Conditions for proving genuine use of mark reaffirmed

European Union
In Engelhorn KGaA v Office of Harmonisation in the Internal Market (OHIM) (Case T-30/09, July 8 2010), the General Court has held that the trademark PEERSTORM was confusingly similar to the earlier mark PETER STORM.

In 2004 Engelhorn KGaA filed an application for the registration of the word mark PEERSTORM as a Community trademark (CTM). The application was published on June 20 2005. The Outdoor Group Ltd filed a notice of opposition based, among other things, on its earlier CTM PETER STORM. Both marks covered “clothing, footwear, headgear” in Class 25 of the Nice Classification.

Upon request by Engelhorn, Outdoor Group was invited to furnish proof of genuine use of its PETER STORM mark. Outdoor Group submitted a witness statement made by a member of the firm representing it, in which it was stated that the CTM PETER STORM had been in use during the five-year period preceding the publication of the application for the PEERSTORM mark. Outdoor Group also submitted an autumn/winter 2002 UK product brochure showing a range of clothing sold under the trademark PETER STORM, the prices, an order form, a telephone number, fax number, postal address and internet address for mail order purchases, and a list of more than 240 shops in the United Kingdom in which those items were sold. The brochure comprised 36 pages, offering more than 80 different items of clothing for sale under the mark PETER STORM. The PETER STORM mark appeared next to each item.

Furthermore, Outdoor Group submitted a spring/summer 2004 UK product brochure, showing seven items of footwear offered for sale under the PETER STORM mark, with brief descriptions of their respective characteristics. The brochure stated the prices of the items in British pounds and the reference number for each item. A telephone number and an internet address were given for mail order purchases.

Following Engelhorn's observations in February 20 2007, Outdoor Group, upon invitation by OHIM to submit its observations in reply, filed a witness statement from its company secretary, which stated that:
  • Outdoor Group traded throughout the United Kingdom from its retail store chains; and
  • sales of goods identified by the earlier CTM in respect of clothing, footwear and headgear amounted to more than £11 million over a four-week period in December 2004.
The Opposition Division of OHIM rejected the opposition. The Fifth Board of Appeal upheld Outdoor Group's appeal, finding, in particular, that:
  • proof of genuine use of the earlier CTM had been furnished in respect of clothing, footwear and headgear; and
  • there was a likelihood of confusion between both signs.
Engelhorn appealed to the General Court.

Engelhorn relied on two pleas in law, alleging, first, breach of Articles 15 and 43(2) of the Community Trademark Regulation (40/94) and, second, breach of Article 8(1)(b). Engelhorn maintained, among other things, that the evidence adduced by Outdoor Group was not sufficient, given that it did not provide any information regarding actual use of the earlier mark. It stated that no additional supporting documents, such as packaging, labels or drawings, showing that the goods were actually offered for sale were submitted. Furthermore, it argued that the Board of Appeal had erred in admitting the evidence submitted by Outdoor Group upon invitation by OHIM to submit its observations in reply, because such evidence was submitted after the period set by OHIM for lodging evidence had expired.

With regard to the first plea, the court stated that, by submitting the catalogues, Outdoor Group had proved, to the requisite legal standard, that the earlier mark was used for the purposes of creating or preserving an outlet for the goods at issue. It was clear from the catalogues, which also contained items offered under other trademarks, that the PETER STORM mark was used in the United Kingdom in respect of items of clothing for a significant part of the relevant period. The mark was affixed to a large number of goods which could be ordered by mail or purchased in certain shops. Those catalogues, which were intended for end consumers, contained specific information concerning the goods offered for sale under the mark, their prices and the way in which they were marketed in the United Kingdom. In light of the telephone and fax numbers and postal and internet addresses given for mail order purchasing, and the specific information relating to a large number of shops offering the goods at issue in the United Kingdom, it was clear that items of clothing had been offered for sale under the trademark PETER STORM to end consumers.

Although it was true that the catalogues provided no information on the quantity of goods sold by Outdoor Group under the mark, it was necessary to take into account the fact that a large number of items designated by the trademark PETER STORM were offered in the catalogues and in more than 240 shops in the United Kingdom for a significant part of the relevant period. Those factors supported the conclusion, in the context of a global assessment of whether use of the earlier mark was genuine, that the extent of such use was fairly significant. In that regard, the court also recalled that the purpose of the requirement for genuine use is not to assess the commercial success of the undertaking in question.

Therefore, Outdoor Group had furnished sufficient information on the place, duration, nature and extent of use of its earlier mark. The court thus rejected Engelhorn's first plea without examining whether the board had been justified in admitting the evidence produced by Outdoor Group after the period set by OHIM for lodging evidence had expired.

With regard to the second plea, the court stated that, in view of the fact that the goods covered both trademarks were identical, and that the marks were visually, phonetically and conceptually similar, there was a likelihood of confusion between both signs, even if the earlier mark were to have only a weak distinctive character (which Engelhorn failed to prove).

Based on these findings, the action was dismissed.

The decision highlights the fact that the rationale of the genuine use requirement is to restrict the possibilities of conflicts between two marks, and not to:
  • assess the commercial success, or review the economic strategy of, an undertaking; or
  • restrict trademark protection to cases where large-scale commercial use has been made of the marks.
There is genuine use of a trademark where it is used in accordance with its essential function - namely, to guarantee 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 the mark. Furthermore, the conditions relating to genuine use of a mark require that the mark, as protected on the relevant territory, is used publicly and outwardly.

The case also shows that submitting two product brochures might be sufficient to prove genuine use of a CTM. Here, the brochures at issue offered for sale a large number of items designated by the earlier mark, and these items were sold in more than 240 shops in the United Kingdom.    
Therefore, when assessing whether use of a mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark is real. A global assessment must be carried out, taking into account the interdependence of the relevant factors. Therefore, a low level of commercial volume achieved under a mark may be offset by a high intensity or long period of use of that mark, or vice versa.

Philipp Henrichs, Maiwald Patentanwalts GmbH, Munich

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