When an undertaking operates in more than one country of the European Union it is a wise legal choice to apply for a trademark on a community level. A community trademark allows the applicant to file for a trademark within 28 countries of the European Union instead of the expensive and time consuming method of independent national filings for each country.
The downside of the Community trademark application is with respect to satisfying the requirement of genuine use in connection with goods and services. Within 5 years of trademark registration the mark must be used in more than one country of the European community. The term ‘genuine use’ has been contentious in the past to be defined as the proof of actual and substantial use stretching from one to more than one country in the European Union.
Recent judgment elucidates upon the term “Genuine Use”
In a recent case, Sofa Workshop Limited v. Sofaworks Limited  EWHC 1773 (IPEC), the court held that genuine use in one member country per se does not constitute genuine use in the entire European Union.
Sofa Workshop sought to hold Sofaworks liable on two accounts; namely infringement and passing off in the European Union of their mark based on the article 9(1)(b) of Council Regulation (EC) 207/2009. Sofaworks counterclaimed that Sofa Workshop’s trade mark was descriptive and filed for revocation of the trademark ‘Sofa Workshop’ on the basis of non-use and descriptiveness.
The court concluded that genuine use calls for the fulfilment of the real purpose of creating the mark such that the mark has sufficient market share in more than one country of the European Community in addition to the indication of origin of the mark unless it qualifies for the exception. The sufficient market share had been defined in terms of real commercial exploitation (i.e., attracting business or business operations) within the rest of the communities; this would satisfy the use requirement. In the present case, advertising alone was not found sufficient to constitute adequate genuine use or business operations in the countries of European Union besides United Kingdom. Therefore the mark, Sofa workshop, was revoked.
Although Sofa Workshop failed in the claim of infringement, it succeeded in its claim of passing off alleging acquired distinctiveness through use, finding the mark ‘Sofaworks’ as deceptive and therefore holding Sofaworks liable for passing off.
A silver lining exists for the trademark owners who have not used their marks in more than one country; that is to convert their community application into a national application.
Sofa Workshop could have prevented the revocation had it applied for conversion of its CTM to a National mark.
‘Usage’ of a trademark with respect to goods and services has been elaborated in the previous cases as qualifying genuine for use as follows:
- The use must be consistent with the essential function of a trademark, which is to guarantee the identity of the origin of the goods or services to the consumer or end-user by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin: Sunrider ; Onel
- Genuine use means actual use of the mark by the proprietor or third party with authority to use the mark. The use must be more than merely token, which means in this context that it must not serve solely to preserve the rights conferred by the registration. The use must be by way of real commercial exploitation of the mark on the market for the relevant goods or services, i.e. exploitation that is aimed at maintaining or creating an outlet for the goods or services or a share in that market: Ansul.
- In determining ‘real commercial exploitation’, the relevant facts and circumstances must be taken into account, including in particular, the nature of the goods or services at issue, the characteristics of the market concerned, the scale and frequency of use of the mark, whether the mark is used for the purpose of marketing all the goods and services covered by the mark or just some of them, and the evidence that the proprietor is able to provide: Ansul ;La Mer ; Sunrider
- Use of the mark cannot be measured in quantitative terms; no de minimis rule applicable. Even minimal use may qualify as genuine use if it is the sort of use that is appropriate in the economic sector concerned for preserving or creating market share for the relevant goods or services. Ansul; La Mer, and; Sunrider.
However, there exists an exception to the genuine use essentials. The exemption relates to exceptional circumstances where the market for goods and services is only restricted to a particular territory. The owners of the trade mark will have to ensure that their brands are put to actual use in terms of sale and business operations to prevent their trade mark revoked.
The takeaway from this decision is to take time to make the right choice of application between a national filing and a community filing. Where will you actually be ‘using’ the mark? Just one member state or more? Additionally it is a reminder to the community trademark owners to put to use the goods and services of the trademark in the European Community within five years in more than one state if they haven’t already, or apply for conversion of the community trademark to a national mark to avoid revocation of their trade marks by new applicants.