Proving genuine use of iconic marks: the TESTAROSSA pole position

Background

Ferrari S.p.A. (“Trademark Owner” or “Ferrari”) is the proprietor of an international registration for the trademark “Testarossa”, registered since 1987 for goods in Class 12, and since 1990, also registered in Germany for other goods in Class 12 (together, the “Contested Marks”).

On 2 August 2017 the Düsseldorf Regional Court (Germany) ordered the cancellation, on grounds of revocation, of the Contested Marks on the ground that, during a continuous period of five years, the Trademark Owner would have not made genuine use of those marks in Germany and in Switzerland, for the goods covered by the registration. Ferrari appealed against the decisions of the Regional court before the Higher Regional Court (the “Referring Court”), which on 8 November 2018 decided to stay the proceedings and to refer a number of questions to the CJEU for a preliminary ruling.

The Referring Court notes that from 1984 to 1991 Ferrari marketed a sports car model under the name “Testarossa” and sold the follow-up models until 1996, while in 2014, it produced a unique model with the designation “Ferrari F12 TRS”. Moreover, during the period relevant to the assessment of the use of the marks at issue (between 2011 and 2016), Ferrari used the Contested Marks to identify replacement and accessory parts of very high-priced luxury sports cars previously sold under those trademarks.

Proof of genuine use - EUIPO context

According to Article 16 of EU Directive 2015/2436, a trademark is liable to revocation if, within a continuous period of five years, it has not been put to genuine use in the Member State for the goods or services covered by the registration, and there are no proper reasons for the non-use of that mark. Identical principles are expressed by the EUTM Regulation (EUTMR) in its Articles 18 (obligation to use a mark), 47 (consequences of lack of use in opposition proceedings) and 58 (1) (a) (consequences of lack of use in revocation proceedings).

Turning to use for integral parts and after-sales services of the registered goods, in the Minimax judgment, the CJEU held that, in certain circumstances, use of a mark may be considered genuine also for ‘registered’ goods that had been sold at one time and were no longer available (11/03/2003, C-40/01, Minimax, paras. 40 et seq.), in that case use of replacement parts for a fire extinguisher maintained the registration for the main product despite it no longer being sold under the MINIMAX brand. However, as made clear by the EUIPO’s Guidelines (Guidelines for Examination in the Office, Part C Opposition Section 6 Proof of Use), this finding should be interpreted strictly and applied only in very exceptional cases.

CJEU findings

With its decision of 22 October 2020 in cases no. C‑720/18 and C‑721/18 the CJEU adopts a broader interpretation of the notion of admissible proof of use. In particular the following CJEU reasoning should be noted:

1. No subcategory of luxury cars: the CJEU clarifies that the fact that the vehicles for which the mark has been used are 'luxury vehicles' is “insufficient to classify them as an independent subgroup of vehicles”. Accordingly, Ferrari maintains its TESTAROSSA registrations for “land vehicles” as such and not for “luxury cars” only (see paragraphs 41-50). This being said, the fact that the cars at stake are “luxury and very high-priced” may play an important role when it comes to the extent of use, as it is capable of demonstrating that, despite the relatively low number of product units sold, the use made constitutes genuine use.
    
2. Use for replacement parts is genuine use for the main product: in this respect the CJEU confirms that not only use of a mark for land vehicles can be proven even if it has been used only in respect of some of the goods (e.g. “high-priced luxury sports cars”) but also if the sign has been used “only in respect of replacement parts or accessories of some of those goods”. However, this principle will not apply if it is apparent from the relevant facts and evidence that the relevant public will perceive those goods as an independent subcategory of the category of goods for which the mark was registered (para. 53). The CJEU reconfirms its position in Ansul that the use of replacement parts counts not only as genuine use of the mark for the spare parts alone but also for the main product - here land vehicles.
    
3. Re-sale of second-hand goods: in the Court’s view, use of a mark through re-sale of second-hand goods is capable of constituting ‘genuine use’ of a mark, provided that the relevant trademark owner "uses that mark in accordance with its essential function (i.e. as a badge of origin) for the goods for which it was registered, when reselling second-hand goods" (para. 56). This means that the typical use of a brand name in advertising second-hand vehicles or machines as well as selling them, will be enough to maintain the mark for such goods even though the products were sold on the market earlier (causing exhaustion of the proprietor’s trademark rights). The Court does not indicate whether this requires that the re-sold goods were inspected and refurbished or even sold with a new warranty or whether the mere act of reselling is enough.
    
4. Burden of proof: in contrast with German case law and in line with the practice of the EUIPO, the CJEU confirms that the owner of a trademark principally bears the burden of proving that the trademark has been “put to genuine use”.
    
5. Convention between Germany and Switzerland: the CJEU also assesses the legal value of the Convention of 1892, according to which use of a German trademark registration in the territory of the non-member State (Switzerland) must be taken into consideration in order to determine whether that German mark has been put to ‘genuine use’. It is noted that the CJEU in Case C-445/12, Rivella International AG v. OHIM, para 54 to 59 already clarified that the Convention of 1892 does not apply to the genuine use of an EUTM, meaning that use of an EUTM in Switzerland cannot be considered as genuine use under Article 18 EUTMR. While the Court recommends the Federal Republic of Germany to resolve the incompatibility of the Convention, it also notes that without this step the court of an EU Member State may apply an incompatible convention. It will need to be seen whether the German legislator will now start negotiations with Switzerland to abolish the Convention of 1892 in relation to German trade marks or International Registrations designating Germany as indirectly requested by the Court at para 71 of its judgment. 

Comment and next steps

With its decision of 22 October 2020, the CJEU adopts a broad interpretation of the notion of  use under Article 16 of Directive 2015/2436. On the one hand the Court confirms the principles expressed in Minimax as regards use of a mark for replacement parts. On the other hand,  the CJEU confirms that use of a mark for product can also be proven through re-sale of such second-hand goods.

This decision, will make it easier for brand owners of complex products such as cars, construction machines or any type of electronic products to maintain their registrations  even after the main product is no longer sold as long as it still offers spare parts for that product or re-sells it under that name. This is particularly so for owners of iconic trademarks, which will be able to prove genuine use of their mark, regardless of the fact that the labelled goods have been sold at one time in the past and are no longer available on the market.

Authored by Federica Pezza