Background
Supreme Court judgment


In a July 2 2013 decision the Supreme Court declared the cancellation of a trademark for the products for which it was registered in Class 33 ("wines, spirits and liquors"), and permitted the trademark to continue in force only for those products for which it was effectively used (ie, orujo products). Orujo is a particular type of strong alcoholic liquor distilled from grape or herb pressings.

Background

Mexican company Maestro Tequilero, SA de CV, which markets tequila and its derivatives, applied for denominative Community trademarks in Classes 32 and 33 containing the denomination 'Maestro' for goods related to tequila. Those trademarks were not granted due to an opposition filed by Spanish company Destilerías Carthago, SAL on the grounds of the Spanish denominative trademark MAESTRO (No 900.923), registered in Class 33 for "wines, spirits and liquors". During the opposition proceedings, when requested to provide proof of use of its trademark, Destilerías Carthago submitted only proof of use of the trademark for orujo products, which the Office for Harmonisation in the Internal Market considered enough to refuse registration of Maestro Tequilero's trademark applications.

Dissatisfied with this decision, Maestro Tequilero filed suit against Destilerías Carthago based on Articles 39, 55, 58 and 60 of the Spanish Trademarks Act, which regulate the obligation to use a trademark and the consequences of lack of use – in particular, the consequent declaration of its cancellation. Specifically, Maestro Tequilero argued that the MAESTRO trademark had not been effectively used for the goods for which it was registered, and that therefore its cancellation should be declared for all goods for which it was registered, with the exception of orujo products.

The first instance and appeal courts dismissed the lawsuit. In particular, the appeal court assumed that the existing Trademarks Act had revoked the principle according to which the use of a trademark for certain goods or services serves to prove use of the goods in the same class of the International Nice Classification, contained in the former Trademarks Act. Despite this, it paradoxically argued, as reasoning for dismissal of the partial cancellation lawsuit, that the goods for which the trademark was registered were products of the same class as tequila, and that this, together with the similarity of the signs, could produce a likelihood of confusion for the consumer.

Maestro Tequilero appealed to the Supreme Court, arguing that the appeal court had in fact applied the expansive system established in the revoked Trademarks Act, without taking into account the changes implied by the introduction of Article 60 of the existing Trademarks Act, which foresees the partial invalidity and cancellation of a trademark.

Supreme Court judgment

In its decision, the Supreme Court recognised that the appeal court had extended the effect of partial use to products similar to those for which the MAESTRO trademark was being used. According to the Supreme Court, the appeal court did not take into account that the permissive system established in the former Trademarks Act has been replaced by a system that is more beneficial for the competitive functioning of the market and in greater accord with the EU regulations implemented in the existing Trademarks Act, according to which a declaration of cancellation of a trademark for lack of use covers, without exception, all goods and services which have not been effectively used by the holder or an authorised third party.

The Supreme Court cited the European Court of Justice's IP Translator decision (June 19 2012, C-307/2010), highlighting the importance of clarity and precision in the identification of the goods and services for which trademark protection is sought, in connection with the need to consider a trademark's function as an indication of origin of the goods or services that it identifies.

In this regard, the Supreme Court stated that the requirements of clarity and precision seek to facilitate the correct application of the governing regulations without substantially limiting the protection granted to the trademark on the one hand; but on the other always bearing in mind that the purpose of recording a trademark in a public registry is to enable both businesses and the competent authorities to determine the extent of the protection conferred by the trademark on that basis alone.

Therefore, the Supreme Court, in applying the requirements of clarity and precision, and bearing in mind the fact that Destilerías Carthago had used the MAESTRO trademark only for very specific products, concluded that Maestro Tequilero's appeal should be considered and cancelled the MAESTRO trademark for all products except orujo products.

For further information on this topic please contact Teresa de Sicart at Grau & Angulo by telephone (+34 93 202 34 56), fax (+34 93 240 53 83) or email (t.desicart@gba-ip.com).