Another issue that came up in a Table Topics discussion I moderated at INTA earlier this month was what constitutes genuine use sufficient to sustain a CTM in the European Union (EU). We briefly touched on Merken v. Beheer (better known as ONEL) recently decided by The Court of Justice of the European Community (CJEU).
Again because ONEL might not be well known to practitioners outside the EU I decided to summarize it and the guidance it provides.
In the past maintaining a Community Trade Mark (CTM) registration in the European Union (EU) was easy. That’s because, pursuant to guidelines set by the Office for Harmonization in the Internal Market (OHIM) and a 1993 Joint Statement by the EU Council and the European Commission, use of a CTM in one member state in the EU was sufficient to protect the registration in all 27 states.
But not anymore. ONEL refused to follow the OHIM guidelines and the Joint Statement holding that use in single member state may no longer be enough.
Wondering in light of ONEL what constitutes genuine use? Its guidance is best understand with some brief case background.
In 2009 Hagelkruis Beheer sought to register the word mark OMEL at the Benelux Office for Intellectual Property (the IP office for Belgium, the Netherlands and Luxembourg referred to as BOIP). Leno Merken opposed relying on the earlier CTM registration for ONEL. The parties agreed that a likelihood of confusion existed; that the marks were for similar services and that Merken had made genuine use of the ONEL mark only in the Netherlands.
The BOIP agreed with the applicant that Merken’s use was insufficient. Merken appealed to the Court of The Hague which referred to the CJEU the question of what constitutes genuine use in the EU.
The referring court asked the CJEU four questions:
- 1. Is use in one country always enough?
- 2. If not, is use in one country never enough?
- 3. If such use is never enough, what more is needed?
- 4. Should genuine use in the EU be measured without reference to the borders of the
- territory of the individual Member States?
The Advocate General’s Advisory Opinion
In an advisory opinion to the CJEU the Advocate General focused on the 4th question stating that national borders should be ignored. She observed, “[w]hat matters is the impact of the use in the internal market: more specifically, whether it [the use] is sufficient to maintain or create market share in that market for the goods and services covered by the mark and whether it [the use] contributes to a commercially relevant presence of the goods and services in the market. Whether that use results in actual commercial success is not relevant.”
The Advocate General further stated that, in assessing whether the mark has been put to genuine use, the CJEU should make a “case-by-case assessment” by examining “the characteristics of the internal market” including “language, obstacles, transportation or investment costs or consumer tastes and habits.” The Advocate General added that “[u]se of a trade mark in an area where the market is particularly concentrated may thus play a more significant role in the assessment than use of the same mark in a part of the market where sources of supply and demand for these goods or services hardly exist or arise.”
The CJEU Opinion in ONEL
The CJEU in ONEL also concentrated on the 4th question, agreeing with the Advocate General that territorial borders are not determinative in deciding genuine use.
Regarding cross-border use the CJEU stated:
“Whilst there is admittedly some justification for thinking that a Community trade mark should—because it enjoys more extensive territorial protection than a national trade mark—be used in a larger area than the territory of a single Member State in order for the use to be regarded as ‘genuine use’, it cannot be ruled out that, in certain circumstances, the market for the goods or services for which a [CTM] has been registered is in fact restricted to the territory of a single Member State. In such a case, use of the [CTM] on that territory might satisfy the conditions both for genuine use of a Community trade mark and for genuine use of a national trade mark.”
In other words, genuine use “depend[s] on the characteristics of the product or service concerned on the corresponding market.”
The CJEU also held that genuine use means use of the CTM “in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services” and for the purpose of “maintaining or creating market share” for those goods or services. The CJEU sent the case back to the referring court to determine use by assessing all the relevant facts and circumstances, including “the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark.”
In response OHIM announced that the “automatic assumption” that use of the CTM in one country constitutes use in all “can no longer stand.”
Guidance Going Forward
Here is some suggested guidance:
1. Use in a single member state may still be enough if the market for the goods or services is restricted to that state. For instance a holder of a mark for a Covent Garden pastry shop will most likely have made genuine use of the mark by employing it to create market share only in the London area. That’s because the shelf life of these products is limited and therefore the market for them is local.
2. But in contrast the holders of marks covering universally used, everyday goods or services such as those made by Procter & Gamble or McDonald’s will have a greater burden of sustaining use because the market for these brands is EU-wide.
3. ONEL set no minimum threshold for market share or requirement for commercial success. Therefore a mark holder will most likely show genuine use by demonstrating that it has used the mark in accord with its essential function (to distinguish the goods or services) and in an attempt, however successful, to create or maintain market share in the appropriate territory.
No doubt future cases will flesh out more guidance. Your suggestions for establishing genuine use post ONEL are welcome.