Opinion on genuine use threatens promotional mark protection

European Union

Following Advocate General Dámaso Ruiz-Jarabo Colomer’s opinion in Silberquelle GmbH v Maselli-Strickmode GmbH (Case C-495/07, November 18 2008), the European Court of Justice (ECJ) will have to decide whether there is genuine use of a trademark if the use is solely in relation to promotional goods which are given away.

Maselli-Strickmode GmbH is the owner of the Austrian trademark WELLNESS, which has been registered since 1989 for, among other things, non-alcoholic drinks. Maselli, whose core business is in the manufacture and sale of knitwear, used the WELLNESS mark in 1999 and 2000 on bottles of soft drinks given as free gifts to purchasers of its knitwear.
At the request of Austrian company Silberquelle GmbH, the Austrian Patent Office partially revoked the registration for WELLNESS in respect of non-alcoholic drinks with effect from 1997. Silberquelle alleged that the trademark had never been put to genuine use with regard to non-alcoholic drinks in Class 32 of the Nice Classification, as Maselli intended to promote knitwear only and not to trade in Class 32 goods per se. In addition, Silberquelle argued that Maselli used its trademark only in a token way. 
Maselli appealed to the Austrian Supreme Patent and Trademark Senate, alleging that the mark had been genuinely used since 1999. However, Maselli admitted that the mark had served only in an 'auxiliary function'.
As the final decision in these proceedings depends on the interpretation of the First Trademarks Directive (89/104/EEC), the senate referred the following question for a preliminary ruling to the ECJ: 
"Are Articles 10(1) and 12(1) of the [First Trademarks] Directive to be interpreted as meaning that a trademark is put to genuine use if it is used for goods which the proprietor of the trademark gives, free of charge, to purchasers of its other goods after a sale has been made?"
In his opinion, Advocate General Dámaso Ruiz-Jarabo Colomer held that this was not the case. On the one hand, he considered that using a trademark for advertising goods or services sold as part of advertising campaigns when sale is imminent is generally approved as a form of genuine use. On the other hand, he pointed out that, in the present case, the trademark covered only the class of goods given away. The advocate general felt that the goods in question served a purely promotional purpose, totally detached from the beverage market. In this context, he referred to the judgment of the ECJ in Ansul BV v Ajax Brandbeveiliging BV (Case C-40/01), where the ECJ ruled that a trademark is in genuine use where the use fulfils its main function - namely, to guarantee to the recipients the identity of 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. Moreover, the ECJ emphasized that it should be considered whether the use would be viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark.
Against this background, the advocate general pointed out that, in the case at hand, the trademark WELLNESS with regard to drinks did not compete in the relevant market. Therefore, it did not compete with other trademarks in the beverage sector and the main function of the trademark (ie, to allow consumers to distinguish between different goods or services without confusion) could not be fulfilled. In addition, a competitor could not be obliged to respect conflicting trademarks in all imaginable markets - except in the case of well-known trademarks. Furthermore, following Maselli’s line of argument would - as in cases of token use of a trademark - lead to trademark registers being filled with dead wood.
If the ECJ follows the opinion of the advocate general, there is a prospect that all trademark protection relating to promotional goods would be threatened. Moreover, this would probably discourage the development of complex or elaborate marketing strategies by using promotional goods. As in the present case, it seems a likely consequence that others would benefit from marketing ideas and initiate cancellation proceedings with the aim of registering the trademark in the relevant market sector. Finally, against the background of the ECJ's decision in Ansul (according to which all facts and circumstances relevant to establishing whether the commercial exploitation of the trademark is real must be considered), it is likely that each case involving genuine use will be decided on its own merits.
Julia Biebl, Hammonds LLP, Munich

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