The European Court of Justice (ECJ) handed down a slightly controversial judgement in January, holding that affixing a trade mark to items given away free of charge to purchasers of other goods is not genuine use of the trade mark in respect of the free items.
The judgement was a decision on a reference of Austria's Oberster Patent und Markensenat (the high patent and trade mark tribunal). Maselli-Strickmode GmbH, the defendant in this case, had a registration for the word mark "Wellness" in Austria in respect of goods in classes 16 (printed materials), 25 (clothing) and 32 (alcohol-free drinks) of the Nice classification system. Maselli's main business is as a clothing retailer and, by way of a promotion, it offered a gift of a free non-alcoholic drink described as "Wellness-drink" to purchasers of some of its clothing. Crucially, Maselli only used the trade mark in connection with free promotional drinks and not for drinks sold separately.
The claimant, Silberquelle GmbH, is a producer of non-alcoholic drinks in Austria and applied for a cancellation of Maselli's "Wellness" mark for goods in class 32 on the grounds of lack of genuine use. The ECJ granted Silberquelle's application and held there was no genuine use of a trade mark where promotional items were handed out as a reward for the purchase of other goods. It reasoned that, in those circumstances, the items were not distributed with the aim of penetrating the market for goods in the relevant class and distinguishing those goods from the goods of other undertakings, which the Court described as the "commercial raison d'etre" of a trade mark.
This case has caused some concern to commentators in the field. If followed closely in other cases, the judgement could make many trade marks registered in respect of goods intended as free promotional items vulnerable to attack.
Novelty items such as pens and key-rings are given away regularly by businesses whose main products or services are covered by a different Nice classification than the free gifts. Indeed, many food and drinks companies offer promotional T-shirts and other items of clothing to their customers, and it is easy to imagine the reverse situation from the facts of Maselli exposing trade mark registrations in respect of such items to challenge.
The judgement has also been criticised in some quarters for seeming to place undue importance on keeping the number of trade marks on registers under control to the expense of the protection of the consumer, which, to use the ECJ's terminology, could be described as the "raison d'etre" of the trade mark system. Arguably, a consumer could still be confused by one business's free goods and another business's retail product if the marks used in relation to the two are similar.
Whether the floodgates for attacking trade marks registered in respect of promotional items have indeed been opened by the Maselli judgement, or whether this case will be interpreted narrowly in relation to its own facts, remains to be seen.