Trade mark use: what is “use” and why it is important?
It is not necessary to have actually used a trade mark in order to apply for a registration, but if no use is made thereafter, there is a danger, eventually, of a mark being revoked for non use.
Revocation may be total if there is no genuine use whatsoever, or partial if there has been genuine use in respect of some goods and services but not others. The leading English law decision on use, La Mer Technology Inc. v Laboratories Goemar S.A., was decided in the High Court on 21 December 2004 following a previous reference to the ECJ in 2001.
What is use?
Articles 10-12 of the Trade Marks Directive and s.46 TMA provide that a registered trade mark will be liable to revocation if it is not put to “genuine use” within a period of five years from the date of registration or if use has been suspended for a continuous period of five years, unless there are “proper reasons” for non use. There are similar provisions in Regulation 40/94/EEC applicable to Community Trade Marks. The English law view of genuine use had historically been that use, however small, could count as genuine provided that it related to a real commercial transaction and was not bogus or made purely to circumvent a revocation application.
The La Mer case
Laboratories Goemar S.A. (“Goemar”) had two trade mark registrations for the words LABORATOIRE DE LA MER in classes 3 and 5. La Mer Technology Inc. (“La Mer”) applied for revocation of the marks and the Registry made a partial order for revocation in both classes 3 and 5. La Mer then appealed the decision on the basis that the registrations should both have been completely revoked. In the High Court, Mr Justice Jacob agreed in relation to class 5, but in relation to the remainder of goods registered in class 3 he referred questions to the ECJ concerning the meaning of “genuine use”, including questions concerning the extent and type of use to be considered.
The only use made by Goemar of the mark during a five year period was the sale of £800 worth of goods from France to the UK which fell within the class 3 registration. The goods were sold over a period of five months in the form of five deliveries to an agent in Scotland. The products bore the mark together with a recommended retail price label. The agent made preparations to sell the products via a private party network; however, there was no evidence of any sales to the public having taken place, and shortly afterwards the agent ceased trading. There was some evidence that Goemar sold other unrelated goods in the UK and was taking steps to find a new agent. In the High Court in 2001 Mr Justice Jacob had given his own view that a transaction however small, provided it was genuine, would constitute trade mark use. Here in his view there was genuine, albeit small scale, use.
The ECJ’s view
The ECJ’s judgment was given in January 2004, but relied heavily on a separate decision on the same issues in the case of Ansul B.V. v Ajax Case (C-40/01). The Ansul case gave substantial guidance on “genuine use” which the ECJ summarised in its judgment in La Mer:
Articles 10(1) and 12(1) of the Directive “must be interpreted as meaning that there is genuine use of a trade mark where it is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services; genuine use does not include token use for the sole purpose of preserving the rights conferred by that mark. When assessing whether use of the trade mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether the commercial use of the mark is real in the course of trade, particularly whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark. When it serves a real commercial purpose, in the circumstances cited above, even minimal use of the mark or use by only a single importer in the Member State concerned can be sufficient to establish genuine use within the meaning of the Directive.”
The ECJ further found that the national court could take account of any circumstances postdating the filing of an application for revocation in order to assess the genuineness of the use within the relevant period. Such circumstances may confirm that use was indeed genuine, or conversely, may reflect the trade mark owner’s intention to defeat the revocation application.
The High Court decision
The High Court felt that on this basis Goemar’s use, while not “sham” or carried out purely for the purpose of preserving rights, could not constitute genuine use and therefore the appeal was allowed. The test to be applied went beyond showing that the use of the mark was more than token and more than internal to the proprietor. This was on the basis that in practice, genuine use required use of the mark on the market for the goods or services protected by the mark, such that customers were exposed to advertisements or other preparations for sale, and when viewed overall was sufficient in the market concerned to maintain or create a share in that market. Much would depend upon the type of goods and the market. The position may be different as between use of a mark on a small, cheap consumer product on the one hand and a specialist expensive product on the other hand. Here there was no evidence that the products were sold or even offered for sale or advertised. The mere importation was not sufficient. Also, the fact that the act of importation alone could under a different part of the trade marks legislation constitute infringement, was not relevant.
This case confirms the ECJ’s consistent focus on the essential function of a trade mark, that is, to guarantee the identity of the origin of goods and services for which it is registered. It seems now that it will be
necessary to demonstrate genuine use by either actual sales or at least offers for sale or advertising, and in this respect there has been a change to English law.
The wrong type of use
If a mark is used, but not in the proper way, it may also become vulnerable to revocation by becoming the generic or descriptive word for a class of goods or services rather than distinguishing of a particular trader. This principle derives from Article 12(2) of the Trade Marks Directive which provides that a trade mark shall be liable to revocation if “in consequence of the acts or inactivity of the proprietor, it has become the common name in the trade for a product or service in respect of which it is registered”. This wording is mirrored in s.46 of the TMA.
The ECJ came to this conclusion in the case of Bjornekulla Fruktindustrier AB v Procordia Food AB, Case C-371/02 in April 2004. Procordia sold chopped pickled gherkins under the trade mark BOSTONGURKA. Bjornekulla brought proceedings for revocation claiming that the mark had lost its distinctive character and had become a generic name. It relied on two market research surveys of consumers. Procordia disagreed and relied on market research studies conducted on trade operators in the grocery, mass catering and food stall sectors. Procordia was successful at first instance. On appeal the Swedish Court of Appeal was not certain that the relevant classes of persons to consider were those who dealt with the products commercially and referred the following question to the ECJ:
“In cases where a product is handled at several stages before it reaches the consumer, what is or are, under Article 12(2)(a) of the Trade Mark Directive, the relevant class or classes of persons for determining whether a trade mark has become the common name in the trade for a product in respect of which it is registered?”
The ECJ held that the aim of the commercialisation process was the purchase of the product by consumers and end users, and the role of trade intermediaries consisted of detecting and anticipating the demand for that product and increasing it. The relevant persons for the purpose of Article 12(2) therefore principally comprised consumers and end users although (depending on the relevant product market concerned) the influence of intermediaries on decisions to purchase, and thus their perception of the trade mark, must also be taken into account. This interpretation was supported by the general scheme and objectives of the Directive.
With questions of use, as with many other aspects of trade mark law, judgments from the ECJ are continuing to demonstrate the fundamental importance of considering the essential function of a trade mark, which is to guarantee the origin of goods and services in the market place.
