The use of the Community trademark: what territory is considered sufficient?

Authors: Kristina Vilkiene, Assistant Attorney-at-Law in METIDA, Inga Lukauskienean Associated Partner, an Attorney-at-Law and a Patent Attorney in METIDA

Why the usage is so important?

puzleA trademark just like any other possession can bring a lot of benefits to its proprietor if it is appropriately and wisely used, however, it can also cause inconvenience and potential losses if it is inappropriately used or not used at all.

Even though Community trademark law does not anticipate the usage requirements for trademark’s registration, the usage is considered to be a condition which allows to maintain the registration of the Community trademark.

Since a trademark is one of the competition means on the market, appropriate requirements are set to its usage like to any other competition means in order to limit the possibility of restricting the competition by ‘sleeping’ trademarks.

This is especially relevant to the Community trademarks, as the proprietor of the Community trademark is granted with the exclusive rights in the whole Community’s territory after his or her trademark’s registration. However, Community trademark is, in fact, rarely used in the whole Community’s territory.

Legal regulation:

In the 9th paragraph of the preamble of The 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 (codified version) it is indicated that ‘<…> in order to reduce the total number of trademarks registered and protected in the Community and, consequently, the number of conflicts which arise between them, it is essential to require that registered trade marks must actually be used or, if not used, be subject to revocation’.

The usage in a specific territory:

When considering the usage of the Community trademark, a problem regarding the territory of the trademark use arises, since the Community trademarks are protected in all 27 Member States

To what extent the usage in the EU territory is considered sufficient enough for the trademark to be considered used in the EU? And what usage would counterbalance the non-usage in the rest of the EU so that it could not be a ground for the trademark’s revocation due to its non-usage?

Courts’ practice has established the requirement that the trademark has to be used in a significant part of the territory.

However, even the usage in a relatively limited territory can be considered sufficient, since the territory of the usage is only one factor from a few which has to be evaluated when taking into consideration other case’s circumstances. In this way, the usage of trademark only in one Member State or in a part of its territory would be considered sufficient provided that other criteria of the ‘actual’ use are met.

A conflict between ‘AB InBev’ and ‘Budvar’ regarding Community trademark ‘BUD’

One of the latest court judgements in which the adequacy of the trademark usage was assessed in terms of territory is the judgement of the General Court (previously called The First Instance court) of 22January 2013. According to this judgement, the court left ‘AB InBev’ Community trademark ‘BUD’ registration for beer and other goods as valid. The conflict arose between the companies that had been battling against each other for many years: Anheuser-Busch InBev (‘AB InBev’), the biggest in the world beer producer, and Czech beer producer Budějovickż Budvar (‘Budvar’).

Back in 2008 the General Court during the investigation of a case between these two beer producers revoked three decisions made by the Office for Harmonization in the Internal Market (OHIM) which rejected the appeals by ‘Budvar’ regarding Community trademark ‘BUD’. In these decisions OHIM stated that the evidence provided by the trademark proprietor in terms of the use of the appellation of origin of ‘BUD’ in Austria, France, Italy and Portugal was insufficient. Meanwhile, the General Court decided that OHIM had applied a misleading concept of the appellation of origin in its decision and had unreasonably based it on the judgements of the national courts treating them as final. Due to the provided evidence of the usage in this case the General Court decided that ‘Budvar’ had given the sufficient evidence for usage in commercial activity in Austria and France.

‘AB InBev’ complained about this decision to the Court of Justice of the European Union which in response partly revoked General Court’s judgement stating that the General Court inappropriately applied Regulations’ provisions regarding Community trademark. The Court of Justice of the European Union noted that the earlier trademark, which served as a ground to dispute the registration of the later trademark, has to be used to a wide extent in a commercial activity in a large part of the territory where it is protected. On the other hand, the Court of Justice of the European Union did not deny General Court’s statement that the term ‘used in a commercial activity’ should not be understood as a reference to the ‘actual’ usage. According to the Court of Justice of the European Union, the use of the earlier trademark has to be wider than the use of the local notion. Also, the usage in a commercial activity has to be evaluated from each territory’s perspective where the trademark is protected. After stating these essential criteria, the Court of Justice of the European Union resent this case to the General Court for a reanalysis. The General court had to reassess whether ‘Budvar’s’ used appellation of origin ‘BUD’ was a sufficient ground to dispute ‘AB InBev’ trademark’s application.

In the second judgement of 22 January 2013, the General Court decided that ‘Budvar’ had not provided OHIM with any evidence that would prove that the usage of the previous mark in a commercial activity had been more than of a local notion until the filing date of the application of the later Community trademark. The accounts, whose dates were later than ‘AB InBev’s’ application to register Community trademark, and which were provided as usage evidence, were rejected. Moreover, the court stated that the accounts justifying the usage of ‘BUD’ reference until the application of the disputable Community trademark registration were of a very limited territory or volume of goods. For example, the supply of goods in France limited itself maximally to the three cities, and the accounts regarding the sales in Austria were insufficient due to a very low number of goods and a turnover index. Consequently, the General Court rejected ‘Budvar’s’ appeals.

To summarise this court’s decision, it is crucial to emphasise the importance of the actual usage of the trademark in as much larger part of the territory, where the trademark is protected, as possible. It is also important to take a note that only the fact of the usage is not sufficient enough.  To be more precise, the extent of this usage is crucial too, which in every specific case is evaluated in respect to the nature and the specifics of the goods and services marked with this trademark.

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