Case C-495/07: Silberquelle GmbH v Maselli Strickmode GmbH
The European Court of Justice (ECJ), agreeing with the Opinion of the Advocate General, has confirmed that where a proprietor of a mark affixes that mark to items that it gives, free of charge, to purchasers of its goods, it does not make genuine use of that mark in respect of the class covering the items given away.
Like the Advocate General, the court held that "genuine use" means "actual use, consistent with the essential function of a trade mark" (paragraph 17), and that a mark cannot continue to be registered if the only use made of it is not such as 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" (paragraph 18). Therefore, the distribution of promotional items as a reward for the purchase of other goods is not "genuine use" within the meaning of the directive, and marks which are only used in this way are liable to be revoked.
Maselli, a fashion company, had registered the trade mark WELLNESS in Austria for products in class 16 (magazines and books), 25 (clothing) and 32 (non-alcoholic beverages excluding non-alcoholic beers) in 1989. In 2000 it had used the mark, in the form WELLNESS-DRINK, for non-alcoholic beverages which it offered free of charge to purchasers of its clothes.
Silberquelle, which sold water, sought to have the registration of the mark under class 32 revoked under articles 10 and 12 of the Trade Mark Directive (89/104/EEC) (Directive) (which was replaced on the 28 November 2008 by Directive 2008/95/EEC) on the basis that it had not been used in relation to those goods for more than five years. It argued Maselli's use of the mark on the bottled water was not to create or maintain a market in those goods but only to promote its clothing.
The Austrian court referred to the ECJ the question "whether articles 10(1) and 12(1) of [the Directive] are to be interpreted as meaning that a trade mark is being put to genuine use if it is used for goods (here: alcohol-free drinks) which the proprietor of the trade mark gives, free of charge, to purchasers of his other goods (here: clothes) after the conclusion of the purchase contract?".
The court ruled that "Articles 10(1) and 12(1) of the [Directive] must be interpreted as meaning that, where the proprietor of a mark affixes that mark to items that it gives, free of charge, to purchasers of its goods, it does not make genuine use of that mark in respect of the class covering those items."
The ECJ has followed the Advocate General's opinion, which is in line with previous English case law relating to the position prior to the implementation of the Directive, at least as regards free promotional items.
However, paragraph 13 of the judgment states that "it must be noted at the outset that the reference for a preliminary ruling concerns a case that is different from one in which the proprietor of a mark sells promotional items in the form of souvenirs or other derivative products" (emphasis added). This seems to suggest that although in the case of free promotional goods there is no attempt to maintain or create a market in such goods with reference to the mark the same may not be true for goods which are sold but which also promote other goods. What the position is in relation to such goods remains unclear.
Many issues relating to promotional use have yet to be referred to the ECJ and therefore remain uncertain. For example:
- In the present case it does not seem that the proprietor ever had any intention of using the mark to create or maintain a market in goods in question (i.e. non-alcoholic beverages). How would the court react to an application for revocation on the grounds of non-use where the only use in the previous five years was on goods given away but the owner of the mark had adopted this practice in order to assess whether there was a market for that product under that mark, or to increase its goodwill prior to (commercial) launch? Earlier ECJ guidance has confirmed that preparatory use can constitute genuine use.
- Do marked goods have to be sold for money or is other forms of consideration sufficient? Is it genuine use to use a mark on goods which are available by redeeming vouchers given away with purchases of other products? In this case, would it matter whether those goods are only available by redeeming vouchers, or whether a purchaser of those goods can decide whether to redeem vouchers, pay cash, or pay with a mixture of cash and vouchers?