From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Thursday, 5 June 2014

Vampire vodka Dracula spectacular: a Transylvanian tale of non-use juice

This one is about proving genuine use of a Community trade mark. The decision is of the General Court, and it is Cases T‑495/12 to T‑497/12 European Drinks SA v OHIM, SC Alexandrion Grup Romania Srl intervening, handed down today.
European trade mark law operates a “use it or lose it” policy with Community and national trade marks. Once your mark has been registered for more than five years, if you don’t use it the mark becomes liable to revocation for non-use and also cannot be asserted in opposition or invalidity proceedings against a later mark (unless you prove use in those proceedings). Full of enthusiasm and with big plans for a mark, applicants will often file marks with broad specifications in numerous classes, hoping to secure as wide a possible protection for their new brand. But time flies, and business reality does not always meet with business theory, meaning broad registrations often come up short when it comes to proving use all those years later. 
The marks in dispute
This case concerned three applications back in 2009 by SC Alexandrion for CTMs inspired by that hematolagnia-indulging undead aristocrat, Count Dracula*. They were to be registered in respect of “Class 33: ‘Alcoholic beverages (except beers)” and related services in classes 35 and 39. European Drinks (ED) opposed these, relying on its figurative mark from 1995, registered in corresponding classes.
Applicant’s marks
Opponent’s mark

The oppositions failed at the OHIM level and at the Board of Appeal: ED failed to prove use.
The evidence of use relied upon
The mark in use
ED submitted:
1.    Six dated invoices in Romanian issued by another company to a wholesaler within a three month period each covering 432 bottles of vodka associated with the wording “V DRACULA”.
2.    An undated photograph of part of a bottle showing the DRACULA sign to the right/below.
3.    Undated promotional text in Romanian and English with no mention as to its medium, relating to “vodka DRACULA” and bearing the verbal element “DRACULA” in characters identical to those used in the photo.
What is the law on genuine use?
The General Court provided a very good summary of what proof of use is all about:
1.    In an opposition, the period in which use must be proved is five years prior to the date the application was published (Article 42(2) and (3) of Regulation No 207/2009, the CTM Regulation).
2.    The rationale for not allowing an earlier mark to be used in an opposition without proof of use is “to restrict the number of conflicts between two marks, where there is no good commercial justification deriving from active functioning of the mark on the market” (see Case T‑203/02 Sunrider v OHIM — Espadafor Caba (VITAFRUIT)).
3.    Genuine use of a trade mark means use in accordance with its essential function – as a badge of origin – “in order to create or preserve an outlet for those goods or services”, ie, real commercial exploitation. It does not include token use for the sole purpose of preserving the rights conferred by the mark (Ansul).
4.    The assessment of genuine use requires the usual overall assessment of all the relevant factors in the particular case.
5.    Use must be “viewed as warranted in the economic sector concerned in order to maintain or create a share in the market for the goods or services protected by the mark”, taking into account amongst other things the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark (VITAFRUIT and CERATIX (in French here)).
A different kind of Vampire Vodka, this
one seems to be available online
6.    Under Rule 22(3) of Regulation No 2868/95 (the CTM implementing regulation), evidence of use must concern the place, time, extent and nature of use of the earlier trade mark.
7.    The use must be public and outward in the relevant territory (VITAFRUIT).
8.    Extent of use is considered in particular by commercial volume as well as length and frequency of use (VITAFRUIT, HIPOVITON).
9.    A low volume of goods marketed under that trade mark may be offset by a high intensity or a certain constancy over time in the use of that trade mark or vice versa.
10.  Use need not always be quantitatively significant in order to be deemed genuine: turnover and the volume of sales of the goods under the earlier trade mark cannot be assessed in absolute terms but must be looked at in relation to other relevant factors, such as the volume of business, production or marketing capacity or the degree of diversification of the undertaking using the trade mark and the characteristics of the goods or services on the relevant market (HIPOVITON, VOGUE, Ansul).
11.  However, if you can only show a low volume of sales, you’ll be expected to put in more evidence, if you have it, to “dispel possible doubts as to the genuineness of the use of the mark” (HIPOVITON, VOGUE). So purely relying on a low volume of sales is a risky business.
12.  Genuine use of a trade mark cannot be proved by means of probabilities or suppositions, but must be demonstrated by solid and objective evidence of effective and sufficient use (VITAKRAFT).
13.  Use of the mark in a form differing in elements which do not alter the distinctive character of that mark in the form in which it was registered also counts towards proof of use of the mark (CRISTAL CASTELLBLANCH).
The General Court wasn’t impressed with what ED filed
With the above in mind, the General Court had the following criticisms of ED’s evidence, mirroring much of what the Board of Appeal had said:
  • The photograph and promotional text did not “substantiate the place, time or still less extent of the use”.
  • Five of six of the invoices date from the period between the applications being filed and published, and in these circumstances although they can be taken into account “the duration and the frequency of the use adduced [by them] does not support the conclusion that the products bearing the name of the earlier mark were marketed continuously over the relevant period”.
  • No information was provided about the identities of the companies in the invoices, nor the relationship between the company issuing it and the opponent.
  • It had not been established that the company on the invoice had used the mark with the opponent’s consent.
  • It had not been established that the mark had been used publicly and outwardly.

Amongst other factors the above led the General Court to conclude that:
  • The use on the invoices equating to 900 units a month was a “small” quantity in the relevant market (ie, alcoholic drinks). In fact, “the sales volume is marginal bearing in mind the average monthly consumption of vodka on the Romanian market” (How much, hic, vodka, is marginal, to, hic, consume, in an average, hic, month? Slurs Merpel).
  • Accordingly, 2,592 bottles of vodka over three months was not enough to establish genuine use in the circumstances, notwithstanding the finding in VITAFRUIT that 3,516 bottles of concentrated fruit juice was enough over 11 months.
  • The six invoices could not be considered as merely samples of a greater batch of sales and/or use.
Sadly for ED, it followed that its vampiric vodka failed to get over the line based on the scant evidence it was able to provide. Its oppositions were therefore dismissed. It was criticised for not doing a good enough job, and while that may well be the case, it may also be that it simply hadn’t made enough use and it was doing the best it could with what little it had.

The sharp-eyed (a sharp-toothed?) amongst you will note that the photograph of the use does not match the figurative trade mark relied upon by the opponent. That too was a live question in the case (whether the differences in the form in which the earlier mark was used and the form in which it was registered altered the distinctive character of that mark as it was registered), but the General Court declined to rule on the effect of the differences in light of its finding on the evidence of use.
This case is a useful illustration for those undertaking proof of use exercises (which is a common task for this Kat and his colleagues) of what to do and what not to do. Clear, precise, detailed information is your friend here – don’t just toss in a bit of paper. Tell the story of the use, fill in the gaps and convince the Office the mark has been put to use. There’s a good lesson here as to the unpredictability of the courts too. ED might be more than a little disappointed to see it failed to prove use when it sold 2,500 bottles over three months whereas 3,500 bottles over 11 months was enough in VITAFRUIT.
To all vodka lovers and all blood suckers, please remember to drink responsibly.
*Amusingly to this obviously not-very-well-read Kat, Wikipedia reveals that the original Dracula novel by Bram Stoker is a tale that “begins with Jonathan Harker, a newly qualified English solicitor, visiting Count Dracula in the Carpathian Mountains on the border of Transylvania, Bukovina, and Moldavia, to provide legal support for a real estate transaction overseen by Harker's employer". That almost sounds as if a property lawyer has been fiddling with the Wikipedia entry… 

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