Authors: Inga Lukauskiene, an Associated Partner, an Attorney-at-Law and a Patent Attorney in METIDA, Kristina Vilkiene, Assistant Attorney-at-Law in METIDA
A trademark, as any other assets, will give every benefit to its proprietor if used properly and wisely and, on the contrary, will cause inconvenience and will possibly bring losses if used improperly or not used at all. Though the Community trademark law does not provide for a usage requirement as a precondition for the trademark registration, but trademark use is a condition for the maintenance of Community trademark registration.
As a trademark is one of the means of competition in the market, respective requirements are set for its use in order to limit a possibility to restrict competition with dormant trademarks.
However, non-use of a trademark is not always related to restriction of competition, it is more often the case of the trademark proprietor’s not knowing how, where, to what extent and what trademark to use.
It is specified in paragraph 9 of the preamble of Directive 2008/95/EC of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the Member States relating to trade marks that:
“In order to reduce the total number of trade marks registered and protected in the Community and, consequently, the number of conflicts which arise between them, it is essential to require that registered trademarks must actually be used or, if not used, be subject to revocation.“
It is also established in the Trademark Directive that:
“If, within a period of five years following the date of the completion of the registration procedure, the proprietor has not put the trade mark to genuine use in the Member State in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the trade mark shall be subject to the sanctions provided for in this Directive, unless there are proper reasons for non-use.
The following shall also constitute use within the meaning of the first subparagraph:
(a) use of the trademark in a form differing in elements which does not alter the distinctive character of the mark in the form in which it was registered;
(b) affixing of the trademark to goods or to the packaging thereof in the Member State concerned solely for export purposes.
Use of the trademark with the consent of the proprietor or of any person who has authority to use a collective mark or a guarantee or certification mark shall be deemed to constitute use by the proprietor.”
The same provisions in connection with trademark use were also established in First Council Directive 89/104/EEC of 21 December 1988 to approximate the laws of the Member States relating to trademarks.
The main evaluation criteria:
According to the usage requirement formulated in legal acts, the following main conditions may be distinguished which are necessary in order to consider that a trademark is in use:
- For beginning of using – a period of 5 years;
- Genuine use;
- Use in respect of goods and services for which the trade mark is registered;
- Use of the trade mark in the form in which it is registered;
- Use in a specific territory;
- Use by the trade mark proprietor or by a person who has the proprietor’s authority;
- Now, about each of them individually:
For beginning of using – a period of 5 years
The starting point of the 5 year period for starting the use of the trademark is the completion of the trademark registration procedure. This period may begin to run only when all the trademark registration procedures are over. Evaluating whether the trademark was used during the set 5 year period, it is not required that the use be uninterrupted or continuous throughout this period.
In settling Le Chef DE CUISINE case C-246/05, the court indicated that:
- The Directive does not establish requirements for the Member States how and according to what procedure the trademark registration is to be performed;
- herefore, the 5 year period of use must be counted taking into account the national registration procedures.
According to the trademark registration procedures applicable in Lithuania, the 5 year period of trademark use is counted as follows:
- The beginning of the period for a national trademark is the registration certificate issuance date;
- The beginning of the period for an international trademark:
– When extended to Lithuania it is the date of the notification of extension of the international registration plus 18 months;
– When extended to the European Community it is the date of the second publication.
Another essential criterion for evaluating whether the trade mark use requirement is met is genuine use. So, when is the trademark considered to be in genuine use?
One of the main cases, where the characteristics of genuine use and their evaluation principles were formulated, is Ansul case C-40/01:
- Preserving the exclusive rights conferred by the mark is not the sole purpose of use;
- Relationship with the main function of the trademark;
- Commercial purpose of use;
- Market share maintaining or creation purpose;
- Nature of goods and services;
- Market characteristics;
- Frequency of use;
- Scale of use.
The court indicated in this case that symbolic use of the trademark, intended only for preservation of exclusive rights, cannot be considered as genuine use.
A trade mark put to genuine use must perform its main function, i.e. must help the consumer to distinguish goods or services of one manufacturer from those of another, thus it cannot be used only inside the company.
As the trademark protection grants exclusive rights in respect of third parties, such a protection cannot continue in force if the trademark loses its commercial purpose, which is understood as an attempt to create or maintain a market share for goods or services marked with the trademark. Thus, use of the trademark must be related to goods supplied or services provided, or to goods and services to be provided and in respect of which the company takes actions in order to attract customers, especially in the form of advertising campaigns.
When assessing whether use of the trademark is genuine, regard must be had to all the 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 goods or services protected by the mark. When assessing such circumstances, regard must also be had to the nature of the goods or services at issue, the characteristics of the market and the scale and frequency of use of the mark.
However, the use of the trademark does not always have to be quantitatively significant in order to be regarded as genuine use, as it depends on the characteristics of goods or services and peculiarities of the specific market. Thus, even minimal use can be assessed as genuine use, provided that it is warranted in the economic sector concerned.
Besides, even in those cases, where the mark is used by one client, which imports goods marked with the trademark, such use can be regarded sufficient for proving genuine use, if such import is really commercially warranted by the trademark proprietor.
Assessment whether the use is sufficient for maintenance or creation of a market share for relevant goods or services is to be performed in each specific case. In Ansul case the court also confirmed that the fact that a mark that is not used for goods newly available on the market but for goods that were sold in the past does not mean that its use is not genuine if the proprietor makes actual use of the same mark for component parts that are integral to the make-up or structure of such goods or otherwise meeting the needs of customers of those goods.
Reasons justifying non-use:
In Le Chef DE CUISINE case C-246/05 the court not only confirmed the principle of 5 year term of use of the mark, but also examined the validity of reasons for non-use of the mark.
- Trade mark proprietor’s possibility to exercise influence;
- Direct relationship with the trademark;
- Dependence of use on specific circumstances;
- Possibility to use the mark taking into account specific circumstances.
In this case the trademark proprietor stated that use of the mark was hindered by ‘bureaucratic obstacles’. The manufacturer of ready-to-eat food distributes its goods only in the retail chain owned by itself. Before opening of the first outlet of the chain in Austria, Lidl created the design of the goods, agreed on it with the suppliers and started storing the supplied goods. According to the trademark proprietor, the chain development in Austria was hindered by ‘bureaucratic obstacles’, in particular delays in the issue of operating licences.
The court noted that the Directive does not contain any indication of the nature and characteristics of the ‘proper reasons’, therefore, for the interpretation of this provision, the provisions of the TRIPS Agreement were used. Under the TRIPS Agreement, circumstances arising independently of the will of the proprietor of the trademark which constitute an obstacle to the use of the trademark are to be recognised as valid reasons for non-use. The court also noted that this provision should not be interpreted too widely, as that would distort the aim to reduce the number of non-used trademarks.
So, it is not enough that ‘bureaucratic obstacles’ are beyond the control of the trademark proprietor. Such obstacles must be directly related to the trademark so that the use of the trademark would depend on the successful completion of the administrative action concerned. But the court pointed out, however, that the obstacle concerned need not necessarily make the use of the trademark impossible – if an obstacle is such as to jeopardise seriously the appropriate use of the mark, its proprietor cannot reasonably be required to use it none the less, for example, the proprietor of a trademark cannot reasonably be required to sell its goods in the sales outlets of its competitors.
Use in marketing:
In WELLNESS case C-495/0715 the court assessed whether use of the mark on goods, which are distributed for free to buyers of other goods produced by the same manufacturer, can be regarded as genuine use.
The trade mark proprietor Maselli produces and sells clothes. The trademark is registered for goods of classes 16, 25 and 32. The company used to give buyers of the clothes non-alcoholic beverages marked with the same trademark as the clothes. This trademark was not used for beverages sold on their own.
As it was already stated in the said Ansul case, in this case the court also noted that for the purposes of the Directive genuine use must be understood as corresponding to the main function of the trademark, allowing the customer to identify the source of origin of the goods or services and differentiate them from the goods or services originating from another source.
The court noted that protection of the trademark in respect of specific goods or services should remain in effect only in cases when the trademark is used in the market for marking of goods or services belonging to a specific class. Meanwhile, this condition is not met when advertising means are distributed as a gift for acquisition of other goods and constitute promotion of such acquisition.
Goods distributed for free are not distributed in order to get a market share of specific goods, the trademark is not used as a reference to the origin of the goods, therefore, such use is not regarded as genuine use.
Use for charity purposes:
In Radetzky-Orden/Feldmarschall Radetzky case C-442/07 it is stated that the trademark proprietor used the registered trademark in the preservation of military traditions – such as memorial services for those who have fallen in combat, remembrance services, military reunions and the upkeep of war memorials, collection of gifts, charitable work. The trademark was also used on badges of the organisation that the members of the organisation used to wear during various events, it was also printed on various documents used in the activities of the organisation.
In the reference for a preliminary ruling the court was asked whether such use can be regarded as genuine use. The court specified that assessing the sufficiency of trademark use, in this case it is not important that the activities of the trademark proprietor are not for profit, as that does not negate the fact that the trademark proprietor is implementing the purposes of its activities and uses the mark in a specific sphere of services or activities. Thus, it was stated in that case that such use of the mark could be regarded as genuine use.
Use in respect of goods and services for which the trademark is registered
- Principle of specification;
- Use only for some of goods and services for which the mark is registered;
- Use for goods and services other than those for which the mark is registered;
- Homogeneity of goods or services.
When assessing the scope of protection of a registered trademark, it is important to take into account the principle of “specification” applicable to the trademark, i.e. the list of goods and services defining the limits of protection of the registered trademark.
Speaking about use of a registered trademark in respect of goods and services, two problematic aspects can be pointed out:
- use of the mark only for some of goods and services for which the mark is registered;
- use of the mark for goods and services other than those for which the mark is registered.
Where a mark is used only for some of goods and services, it is not required that the registered trademark be used for all goods and services for which it is registered, without exceptions. In such a case it is evaluated whether the goods (services), for which the mark is used, can be attributed to the same category as those for marking of which the trademark was not used.
Use of the trademark in the form in which it is registered
Even trademarks that are well known to consumers sometimes undergo changes in “appearance”.
In evaluating whether use of a changed sign can be regarded as proper use of a registered trademark, the main criterion is whether such changes have an essential effect on the distinctive character of the registered trademark.
Rather often changes in the image of a mark are made by adding or taking away specific elements – if that changes the distinctive character of the mark, use of such a changed mark would not be regarded as use of the registered trademark.
It is also often the case where the mark proprietor registers several trademarks that share a common concept, but have certain differences (a “family” of trademarks). However, in such a case the idea of a “family” of trademarks is significant only if each trade mark is put to genuine use.
It is also important that if a sign is used in commercial activities, which differs from the registered trademark only a little, such use can be presented as a proof of use of the registered trademark.
But if the trademark proprietor registered 2 similar trademarks, the use of only one of them does not release from the duty to use the other registered trademark.
If several separate marks are used together, it is important to make it clear that the marks so used do not form one complex trademark. In such a case, each trademark must keep its independence and individuality.
Use in a specific territory:
When assessing the use of the Community trademark, a problem concerning the territory of use of the mark arises, as the Community trademark enjoys protection in all the 27 Member States.
It is established in the case law that the trademark must be used in a significant part of the territory, but even use in a rather limited territory may be regarded sufficient, taking into account all other circumstances of the case, as the territory of use is only one of several factors to be taken into account.
In this way use of the trade mark in only one Member State or a part of its territory would be regarded sufficient provided that other criteria for genuine use have been met.