The mark FRUITFULS was registered as an EUTM in relation to “confectionery, chocolate and chocolate goods, pastry” in Class 30. An application was filed to revoke the registration for non-use. The evidence of use provided by the trade mark owner, August Storck KG, only concerned a single type of confectionery, namely “hard fruit candies”.
The Cancellation Division and Board of Appeal upheld the application for revocation in its entirety on the ground that the mark had not been put to genuine use in relation to confectionery during the relevant period
The trade mark owner argued that the Board of Appeal should not have compared its volume of sales of a specific hard fruit candy in a single EU member state to sales to the confectionery market in general in the entire EU in order to conclude that its volume of sales was extremely low.
The General Court therefore had to answer two questions:
1. In assessing genuine use, was the Board of Appeal wrong to compare the volume of sales by the trade mark owner to sales on the “confectionery” market in general to conclude that the volume of sales was low?
2. In carrying out the same analysis, was the Board of Appeal wrong to compare the applicant’s sales in a limited part of the EU with the whole EU?
General Court findings
Hard fruit candies v confectionery
The General Court commented that, if a trade mark is registered for a category of goods or services which can be split up into a number of independent sub-categories, proof that the mark has been put to genuine use in relation to only part of those goods or services affords protection only for the relevant sub-category or sub-categories to which the goods or services belong.
On the other hand, if a trade mark has been registered for goods or services defined so precisely and narrowly that it is not possible to make any significant sub-divisions within the category concerned, then the proof of genuine use of the marks for the goods or services covers the entire category for the purposes of the opposition. To give another example, if a mark was registered for “trousers”, proof of use in relation to jeans only would be enough to prove use for trousers in general.
It was therefore necessary to decide whether “hard fruit candies” constitute a coherent sub-category which could be considered autonomously in relation to “confectionery”, or whether those goods are part of a single group of goods designated by the word “confectionery”, where division into sub-categories would be arbitrary.
The General Court held that “hard fruit candies” did not constitute a separate sub-category in relation to “confectionery”. In its assessment, the Court considered that the purpose of the products is vital to consumers, whereas the nature and characteristics of the goods are not relevant to the definition of sub-categories of goods. It was important that the purpose of confectionery was the same as that for hard fruit candies – to be consumed for enjoyment rather than nutritional needs.
Therefore, the Board of Appeal was wrong to compare sales of a specific type of hard fruit candies on the one hand, with confectionery of all types on the other.
Slovenia / Germany v EU
The General Court also found that the Board of Appeal had erred in comparing the sales made by the trade mark owner in Slovenia, and possibly the production of the goods at issue in Germany, with the market in the entire EU.
The Court said that, in the interpretation of the notion of genuine use, account must be taken of the fact that the reason for the requirement of genuine use is not to assess commercial success or to review the economic strategy of an undertaking, nor is it intended to restrict trade mark protection to the case where large-scale commercial use has been made of the mark.
The Board of Appeal had favoured a method of reasoning which tended to underestimate the relative scale of the trade mark owner’s sales, without providing specific justification as to the necessity for judging genuine use in relation to all sales of confectionery in the EU.
As the trade mark owner had not produced evidence in relation to the use of the mark in relation to chocolate and chocolate goods and pastry, the Court revoked the registration in respect of these goods.
Impact on brand owners
Therefore, if a trade mark has only been used in relation to a sub-category of the goods or services for which it is registered, brand owners must consider whether that sub-category of goods is capable of being viewed independently, or whether to do so would be arbitrary. The decisive factor for defining sub-categories of goods or services is the purpose and intended use of the goods at issue – the nature and characteristics of the goods or services is irrelevant. If the goods or services have a different purpose or intended use to the registered goods or services, there is likely to be an independent sub-category.
If the sub-category is capable of being viewed independently, the brand owner will have to prove use in relation to the entire category of goods or services for which it is registered. If not, the brand owner will have protection for all the goods or services in question, despite only having to prove use in relation to that sub-category. Using the example above, this means that owners of a trade mark for “trousers” in Class 25 would gain protection for trousers while only having to show use in respect of jeans. This is clearly helpful for brand owners who are only using their mark on a small scale in relation to a limited class of goods or services.
However, brand owners should still be mindful of the 2014 case of Reber Holding GmbH & Co KG v OHIM, where an EUTM covering “chocolates” was revoked for non-use, despite the trade mark owner selling 40-60kg of hand-made chocolates annually. In that case, the CJEU affirmed that the trade mark owner’s use had to be assessed in respect of chocolate, not pralines, as the trade mark owner claimed. The CJEU said that the appreciation of genuine use must be based on the products and services covered by the trade mark and not on a certain marketing concept (i.e. hand-made pralines). Therefore, brand owners must still be aware that, if their goods have an artisan quality, this is irrelevant when assessing genuine use.