The EU General Court has held that test sales amounting to €800 were not enough to demonstrate genuine use of the SMART WATER Community trade mark (CTM) for drinks.
A trade mark registration may be revoked if there has been no genuine use of the mark, either by the proprietor or his licensee, for the first five years following the completion of the registration procedure and there are no proper reasons for non-use (section 46(1)(a), Trade Marks Act 1994 and Article 51(1)(a), CTM Regulation (207/2009/EC)) (Article 51(1)(a)).
The European Court of Justice (ECJ) has held that even minimal use of a mark, or use by a single importer in the EU member state concerned, could be enough to establish genuine use provided that it served a real commercial purpose (La Mer Technology Inc v Laboratories Goemar). The ECJ has also held that, for use to be genuine, it must be consistent with a trade mark’s essential function of denoting the origin of the goods and be more than merely token or internal use within the undertaking concerned (Ansul BV v Ajax Brandbeveligung BV, C-40/01).
W applied to register SMART WATER as a CTM for "beverages, namely water with dietary supplements". The mark was assigned to N.
E applied to revoke the mark under Article 51(1)(a) for non-use in relation to all of the goods for which it had been registered.
The Office for Harmonisation in the Internal Market (OHIM) cancellation division revoked the mark. N appealed.
The OHIM Board of Appeal (the Board) dismissed the appeal. It found that the evidence did not establish that the mark had been put to genuine use and that there were no proper reasons for non-use. N appealed.
The court dismissed the appeal. It upheld the Board’s decision that there had not been genuine use of the SMART WATER CTM for drinks under Article 51(1)(a).
The evidential value of the affidavits from N’s chief executive and an external consultant was lower than if had they come from third parties.
The court rejected N’s argument that the Board had not correctly assessed the evidence of actual sales. As the goods were for mass consumption and the market was of a significant size, a quantity of 15,552 bottles was too small to constitute genuine use. In addition, the total value of transactions involving use of the mark over the relevant five-year period was only €800, a minimal use that could not be regarded as sufficient. N’s evidence of advertisements and promotional activities was not proof of imminent marketing as it was at the beginning of the five-year period for assessing genuine use.
The court also rejected N’s argument that the Board had been wrong to find that the problems that N encountered in 2007 concerning the manufacture of the drinks and revocation proceedings brought by a third party did not constitute proper reasons for non-use of the CTM. "Proper reasons" means circumstances unconnected with a trade mark owner, rather than ones associated with its commercial difficulties. As for the revocation proceedings brought by a third party, it was up to N to conduct an adequate assessment of its chances of success in the proceedings and to draw the appropriate conclusions from that assessment about whether to continue to use its mark.
This decision may appear difficult to reconcile with La Mer and Ansul, which confirmed that there is no de minimis rule for genuine use. Minimal use may qualify as genuine use if it is the sort of use appropriate in the relevant market for the particular good and services. In practice, however, the application of the law to the facts may produce very different results depending on the circumstances. Here, a relatively low volume of test sales in the context of the mass market for bottled water was held not to be sufficient. The decision also underlines that genuine use must be proved by credible evidence relating to actual commercial use and it must relate to the relevant five-year period of alleged non-use.
Case: Naazneen Investments Ltd v OHIM, T-250/13.
First published in the April 2015 issue of PLC Magazine and reproduced with the kind permission of the publishers. Subscription enquiries 020 7202 1200.