion, the registration of the trade mark for non-alcoholic beverages was liable to be revoked for non-use.
Maselli, a fashion company, had registered the trade mark WELLNESS in Austria for products in class 16 (magazines and books), 25 (clothing) and 32 (non-alcoholic beverages excluding non-alcoholic beers) in 1989. In 2000 it had used the mark, in the form WELLNESS-DRINK, for non-alcoholic beverages which it offered free of charge to purchasers of its clothes.
Silberquelle, which sold water, sought to have the registration of the mark under class 32 revoked under articles 10 and 12 of the Trade Mark Directive (89/104/EEC) (Directive) (which will be replaced on the 28 November 2008 by Directive 2008/95/EEC) on the basis that it had not been used in relation to those goods for more than five years. It argued Maselli's use of the mark on the bottled water was not to create or maintain a market in those goods, but only to promote its clothing.
The Austrian court referred to the European Court of Justice (ECJ) the question "whether articles 10(1) and 12(1) of [the Directive] are to be interpreted as meaning that a trade mark is being put to genuine use if it is used for goods (here: alcohol-free drinks) which the proprietor of the trade mark gives, free of charge, to purchasers of his other goods (here: textiles) after the conclusion of the purchase contract?"
The AG noted that the Austrian court was not concerned with the intensity of the use but about the nature of the use to which the mark was put.
In reaching his decision the AG pointed out that:
- the decision of the ECJ in the Ansul case makes it clear that trade marks must be used by an undertaking to maintain or create a market for its products, and that the essential function of a trade mark is therefore to allow a consumer to distinguish (without risk of confusion) between the goods or services of the owner of the mark in respect of which that trade mark is registered and the goods or services of another undertaking for this purpose. In the present case, Maselli was not using the mark to allow consumers to distinguish between its water and other undertakings' water in order to maintain or create a market for its water;
- registered trade marks constituted a (necessary) limit on competition. Accordingly, registrations should be kept to the minimum required, so that they accurately reflect the reality of the marketplace. In this respect, if a trade mark registration is to be kept alive, it is the owner's obligation to use that mark to create or maintain a market for the goods for which it is registered. The sanction compelling the owner to use marks in this way is that, if they do not, competitors can, after five years, apply to have that mark revoked. Maselli had not used the trade mark in relation to drinks. Even if consumers purchased WELLNESS-branded clothing in order to receive WELLNESS-branded drinks, such purchases would not increase the market share of the mark in the drinks sector, but the market share of the mark in the fashion sector; and
- use of marks in publicity and promotional materials can constitute genuine use of the mark, whether the products for which they are registered are already on the market or not. However, the application of the mark to the bottles of water was use of the mark in publicity totally disconnected from the market for soft drinks. Any other view would result in the ability to register marks obstructively, which would lead to unjustifiable restrictions in the marketplace.
The AG therefore recommended that the ECJ answer the question referred to it, by confirming that use of a mark on bottled water given away free after the purchase of clothing was not genuine use of that mark in relation to bottled water.
This is the first time the ECJ has been asked to consider whether use of a mark on a first class of goods (here: bottled water) to advertise/promote a second class of goods sold under the same trade mark (here: clothing) can amount to genuine use "in relation to" the first class of goods. The AG's thinking is foreshadowed by English case law relating to the position prior to the implementation of the Trade Marks Directive. This was to the effect that use on goods and use in relation to goods can be two different things (see for example the Kodak case where use of the mark KODAK on t-shirts was held not to be use in relation to t-shirts, but use in relation to film; and Budejovicky Budvar v Anheuser-Busch, where use of the trade mark BUD on beer mats was held to be use in relation to beer). However brand managers who, as a matter of course, include in their trade mark application specifications the full range of possible promotional items (t-shirts, paper goods, mugs, badges etc) should be aware that these may well be vulnerable to revocation if challenged.