Token use does not demonstrate genuine use, says CFI

European Union
In Sonia Rykiel Création et Diffusion de Modèles v Office for Harmonization in the Internal Market (OHIM) (Case C-131/06, April 30 2008), the Court of First Instance (CFI) has annulled a decision by the Second Board of Appeal on the grounds that the board had failed to take into account all the relevant factors in determining whether use of an earlier mark could be regarded as genuine.
Sonia Rykiel Création et Diffusion de Modèles applied to register the mark SONIA SONIA RYKIEL (and design) for clothing in Class 25 of the Nice Classification. Cuadrado SA opposed the application on the basis of its two earlier SONIA Spanish word and figurative trademarks for various goods in Classes 24 and 25. Sonia Rykiel requested that Cuadrado provide proof of use of its two earlier Spanish marks. However, the Opposition Division of OHIM (apparently due to an oversight) did not inform Cuadrado of the request for proof of use. The Opposition Division went on to find a likelihood of confusion between the marks at issue in respect of clothing in Class 25, but did not consider whether there had been genuine use of the earlier marks. 
Sonia Rykiel appealed. The Second Board of Appeal found that the Opposition Division had infringed its obligation to request that Cuadrado submit evidence of use of the earlier marks. The case was therefore remitted to the Opposition Division, which duly requested Cuadrado to furnish evidence of genuine use of the earlier marks. The Opposition Division took the view that the evidence submitted by Cuadrado showed genuine use of the earlier word mark SONIA, but only in respect of “women’s slips” and “petticoats” (Decision 204, January 28 2005). On the other hand, it considered that no evidence of genuine use of the stylized mark had been provided. Comparing the earlier word mark with the trademark applied for, it concluded that there was no likelihood of confusion. 
Cuadrado appealed. The First Board of Appeal confirmed the Opposition Division’s finding that there had been genuine use of the earlier word mark. However, the board found a likelihood of confusion between the respective marks and annulled the Opposition Division’s decision, resulting in the refusal of the application in respect of goods in Class 25.
Sonia Rykiel lodged an appeal before the CFI, claiming that the evidence of use submitted by Cuadrado in respect of women’s slips and petticoats, was:
  • neither relevant nor sufficient; and 
  • insufficient to show genuine use of the earlier word mark in light of the decision of the European Court of Justice in Ansul (Case C-40/01).
The CFI considered the concept of genuine use as developed by recent Community case law (including the decisions in Ansul, LA MER (Case T-418/03), SUNRIDER (Case C-416/04 P) and HIPOVITON (Case T-334/01)) and applied the case law to the circumstances of the appeal. The relevant five-year period for the purposes of Article 43(2) of the Community Trademark Regulation (40/94) in respect of the Spanish word mark SONIA ran from December 6 1994 to December 5 1999. Cuadrado’s evidence of use consisted of:
  • copies of invoices issued in 1997, 1998 and 2002;
  • packaging and labels; and 
  • a copy of an invoice for the cost of manufacturing packaging bearing the mark. 
The CFI held that OHIM had rightly rejected invoices drawn up in 2002 and the invoice for the manufacture of packaging (since it was also drawn up after the relevant period).
The CFI noted that during the proceedings before OHIM, Cuadrado had not submitted any documents to indicate the volume or extent of its sales, with the result that only the invoices, packaging and labels could provide evidence of genuine use of the mark. It also noted that 54 units of women’s slips and 34 units of petticoats were sold over a period of 13 months for a total sum of €432. Therefore, it was necessary to determine (having regard to the existing case law) whether such a small turnover during that period warranted a finding that there was genuine use of the earlier word mark. The CFI remarked that the articles in question were goods of everyday consumption sold at a reasonable price (not luxury items sold in limited numbers). It went on to consider whether the very small volumes of sales might have been offset by extensive or regular use of the mark. However, in the present case, there was nothing to indicate that use of the mark was extensive or regular. The CFI commented as follows:
"59. The contested decision does not include any concrete information on, or an adequate analysis of, the relevant factors referred to in the previously cited case law enabling the minimal turnover (€432) and the very small quantity of goods sold under the earlier word mark (85 units) over a relatively long period (13 months) to be placed in context.
60. In addition, the total amount of transactions over the relevant period seems to be so token as to suggest that in the absence of supporting documents or convincing explanations to demonstrate otherwise, the use by Cuadrado of the earlier word mark cannot be held to be warranted, in the economic sector concerned and taking account of the nature of the goods concerned, for the purpose of maintaining or creating market shares for the goods protected by the earlier word mark.
61. Moreover, the applicant cannot rely on the judgment in LA MER on the grounds that unlike in the present case, the low volume of sales of the goods under the earlier mark was to a large extent offset by the very regular nature of the use of that mark. The evidence provided in that case related to a period of 33 months (20 months more than in the present case) and the 10 invoices adduced were not concentrated on two or three months, but were spread over the whole of that period."
In light of these various considerations, the CFI held that there had not been genuine use of the earlier Spanish mark SONIA during the relevant five-year period. 
This case highlights the danger of placing too much reliance on invoices and samples of labelling/packaging to prove genuine use without placing such use in context, where the numbers of invoices is low and the period of use relatively short,
Mary Bleahene and Sarah Jane Nally, F R Kelly & Co, Dublin

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