CJEU assesses the scope of ‘genuine use’ and considers that the resale of vehicles and replacement parts thereof amounts to ‘genuine use’

Does the resale of vehicles and replacement parts thereof amount to genuine use of a trade mark under Article 12(1) of Directive 2008/95/EC (the former Trade Mark Directive) [now Article 19 of Directive 2015/2436]? Is there genuine use – pursuant to that same provision – when the trade mark proprietor offers services which do not use the trade mark but are intended for the goods already sold?

These, in a nutshell, were some of the questions referred to the Court of Justice of the European Union (CJEU) in a recent referral for a preliminary ruling from Germany.

The Court answered them in the affirmative in Ferrari SpA v DU, C–720/18 and C–721/18.

The judgment is relevant in that it further clarifies the concept of ‘genuine use’.

Background

In 1987, Ferrari obtained an international trade mark registration designating the EU for the following mark:

Registration was granted for goods in Class 12 (vehicles, apparatus for locomotion by land, air or water, in particular motor cars and parts thereof) of the Nice Classification. In 1990, the same mark was also registered with the German Patent and Trade Mark Office for goods in Class 12 (land vehicles, aircraft and water vehicles and parts thereof, motors and engines for land vehicles, and car components).

Ferrari sold a sports car model under the designation ‘Testarossa’ between 1984 and 1991 and the follow-up models 512 TR and F512 M until 1996. In 2014, Ferrari produced a one-off piece with the model designation ‘Ferrari F12 TRS’.

The Regional Court in Düsseldorf ordered the cancellation of the two registrations on the ground that Ferrari – during a continuous period of five years – had not made genuine use of the marks in Germany and in Switzerland. Ferrari appealed the decision to the Higher Regional Court in Düsseldorf (the referring court). According to the referring court, Ferrari had used those trade marks to identify replacement and accessory parts of high-priced luxury sports cars previously sold under those trade marks. The referring court decided to refer the matter to to the CJEU for guidance on the following points:

1. When assessing the question of whether use is genuine within the meaning of Article 12(1) of Directive 2008/95 in the case of a trade mark which is registered in respect of a broad category of goods, but is actually only used in respect of a particular market segment (high-priced luxury cars and parts), is account to be taken of the market for the registered category of goods overall or may account be taken of the particular segment? If the use in respect of the particular market segment is sufficient, is the trade mark to be maintained in relation to that market segment in cancellation proceedings due to revocation?
   
   
2. (Does the sale of used goods which have already been released onto the market by the trade mark proprietor in the EEA constitute use of the trade mark within the meaning of Article 12(1) of Directive 2008/95?
   
   
3. Is a trade mark which is registered not only in respect of a product, but also in respect of parts of that product also used in a right-maintaining manner in respect of the product if that product is no longer sold, but there are still sales of trademarked accessory and replacement parts for the trademarked product sold in the past?
   
   
4. When assessing whether there is genuine use, is consideration also to be given to whether the trade mark proprietor offers services which do not use the trade mark but are intended for the goods already sold?
   
   
5. When examining the use of the trade mark in Germany within the meaning of Article 12(1) of Directive 2008/95, pursuant to Article 5 of the Convention of 1892, are uses of the trade mark in Switzerland also to be taken into consideration?
   
   
6. Is it compatible with Directive 2008/95 to require the trade mark proprietor against which action is being taken due to revocation of the trade mark to comprehensively explain the use of the trade mark, but to impose the risk of evidence not being furnished on the cancellation applicant?

The first and third questions

In terms of assessing ‘genuine use’, the CJEU first noted that, according to Ansul BV v Ajax Brandbeveiliging BV (C–40/01), the fact that a mark is not used for goods newly available on the market but rather for goods that were sold in the past does not mean that its use is not genuine. The requirement is that the proprietor makes actual use of the same mark for parts that are integral to the make-up or structure of such goods, or for goods or services directly connected with the goods previously sold and intended to meet the needs of customers of those goods.

In this sense, use of a trade mark in respect of replacement parts forming an integral part of the goods covered by that mark is capable of constituting ‘genuine use’, not only for the replacement parts themselves, but also for the goods covered by that mark. The CJEU considered it irrelevant that the registration of that mark covers not only entire goods but also replacement parts thereof.

Furthermore, according to Article 13 of the former Trade Mark Directive, where grounds for revocation, such as those provided for in Article 12(1) of that directive, exist in respect of only some of the goods or services for which that trade mark has been applied for or registered, revocation is to cover those goods or services only. 

The CJEU reasoned that it is true that cars referred to as ‘sports cars’ are high-performance vehicles and therefore are capable of being used in motor sports. However, this is only one of the possible intended uses for such cars, which are also capable of being used, like any other car, for the transport by road. Accordingly, the mere fact that the cars in respect of which a mark has been used are referred to as ‘sports cars’ is not sufficient to concluding that they belong to an independent subcategory of cars. By analogy, the concept of ‘luxury’ used by the referring court could be relevant to several types of cars and is therefore neither sufficient to belong to nor an independent subcategory of cars.

Nonetheless, these circumstances are capable of demonstrating that, despite the relatively low number of product sold under the concerned trade mark, the use which has been made of that mark has not been token, but constitutes use of that mark in accordance with its essential function and must be classified as ‘genuine use’ within the meaning of Article 12(1) of the former Trade Mark Directive.

In light of the foregoing, the CJEU considered that a trade mark registered in respect of a category of goods and replacement parts thereof must be regarded as having been put to ‘genuine use’ within the meaning of Article 12(1) of the former Trade Mark Directive even if it has been so used only in respect of some of those goods, such as high-priced luxury sports cars, or only in respect of replacement parts or accessories of some of those goods, unless it is apparent from the relevant facts and evidence that a consumer who wishes to purchase those goods will perceive them as an independent subcategory of the category of goods in respect of which the mark concerned was registered.

The second question

According to the CJEU, the resale of a second-hand product bearing a trade mark does not mean – in itself – that that mark is being ‘used’. A mark is ‘used’ when it was affixed by its proprietor onto the new product when that product was first put on the market. However, if the proprietor uses that mark, in accordance with its essential function, which is to guarantee the identity of the origin of the goods for which it was registered, when reselling second-hand goods, then such use is capable of constituting ‘genuine use’ of that mark.

Consequently, Article 12(1) must be interpreted as meaning that a trade mark is capable of being put to genuine use by its proprietor when that proprietor resells second-hand goods put on the market under that mark.

The fourth question

In terms of the fourth question, the CJEU reasoned that Article 12(1) must be interpreted as meaning that a trade mark is put to genuine use by its proprietor where that proprietor provides certain services connected with the goods previously sold under that mark, on condition that those services are provided under that mark.

The fifth question

The fifth question brought into consideration the application of Article 351 TFEU. In this sense, the CJEU reasoned that paragraph 1 in that provision must be interpreted as allowing a court of a Member State to apply a convention concluded between a Member State of the EU and a non-member State before 1 January 1958 or, for States acceding to the EU, before the date of their accession, such as the Convention between Switzerland and Germany concerning the Reciprocal Protection of Patents, Designs and Trademarks, signed in Berlin on 13 April 1892, which provides that the use of a trade mark registered in that Member State in the territory of the non-member State must be taken into consideration in order to determine whether that mark has been put to ‘genuine use’, until such time as one of the steps referred to in the second paragraph of Article 351 TFEU makes it possible to eliminate any incompatibilities between the TFEU and that convention.

The sixth question

In light of Oberbank AG and Others v Deutscher Sparkassen- und Giroverband eV (C‑217/13 and C‑218/13), the CJEU reasoned that it is the proprietor of the mark at issue which is best placed to adduce evidence in support of the assertion that its mark has been put to genuine use.

Comment

This case is interesting since it essentially confirms that the resale of vehicles and replacement parts thereof amounts to genuine use. By contrast, readers may consider national approaches to this concept and in particular, the approach taken by the High Court of England and Wales in Aiwa Co Ltd v Aiwa Corp [2019] EWHC 3468 (Ch) [Katpost here]. In that case, Mr Justice Mann considered that the sale of second-hand goods was not ‘genuine use’ of the trade mark proprietor’s goods, in light of the principles summarized by Mr Justice Arnold (as he then was) in London Taxi v Frazer-Hash Research Ltd [2017] EWCA Civ 1729. In Aiwa, the High Court of England and Wales accepted that the appearance of the mark on second-hand goods was capable of performing the essentially function of a trade mark, but that this would not be enough, as it would mean that virtually any second-hand sale without more was a genuine use of the mark. The High Court of England and Wales was therefore unable to find that the level and nature of activity generated in relation to second-hand sales was capable of maintaining a market share for goods bearing the mark or was such that it preserved an outlet for the goods or services that bear the mark.