Op-Ed: “Testarossa judgment does not leave Ferrari red-faced“ by William Bull
The requirement for trade mark proprietors to make genuine use of their trademarks is one that those new to intellectual property law may not be aware of. Typically summed up in the maxim “use it or lose it”, a registered trade mark must be put to genuine use if it is to remain valid. In the EU, this rule is laid down in Article 16(1) of the recast Trademark Directive of 2015 (Directive 2015/2436), which provides for the revocation of a trade mark that has not been put to genuine use for a continuous period of five years in the Member State in connection with the goods or services in respect of which it is registered. While at first sight it may seem odd to require a trade mark owner to actually use their property, there are sound economic reasons for doing so, related to the need to ‘keep free’ registrable signs for third parties; in this sense comparable in the area of real property to the need to ensure that use is actually made of land, albeit in that case through rules on prescription. The genuine use requirement has recently been in the headlines, too, following the news that the elusive yet illustrious Bristolian artist Banksy’s attempt to prevent a greetings card company from using his iconic ‘Flower Thrower’ mural, originally painted in Bethlehem, had failed. Banksy had registered a trade mark incorporating the mural with the EU Intellectual Property Office (EUIPO) via an organisation called Pest Control, the official body that authenticates Banksy’s art. However, the registration was challenged by the aforementioned greetings card company, Colour Black, which sought cancellation of the trade mark on the ground that it did not constitute a bona fide registration. This then prompted Banksy to open a shop intended to sell his own merchandise, including merchandise showing the Flame Thrower, in order to use the trade mark he had registered. Unfortunately for him, though, pursuant to a long-running legal battle the EUIPO invalidated the trade mark last month, after Banksy himself had admitted the use being made of it was not genuine.
The Court of Justice has already delivered a number of rulings concerning the interpretation of Article 16(1), or its equivalent provision in the EU Trademark Regulation (Regulation 2017/1001, Article 18(1)). Notably, in Ansul BV v Ajax Brandbeveiliging BV (C-40/01), the Court held that any use ‘must be consistent with the essential function of a trademark’ (paragraph 36), that is as a sign designating trade origin, meaning in particular that such use cannot be merely internal use within the proprietor’s organisation, but rather must be public and external use in relation to goods or services on the market or about to be marketed (paragraph 37). A few years later, the Court also clarified in Il Ponte Finanziaria SpA v EUIPO (C-234/06) that in cases where the proprietor of a trade mark has registered several variations of that mark, the use of a particular mark in the proprietor’s ‘portfolio’ cannot be taken as use of a similar mark in the portfolio on the basis of that similarity; in other words, the requirement of genuine use that must be made of a registered trade mark applies to each individually registered mark in its own right (once again, in relation to the goods or services in respect of which each individual mark is registered). And more recently, in Leno Merken BV v Hagelkruis Beheer BV (C-149/11), the Court was asked the specific question concerning EU trade marks (namely the requirement in the Trademark Regulation) as to what constituted genuine use within the EU, and particularly whether use in only one EU Member State is sufficient to meet the requirement. The Court’s answer in that case was essentially that territorial borders do not play a role as such in this question at EU-level, and instead regard must be had to whether the trade mark has been used for the purpose of establishing market share within the EU for the goods or services that it covers, and therefore the impact of the use in the internal market as a whole. Hence, the fact that an EU trade mark has been used in only one Member State is not in and of itself determinative of anything.
Now, in its latest judgment on the matter delivered last week in Ferrari (joined cases C-720/18 and C-721/18), the Court has addressed another fundamental question regarding the requirement of genuine use, namely whether genuine use of a trade mark must have been made in relation to all of the goods and the spare parts of which they are composed in the class in respect of which the mark is registered in order to satisfy the requirement, or alternatively if it is sufficient that there has been genuine use in relation to only some of those goods and the spare parts composing them. This question arose in a dispute involving the Italian luxury sports car manufacturer Ferrari, whose registered trade mark ‘testarossa’ had had its protection withdrawn on a request by a third party applicant to German Patent Office, on the ground that Ferrari had failed to satisfy the genuine use requirement over a continuous period of five years in Germany and Switzerland. Ferrari had marketed different models of sports car under the name ‘testarossa’; however, the trade marks at issue were registered for cars and car parts in general, as opposed to only high-end sports cars in particular. It was this fact that led to the preliminary reference to the Court of Justice by a regional court in Düsseldorf, and to the Court’s latest pronouncement on the Trademark Directive’s provision on genuine use (specifically Article 12(1) of the previous incarnation of the Directive, 2008/95/EC). And, as has already been reported on EU Law Live, the Court has decided that the answer is the latter: a mark registered for a category of goods and of spare parts must be considered as having been the subject of genuine use within the meaning of Article 12(1), now Article 16(1), for all goods and the spare parts composing them that fall within that category, even if it is only been used for some of those goods. The one proviso the Court added to this would be if it emerges from the facts that the consumer wishing to purchase the goods perceives them as constituting an independent sub-category of the class of goods for which the mark concerned has been registered.
So the fact that Ferrari had made use of its mark in relation to luxury sports cars does not necessarily prevent the conclusion that it used its mark genuinely in relation to the broader class of automobiles for which it had been registered – though whether this is ultimately the case will be a matter for the referring court to determine. Of course, in light of the Court’s previous judgment in the EU-wide context in Leno, this ruling may not come as a big surprise. It is also arguably consistent with a previous decision of the Court of First Instance (as it was known at the time) in the case of La Mer Technology v OHIM ( T-418/03), where it was held that minimal use can be deemed genuine use, provided that more limited amount of use is warranted in the industrial sector concerned as a means of creating market share for the goods or services protected by the mark. At any rate, what is now clear is that not only does the use not necessarily have to be significant in order to be genuine, but it does not have to be all-encompassing either.
William Bull is an Assistant Professor at Maastricht University, having published his PhD thesis in 2016 on the subject of Optional Instruments of the European Union, including the EU trade mark. He is a researcher of the Maastricht European Private Law Institute (M-EPLI), and coordinator of the Maastricht Project on European Private Law.