Good news for owners of national marks: General Court confirms low threshold for genuine use

European Union

In LS Fashion LLC v Office for Harmonisation in the Internal Market (OHIM) (Case T-41/12), the General Court has upheld a decision of the Fourth Board of Appeal of OHIM finding that there was a likelihood of confusion between the marks L'WREN SCOTT and LOREN SCOTT.

US company LS Fashion LLC filed an application for the registration of the Community trademark L'WREN SCOTT for goods that included a number of articles of clothing in Class 25 of the Nice Classification. The application was published on January 15 2007. Sucesores de Miguel Herreros SA, the predecessors in title to Gestión de Activos Isorana SL, filed an opposition based on the earlier Spanish trademark LOREN SCOTT, registered on April 5 1991 and covering identical and related goods in Class 25.

The applicant required the opponent to submit proof of use of its mark, and the Opposition Division of OHIM concluded that there had been genuine use for a considerable portion of the goods covered. Therefore, in view of the similarity between the marks and the identity or similarity of the goods, the Opposition Division held that there was a likelihood of confusion between the marks.

The Fourth Board of Appeal of OHIM dismissed the subsequent appeal and upheld the Opposition Division's conclusion that there was sufficient proof of use of the earlier mark and that there was a likelihood of confusion between the parties' marks.

LS Fashion filed an appeal with the General Court.

In its first plea in law, LS Fashion claimed that the evidence of use of the Spanish trademark failed to fulfil the conditions laid down by the case law, as the opponent had submitted only a small number of invoices (12), which did not always identify the goods invoiced by the relevant trademark, for a total amount of around €600 over five years, from four marketing locations in Tenerife in the Canary Islands. In addition to the invoices, the opponent had submitted a catalogue for one of the five years in the relevant time period, along with some specimens of the clothing items sold.

The General Court admitted that the volume of sales was indeed low, but ruled that, based on case law (mainly Ansul (Case C-40/01) and Capio (Case T-325/06)), low sales may be offset by extensive or very regular use, and vice versa.

Although the volume of sales was low, the price of the goods was also low (with a unit price of €0.82), so the sales volume could not be regarded as derisory. Furthermore, overruling LS Fashion' objections, the General Court accepted the opponent's argument that the invoices submitted were only illustrative, and did not represent the total sales. In addition, the invoices were spaced out over the five years of the relevant time period, suggesting that, even though they were for modest amounts, sales had been regular. Finally, indications were that the trademark had been used publicly and externally, not solely within the trademark owners' own distribution network.

The General Court thus concluded that use had not been merely token, minimal or notional for the sole purpose of preserving the rights conferred by the mark, but had been sufficient to preserve an outlet for the goods concerned. Hence, it rejected the first plea.

It its second plea in law, LS Fashion claimed that Article 8(1)(b) of the Community Trademark Regulation (207/2009) had been wrongly applied, having regard to the significant visual differences between the signs and the lack of phonetic and conceptual similarity. While this plea was of lesser importance in the judgment, the General Court nonetheless found that L'WREN SCOTT and LOREN SCOTT were visually similar (they both have the same number of letters, and the first words both start with the letter 'L' and end with the element 'ren') and phonetically similar, and covered the same or related goods/services.  

LS Fashion also claimed that the trademark applied for was the name of a famous designer, but in the absence of conclusive proof, the General Court ruled that LS Fashion had not proven that the name was familiar to the average consumer in Spain, the relevant territory.

This judgment reaffirms the reasoning followed by the court in Ansul and Capio - namely, that:

  • even minimal use can be sufficient to be deemed genuine, provided that it is viewed as warranted in the economic sector concerned in order to maintain or create a share in the market; and
  • there is no scope for setting a de minimis rule.

Arguably, it is surprising that such inconsiderable use of the earlier trademark (with sales of €600, only in Tenerife) has been held to be sufficient to prevent the registration of a later Community trademark; however, it is a favourable precedent for owners of national trademarks.

Luis Soriano, Elzaburu, Munich

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