Trevor Little

The Court of Justice of the European Union (ECJ) has issued its long-awaited decision in the ONEL case. While stating that the use of a Community trademark (CTM) in one member state could be sufficient to establish genuine use in the Community, it confirmed that “all facts and circumstances” should be accounted for, ruling out  a de minimis  rule and suggesting that the bar for showing genuine use within the Community will be a bit higher than that for showing the same in a specific member state.

Article 15(1) of the Community trademark Regulation (207/2009) states that the relevant use of a CTM must be “genuine use in the Community”. On the basis of its earlier CTM ONEL for similar services, Leno Merken BV had opposed  Hagelkruis Beheer BV’s application for the trademark OMEL as a Benelux service mark. The Benelux Office for Intellectual Property rejected the opposition on the grounds that Leno had failed to prove genuine use of its mark, the cited examples of use relating wholly to use in the Netherlands – stating that the default position that "genuine use in one single country by definition results in genuine use in the Community cannot be maintained", with each case to be considered on all relevant circumstances.

On February 1 2011 the Court of Appeals of The Hague referred four questions to the ECJ. The first was whether Article 15(1) is satisfied by use of a CTM within a single member state where that member state would have regarded the use as sufficient to maintain a corresponding national mark within the territory. If not, the second question asked whether use of a CTM in one member state could ever amount to genuine use in the Community. If not, the third question asked which requirements apply in respect of the territorial scope of the use. The final question then asked whether “as an alternative to the above”, an assessment pursuant to Article 15(1) must be carried out “wholly in the abstract, without reference to the borders of the territory of the individual member states”.

Today the ECJ stated that the territorial borders of the member states should be disregarded in the assessment of whether a trademark has been put to ‘genuine use in the Community’ within the meaning of the provision, adding: “Whilst there is admittedly some justification for thinking that a Community trademark should – because it enjoys more extensive territorial protection than a national trademark – be used in a larger area than the territory of a single member state in order for the use to be regarded as ‘genuine use’, it cannot be ruled out that, in certain circumstances, the market for the goods or services for which a Community trademark has been registered is in fact restricted to the territory of a single member state. In such a case, use of the Community trademark on that territory might satisfy the conditions both for genuine use of a Community trademark and for genuine use of a national trademark.”

Considering the above passage, Arnaud Bos, trademark attorney with Onel Trademarks, told WTR: “As expected, borders do not play a role in the assessment of use. When reading Paragraph 50 (and 54) we feel that, although use in one country can be sufficient, the ECJ seems to be reluctant to accept this. It seems that it will be more difficult to prove use of a trademark in the event it has only been used in one country and no ‘special circumstances’ are present. What these special circumstances are, or other guidance, is lacking in the decision - this is a missed opportunity to clear up the issue.”

The ECJ’s conclusion was that:

“A Community trademark is put to ‘genuine use’ within the meaning of Article 15(1) of Regulation No 207/2009 when it is used in accordance with its essential function and for the purpose of maintaining or creating market share within the European Community for the goods or services covered by it. It is for the referring court to assess whether the conditions are met in the main proceedings, taking account of all the relevant facts and circumstances, including the characteristics of the market concerned, the nature of the goods or services protected by the trademark and the territorial extent and the scale of the use as well as its frequency and regularity.”

Reflecting on the ruling, Edwards Wildman Palmer’s Gareth Dickson characterises the decision as a “sensible” one, stating: “The legal test they have put forward is quite straightforward: genuine use of a CTM is use which is in accordance with the mark's essential function (ie, to designate origin), and which is intended to create or maintain market share for the goods and services protected. There is no requirement that the use be in a substantial part of the Community. Similarly, the Community must be viewed as a single territory. National borders are to be ignored for the purposes of the legal analysis, and whether use of a mark takes place in more than one member state is only one part of the factual investigation into the relevant market.”

As to when use in a single member state will suffice, he adds: “It appears that use within a single member state will only be considered ‘genuine use’ if the market for the protected goods and services is also limited to that particular territory (see Paragraph 50). It's also interesting that the court appears to have had some sympathy for alternate views, using the word ‘admittedly’ twice in close succession in Paragraphs 43 and 50. The court does suggest that, if it had had additional factual information then it would have provided ‘specific guidance’ about the issues before the referring court, but it is also very aware of just how fluid markets can be and on that basis specifically rejects the idea that an umbrella de minimus rule would be helpful - and I agree.”

As to what this will practically mean for brand owners, Hastings Guise, trademark and brand protection lawyer at Field Fisher Waterhouse, observes: "It will come as a great relief to brand owners that the court avoided the extreme position of finding that a CTM had to be used in more than one member state. Such a finding, which would have created a position akin to the requirement for use in interstate trade familiar from US federal trademark law, would have been disastrous and would have called into question the CTM rights of a huge number of businesses who have registered in reliance on the historical OHIM position that a CTM need only be put to genuine use in a single member state.” However, he concludes: "Businesses will need to think a little more carefully when replacing national trademarks with CTMs since the bar for showing genuine use within the Community will be a bit higher than that for showing genuine use within a specific member state. This is because it could be harder in some cases to show that use of a mark is economically warranted to create or maintain market share when the market in question encompasses the whole EU rather than the specific member state.”

The decision will be the subject of intense scrutiny in the coming days – and the nature of the ruling is such that there is plenty of room for debate.

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