Posts by: Maria Nyrell | (1) posts

Controversy over Benelux decision on what constitutes “genuine use” of a Community Trademark

What constitutes genuine use of a Community Trademark (CTM) has recently been subject for discussions within the European Union. Although, there is still no precedent case, the general opinion has been that use in only one member state is sufficient to fulfill the requirement of genuine use in the Community as stipulated in the CTMR (Council Regulation (EC)) No. 207/2009 dated 26 February 2009 on the Community Trade Mark). Therefore, when the Benelux Office for Intellectual Property (BOIP) issued a ruling indicating the exact opposite – that use in one member state could not constitute genuine use – several voices were raised.According to article 15 CTMR, to be able to avoid sanctions, a proprietor shall within a period of five years following the registration put the Community trade mark to “genuine use in the Community”. When the CTMR was established the Council and the Commission expressed their opinion and interpretation in the so-called Joint Statements, which states that use which is genuine within the meaning of article 15 in one member state constitutes genuine use in the whole Community.

The background is as follows. The holder of the Community trademark ONEL, filed an opposition against a company that had filed a Benelux trademark application for the mark OMEL. During the proceedings it was admitted between the parties that the opponent had made genuine use of their mark ONEL, in the Netherlands, for the services for which it was registered. The BOIP considered itself to be bound by the parties opinion in this respect. Therefore, the question the parties disagreed upon and for BOIP to decide, was whether use in one member state of the EU was enough to constitute genuine use in the Community according to article 15 CTMR.

In the absence of case law the BOIP questioned whether the opinion presented in the Joint Statements was legally binding or not. In its findings, the BOIP comes to the conclusion that the view presented in the Joint Statements cannot be maintained. To support its conclusion the BOIP refers to e.g. the principle of free movement of goods and freedom to provide services. It says that in order to justify the monopoly given by a trademark and to fulfil its essential function, a mark must be used. “A monopoly that goes (much) further than the territory in which the mark is used, will indeed form an obstacle for the free movement of goods as well as the freedom to provide services within the internal market”.

Following the decision several organizations have expressed their opinions on the matter, i.e. OHIM (the office responsible for registering trademarks and designs that are valid in all 27 member states of the EU) and MARQUES (a European organisation which represents brand owners in Europe).

The OHIM refers to the principle of the unitary character of the CTM and considers that boundaries of Member States should not play a part in assessing genuine use within the EU Single Market (Press release on the OHIM homepage dated 27 January 2010). Further, in a recently published contribution to the study on the overall functioning of the trade mark system in Europe the OHIM maintains this view, and says that proving genuine use is not an easy matter – there must be real evidence that is open to challenge from the other party to the proceedings – and adding the uncertainty of what might constitute the proper territorial coverage would place a severe and unwarranted burden on CTM proprietors. MARQUES takes it one step further and asserts that the decision seriously jeopardizes the concept of the unitary character of the CTM (statement of MARQUES dated 28 January 2010 published on its homepage).

We are of the opinion that BOIP was mistaken in its interpretation of article 15 CTMR. Should the interpretation presented in the decision turn out to be correct, one question would be how many member states a CTM would have to be used in to fulfill the requirement of genuine use. It is our opinion that setting up such quantitative measures regarding what constitutes genuine use, would be unreasonable. Whether a mark has been put in genuine use in the Community or not should not be based merely on territorial provisions. Rather, it shall be based on qualitative measures, i.e. real evidence. We believe that another interpretation would not only be contrary to the principle of the unitary character of the CTM but also to the purpose of the CTM system as a whole. Further, it would create an unjustified uncertainty among trademark owners as to whether the use of their mark is in fact genuine or not.

According to a press release, dated 11 February 2010, on the homepage of Onel, an appeal has been filed with the Appeal Court of the Hague. Thus, to bring clarity to the issue, we hope that the question will be refered to the ECJ. We will continue to watch the case.

Maria Nyrell, European Trademark Attorney