Only the trade mark proprietor has burden of proving genuine use, CJEU confirms

Proving genuine use of a trade mark (within the meaning of article 16 Directive TMD) can be a challenging task. This is especially the case when a mark has been used irregularly.  In those circumstances finding sufficient and suitable proof may be difficult. At the same time, proving that a mark has not been used is arguably more difficult; how do you provide evidence of something that does not exist? For this reason, the CJEU ruled in the Ferrari case that the burden of proof that a trade mark has been put to genuine use rests on the proprietor of that mark. 

But does this mean that a competitor seeking to have a mark revoked for non-use can merely file a revocation action without further efforts? Is some standard of substantiation required, whereby the applicant for a revocation action sets out what research he conducted to ascertain the mark had not been used genuinely? These questions were recently answered in a ruling by the CJEU in the Globus v. Maxxus case.

Looking for proof on the roof

Background of the case

Globus, a German company, is the proprietor of two national German marks, being the word mark ‘MAXUS’ and a figurative mark consisting of that same word. The marks were registered in 1996 for goods in classes 1 to 9 as well as 11 and 34 of the Nice classification. 

Before the referring Regional Court of Saarbrücken (Landgericht Saarbrücken), Maxxus, another German company, sought a declaration of revocation of Globus’s trade marks on the ground of non-use. Maxxus argued that Globus did not use the trade marks over the past five years. To reach this conclusion, Maxxus had conducted an online investigation, including the website of Globus. Via the internal search tool of that website, two results were displayed when searching on the term ‘Maxus’. The results related to a beverage store in Germany, operated by a company connected to Globus. To confirm that none of the goods sold in that store bore the mark ‘MAXUS’ and that mark was not used in any other context, Maxxus hired a detective agency to visit the store. 

In its defense, Globus disputed that the marks were not used genuinely. Considering that Maxxus could not procure more facts than the aforementioned, Globus alleged that Maxxus had fallen short of its burden to set out the facts under national German law. On the basis of this burden, a claimant must set out, in a substantiated manner, the matters intended to show non-use of the mark. When challenged by the proprietor, the claimant must furthermore prove that, before its revocation action was lodged, it carried out market research and that it was unable to establish that the mark was put to genuine use.

Although this burden must be distinguished from the actual burden of proving genuine use, which lies with the trade mark proprietor, not setting out sufficient facts could lead to a dismissal of the claim. The referring court was unsure how this aspect of German procedural law would reconcile with article 17 TMD and referred the case for a preliminary ruling by asking the following two questions:

“Is EU law […] in particular articles 16, 17 and 19 [of directive 2015/2436], to be interpreted as meaning that the effet utile of those provisions prohibits an interpretation of national procedural law which:

(a)      imposes on the applicant in civil proceedings for cancellation of a national registered trade mark on grounds of revocation for non-use a burden of setting out the facts, as distinguished from the burden of proof; and

(b)      requires the applicant, in the context of that burden of setting out the facts,

–        to make, in such proceedings, substantiated submissions regarding the defendant’s non-use of the trade mark, to the extent that it is possible for the applicant to do so; and

–        to carry out, for that purpose, its own research into the market, in a manner which is appropriate to the request for cancellation and to the specific nature of the trade mark concerned?’

It's no use to prove non-use!

The ruling by the CJEU

The CJEU first dismissed that article 16, which relates to the concept of genuine use as such, and article 17, which relates to non-use as a defense in infringement proceedings, are of relevance to answering the preliminary questions. Instead, the CJEU considers that the main question is whether an applicant for revocation of a trade mark of non-use, must make a substantiated submission in support of its application, including by providing some sort of market research. 

The CJEU recalled that, primarily, the burden of proof under article 17 TMD does not constitute a procedural provision falling within the competence of the Member States. 

Secondly, the CJEU notes that:

“the principle under which it is for the proprietor of the mark to prove genuine use of that mark is in reality merely an application of common sense and of a basic requirement of procedural efficacy. 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” (point 35).

Simultaneously, this does not mean that no standard applies as to the application for a revocation of a trade mark, so the CJEU rules:

“It is true that the fact that the applicant, in a given procedure, does not have to bear the burden of proof does not necessarily release that party from the obligation to provide, in its application, a full statement of the facts upon which it bases its claims.” (point 37)

“However, it is clear from Article 19 of Directive 2015/2436 that an application for revocation of a trade mark on the basis of that provision is founded on the claim that the mark has not been put to genuine use by its proprietor. Such a claim, by its nature, does not lend itself to a more detailed statement.” (point 38)

With regard to the rule under German national law, the CJEU found that is goes ‘beyond’ a mere obligation to set out facts, and partially places the burden of non-use on the applicant. The CJEU repeats that this is contrary to the unambiguous ruling in the Ferrari case.

Lastly, the CJEU addresses potential misuse of a revocation action by applicants who only summarily substantiate their application. The CJEU holds that there are sufficient procedural means to deter applicants from doing so:

“Those procedural means include the possibility of laying down provisions enabling an application for revocation on the ground of non-use to be dismissed summarily as manifestly inadmissible or manifestly unfounded, or the applicant to be ordered, if its claims are rejected, to pay the costs incurred by the proprietor of the trade mark at issue. It is also possible to require the applicant to pay a fee when it brings its action. It is clear from the documents before the Court that, in this instance, Maxxus had to pay such a fee.” (point 43). 

In answer to the preliminary questions, the CJEU therefore concludes that:

“[…] Article 19 of Directive 2015/2436 must be interpreted as precluding a procedural rule of a Member State which, in proceedings concerning an application for revocation of a trade mark for non-use, requires the applicant to carry out market research concerning the possible use of that mark by its proprietor and to make in that regard, to the extent possible, substantiated submissions in support of its application” (point 46). 

Comment

The ruling by the CJEU is convincing. In the end, the trade mark proprietor is best placed to procure evidence that a mark was in fact used genuinely. Especially in cases where limited (but in the end sufficient) use of the mark has been made, it cannot be expected from an applicant that the paradoxical evidence of ‘not finding proof’ must be brought forward. To this GuestKat, the ruling does not mean that the door for frivolous and speculative revocation claims is now wide open. The CJEU clearly states that an applicant is not released of submitting a full statement of facts as a basis to the revocation claim. Moreover, the CJEU confirms that abusing revocation claims can be punished by national courts in various ways. 

 Top picture is by Edgars Košovojs, shared under a Creative Commons Attribution-Share Alike 4.0 International License

Middle picture is by Mylissa, shared under a  Creative Commons Attribution-Share Alike 2.0 Generic license.