Getting over the finishing line – Genuine use established via spare parts and second hand goods

Is use on spare parts or on goods making up only a portion of a class enough to get over the hurdle of genuine use? Yes, according to this latest CJEU case in Ferrari SpA v DU (Joined Cases C-720/18 and C-721/18)).

Ferrari's Testarossa marks were at risk of being revoked due to Ferrari allegedly not making genuine use of the marks in Germany. Whilst it is one of the most mass-produced Ferrari models, the Testarossa car has not been produced since 1996. Both the marks called into question in this case were registered before the Testarossa was discontinued. The mark had, however, been used in relation to second hand vehicles and on spare parts for the luxury car.

Background

The Higher Regional Court, Dusseldorf referred questions to the CJEU in relation to Article 12(1) of the 2008 Trade Marks Directive (2008/95/EC) (2008 Directive). This is now Article 19(1) of Directive 2015/2436). Article 12(1) of the 2008 Directive states that if a mark has not been put to genuine use for a continuous five-year period it may be revoked (assuming there are no proper reasons for non-use).

The underlying case related to two "Testarossa" figurative marks registered by Ferrari SpA, a German mark and an international mark, in respect of various goods in class 12 including "vehicles and parts thereof".

Before the Regional Court of Düsseldorf, it was held that Ferrari had not made genuine use of the marks and they should therefore be revoked. Ferrari appealed to the Higher Regional Court, which then referred the case to the CJEU.

During the contested five-year period relevant to the assessment of genuine use, Ferrari had used the trade marks in issue to identify replacement and accessory parts of very high-priced luxury sports cars previously sold under those trade marks. Ferarri also said that it had resold, after inspection, used vehicles bearing the mark in issue. It did not, however, sell the original car models themselves.

Judgment

The CJEU answered the various requests for clarification on the application of Article 12(1) of the 2008 Directive.

It held that a trade mark registered in respect of a category of goods and replacement parts for those goods did equate to genuine use of the mark. This is in respect of all the goods and replacement parts even if it had only been used in respect of some of those goods. There is, however, an important carve out that such use is not sufficient to pass the genuine use hurdle if a consumer who wished to purchase those goods would perceive them as an independent subcategory. If this is the case, only that subcategory would have been put to genuine use, as opposed to the whole class.

It was further clarified that second-hand goods and services relating to goods previously sold under the mark, could amount to genuine use of that trade mark.

The court also provided a reminder that the burden of proof regarding genuine use rests with the trade mark owner.

This is consistent with the case of Ansul (Case C-40/01), where it was held that use of a mark in relation to component parts for goods and related repair services may constitute genuine use.

The case now goes back to Düsseldorf's Higher Regional Court to decide on the facts whether genuine use can save the revocation of the Testarossa marks. Although this will be that court's decision, the CJEU did provide its thoughts that "very high-priced luxury sports cars" was not an "independent subcategory" of the goods, i.e. vehicles in class 12. In other words, use of the marks in relation to spare parts for these luxury car models was enough to show genuine use across the whole class of goods.

Comment

This case will no doubt be welcomed by trade mark owners, and especially trade mark owners of luxury brands, for opening the door wider on establishing genuine use. It also reinforces the earlier case law in relation to spare parts.

There is, however, a new grey area as to what will be considered an "independent subcategory" where a mark is not used across the entirety of a class. We will monitor decisions on this topic and report back with any updates.