Introduction
Place of use
Author of use
Products and/or services used
Sign used
Extent of use
Global appreciation
Practical examples
Comment
Article 58 of the EU Trademark Regulation(1) states that:
The rights of the proprietor of the EUTM shall be declared to be revoked on application to the Office or on the basis of a counterclaim in infringement proceedings:
- if, within a continuous period of five years, the trade mark has not been put to genuine use in the Union in connection with the goods or services in respect of which it is registered, and there are no proper reasons for non- use.
In principle, EU trademarks (EUTMs) thus become vulnerable to non-use cancellation if they are not genuinely used for a continuous period of five years. However, things can get a little bit complicated in view of the specificity of the European trademark system – notably, the territory covered.
Before getting into detail, it is important to understand the basics of the calculation of delays. There are two scenarios:
- EUTMs filed directly before the EU Intellectual Property Office (EUIPO), for which all delays are clearly indicated on the register page of the trademark in question; and
- international registrations designating the European Union.
Figure 1 exemplifies how delays are calculated.
Figure 1: calculation of delays
Use that is made during the three-month period prior to the request for cancellation of an EUTM for non-use shall be considered irrelevant by the courts. Indeed, this "frozen period" provides opportunity and time for the parties to discuss and possibly settle the matter amicably. It also prevents any bad faith endeavours from the owner of the challenged trademarks, which could be tempted to start using the mark to avoid cancellation.
Finally, it should be noted that, in principle, competence lies with the EUIPO. Considering the specificity of the EUTM system, the European Court of Justice (ECJ) has developed criteria for assessing genuine use.
The question of the place of use is one of the most delicate subjects when assessing genuine use in the European Union. In theory, for a use to be considered genuine in terms of geographical extent, it must take place within a substantial part of the European Union – not necessarily in each and every EU member state. The question thus arises: what qualifies as a "substantial part of the European Union"?
While the ECJ does not exclude the possibility that use in a single member state may characterise genuine use in the European Union, this must be considered as the exception, not the rule. Even if "it is not necessary for such use to be geographically extensive in order to be qualified as genuine", as indicated by the ECJ in the Leno Merken case,(2) EUTMs must be used in accordance with their essential function and for the purpose of maintaining or creating a market share within the European Community for the goods or services covered by them.
The ECJ gave the following justification in the Leno Merken case:
Whilst there is admittedly some justification for thinking that a Community trade mark should – because it enjoys more extensive territorial protection than a national trade mark – be used in a larger area than the territory of a single Member State in order for the use to be regarded as 'genuine use', it cannot be ruled out that, in certain circumstances, the market for the goods or services for which a Community trade mark has been registered is in fact restricted to the territory of a single Member State. In such a case, use of the Community trade mark on that territory might satisfy the conditions both for genuine use of a Community trade mark and for genuine use of a national trade mark.
In the Leno Merken case, the trademark cancelled at first instance for non-use was EUTM OMEL, which had been filed on 19 March 2002 and registered on 2 October 2003 for services in classes 35, 41 and 42, and for which the owner had demonstrated genuine use in the Netherlands only. At section 43, the ECJ made a distinction between the wording "territory of one or more Member States" and the phrase "in the Community", which are used in the EU Community Trademark Regulation,(3) and therefore emphasised the unity and singularity of the European territory.
Post Brexit use in the United Kingdom
Brexit does not have retroactive consequences in this regard. This means that use in the United Kingdom prior to 31 December 2020 will be taken into account for the purpose of assessing genuine use of an EUTM. Of course, use made after this date is irrelevant since EUTMs no longer cover the United Kingdom.
This criterion is easier to understand. Indeed, to be considered genuine, use must be made by the owner of the EUTM (a natural or legal person) either directly or indirectly via an authorised user. An authorised user can be:
- a licensee;
- a sublicensee – if authorised in the licence agreement; or
- a distributor at wholesale or retail level.
With regard to the latter, the General Court considered, in its Friboi decision, that:
the use of the mark of a production company by a distribution company which is economically linked to it is presumed to be use of that mark with the consent of the proprietor and is therefore to be deemed to constitute use by the proprietor, in accordance with Article 15(2) of Regulation No 207/2009.(4)
The affiliation between the owner of the EUTM and the distribution company must be evidenced.
The burden of proof of authorisation for use lies with the trademark owner, which is why, in practice, it is advisable to draw up a licence agreement that includes a clause related to the conservation of evidence of use.
EUTMs must be put in genuine use for the goods and/or services for which they are registered – that is, each and every good and/or service designated in the application. With this in mind, partial cancellations are possible.
Furthermore, use does not extend its effects to similar goods or services, not even in the event of a well-known trademark. This applies to the use being made in relation to a specific subclass, which is not sufficient to demonstrate use of the entire class. For example, demonstrating use in relation to "racing cars" is not relevant for an assessment of genuine use in relation to the broader category of "cars", since the destination of the products are different.(5)
The criterion for determining whether a category is sufficiently specific is the purpose or destination of the product or service, and not the market segment and geographic origin. For example, "luxury cars" or "luxury clothing" do not form autonomous subclasses within the categories of "cars"(6) or "clothing".(7) The same applies for wines with different appellations of origin, which do not constitute autonomous subclasses.(8)
One exception to that principle applies for spare parts and after-sales services (eg, in the automotive or household appliances sectors),(9) for which use is considered as if it was made in relation to the products designated.
To be taken into consideration in a genuine use assessment, the sign must be used as registered (ie, in an unaltered form). The evidence must show that the challenged mark has been used as a mark – that is, to guarantee the origin of the goods and/or services for which it is registered (eg, not only as a corporate or trade name).
However, this principle is approached by the European courts in a practical way. Indeed, it is settled case law that use of an EUTM in a modified form that does not alter its distinctive character is considered to be use of the sign as registered. The purpose of this flexibility is to allow variations to be made to the sign when it is used commercially that, without altering its distinctive character, enable it to be better adapted to the marketing and promotional requirements of the goods and/or services concerned.
What if the sign that has evolved has also been registered as a trademark?
The ECJ, in its Rintisch decision, considered that the proprietor of a trademark may:
for the purpose of establishing the use of the mark . . . rely on its use in a form which differs from that in which that mark was registered without the differences between those two forms altering the distinctive character of that mark, and this notwithstanding the fact that that different form is itself registered as a trade mark.(10)
Use of a single sign may thus allow the owner to evidence genuine use of two registered EUTMs, as long as they share the same distinctive and dominant elements.
What if the sign as registered is always used as part of a complex trademark that is itself registered?
The ECJ answered this question in its Levi Strauss decision, confirming that the condition of genuine use can be fulfilled:
when a registered mark, which has acquired its distinctive character as a result of the use of another complex mark of which it constitutes one of the elements, is used only through the intermediary of this other complex mark, or when it is used only in conjunction with another mark, the combination of these two marks being, moreover, itself registered as a mark.(11)
It is therefore considered that the distinctive character is not necessarily altered when the sign is used as a component of another sign that bears its own distinctive character. Figures 2 and 3 contain examples of trademarks where the distinctive character was considered unaltered and altered, respectively.
Figure 2: examples of trademarks, the distinctive characters of which were considered to be unaltered
Figure 3: example of a trademark, the distinctive character of which was considered to be altered
The final criterion to take into account is that use must be real and serious – that is, in conformity with the essential function of trademarks, which is to allow the identification of the commercial origin of the goods and/or services designated by them.
In the Ansul decision, it was held that genuine use of a trademark, in accordance with its essential function "presupposes use of the trade mark on the market for the goods or services protected by the trade mark and not merely within the undertaking concerned" – that is:
in relation to goods or services which are already being marketed or the marketing of which, prepared by the undertaking with a view to winning customers, in particular in the context of advertising campaigns, is imminent.(12)
Indeed, use of a sign internally, or only for promotional purposes, is not sufficient. The trademark owner must demonstrate actual use on the market and sufficient turnover. As stated in the Bainbridge decision:
minimal or insufficient use for the purpose of determining that a mark is being put to real, effective use on a given market. In that regard, even if it is the owner's intention to make real use of his trade mark, if the trade mark is not objectively present on the market in a manner that is effective, consistent over time and stable in terms of the configuration of the sign, so that it cannot be perceived by consumers as an indication of the origin of the goods or services in question, there is no genuine use of the trade mark.(13)
Of course, the ECJ's role is not to evaluate commercial success, nor to control the economic strategy of an undertaking, but rather to have a case-by-case approach, depending on the sector of activity.
Genuine use assessments are conducted by courts globally on a case-by-case basis, taking into account the interdependence of all relevant criteria.
The overall assessment of the evidence must be based on all the facts and circumstances capable of establishing the reality of the commercial exploitation of the mark. In particular:
- the uses considered justified in the economic sector concerned to maintain or create market shares for the goods or services protected by the mark;
- the nature of these goods and/or services;
- the characteristics of the market; and
- the extent and frequency/regularity of use of the mark.
Indeed, it would not be relevant to require the same extent of use for mass market food products as for exclusive luxury products.
Additionally, meaningful use can be established by a combination of elements that, taken individually, would be insufficient. As long as such elements are concrete and objective, and do not rely on probabilities or presumptions, they can prove an effective and sufficient use of the mark on the market concerned. A low volume of products marketed under a brand name may, for example, be compensated for by a high intensity or consistency of use of this brand name over time, and vice versa.
McDonald's
It was difficult to miss the 11 January 2019 EUIPO decision that resulted in McDonald's losing its 1996 EUTM BIG MAC in a revocation case filed by the Irish chain Supermac's, after McDonald's failed to demonstrate genuine use.(14) McDonald's had provided affidavits, brochures and advertising poster prints, and numerous printouts of websites, including one from Wikipedia, but no evidence of actual use on the market.
Monopoly
Hasbro Inc is the proprietor of three wordmarks for MONOPOLY, filed in:
- 1996, in classes 9, 25 and 28;
- 2008 in class 41; and
- 2010 in class 16.
Hasbro applied for a fourth wordmark in 2010 in relation to classes 9, 16, 28 and 41 – classes which had already been covered by previous registrations.
In opposition proceedings against the registration of the trademark DRINKOPOLY (Kreativini Dogadaji DOO) in 2011, Hasbro faced an invalidation action against its 2010 MONOPOLY mark on the ground that Hasbro had refiled the same mark in order to avoid facing the use requirement.
It was revealed during the proceedings that "being able to rely upon one registration without the need to prove use" was a benefit to Hasbro and that it considered this obvious benefit as something that is "considered by all brand owners and in many different industries".
The Boards of Appeal of the EUIPO considered that even if the refiling had not solely been motivated by the advantage of not having to prove the genuine use of the mark concerned, this did not make the strategy more legal or acceptable, and nor did the fact that other companies used the same filing strategy.
As such, Hasbro's latest MONOPOLY trademark registration was declared invalid for all goods and services that had been covered by previous registrations.
It follows from the courts' case law that "genuine use" is a concept which has its own independent meaning in EU law and that all the factors to be taken into account in assessing whether an earlier trademark has been put to genuine use for the goods or services for which it has been registered are interdependent. The courts will adapt a pragmatic approach on a case-by-case basis.
For further information on this topic please contact Camille Verneuil at INLEX IP Expertise by telephone (+33 1 56 59 70 90) or email ([email protected]). The INLEX IP Expertise website can be accessed at inlex.com.
Endnotes
(1) Regulation (EU) 2017/1001.
(2) C-149/11, 19 December 2012.
(4) T-324/09, 17 February 2011, section 32.
(5) T 677/19, SYRENA, 23 September 2020.
(6) C-720/18, 22 October 2020.
(7) C-721/18, 5 October 2017.
(8) C-714/18, Taiga, 16 July 2020.
(9) Joined cases C-720/18 and C-721/18, 22 October 2020.
(10) C-553/11, 25 October 2012.
(11) C-12/12, 18 April 2013.
(12) C-40/01, 11 March 2003.
(13) T-194/03, Bainbridge, 23 February 2006, section 32.