A recent decision from the Intellectual Property Enterprise Court, part of the High Court of England and Wales, has cast doubt on whether use of a registered Community Trade Mark (CTM) in a single European Union country, in this case the UK, can be sufficient to maintain a CTM registration, which covers the whole of the European Union.
After a CTM has been registered for five years, it becomes vulnerable to cancellation on the grounds of non-use. If a third party files a cancellation, or “revocation”, action, the CTM will be maintained only for those goods or services for which the proprietor can show “genuine use” in the European Union.
When assessing whether there has been genuine use of a mark in the European Union, the territorial scope of the use is one relevant factor to consider. However, the Court of Justice of the European Union (CJEU) has made it clear that the territorial borders of the Member States of the European Union should be disregarded (C-149/11 Leno Merken BV v Hagelkruis Beheer BV ‘ONEL’). This would seem to imply that use in just one Member State could be enough to constitute genuine use, depending on the extent of the use in that territory.
However, this has been called into question by a recent decision from the Intellectual Property Enterprise Court of England and Wales (The Sofa Workshop Ltd v Sofaworks Ltd  EWHC 1773).
This case involved Sofa Workshop and Sofaworks, who are both retailers of sofas and other furniture. Sofa Workshop claimed that use of SOFAWORKS in relation to furniture constituted “passing off” and infringement of its CTM registrations for the word mark SOFA WORKSHOP, which cover a variety of goods and services, including furniture.
Sofaworks denied both passing off and infringement and brought counterclaims for cancellation of Sofa Workshop’s registrations on the grounds of non-use, as well as on the grounds that the mark SOFA WORKSHOP is descriptive and lacks the distinctiveness required for registration.
CANCELLATION ON THE GROUNDS OF NON-USE
There was clear evidence that Sofa Workshop had used the mark SOFA WORKSHOP on “an extensive scale” in the UK. However, Sofaworks claimed that this use in the UK was not sufficient to be considered genuine use of a CTM registration.
In considering this point, Judge Hacon noted the guidance from the CJEU in ONEL that the territorial borders of the Member States should be disregarded in the assessment of genuine use in the European Union. However, he felt that some of the CJEU’s other comments in the ONEL decision cast further light on the requirements for genuine use in the European Union. In particular, he noted the CJEU’s comment that “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”.
Taking this into consideration, Judge Hacon concluded that, as a general rule, genuine use of a mark in just one Member State will not be sufficient to qualify as genuine use in the European Union, and will therefore not be sufficient to maintain a CTM registration.
A CTM registration cancelled on the grounds of non-use can be “converted” into a national trade mark in the European Union country or countries in which there has been use of the mark. However, this would leave the mark free for use in the rest of the European Union.
In the case at hand, Sofa Workshop’s evidence from outside the UK was very limited. As a result, Judge Hacon felt that the evidence was insufficient to show that the mark SOFA WORKSHOP had been put to genuine use in the European Union, and therefore he concluded that Sofa Workshop’s CTM registrations should be cancelled on the grounds of non-use.
Judge Hacon went on to say that, in the event that there had been genuine use of the mark SOFA WORKSHOP in the European Union, Sofa Workshop’s CTM registrations would have been invalid anyway, since the mark SOFA WORKSHOP is descriptive. He said that, whilst there was evidence that the mark had acquired distinctiveness in the UK, there was no evidence from other English speaking countries, such as Ireland and Malta.
Nevertheless, despite losing their CTM registrations, Sofa Workshop was ultimately successful in this case, as Judge Hacon concluded that use of the mark SOFAWORKS constituted passing off of Sofa Workshop’s unregistered trade mark rights, or “goodwill”, in SOFA WORKSHOP.
This decision from Judge Hacon is highly surprising. However, we do not feel that brand owners should be overly concerned.
The CJEU has made it clear that territorial boundaries of Member States are to be disregarded in an assessment of genuine use. This suggests that whether there has been use in one Member State or several is irrelevant; instead what matters is the extent of the use. It is this principle which the UK and EU Courts, the UK Intellectual Property Office and the CTM Office (OHIM) have followed in other cases.
By way of example, genuine use in the European Union was considered by the General Court of the European Union quite recently in Case T-278/13 Now Wireless Ltd v OHIM – Starbucks (HK) Ltd. In an earlier decision, the CTM Office Board of Appeal had said that evidence of use of a CTM in London and the Thames Valley was sufficient to prove use of the mark in the European Union, commenting that significant weight should be assigned to use of the mark in London, as London is the largest city in the UK and the largest urban area in the European Union. The General Court confirmed that the Board of Appeal was right to conclude that there had been genuine use of the CTM registration as a result of the use of the mark in the UK.
It therefore seems unlikely that Judge Hacon’s decision that use of a CTM in a single Member State cannot be sufficient to maintain a CTM registration will ultimately be followed by the UK Intellectual Property Office, the CTM Office or the UK Courts in future.