EU territorial borders and assessment of genuine use
This recent Intellectual Property Enterprise Court (IPEC) decision found that genuine use was required in more than one European Union (EU) member state to maintain a Community trade mark (CTM) registration. This case involved an infringement action brought by The Sofa Workshop Limited (Sofa Workshop) against Sofaworks Limited (Sofaworks).
Sofa Workshop v Sofaworks
The two companies were in the business of selling sofas and household furniture.
Sofa Workshop claimed Sofaworks' use of SOFAWORKS infringed its CTM registration for SOFA WORKSHOP and amounted to passing off.
By way of a defence Sofaworks counter claimed that Sofa Workshop's CTM registrations were invalid as they were descriptive and lacked distinctiveness, or in the alternative, should be revoked on the ground of non-use.
Sofa Workshop's infringement case was unsuccessful. The judge ruled that both of Sofa Workshop's CTM registrations were invalidly registered as they consisted exclusively of signs which may serve in trade to designate a characteristic of some of the grounds for which those marks are registered. However, the judge noted that even if this had not been the case, the CTMs relied on had not been put to genuine use across the EU as the evidence of use filed was limited to the UK only.
A thorough review of the relevant case law on genuine use claims was conducted in these proceedings, which gave the following guidance and reasoning to find that there had not been genuine use of the CTMs:
What qualifies as actual use of a mark in a particular member state when it comes to marketing?
- Use of a trade mark in online marketing would only be found where an offer for sale of goods or services bearing the mark is specifically targeted at consumers in that member state, as opposed to a website being merely accessible in that country.
- Genuine use of a trade mark in a published advertisement will qualify as use in a particular member state if, when viewed objectively, the advertisement can be seen to specifically target consumers in the member state in question, such as the provision of overseas phone numbers for consumers.
Can use in only one EU member state suffice?
The judge relied heavily on the ONEL v OMEL case.
C-149/11 ONEL v OMEL case details can be viewed online at www.dyoung.com/article-onelomel0313.
Key issues in ONEL v OMEL were:
- Territorial extent of use required to constitute 'genuine use' of a CTM in the Community - could use in just one country save a CTM?
- Leno owned a CTM for ONEL from 2002 but use was limited to the Netherlands. Leno opposed the Benelux application for OMEL. BOIP rejected the opposition claiming no genuine use.
- Questions put to the Court of Justice of the European Union (CJ) by a Dutch court as to whether genuine use of a Community trade mark in a single member state is sufficient to satisfy the requirement for genuine use in the Community or whether the territorial borders of the member states should be disregarded.
The judge referred to paragraphs 50 and 54 of the CJ decision in particular:
"Whilst there is admittedly some justification for thinking that a CTM should...be used in a larger area than the territory of a single member state".
This was taken to imply that genuine use in one member state would not be sufficient to qualify as genuine use in the Community as a whole.
This was reinforced by the fact that this particular paragraph in the decision ended with an exception for businesses where the market for the particular goods or services is necessarily restricted to only one EU member state.
This part of the decision set out that whilst it is reasonable to expect that a CTM should be used in a larger area than a national mark, it is not necessary that the mark should be used in an extensive geographic area for the use to be deemed genuine, as such a qualification would depend on the characteristics of the product or services in question.
This was found 'ambiguous' by the judge though he concluded that the implied notion was that use beyond one member state is by default a necessary ingredient of genuine use in the Community as a whole.
In the judge's opinion, the logic of disregarding territorial borders (due to the size of markets for particular goods or services) may suggest that it would be necessary to have used the mark in more than two member states.
As Sofa Workshop's use was limited to the UK, and the market for sofas and other furniture was obviously not restricted to the UK, the judge found there had not been use sufficient to constitute 'genuine use in the Community' of the CTMs relied on.
This decision will raise concern amongst trade mark owners as it could indicate a shift, at least in the UK, to use being required more broadly in the EU to maintain a CTM registration. However, applying territorial borders to assess the scope of use is not consistent with the notion of borderless trade in the EU, so we expect to see the decision appealed.
Marketing of a trade mark in the EU must be seen to specifically target consumers in the different countries.
Access to a website alone does not indicate goods or services have been 'offered for sale' to consumers in a particular country.
This case should also serve as a reminder to companies of the potential risk of losing their trade mark protection if relying solely on a CTM for a brand used in the UK only.
Case details at a glance
Jurisdiction: Courts of England and Wales
Decision level: The High Court of Justice Chancery Division Intellectual Property Enterprise Court (IPEC)
Parties: The Sofa Workshop Ltd v Sofaworks Ltd
Citation:  EWHC 1773 (IPEC)
Date: 29 June 2015
Full decision: dycip.com/sofactms