The Italian Supreme Court has recently upheld the decision of the Court of Appeal of Milan and stated that businesses may lose their trademarks if they are not being used in a profitable way in the relevant market.
In 2007, Brandconcern BV ("Brandconcern") submitted an application for the registration of the trademark "Lambretta", despite that trademark having been owned by Scooters India Limited ("SIL") since 2002. Brandconcern concurrently commenced an action against SIL, requesting that the trademark be revoked on the grounds of its "long lasting non-use" by SIL.
The First Court rejected Brandconcern's claim, who appealed the decision before the Court of Appeal of Milan.
The Court of Appeal overturned the decision of the First Court and ruled that the trademark should indeed be revoked as a consequence of the total suspension of its use for three years (from 1985 to 1988). That decision was reached despite the persistent good reputation of the trademark.
This decision can be regarded as useful guidance for businesses on how to avoid losing their trademarks for non-use. In particular, the Court of Appeal stated that in order to avoid revocation, a trademark's use must be effective in that it is used in such a way as to influence the marketplace, affecting competitors' operational scope.
The Italian Supreme Court agreed with the Court of Appeal and confirmed that the essential element for "trademark survival" will be the effectiveness of its use and not its lasting reputation.