Sales of second-hand goods may constitute „genuine use“

In its decision in Cases C-720/18 and C-721/18 of October 22, 2020, the Court of Justice of the European Union (CJEU) further defined the requirements for “genuine use” of a trade mark. In addition to various important questions regarding the use of a trade mark, the court also commented on the burden of proof in cancellation proceedings due to non-use.

Background

The Regional Court and the Higher Regional Court of Düsseldorf had to decide on the revocation of the word/device trade marks TESTAROSSA registered for the Italian car manufacturer Ferrari. The Regional Court upheld the actions for cancellation on grounds of non- use, essentially stating that Ferrari has not sold any new cars under the trade marks  TESTAROSSA for 25 years. Ferrari only sells used cars and spare parts under the trade mark and provides maintenance services for such vehicles. The Higher Regional Court of Düsseldorf suspended the cancellation proceedings and referred various questions to the CJEU on the interpretation of the concept of “genuine use”.

Decision

First of all, the CJEU confirms that a trade mark registered in respect of a category of goods and replacement parts thereof must be regarded as having been put to „genuine use“, in connection with all the goods in that category and the replacement parts thereof, if it has been so used only in respect of some of those goods or only in respect of replacement parts or accessories of some of those goods. It should be otherwise only if it is apparent from the relevant facts and evidence that a consumer who wishes to purchase those goods will perceive them as an independent subcategory of the category of goods in respect of which the mark concerned was registered. The fact that the trade marks are used only for high-priced goods from the luxury segment is not an appropriate criterion for the formation of an independent subcategory.

Furthermore, the CJEU states a trade mark is capable of being put to genuine use by its proprietor when that proprietor resells second-hand goods put on the market under that mark. Thus, the exhaustion of the trade mark right by putting the goods on the market for the first time does not affect the question of “genuine use”.

Next, the CJEU confirms that a trade mark is put to genuine use by its proprietor where that proprietor provides certain services connected with the goods previously sold under that mark, on condition that those services are provided under that mark. The use of the mark for the services is a necessary condition to conclude that the mark has been put to „genuine use”.

Finally, the CJEU comments on the burden of proof in cancellation proceedings due to non-use. In this respect, the court confirms that the proprietor of a trade mark bears the burden of proof that the trade mark has been put to „genuine use”. Indeed, it is the proprietor of the mark at issue which is best placed to adduce evidence in support of the assertion that its mark has been put to genuine use. Member states may not deviate from this allocation of the burden of proof.

Conclusion

The decision is favourable for trade mark proprietors who have stopped selling new goods under their trade mark and limit their acts of use to the sale of second-hand goods and the provision of maintenance services. In the future, such acts can still be classified as “genuine use” of the trade mark. Accordingly, acts of use must be carefully documented, also with regard to resales and maintenance services, in order to be able to prove “genuine use” of the trade mark if necessary.