Decision could inform Community Trade Mark use across European Union.
Nike’s (Nike Innovate C.V.) fight to protect its iconic ‘JUMPMAN’ trade mark in the UK took another twist on 21 July, when an appeal hearing took place before the UK Appointed Person against a decision issued in October 2014 (Decision O-451-14) by the UK Intellectual Property Office (UK IPO) dismissing a trade mark opposition by Intermar Simanto Nahmias (Intermar) against Nike's attempts to register JUMPMAN as a trade mark in the UK.
The decision of the Appointed Person in this appeal may provide important guidance for owners of Community Trade Marks (CTMs) by clarifying the issue of what constitutes 'genuine use' of a CTM. This, in turn, may allow CTM owners to better assess whether their CTM rights are at risk of attack from third parties for lack of use.
A CTM is a unitary trade mark right that automatically extends to all EU member states (of which there are currently 28). The benefits of obtaining trade mark protection by way of a CTM over applying to protect a trade mark separately in each EU member state include: speed, greater simplicity, lower cost and less administration.
However, CTMs, like other trade marks, must be put to genuine use by the trade mark owner (or with its consent) in relation to some or all of the goods/services covered by the registration if the trade mark is to remain validly registered and capable of being enforced against third parties.
If genuine use of a CTM cannot be demonstrated (or cannot be demonstrated to the standard required), the CTM registration will be vulnerable to cancellation for lack of use and protection for the mark may be lost. For many years trade mark owners have obtained CTM protection based on the guidance issued by the CTM Office that genuine use of a CTM in one EU member state is considered genuine use of the mark in the European Community.
In this case Intermar, a Spanish footwear manufacturer, opposed Nike’s application to register the trade mark JUMPMAN as a CTM for goods covered by Class 25. Intermar argued that the trade mark JUMPMAN is confusingly similar to its earlier filed trade mark JUMP, which is registered as a trade mark in Spain (and also as a CTM) for overlapping goods covering Class 25, and that Nike’s application should therefore be refused on the basis of their being a likelihood of confusion between the marks.
Intermar was successful in its opposition to Nike's JUMPMAN trade mark before the CTM Office (based on its earlier Spanish trade mark). Nike reacted to this by requesting conversion of its refused CTM application in to national trade mark applications in a number of EU member states (including the UK). When Intermar opposed Nike's UK application for JUMPMAN (this time based on its CTM for JUMP) the UK IPO dismissed Intermar's opposition on the basis that it had not demonstrated genuine use of the JUMP trade mark in the EU and therefore was not eligible to rely on its CTM registration in the opposition.
To put Intermar's use of the JUMP trade mark in to context, it had sold 55,000 pairs of footwear bearing the JUMP trade mark to a customer based in Bulgaria during the last 16 months of the relevant five year period for assessing genuine use of the mark. These sales equated to a value of $476,000. Additionally, 170 pairs of JUMP footwear was sold by Intermar's Bulgarian customer to a Romanian company within the relevant period for assessing genuine use of the mark. Further sales of JUMP footwear by Intermar to its Bulgarian customer continued outside of the relevant five year period for assessing genuine use of the mark concerned. However, Intermar's evidence was considered by the UK IPO to be insufficient to prove genuine commercial use of its mark in the European Community. Consequently, Intermar's opposition against Nike's JUMPMAN trade mark application in the UK was dismissed.
Intermar is contesting the UK IPO's decision and the outcome of the appeal could have implications for CTM owners.
Dale Carter, an associate based in our London office commented:
“Community Trade Marks are perceived by many as an attractive and cost-effective means of securing EU-wide trade mark protection. However, many CTM owners may never use their CTMs outside of their home territory. The original guidance set out in the Joint statements of the Council and the Commission of the European Communities (entered in the minutes of the Council meeting at which the Regulation on the Community Trade Mark was adopted on 20 December 1993) was that genuine use of a CTM in one EU member state would constitute genuine use of the mark in the European Community. Recent trade mark decisions addressing the issue of genuine use of CTMs have cast a shadow over the guidance in the Joint statements of the Council and the Commission. In some instances, these decisions have set a worrying precedent for CTM owners that even substantial use of a mark registered as a CTM in the home territory of the owner may, depending on the specific facts and circumstances of the case, be insufficient to constitute genuine use of the mark concerned. The issue of whether there has been genuine use of a mark has implications for the ability of CTM owners to maintain and enforce their CTMs against third parties."
"The outcome of this appeal may provide helpful guidance to CTM owners to enable a better understanding of the requirements for genuine use of a CTM and to weigh up the pros and cons of seeking trade mark protection in the EU at a national versus regional level."
“Recent trade mark decisions regarding genuine use of CTMs, if followed, may have potentially serious implications for businesses with operations that are geographically focussed in just one EU country, particularly where those businesses are only small players in a large market."
“Businesses may need to think more carefully about whether to seek trade mark protection on a country-by-country basis in the EU – which will be more costly, but usually offers more robust and secure trade mark protection – or to continue to rely on the benefits (and drawbacks) offered by the CTM system. Depending on the specific circumstances, businesses may be better advised to seek trade mark protection both nationally in their home territory within the EU and also at the CTM level to safeguarded their rights as far as possible in all EU countries in which they trade."