The European Court of Justice (ECJ) has now held in that the hand-out of promotional items as a reward for the purchase of other goods does not establish the “genuine use” of a trademark for such promotional goods under Articles 10 and 12 of Directive 89/104/EEC (Trademark Directive).    Silberquelle GmbH v. Maselli-Strickmode GmbH, Case No. C-495/07, (ECJ, 15 January 2009).

The Oberster Patent- und Markensenat of Austria had referred the case to the ECJ for a preliminary ruling under Article 234 of the EC-Treaty on the interpretation of the Trademark Directive.

Maselli-Strickmode GmbH (Maselli) manufactures and sells clothing. It registered the Austrian word mark “WELLNESS” amongst others for alcohol-free drinks under Class 32 of Nice Classification. Maselli had never sold any of the alcohol-free drinks, but handed them out as a gift in bottles marked “WELLNESS-DRINK” along with the clothing sold. Silberquelle GmbH (Silberquelle) sells alcohol-free drinks and applied successfully for cancellation of the trademark “WELLNESS” in Class 32 on the grounds of non-use before the Austrian Patent and Trademark Office. On Maselli’s appeal, proceedings were stayed pending a decision on the interpretation of “genuine use” of a trademark under the Trademark Directive by the ECJ.

The ECJ was asked to decide if a trademark was being put to genuine use under the Trademark Directive if it was used for goods which the proprietor of the trademark gave free of charge to purchasers of his other goods after conclusion of the purchase contract.   Finding no genuine use in this case, the ECJ stressed that the facts here differed from cases in which the proprietor of a mark sold promotional items in the form of souvenirs or other derivative products.

Pursuant to the ECJ’s case law, “genuine use” of a trademark within the meaning of the Trademark Directive had to be understood to denote actual use, consistent with the essential function of a trademark, which was to guarantee the identity of the origin of goods or services to the consumer or end user by enabling him, without confusion, to distinguish the goods or services from others which have another origin.

The ECJ held that the protection a trademark conferred and the consequences of registering it in terms of enforceability against third parties could not continue to operate if the mark lost its primary purpose, which was to create or preserve an outlet for the goods or services that bear the sign of which it is composed, as distinct from the goods or services of other undertakings.