AG opinion, if followed, raises bar as to what constitutes 'genuine use' of CTM

The advocate general before the Court of Justice of the European Union (ECJ) has handed down her opinion in the case of Leno Merken BV v Hagelkruis Beheer BV (C-149/11, July 5 2012). The advocate general advised that use of a Community trademark (CTM) within the borders of a single member state is not, of itself, necessarily sufficient to constitute 'genuine use' of that trademark.

The key points of the opinion are as follows.

Under Article 15 of the Community Trademark Regulation (207/2009), a proprietor must, within a period of five years following registration, “put the Community trademark to genuine use in the Community in connection with the goods or services in respect of which it is registered”, otherwise the mark may be revoked on the grounds of non-use. Under the traditional interpretation, 'genuine use' in one EU member state was sufficient to demonstrate 'genuine use' of a CTM.

The advocate general opined that, while it is possible that use of a CTM within the borders of a single member state can constitute 'genuine use' in the Community when all relevant factors are considered, the former is not, of itself, necessarily sufficient to constitute 'genuine use' of that trademark.

In particular, the advocate general advised that 'genuine use in the Community' is an indivisible concept, and should be interpreted as use that, when account is taken of the particular characteristics of the relevant market (eg, the market share of the proprietor), is sufficient to maintain or create market share in that market for the goods and services covered by the CTM.

To determine whether the condition of genuine use in the Community is satisfied, the national court must examine all forms of use of the mark within the entire territory of the 27 member states. What matters is the commercial presence of that mark in the internal market – that is, the use of the CTM must be sufficient to maintain or create market share for the goods or services protected by the mark. The advocate general noted in this regard that use of a website that is accessible in all member states would not necessarily constitute 'genuine use'.

The business impact of the opinion is as follows:

• If followed by the ECJ, the opinion of the advocate general raises the bar as to what will constitute 'genuine use' of a CTM.
• The requirement for all relevant factors to be considered in the determination of 'genuine use' prevents a CTM that has narrow and limited territorial use from automatically blocking economic activities of other businesses seeking to revoke that CTM and register and use a similar mark.
• On this test, it will presumably be necessary in most instances to demonstrate use beyond a single member state in order to establish 'genuine use' under the regulation (if followed by the ECJ).
• Where there is a risk that a CTM may be revoked for non-use, businesses should consider the possibility of registering national trademarks as an alternative or in parallel to their CTM counterparts. This consideration is particularly important in light of Article 112(2) of the regulation, which precludes conversion of a CTM into national applications in the event that a CTM has been revoked on the grounds of non-use unless, in the member state for which conversion is requested, the CTM has been put to 'genuine use' under the laws of that member state.

Joel Smith and Anna Gibson, Herbert Smith LLP, London