General Court finds that evidence of use did not counterbalance very low sales volume

European Union

In I Castellani Srl v Office for Harmonisation in the Internal Market (OHIM) (Case T-137/14), the General Court has upheld a decision of the Second Board of Appeal of OHIM finding that the evidence submitted by Castellani was insufficient to demonstrate genuine use of its figurative mark.

The Italian business Castellani had registered the figurative sign below as a Community trademark (CTM) for a range of building materials.

This CTM was revoked on the grounds of non-use following an action before the Cancellation Division of OHIM. Because the CTM was used together with the verbal element 'cerdomus', it was not used in its registered form, according to the Cancellation Division. Castellani appealed.

The Second Board of Appeal of OHIM disagreed with the Cancellation Division's treatment of the verbal element and found that "there was no precept in the Community trademark system obliging the proprietor of a mark to prove use of the mark in isolation, independently of any other mark". However, the Board of Appeal also found that the evidence relied upon by Castellani was insufficient to demonstrate genuine use, and thus dismissed the appeal.

Castellani appealed to the General Court and judgment was handed down on October 23 2015.

Initially, the General Court considered some procedural points, such as whether "new" evidence could be admitted. As would be expected, the court ruled that documents would only be admissible where they had already been submitted before OHIM in the earlier proceedings.

On another procedural point, the General Court confirmed that the Board of Appeal was free to base its decision on all matters of facts and law which the parties had introduced, whether at first instance or during the OHIM appeal. Unlike the General Court appeal, which is a review of the Board of Appeal's decision, the proceedings before the Board of Appeal are essentially a rehearing of the matter.

The substantive points of the case, however, concerned the requirements for proving genuine use. The General Court agreed with the Board of Appeal that the use of the CTM together with a verbal element did not preclude genuine use. However, the court also agreed that, in this case, the overall evidence was insufficient to prove such use.

The General Court confirmed that evidence of use should address the place, length of time, extent and nature of the use made. However, each item of evidence when considered alone need not address all these factors. In this case, the General Court looked particularly at "the commercial volume of the overall use, as well as of the length of the period during which the mark was used and the frequency of the use". Even where the commercial value is not high, there may be genuine use where the accumulated evidence shows the use of the mark to be particularly regular and longstanding.

Notwithstanding the above, and notwithstanding the fact that a connection could be made between sales invoices and photographs featuring the CTM, the court still found that the evidence did not counterbalance the very low levels of commercial activity and establish the genuine use of the CTM. Considering that the goods involved in this case were high-value construction materials, €4,000 worth of invoices over four years was not sufficient to demonstrate commercially significant use.

The General Court's findings regarding admissibility of evidence and the differing nature of the appeals before the Board of Appeal and the General Court are a useful reminder for practitioners. It is always essential to fully understand the scope of the particular proceedings when advising clients on possible appeals.

In relation to the General Court's conclusions on genuine use, the court was clear that the various factors should be considered on a case-by-case basis and the key question should be whether, having taken into account all the factors of the case, the commercial exploitation of the mark is credible. The court also confirmed that a CTM does not need to be used in isolation for the use to be considered genuine. The court's approach is sensible and familiar. However, it is also a reminder that the lack of a de minimis threshold for proving use does not mean that commercial sales volumes are irrelevant. 

Hastings Guise and Alexander Hooley, Fieldfisher, London


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