ZARA mark revoked for Class 39 services due to lack of genuine use

In Industria de Diseño Textil SA (Inditex) v Office for Harmonisation in the Internal Market (OHIM) (Case T‑584/14, September 9 2015), the General Court (Third Chamber) has dismissed an appeal filed by Industria de Diseño Textil SA (Inditex) and confirmed a decision of the Second Board of Appeal of OHIM declaring that the trademark ZARA should be revoked for services in Class 39 of the Nice Classification on the grounds of lack of genuine use.

The background of the case is as follows:

• On April 1 1996 Inditex filed an application for registration of the word sign ZARA as a Community trademark (CTM) with OHIM. The goods and services in respect of which registration was sought were covered by Classes 3, 9, 14, 16, 24, 25, 28, 37, 39, 40 and 42.

• The ZARA mark was registered for the abovementioned goods and services on January 3 2001 under CTM No 112755.

• On October 24 2011 Zainab and Roger Ansell filed an application for the revocation of the trademark in Classes 39 (transport services, delivery of products, packaging and storage of goods, particularly clothing, footwear and accessories, perfume and cosmetics) and 42 (services for providing food and drink; temporary accommodation), arguing that the mark had not been put to genuine use in the Community in connection with these services during a continuous period of five years and that there were no proper reasons for non-use (Article 51(1)(a) of the Community Trademark Regulation (207/2009)).

• On April 30 2013 the Cancellation Division of OHIM revoked the ZARA mark for services in Classes 39 and 42.

• On August 12 2013 Inditex filed an appeal before OHIM against the Cancellation Division’s decision regarding the revocation of the mark for services in Class 39.

• By a resolution dated May 19 2014, the Second Board of Appeal of OHIM dismissed the appeal. In particular, the Board of Appeal considered that Inditex had not filed sufficient evidence to prove the genuine use of the CTM for services of Class 39.

• Inditex filed an appeal before the General Court, arguing that the Board of Appeal had infringed Article 51(1)(a) of the regulation by mistakenly considering that:

  1. the franchisees were entities integrated into Inditex’s internal organisation; and

  2. Inditex had not provided evidence regarding the business volume generated by the provision of transport services.

After reviewing the relevant legislation and case law regarding the genuine use of a trademark, the General Court confirmed the Board of Appeal’s decision, since the evidence filed by Inditex did not establish the public and outward use of the trademark. The decision was based on the following grounds:

• Regarding Inditex’s first allegation, the General Court held that the franchisees were entities independent of the internal organisation of Inditex. Nevertheless, since Inditex had not filed any evidence during the proceeding before OHIM to prove that the franchisees were not integrated into, but only associated with, its distribution network, the General Court concluded that the Board of Appeal had justifiably considered that the franchisees were integrated into Inditex’s internal organisation, in spite of their status as independent entities.

• Regarding the second allegation, the General Court stated that Inditex had not filed any invoices that were strictly related to transport services (among the invoices filed as evidence, the transport costs could not be identified as the services rendered were offered and commercialised together with the products served, which implied that the transport costs were included in the price of the items on sale). Therefore, the General Court declared that the Board of Appeal had reasonably considered that no evidence was filed regarding the volume of business generated by the provision of transport services.

• With respect to the other evidence filed (ie, a press folder that included information about the logistics and distribution systems, a leaflet about Inditex’s logistics platform in Madrid and a report on the distribution system of the ZARA mark), the General Court considered that such evidence did not amount to sufficiently specific and objective elements that could prove the genuine use of the trademark for transport services.

In short, the General Court agreed that, in this case, the requirement of public and outward use of the trademark had not been met. The court thus dismissed Inditex’s appeal and confirmed the revocation of the ZARA mark for Class 39 due to lack of genuine use, ordering Inditex to pay the costs.

Guillem Villaescusa, Grau & Angulo, Madrid