OHIM DECISION CHOC FULL OF GENUINE USE POINTS

The IPKat brings news of a recentish OHIM decision with ramifications for genuine use, house brands and the point of sale at which genuine use must be established.

Mars applied to register AL SULTANA as a CTM for various goods in Class 30. Reber opposed the application under Art.8(1)(b), based on its German SULTANA trade mark, registered in Class 30 for biscuits, cake and confectionery. Mars required Reber to prove that it had used the mark under Art.43 CTMR. Reber responded that it owned a confectionery store in the city of Bad Reichenhall, where it had sold between 65 and 72 kgs of the chocolates over the counter each year during the years 1998-2001. The chocolates were handmade pralines which were sold unpackaged on trays for immediate consumption. A photograph showing the way in which the chocolates were sold was also produced. In reply, Mars argued that the level of sales was “token” and that the photograph did not show that SULTANA was used as a trade mark. Mars also argued that there was no likelihood of confusion because AL SULTANA was Arabic in appearance and that Reber’s goods were sold in Reber’s shops, whereas Mar’s goods were sold in supermarkets. The Opposition Division refused the opposition, holding that Reber had failed to show genuine use since the quantity of chocolates sold were not sufficient to prove the existence of a share in the market for the goods involved and was not corroborated by genuine evidence. Reber appealed, arguing that bearing in mind the special circumstances of the case, which involved products manufactured on a small scale to guarantee quality, the degree of use was serious and not fictitious.

The appeal on the genuine use point succeeded.

* The Opposition Division had failed to take into account the peculiarities of Reber’s business, which were relevant to interpreting the evidence of genuine use. Reber was a small business, engaged in the handmade production of chocolate delicacies made of fresh ingredients and to be consumed on the spot. This explained why relatively small quantities of the products had been put on the market. The fact that Reber specialised in quality, rather than quantity, should have been considered as one of the circumstances relevant to establishing genuine use. Annual sales of 70kg of chocolate products would likely be considered insufficient to establish genuine use where the company in question was a big industrial company. However, the same output could be sufficient where a business that necessarily produced chocolates on a smaller scale could be sufficient. The size of the quantities should be assessed in the light of the relevant market and not in the abstract. Here the quantities sold were not high, but were not out of proportion with the relevant market and so there was a genuine commercial exploitation of Reber’s trade mark.

* The way in which the chocolates were sold (by weight, in the opponent’s coffee shop, directly to end consumers who paid in cash) meant that it was understandable that no invoices were available.

* The photographic evidence demonstrated use of term SULTANA as a trade mark. Consumers would see that SULTANA was the commercial name of the chocolates and order them by that name. The presence of the ® alongside the term SULTANA would strengthen this perception. Other indications, including the word RUM and the terms “Rosin-o-Rum” and “Rumrosinen in Trueffelsahne”, would be seen as describing the flavour of the chocolates. Although the chocolates already bore the housemark REBER, consumers would know that many chocolates often have both a house mark and the mark identifying the particular product. The fact that the photograph was undated did not prevent it from showing the nature of the use.

* The fact that consumers would only see the name SULTANA at the point of sale of the chocolates, and prior to being chosen, the chocolates would be packaged in a blank container, did not mean there was not genuine use, since by the time of packaging, the trade mark had already performed its function.

Reber also partially succeeded on the likelihood of confusion point. Here though, the very narrow approach taken to Reber’s market, which so helped Reber on the genuine use point, worked to its disadvantage, because it was held that Reber’s sophisticated confections wouldn’t be confused with other, more low-brow, non-chocolate based confections.

The IPKat finds this case rather difficult. OHIM has allowed very limited use on a single type of chocolate in a single shop in Bad Reichenhall to tie up the SULTANA mark across the whole EU. On the other hand, he has sympathy for small users, who shouldn’t have their marks drowned out by later use by much larger companies. Merpel adds, don’t German consumers know that SULTANA is virtually synonymous with a raisin, which was the flavour of the chocolates in question?