The question of how much, and how widespread, use of a trade mark must be in order to maintain a European Union Trade Mark has been the subject of controversy in the past few years. A recent decision of Daniel Alexander QC, sitting as the “Appointed Person” (the appeal tribunal from the UK Intellectual Property Office), has helpfully provided a comprehensive review of EU and UK case law on this question.
Intermar Simanto Nahmias, a Turkish company specialising in footwear, opposed a UK trade mark application by Nike for the word JUMPMAN in respect of clothing and footwear goods. Intermar opposed on the basis of its earlier European Trade Mark (EUTM) registration for the word JUMP, covering footwear and socks. Its registration was over 5 years’ old at the time of the publication of Nike’s application, and it was therefore asked by Nike to provide proof of use of its JUMP trade mark in the European Union between March 2008 and March 2013.
Intermar’s use of its JUMP trade mark
Intermar submitted evidence which showed that in the last 16 months of the 2008-2013 period, it sold around 55,000 pairs of trainers and other types of casual shoes under the JUMP mark (amounting to approx. USD476,000 in value). The sales were made to a company in Bulgaria, which in turn sold the footwear via its shop in Varna, Bulgaria. The Bulgarian company also sold 120 pairs of footwear on to a Romanian company, but it was not established whether the Romanian company sold the footwear to end-users.
No sales were made in the EU between 2005 and 2012, but it was noted that some sales took place before the relevant period, specifically about 53,000 pairs of footwear were sold to four businesses in Germany, Finland, Spain and Greece in 2005, and 802 pairs to a single business in Bulgaria in 2007, and that sales to the Bulgarian company continued after the relevant period.
On the basis of the above evidence, the Hearing Officer at first instance found that Intermar had failed to prove “genuine use” of its trade mark. Whilst the Hearing Officer noted that the use did not appear to be token or sham, it was still insufficient to show genuine use within the meaning of the provisions of the EUTM Regulation, following the CJEU’s decision in Reber Holdings GmbH & Co KG v OHIM, C-141/13P (a case in which sales of handmade chocolates from one shop in Germany were deemed insufficient to maintain an EUTM).
According to the Hearing Officer, the use shown by Intermar in the context of the EU footwear market did not constitute real commercial exploitation of the mark in the EU, and was not significant enough to justify maintenance of the registration. As a result, the opposition was dismissed.
Intermar appealed, claiming that the Hearing Officer failed to apply the correct principles of law, incorrectly evaluated the extent of use, and made that evaluation using incorrect standards.
The Appointed Person in his decision provided a thorough review of recent UK case law and confirmed that, whilst the geographical scope of use was one factor to be assessed when adjudicating on genuine use of a mark, there was no pre-set rule as to the geographical extent of use required. He did, however, state that the EU Courts, in his view, had highlighted “the importance of viewing the question of whether there had been use or non-use of a CTM [EUTM] in particular from an EU perspective”. In other words, “the Community” was the reference point for all consideration of whether an EUTM has been put to genuine use.
Given the use made of the JUMP mark by Intermar, and bearing in mind the scale of the market for footwear in the EU, the Appointed Person concurred with the Hearing Officer’s finding that that there had not been sufficient use by Intermar “in the Community” as required by the provisions of the EUTM Regulation. The appeal was accordingly dismissed and Nike’s JUMP mark permitted to proceed to registration.
The outcome of this case may seem harsh, especially to small and medium-sized businesses with presence in only part of the EU. However the decision, in the words of the Appointed Person, “reflects the recognition of a need for some degree of proportionality between the territorial and substantive scope of rights in question [i.e. EU Trade Marks] and the activities a right owner has done to justify them, given 5 years in which to support its retention of rights.”
That is a rational and admirable aim. The current approach to “genuine use”, as established by the EU Courts and as highlighted in this case, adopting as it does a multi-factorial assessment, makes it very hard to judge when a proprietor will be able to maintain an EUTM and when it will not.
It is no longer sufficient for a proprietor to make good faith use of its mark – it must achieve a level of use which amounts to real commercial exploitation, viewed from an EU perspective. Given the lack of certainty that this test provides, we expect to see further cases on this question before the highest courts in Europe.