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March 1, 2012 Vol. 67 No. 5 Back to Bulletin Main Page

Genuine Use of Trademarks in the EU: New Referrals to the Court of Justice by the German Federal Supreme Court

A number of questions surrounding the requirement of genuine use of trademarks under harmonized EU trademark law remain unanswered. These include, for example, the question of whether and to what extent the owner of a registered trademark can successfully claim that use of the mark in an amended form or only in combination with another mark suffices to keep the mark enforceable. If the answer to this question were negative, it would mean that the trademark owner would have to fear, once the five-year grace period for non-use has passed, that third parties could file for cancellation of the mark at OHIM or the respective domestic trademark office of a member state. Up until the European Court of Justice’s (CJEU’s) decision in the BAINBRIDGE case (Il Ponte Finanziaria SpA v. OHIM, Case C-234/06 P (CJEU Sept. 13, 2007)) it was the common understanding, at least in German trademark circles, that use of a registered trademark in a slightly altered form was genuine use, even if this amended form was also registered as a separate mark. The German Trademark Act, for example, specifically says so (Sec. 26(3)). The statements by the CJEU in BAINBRIDGE cast some doubts on this, however. Since then, it has never been fully clarified whether Section 26(3) of the Act complies with EU trademark law.

This has now led the German Federal Supreme Court (Bundesgerichtshof (BGH)) to refer several questions regarding the interpretation of EU trademark law to the Court of Justice (CJEU). In two matters the Supreme Court seeks guidance from the CJEU regarding genuine use.

What Is Genuine Use Under EU Trademark Law?
The EU Trademarks Directive (Directive 89/104/EEC, codified at Directive 2008/95/EC) provides only limited guidance. Article 10(2)(a) of the Directive states that the use of a trademark in a form differing in elements that do not alter the distinctive character of the mark from the form in which it was registered still constitutes genuine use. Whether combined use of two marks, or the use of a variation of a registered mark where the variation is registered as well, is sufficient is not clear.

The ECJ held in BAINBRIDGE that “it is not possible to extend, by means of proof of use, the protection enjoyed by a registered trade mark to another registered mark, the use of which has not been established, on the ground that the latter is merely a slight variation on the former” (para. 86). This statement does not clarify matters for the scenarios mentioned above, however.

The PROTI Case
In the first case referred by the German Federal Supreme Court (I ZR 84/09 (BGH Aug. 17, 2011)—PROTI), the plaintiff was the proprietor of the trademark PROTI. He claimed infringement of the trademark based on the defendant’s use of the designation PROTIFIT and sought injunctive relief and cancellation of the defendant’s mark. The defendant claimed that the plaintiff had not genuinely used the trademark PROTI, while the plaintiff argued that his use of the marks PROTI POWER and PROTIPLUS (both of which he had also registered) also constituted genuine use of the mark PROTI.

The Court of Appeals decided in favor of the defendant. Referring to the BAINBRIDGE decision, it held that EU case law did not accept the argument that genuine use of a mark can be proven based on the use of a different mark that is also registered. The Court of Appeals thus took the view that Section 26(3) of the German Trademark Act was not in line with Article 10(2)(a) of the EU Trademarks Directive.

On further appeal, the Federal Supreme Court was of the opinion that BAINBRIDGE did not answer all questions related to the applicability of the German law, and consequently some further interpretation was needed. Therefore, it referred the case to the CJEU for a preliminary ruling. At the same time, the Supreme Court made it clear that it was of the opinion that Section 26(3) of the Act was consistent with Article 10(2)(a) of the Directive. This view was supported by both the wording and the aim of the provisions in the Directive.

First of all, the Supreme Court referred to the 12th recital of the Directive 89/104/EEC, according to which the provisions of the Trademarks Directive must comply with the Paris Convention. Pursuant to Article 5.C(2) of the Convention, “[u]se of a trademark by the proprietor in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered in one of the countries of the Union shall not entail invalidation of the registration and shall not diminish the protection granted to the mark.” The Supreme Court concluded that the same must then apply for the European equivalent, in Article 10(1)(a) of the Directive.

The objective of the requirement of genuine use is to reduce the number of registered and protected marks and to avoid possible conflicts that could arise between them. This goal is defined in the eighth recital of Directive 89/104. The only restriction on genuine use that is in line with this objective is the elimination of purely defensive registrations. The Supreme Court took the view that restrictions on what constitutes genuine use cannot apply to marks that the owner legitimately wants to adapt (e.g., by modernizing a mark and amending it to respond to a perceived change in consumers’ taste). If the use of such a modernized (and registered) form of the mark could not constitute genuine use of the former version at the same time, the trademark owner would lose the priority of the older mark.

Also, the older mark could have a significant economic value, and this value would be destroyed once the older mark loses protection because of alleged non-use. This result could be avoided only by not filing the modernized version of the mark for separate registration. Such a strategy would be risky as well, as a court might later find that the modernized version of the mark is outside the boundaries of Article 10(2)(a) of the Directive and that the (older) registered version is subject to cancellation for non-use. A narrow interpretation of this provision thus would potentially damage the economic value in a well-established mark and deter the trademark owner from modernizing valuable marks. In the Supreme Court’s view, this cannot have been the intent of the authors of the Directive.

The German court also observed that a more narrow interpretation of genuine use would also lead to a higher threshold when establishing a family of marks with a common element. Especially in the launch period, it is important for the trademark owner to have the common element protected—even if that element is not used on its own (but only in other variants, with additional elements). This is because in the launch period the separate marks may have limited presence in the market, and therefore may not yet fulfill the requirements for supporting a “family of marks with a common element” argument.

Moreover, the Federal Supreme Court noted, a narrow interpretation of the requirement of genuine use would seem to be inconsistent with the Court of Justice’s case law concerning distinctiveness. Pursuant to Article 3(3) of the Directive, registration cannot be denied if the mark has acquired distinctiveness through use. In its decision in AIRE LIMPIO/ARBRE MAGIQUE, the ECJ ruled that a trademark can acquire distinctiveness through use of another registered trademark of which it constitutes an element. L & D SA v. OHIM – Julius Sämann Ltd, Case C-488/06, para. 49 (ECJ July 17, 2008). It would be contradictory if the Court of Justice allowed registration of such a mark and later withdrew protection for lack of genuine use, based on the argument that there was no use of the mark in question, but only use of another registered mark that contained the mark in question.

The Levi Strauss Case
The second case referred by the German Federal Supreme Court (I ZR 206/10 (BGH Nov. 24, 2011)—Clothing Tabs II) concerns a conflict between Levi Strauss & Co. and a retailer. Levi Strauss is the owner of a position mark consisting of a blank red tab made of cloth, which is attached to the upper left-hand side of the back pocket of LEVI’S jeans. Levi Strauss claimed infringement based on the fact that the defendant attached a red label to the right side of the back pocket of its jeans. The defendant claimed that the plaintiff had used the red tab only in a differing form, namely as a red tab with the word LEVI’S. This version of the tab is also registered as a trademark. The defendant took the view that only the latter mark was used genuinely.

In referring this case to the CJEU for a preliminary ruling, the Supreme Court asked questions concerning the interpretation of genuine use. The Court made it clear in its referral decision that the trademark owner has a legitimate interest in separately registering parts of a mark that are perceived by the relevant consumers as independent marks. As a consequence, it took the view that the combined use of marks must also comply with Article 10(1)(a) of the Directive.

The Supreme Court pointed out that the trademark owner’s interest in effective enforcement of its marks needs to be taken into account. If the trademark owner obtains registration of the combination mark only, he may not be able to show infringement by a third party using only a part of the combination mark if such part is not dominant in the combination mark. If the trademark owner enjoys separate protection for elements of the combined mark, there will be a greater likelihood that a risk of confusion can be found if one of these elements is contained in the designation used by the infringer.

Point of Time for Nonapplicability of the German Provision?
Should the CJEU decide, contrary to the view taken by the German Federal Supreme Court, that a registered trademark is not put to genuine use if it is used in a form differing from that which is registered, where the mark in the form used is registered as well, Section 26(3) of the German Trademark Act would conflict with European law.

The question would then be from what point in time the German provision could no longer be applied. The Supreme Court asked the CJEU in the referral whether Section 26(3) could be applied to cases predating the first indication of a possible incompatibility of the German provision with European law (i.e., the BAINBRIDGE decision).

The German Federal Supreme Court pointed out that, because of legal certainty and the right to rely on existing laws, its case law supports the application of a modified legal provision only for future cases. In German case law, Section 26(3) of the Trademark Act was never expressly found to be incompatible with the EU Trademarks Directive, and trademark owners therefore relied on the applicability of the provision. The Supreme Court regards legal certainty and the right of trademark owners to rely on existing laws as more important than the compatibility with Article 10(2)(a) of the Directive, and therefore it would want to apply the relevant German provision at least for cases that concern genuine use prior to the ECJ’s BAINBRIDGE decision.

It will likely take about two years for the CJEU to hand down its judgment on these referrals from Germany’s highest civil court. From the standpoint of trademark owners, but also from the perspective of trademark law, the CJEU’s decision in these matters will be very important indeed. Should the Court of Justice not follow the position of the German Federal Supreme Court in the referral decisions to interpret the requirement of genuine use more broadly for the trademark owner’s benefit, its decision will have a potentially significant impact on the validity of a large number of marks in the EU.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers
are urged to check independently on matters of specific concern or interest.

© 2012 International Trademark Association