Supreme Court: use in Germany alone sufficient to establish 'genuine use' of CTM

In a case involving the trademark VOODOO, the German Federal Supreme Court has considered the widely debated issue of whether use of a Community trademark (CTM) in one EU member state is sufficient to establish ‘genuine use’ of the mark in the Community under Article 15(1) of the Community Trademark Regulation (207/2009) (Case I ZR 106/11).

The Court of Justice of the European Union decided in the ONEL case that Article 15(1) of the regulation must be interpreted as meaning that the territorial borders of the member states should be disregarded in the assessment of whether a trademark has been put to “genuine use in the Community” within the meaning of that provision. A CTM is put to “genuine use” within the meaning of Article 15(1) when it is used in accordance with its essential function and for the purpose of maintaining or creating market share within the European Community for the goods or services covered by it. It is for the referring court to assess whether the conditions are met in the main proceedings, taking account of all the relevant facts and circumstances, including the characteristics of the market concerned, the nature of the goods or services protected by the trademark, and the territorial extent and the scale of the use, as well as its frequency and regularity.

The plaintiff, a Swiss joint-stock company, is the holder of a licence to use the CTM VOODOO (CTM No 1911742), which was registered in January 2005 with a priority date of October 2000 for sporting goods. In December 2009 the plaintiff granted a sub-licence to Munich-based company Voodoo Flyfishing Ltd, which included past uses of the VOODOO mark. The owner of the CTM VOODOO had authorised the plaintiff to claim the rights to the trademark in its own name.

The defendant operates websites offering various fishing goods - among other things, baits for fish under the name Voodoo Pellets. The plaintiff filed a lawsuit for trademark infringement in May 2009; in its defence, the defendant argued that the VOODOO mark had not been put to genuine use. Further, the defendant filed invalidity requests with the Office for Harmonisation in the Internal Market in July 2009 and March 2010 on the ground of non-use.

Both the District Court and the Court of Appeal ruled in favour of the plaintiff. The Federal Supreme Court annulled the decision of the Court of Appeal and referred the matter back to it.

The Federal Supreme Court rejected the argument that the infringement action should have been suspended because of the pending cancellation action. The court considered that Articles 104(1) and (2) of the regulation were inapplicable, as the request for invalidity of the VOODOO mark had not been made before the action had been brought to court.

As regards the issue of whether VOODOO had been put to genuine use, the court, referring to ONEL, considered that genuine use in Germany would be sufficient to establish genuine use of the mark in the Community. However, the court found that the evidence was not sufficient to prove that VOODOO was being used as a trademark. Use of the company name Voodoo Flyfishing Ltd, even with the sign ® after ‘Voodoo’, was not use of the mark, but use of the company name. Further, even though the sub-licence covered past uses of the VOODOO mark, such earlier use by the sub-licensee had not been authorised by the trademark owner.

The decision is remarkable because of the ease with which the Supreme Court accepted that use in Germany alone was sufficient to maintain rights in a CTM. The decision also confirms established case law that use of a mark as part of a company or trade name is generally not perceived as use of a mark. The novel element in the present decision is that the addition of the ® sign to the company name does not alter this conclusion. Finally, the decision shows that a licensing agreement with a potential infringer does not have any retroactive effect.

Karin Costescu, Bardehle Pagenberg, Munich