Reber's chocolate dancing dream ends in meltdown

When life is hard and one's daily tasks are tiresome, what better tonic is there than a bit of chocolate?  This Kat can't actually offer you any, but the next best thing is a guest post from Katfriend and occasional contributor Valentina Torelli on a ruling from Europe's top court today on a trade mark for chocolate. This decision establishes, among other things, that when it comes to assessing whether there has been genuine use of a trade mark or not, the fact that a trade mark owner is a multinational corporation or only a small or medium sized enterprise (SME) is irrelevant and will not therefore be taken into consideration,.  Valentina explains as follows:

Chocolate symphonies are not so rare in the European Union, as it seems from a case on which the Court of Justice of the European Union (CJEU) pronounced today. The Court ruled on the bitter-sweet issue of the genuine use of an earlier national trade mark for the purposes of proof of use within an opposition proceeding before the OHIM (Case C-141/13 P Reber Holding GmbH & Co. KG v OHIM, Wedl & Hofmann GmbH) .

Austrian company Wedl & Hofmann (W&H) applied to register the figurative mark on the left, mainly featuring the word 'Walzertraum', as a Community trade mark (CTM) for 'coffee; instant coffee; decaffeinated coffee; sugar' (Class 30), on 16 August 2005. A few days after the publication of the CTM application, on 13 February 2006, German company Reber opposed, claiming a likelihood of confusion with its earlier national word mark 'Walzetraum', registered for 'bakery products, confectionery, chocolate and sugar confectionery' (also in Class 30), citing Article 8(1)(b) of Regulation 207/2009.

W&H cleverly asked for the proof of use of the German Walzertraum mark, which divided the Opposition Division (which upheld the opposition) and the Fourth Board of Appeal (which annulled that decision) as to the sufficient probative value of the following documents submitted by the German company:

1. A written statement of Reber's manager, dated 31 January 2007;

2. Two undated photographs displaying the Reber confectionery;

3. Copies of the chocolates' monthly lists of sales for the period from March 2001 to December 2002;

4. Excerpts from Reber's website, displaying different kinds of chocolate marketed by the company, dated 30 March 2004 and 23 January 2007.

The Board of Appeal concluded that Reber had not proved genuine use of its national mark between the relevant period from 13 February 2001 to 12 February 2006. Some of evidence fell outside that period, while the other documents -- although belonging to that time frame -- were insufficient to sustain proof of use under Rule 22(3) of Regulation 2868/95 (which implements the CTM Regulation). Said the Board of Appeal, the extent and the nature of the use of the Walzertaum mark could not qualify it as genuine, considering that the mark had been geographically and quantitatively limited to a local and narrow exploitation.

On appeal to the General Court, Reber presented two pleas in law. The first plea concerned the wrong interpretation of Articles 42(2) and 42(3) of Regulation 207/2009, alleging that the Board of Appeal erroneously denied that there had been genuine use of its Walzertrum mark, given the volume of the sales and the number of sale points. The second plea referred to the violation of the principle of equal treatment, in that Reber was discriminated against in comparison to multinational companies: for an SME the proof of use is much more complicated when it comes to consideration of the volume of sales and, in the present case, that issue was treated differently from a previous dispute (R 1101/2004-1) in which, on the contrary, it succeeded in establishing proof of use of one of its marks in similar conditions, where the goods at issue were pralines.

As to the first plea in law, the General Court upheld the Board of Appeal's decision, only disagreeing as to whether the two undated photographs could serve to prove the genuine use. As to the substance of the matter, the Court did not contest that the German Walzertraum mark had been exploited but simply affirmed that such use could not amount to the level of genuine use required by the CTM Regulation: all the facts and circumstances of the case must be taken into account in assessing the reality of the genuine use of a trade mark, particularly in view of maintaining or creating a market share for the goods or services protected by the mark. In this regard the Court's overall assessment, based on the connection between the volume of the sales with the nature and characteristics of the goods (are consumer goods, for which the earlier mark is registered together with the geographical coverage of its use), was decisive. However, while it is not necessary that the use of the mark always be quantitatively significant to be deemed genuine, the annual sale of 40-60 kg of chocolates from March 2001 to December 2012, directed to some 80 million German consumers and which  occurred solely at the Reber confectionery in Bad Reichenhall, a town of 18,000 inhabitants, did not match the requirements of Article 42(3) of Regulation 207/2009. Further, the Court stated that the artisanal production of the chocolates and their related distribution method played no role in the assessment of genuine use, as was the case for the marketing on the internet, which incidentally only related to Reber confectionery but not the Walzertraum mark.

Finally, the General Court rejected that argument that OHIM violated the principle of equal treatment by reaching a different solution in similar cases concerning the same opponent, as that principle must be applied in the respect of the principle of legality. The Court emphasised that the registration of a trade mark depends on specific criteria which apply according to the circumstances on a case-by-case basis. Neither OHIM nor the European courts are bound by national case-law (in this case a decision of the German Bundespatentgericht) since the national and the Community trade mark systems are autonomous.

As to the second plea in law, the General Court simply stated that there is no difference between SMEs and multinational companies in the assessment on the genuine use of a trade mark. Citing the VITAFRUIT decision (Case T-203/02), the Court said:

When assessing whether use of the trade mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark is real, particularly whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the products or services protected by the mark, the nature of those products or services, the characteristics of the market and the scale and frequency of use of the mark.

Consequently, the appreciation of the genuine use regards the same objective criteria irrespectively to the size of the company concerned.

Reber then appealed on the same two grounds to the CJEU, which upheld the General Court's decision and, in doing so, clarified some essential features of the assessment of genuine use under its own case-law.

First it stated that the scope of the genuine use requirement is strictly connected to the essential function of the trade mark as a business identifier, in connection with the goods and services for which it is registered. That said, use is genuine when it is directed at creating or maintaining a market share in the sector concerned for those goods and services. The CJEU added that, in order to establish a real genuine use of the Walzertraum mark, all the facts and circumstances of the case have to be considered, according to the guidelines provided by Rule 22 of Regulation 2868/95, as modified by the Regulation 1041/2005, which reads:

The indications and evidence for the furnishing of proof of use shall consist of indications concerning the place, time, extent and nature of use of the opposing trade mark for the goods and services in respect of which it is registered and on which the opposition is based, and evidence in support of these indications in accordance with paragraph 4.

The Court of Justice concluded that the General Court did not err in applying the concept of genuine use: the assessment of the genuine use cannot be limited to the finding of any mere use of the mark since not every commercial exploitation of a trade mark can be automatically qualified as genuine use.

As to the General Court's identification of the market sector in the assessment of the genuine use, the CJEU affirmed that Walzertraum's real and effective use had to be analysed in respect of chocolates, not pralines, as Reber claimed.  The CJEU explained that the appreciation of the genuine use must be based on the products and services specified in the trade mark application and not on a certain marketing concept. As a result, the alleged artisanal character of the Walzertraum chocolates should not to be taken into account when assessing the mark's genuine use.

The CJEU also affirmed the General Court's findings regarding the principle of equal treatment, in regard to both previous OHIM and the national court decisions, but said nothing about marketing on the internet: since this was not a matter of law, it was not subject to its revision.

To conclude, in regard to the second plea in law, alleging the violation of the principle of equal treatment with reference to a discrimination based on the company's size, the Court of Justice completely adopted the General Court's conclusions.

This Kat thinks that everyone got it right except the Opposition Division but that it would have been easier if a term other than "genuine use" had been used in the legislation in the first place -- maybe "commercially meaningful" or "significant", or whatever.  To suggest that use is not genuine suggests that it's fake, which is probably why so many businesses challenge office determinations and court rulings that their use is not genuine.  

Ein Walzertraum, by Oscar Strauss, here
Chocolate Dance here and here