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Sunday, 19 April 2015

Genuine use of a Community Trade Mark: General Court puts revocation claim to bed

Back from the Spring break, on top of its IP agenda the General Court encountered a dispute involving the interpretation of the main principles lying at the basis of genuine use of a Community trade marks (CTM). The Court's thoughts can be found in Case T-258/13, involving revocation proceeding for non-use brought according to Article 51(1)(a) oRegulation 207/2009 on the Community trade mark by the German company Matratzen GmbH in 2010 in respect of the ARKTIS word mark, held by the Swiss company KBT & Co. Ernst Kruchen agenzia commerciale sociétá in accomandita.

Extensively used with
the proprietor's consent ...
OHIM's Cancellation Division revoked the registration of the ARKTIS CTM only in respect of goods in class 20 (pillows, sleeping bags”) but rejected the revocation claim for “bedding, bed blankets” in class 24. The Board of Appeal confirmed this decision since the CTM proprietor could prove genuine use of its mark for the goods in class 24. Indeed, the CTM proprietor also submitted ample evidence of use of the word in the form of its ARKTIS LINE logo, featuring diagonal bands sewn at its products' corners. The mark appeared on products sheets, invoices, delivery notes and sales statistics concerning two of the CTM proprietor's licensees, marketing the relevant goods respectively in Germany and Denmark, Belgium and Austria.

While some of the evidence did not expressly bear the ARKTIS mark or its ARKTIS LINE variation, the global combination of all documents provided by its proprietor convinced the Board of Appeal that it sufficiently proved the extent and the nature of the ARKTIS mark's use in the relevant period of five years preceding the application for revocation. It was held likely that, for that purpose, the turnover figures reached between 2007 and 2009 were conclusive as well as the the ongoing sale of more than 3,500 blankets, 1,000 ARKTIS diagonal bands and 1,060 pochettes.

On appeal to the General Court, Matratzen Concord lodged a single plea in law alleging the violation of Article 51(1)(a), in that the CTM proprietor failed to prove any use of its ARKTIS mark for “bedding and bed blankets” or that any such use was genuine within the meaning of the CTM Regulation. The Court rejected the appeal, siding with the Board of Appeal's findings and reasoning.

The present judgment is relevant because it covers the sensitive matter of genuine use, the lack of which can lead to the extreme consequence of revocation. Under the 10th recital of Regulation 207/2009:
There is no justification for protecting Community trade marks or, as against them, any trade mark which has been registered before them, except where the trade marks are actually used.
The reason is that the Community trade mark system avoids granting protection to a mark where use of that mark is token, in order to prevent competitors from registering and using identical or similar marks for identical or similar goods and services. It follows that, according to the settled-case law of the Court of Justice and the General Court, trade mark use -- if it is to be regarded as genuine -- must appear to be a use of a mark in connection with its essential function as a commercial origin identifier, with the purpose of creating or maintaining a market share for the products and services it covers.

In its ruling the General Court outlined an analysis of the requirements to retain a trade mark's genuine use, by applying Article 15 of Regulation 207/2009 to the factual and quantitative circumstances of the case.  Then, in the first part of the operative part of its judgment, the Court dismissed Matratzen Concord's argument that the inconsistencies and the discrepancies in the identification of the products by means of their codes, within the evidence provided by the CTM proprietor, could cast doubt on the proof of genuine use of the challenged mark. Next, the Court referred to settled-case law (Cases T-19/99 Companyline; T-273/10 Olive Line) and affirmed that the use of the term “LINE” in combination with a registered trade mark can be perceived by the public as identifying the product line covered by such mark. Thus, contrary to Matratzen Concord's assertion, the average consumer would consider that the use of the ARKTIS LINE did not substantially alter the distinctive character of ARKTIS, the word 'LINE' being simply an additional term, and that use of ARKTIS LINE therefore counted towards use of the word ARKTIS on its own.

Another interesting remark regards the specificity and the common practice of the relevant market sector, which must be taken into account when assessing genuine use and which Matratzen Concord did not contest. Through the sales of items of bedding, featuring at their corners the diagonal bends and labels including the ARKTIS LINE logo the CTM proprietor could satisfactorily prove genuine use of its mark.

In contrast, the General Court affirmed not only that the contested mark was used but that its use could be qualified as genuine from the perspective of its extent, duration and nature: such use does not need to be always quantitatively relevant, since its status as genuine use depends on the characteristics of the goods and services under examination. The ARKTIS mark satisfied the relevant criteria in the light of the sales documented in invoices and in the sales statistics submitted: the CTM proprietor’s commercial output amounted to rather more than 3,490 products sold between 2006 and 2009 in the EU.

Finally, applying Article 15(2)(2) of Regulation 207/2009 the Court held that the use of the ARKTIS mark through the CTM proprietor’s licensees included use by a licensee with whom it entered into the licence agreement in 2011 and thus outside the revocation proceeding’s relevant period was also to be considered in the assessment of genuine use since the CTM proprietor had specified that this licensee used the mark within the relevant period (2006/2009) with its consent, according to Article 15(2).

To conclude, while the General Court’s review entails a legality check of the Board of Appeal’s decisions, the latter is entitled to carry out an examination of the dispute, in the light of the facts and the points of law introduced by the parties, which does not depend on whether the parties raised a specific plea with regard to the contested decision criticising the appreciation of the evidence provided by the counterparty.

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