Promotional use is not genuine use of trademarks, says ECJ

In Silberquelle GmbH v Maselli-Strickmode GmbH (Case C-495/07, January 15 2009), the European Court of Justice (ECJ) has followed the opinion of Advocate General Damaso Ruiz-Jarabo Colomer and held that use of a trademark solely in relation to promotional goods which are given away does not constitute genuine use of the mark for the purposes of Articles 10(1) and 12(1) of the First Trademarks Directive (89/104/EEC) (now the Trademarks Directive ((2008/95/EC)).

Maselli-Strickmode GmbH manufactures and sells clothing. Since 1989 it has owned an Austrian trademark registration for the trademark WELLNESS for printed material, clothing and non-alcoholic drinks. In 1999 and 2000 Maselli used the WELLNESS mark on bottles of soft drinks given as promotional items to purchasers of its clothing products.

Silberquelle GmbH applied to the Austrian Patent Office for the cancellation of the WELLNESS mark for goods in Class 32 of the Nice Classification, alleging that the trademark had never been put to genuine use under this class and that Maselli used its trademark in a token way. On November 7 2006 the office cancelled the mark for goods in Class 32. Maselli appealed to the Austrian Supreme Patent and Trademark Senate, which decided to stay the proceedings and refer a question to the ECJ for a preliminary ruling.

The question was as follows:

"Are Articles 10(1) and 12(1) of the First Trademarks Directive to be interpreted as meaning that a trademark is being 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 conclusion of the purchase contract?"

In his opinion of November 18 2008, Advocate General Colomer concluded that:

the trademark was not being put to genuine use;
the goods served a purely promotional purpose; and
the goods were not part of the beverage market as such (for further details please see "Opinion on genuine use threatens promotional mark protection").

In its judgment of January 15 2009, the ECJ agreed with the advocate general and highlighted that the proceedings did not concern the rights conferred by Maselli’s trademark for clothing, but only the promotional items issued (ie, soft drinks).

The ECJ stated that it is settled case law that the essential function of a trademark is to guarantee the identity of the origin of goods or services, and that such use of a mark constitutes genuine use within the meaning of the directive (see Ansul (Case C-40/01) and Verein Radetzky-Orden (Case C-442/07)). The ECJ went on to state that the protection that the mark confers cannot continue if the mark loses its reason for being created in the first place.

The ECJ echoed the submissions of the European Commission and the advocate general that it is essential to maintain the rights conferred by a mark for a given class of goods or services only where that mark has been used on the market for goods or services covered by that mark. The ECJ held that in the current case, since the goods were given away as a reward for the purchase of other goods and to encourage their sale, that condition was not met.

The ECJ concluded that affixing a mark to items that are distributed without the aim of penetrating the market for other goods in the same class does not constitute genuine use for the purposes of the directive in respect of the mark in that class.

This decision will constitute a threat to all trademarks used solely for promotional goods. It is to be hoped that:

each new case will nonetheless be decided on its own merits (following the reasoning in Ansul and Verein Radetzky-Orden); and
the facts relevant to establishing commercial use of the trademark in question will be considered.

The issue is how stringently this decision will be applied, but the future looks bleak for trademarks used for purely promotional purposes. Trademark owners should seek legal advice if they are concerned about the validity of any of their registered marks.

Gillie Abbotts, Hammonds LLP, London

Promotional use is not genuine use of trademarks, says ECJ

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