Advocate General Sharpston delivered her opinion in Leno Merken BV v Hagelkruis Beheer BV C‑149/11 on 5 July 2012. The preliminary reference from the Dutch courts, better known as the ONEL/OMEL reference, sought clarification on the extent to which a Community trade mark (CTM) must be used in the Community for that use to be considered genuine use under Article 15(1) of the CTM Regulation.
The dispute between the parties arose when Hagelkruis applied to register OMEL as a Benelux trade mark for legal services. Leno, holder of the CTM ONEL for legal services, opposed the application. As the ONEL mark was registered five years prior to the OMEL application, Hagelkruis required Leno to prove its mark had been put to genuine use. Under Article 15(1) of the CTM Regulation, a CTM that has not been put to use within five years of its registration is liable to be revoked. In response, Leno showed that it had used the mark in the Netherlands, but declined to prove any use outside the Netherlands.
As it was common ground that the use shown in the Netherlands would have sufficed to show genuine use of a national trade mark, the stage was set for a reference to the Court of Justice of the European Union (CJEU) for clarification of the extent to which a Community Trade Mark must be used.
Four questions were referred to the CJEU. In essence, the CJEU was asked whether use in one Member State would always be sufficient; if not, could it ever be sufficient? Advocate General Sharpston began by noting that “genuine use in the Community”, as required by Article 15(1), was an indivisible concept that had to be examined as a whole. As the CJEU had found previously in Sunrider C-416/04 P that the geographic scope of use of a mark was only one of several factors in assessing genuine use, the wording of Article 15(1) already suggested that use in one Member State by itself would not necessarily be sufficient. This also meant, naturally, that use outside the Community was irrelevant to the inquiry.
Advocate General Sharpston noted that the Sunrider decision, which related to whether a national trade mark had been put to genuine use, required that the use was “sufficient to maintain or create market share for the goods or services protected by the mark”. Applying this reasoning to a CTM, Advocate General Sharpston considered the holder of a mark must show this to be case with regard to the internal market. The actual territories of Member States within the internal market should not be relevant to the question of genuine use.
Advocate General Sharpston considered it consistent with previous authorities that setting a quantitative threshold for genuine use was inappropriate. The circumstances of each case must be assessed in light of the market for the goods and services for which the mark is used. Given the unique factors affecting a particular market, Advocate General Sharpston concluded that use in only one Member State did not necessarily preclude this use from being genuine use in the Community. If the market was, for example, concentrated around one territory, then this should be taken into account. This, of course, is for the national court to assess.
At the start of her opinion, Advocate General Sharpston drew a distinction between the threshold for showing genuine use in the Community and the threshold for showing a reputation in the Community for the purposes of Article 9(1)(c) CTMR, the latter having recently been the subject of Pago C-301/07. In Pago, the CJEU found that reputation in a “substantial part” of the Community was required, but that on the facts of a particular case a substantial part of the Community could be one Member State.
Although these are separate issues with differing consequences, they both highlight the practical problems of the CTM system. The legal concept of the internal market is not always consistent with the ways in which businesses operate. If followed by the CJEU, Advocate General Sharpston’s opinion is unlikely to provide the definite answer to the issue that the parties sought.