Proving genuine use of an EU trademark to defeat revocation proceedings

On Jan 11th, the General Court in T-346/21 – Hecht Pharma v EUIPO – upheld a decision that a trademark was not to be revoked as the proprietor had proved genuine use. In their ruling, the GC discussed what constitutes public and external use and the required nature and form to prove genuine use, and what counts as a “medicinal product” under Class 5 of the Nice Convention system of classification.

Background

Gufic Pharmaceuticals, a manufacturer of Ayurvedic medicines, registered in 2010 the word mark “Gufic” for goods in Classes 3, 5, and 29. Hecht Pharma filed a revocation action in the EUIPO on the ground that the extent of trademark use had not been sufficiently demonstrated. In 2019, the revocation request was granted with respect to all three classes.

Gufic appealed this decision in 2020 by submitting new evidence of use, which were invoices that showed that the goods were sold to pharmacies in Germany. This satisfied the Board of Appeal, which reinstated the trademark for “medicines” in Class 5, but maintained the revocation for all the other types of goods.

Hecht, appealed this decision to the GC on three grounds:

1. There was insufficient public and external use of the mark.
2. The sign was not being used as a trademark.
3. The goods were not “medicinal products” and therefore were wrongly classified in Class 5.

Public and external use

Regarding the first ground, Hecht submitted that:

1. According to Paragraph 73 of the Medicinal Products Act (AMG), medicinal products can only be imported and placed on the market in Germany by pharmacies and such use can thus only be proven by adducing corresponding invoices from pharmacies. The invoices that the EUIPO accepted as evidence of use here were not from pharmacies, but from intermediaries who imported Gufic’s goods to pharmacies. This distribution model allegedly contravened the AMG.
2. The importation by intermediaries of Gufic’s medicines contravened Paragraph 73 and thus cannot prove genuine use.
3. Because under Paragraph 8 of the Drug Advertising Act (HWG), Gufic was not allowed to advertise its products in Germany, it could not demonstrate ‘use’ of the trademark to attract customers.

The GC rejected all of Hecht’s arguments.

First, to prove use of a mark for medicines, evidence of genuine use did not need to originate from traders (pharmacies in this case) and be directed at consumers. This is because otherwise, it would be nearly impossible to prove genuine use of marks used solely in B2B relationships.

Second, the Court noted that neither is the EUIPO authorised to decide on compliance with the AMG, nor does Article 18 of Regulation 2017/1001 provide for an obligation relating to the legality of the goods or good faith when using the mark. The alleged illegality of the distribution model under the AMG did not preclude genuine use of the mark. Therefore, marketing that is unlawful under national law therefore does not rule out actual and serious use with regard to trademark law.

Third, although advertising constitutes one of the factors to be taken into account when assessing whether a mark has been genuinely used, a lack of advertising cannot automatically lead to a finding that a mark was not generally used in respect of goods already being sold. This is especially so if advertising would be illegal. Therefore, Gufic did not have to advertise its mark in order to prove use.

Not a trademark?

As for the second ground, Hecht claimed that:

1. Gufic’s sign was not used as a trademark but rather as a company name.
2. The elements added to the Gufic sign gave rise to a new independent sign which impaired the distinctive character of the contested mark. 

The GC rejected both claims.

First, even though a company name does not have the purpose of distinguishing goods or services, it can function as a trademark if the proprietor affixes the name to the goods they sell or to the packaging. It is common practice in the pharmaceuticals sector for medicinal products to bear several different marks on their packaging, namely the product mark and the manufacturer's. Therefore, even though ‘Gufic’ was also the company’s name, it was used in a way on the Ayurvedic medicines that the public could recognise it as a trademark instead of merely a company name.

Second, the GC found that the distinctive character of the sign “Gufic” was not impaired. The additions to signs such as the yellow semi-oval and the “H 15” alphanumeric code were found to have no distinctive character. Even if the public were able to understand the sign H 15 as an autonomous mark, they could still perceive the sign Gufic as an indication of the origin of the goods in question.

Issues regarding class 5

Third, Hecht argued that Gufic’s Ayurvedic medicines were wrongly registered in Class 5. In the absence of a pharmacological effect, Gufic’s product could not be classified as a ‘medicine’. As such, there was no genuine use of the trademark for this class, use for similar goods being insufficient.

The GC disagreed, noting that the relevant question for assessing genuine use in a class is whether the goods for which the mark is used are the same as the goods for which the mark was registered. Though the GC previously held that even the sale of goods exclusively in pharmacies does not mean that they are medicinal products (T‑802/16 - Endoceutics/EUIPO – Merck), still the fact that a product is sold only in pharmacies is a relevant factor when classifying a product as medicinal.

Here, Gufic’s goods were only sold in pharmacies by a doctor's prescription. As well, the products contained information and warnings on the packaging that enabled the relevant public to perceive the products as medicinal.

The GC concluded that the relevant public would view Gufic’s goods as medicinal products, and therefore they were correctly classified.

Kat’s thoughts

The GC has reiterated that marketing that is unlawful under national law does not rule out actual and serious use per trademark law. This Kat wonders what other unlawful uses might still qualify as genuine use of a trademark.