Trademark revocation: the EU General Court on proving the genuine use of trademark signs

A recent decision of the EU General Court (T-910/16 and T-911/16), for which an appeal is presently pending before the EUCJ, ruled on the matter of trademark revocation and specified the elements that a trademark owner must provide in order to prove its genuine use.

In the dispute discussed, Mr Hesse had filed before EUIPO an application for the revocation of the Testa Rossa trademark registered by the company Wedl&Hofmann, invoking Article 51(1)(a) of EC Regulation 2009/207 (applicable ratione temporis, now Article 58(1)(a) of EU Regulation 2017/1001), which provides for trademark revocation in the case of continuous non-use without reasonable causes for at least five years. In the first instance, EUIPO had fully granted Mr Hesse’s application, but the decision was subsequently partially annulled by the Board of Appeal, which stated for the partial revocation of the trademark. Then, both parties appealed against this decision before the EU General Court.

First of all, the EU General Court underlined that, in order to prevent the trademark revocation, the owner must give evidence of its genuine use by indicating facts and circumstances that show an exploitation of the sign aimed at maintaining or creating market shares for the goods and services protected by the trademark itself. In particular, this assessment must take into consideration the nature of the goods for which the trademark has been registered, the characteristics of the market, as well as the scale and frequency of its use. The Judge therefore explained that the reason behind this ascertainment is not to assess the commercial success or commercial strategy of a company, nor is it intended to restrict the trademark protection to large-scale exploitations. Rather, it serves to verify that the trademark is used in accordance with its essential function, which is ‘to guarantee 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 [on the market]’.

The EU General Court therefore held that EUIPO’s Board of Appeal had properly ascertained the genuine use of the trademark at issue for the products referred to in classes 21 and 25 of the Nice Classification on the basis of documents such as copies of advertisements, sales orders, product pictures, business correspondence and lists of sales points. Moreover, in response to Mr Hesse’s claim, according to which these documents proved the use of the trademark only towards licensees and affiliates, the Judge specified that the genuine use of the trademark occurs even when there is no relationship with end consumers. According to Mr Hesse, however, Wedl&Hofmann’s documents did not in any case prove the genuine use of the trademark for the products referred to in classes 21 and 25, which had to be considered as products related to those primarily marketed by the company (namely coffee). In other words, Mr Hesse claimed that the company used its trademark on such goods with the sole purpose of promoting its main product, and not instead to ensure an outlet on the market for the goods themselves. However, the Judge rejected this claim and observed that the aforementioned goods were accounted for by the company separately and independently of coffee, and this circumstance proved the genuine use of the sign for the mentioned product classes.

The EU General Court reached different conclusions as regards the remaining classes of products and services for which the Testa Rossa trademark had been registered (in particular 7, 11, 20, 28, 30, 34, 38). Wedl&Hofmann, in fact, in some cases had not been able to attach any invoice, sales order, revenues, advertising investment or data indicating the market share, while in other cases the limited sales volumes of the products showed a symbolic use of the sign. In this regard, Wedl&Hofmann defended itself by complaining about the considerable difficulty for small companies to give proof of the genuine use of a trademark. However, the Judge pointed out that the risk of unequal treatment between small and large companies is prevented by the fact that the elements that must be taken into consideration in the assessment are objective and concrete.