CJEU rules that small sales of high-priced luxury sports cars and replacement parts may be sufficient to establish genuine use

Background

Several questions were referred following an appeal by the rightsholder, Ferrari, against the decision of the German court to order the revocation of two ‘TESTAROSSA’ figurative marks on the ground that Ferrari had not made genuine use of the marks in Germany and Switzerland in respect of the goods for which they were registered during a continuous period of five years. Ferrari had registered the international and German marks for “vehicles, in particular motor cars and parts thereof”, amongst other things.

Ferrari sold sports cars under the designation ‘TESTAROSSA’ between 1984 and 1996, and later produced a one-off recreation in 2014. Following a regional court finding that Ferrari had not made genuine use of its mark for an uninterrupted period of five years in respect of the goods for which they are registered, Ferrari appealed to the referring court. The referring court took the view that despite the fact that Ferrari had used the marks during the relevant five-year period “to identify replacement and accessory parts of very high-priced luxury sports cars previously sold under those trade marks”, this was not sufficient to establish genuine use in the mass market. The referring court noted that Ferrari’s mark was registered in respect of motor cars and parts thereof, not in respect of high-priced luxury sports cars. Ferrari also claimed to have resold used vehicles bearing the marks in issue and that such sales constituted “right-maintaining use of the marks”. In the main proceedings, Ferrari further claimed to have provided replacement and accessory parts in respect of the vehicles bearing the relevant marks, and offered maintenance services for those vehicles.

CJEU responses to the questions referred

The first and third questions referred to the CJEU focused on whether genuine use of a trade mark registered for a category of goods and services (i.e. motor vehicles generally), and replacement parts for such vehicles, may be established if it has only been used in respect of some of those goods (i.e. only in relation to very high-priced luxury sports cars and replacements parts for the same).

In short, the CJEU found that it could. The CJEU stated that a trade mark registered in respect of a category of goods and replacement parts for such goods (here, motor cars) will be considered to have been put to genuine use within the meaning of Article 12(1) in connection with all the goods in that category and the replacement parts for such goods even where it has only been used in respect of some of those goods (here, high-priced luxury sports cars) or only in respect of replacement parts or accessories of some of those goods.

This will be the position unless the relevant facts made it clear that this smaller range of goods was an independent sub-category of goods in respect of which the mark was registered. Here, the mere fact that the goods in concern were sold at a very high price and, as a result, may belong to a very specific market was not sufficient for the Court to regard them as an independent sub-category. The CJEU also stated that despite the fact that very expensive, high performance cars may be capable of being used in motor sport activities, this constituted only one of many possible uses for such vehicles (including use of the vehicles in every day life), and dismissed the view that Ferrari’s reference to these cars as ‘luxury cars’ and ‘sports cars’ meant that they belonged to an independent sub-category of cars.

Finally, although goods classified as ‘very high-priced’ could not suffice for those goods to be regarded as an independent sub-category, the CJEU did note that this was relevant to the assessment of whether that mark had been put to genuine use. Significantly, the CJEU held that, despite the relatively low number of goods sold under the relevant trade mark, due to the price point of the goods in concern the use which had been made of that mark could not be considered to be ‘token’. Rather, it constituted use of that mark in accordance with its essential function.

In relation to the second question referred to it, namely whether Article 12(1) should be interpreted as meaning that a trade mark is put to genuine use where the proprietor resells second hand goods put on the market under that mark, the CJEU confirmed that the resale of a second-hand product bearing a trade mark does not generally constitute use of that trade mark. However, if the trade mark proprietor actually used that mark in accordance with its essential function of origin (i.e. “guaranteeing the identity of the origin of the goods for which it was registered, when reselling second-hand goods”), then the sale of the product to which the trade mark is affixed does constitute ‘genuine use’ within the meaning of Article 12(1).

Finally, on the fourth question referred to it, specifically whether Article 12(1) should be interpreted as meaning that a trade mark is put to genuine use where the proprietor provides certain services connected with the goods previously sold under that mark but does not use that mark when providing those services, the Court held that genuine use is only established where the services connected with the goods are provided under the mark in question. In the absence of use of that mark, “there can obviously be no question of ‘genuine use’”.

Key takeaways

This ruling will be of interest to many rightsholders, particularly owners of high-end and luxury brands, as it confirms that the genuine use of a trade mark registered in respect of a broad category of goods and replacement parts for such goods can be established even if it has only been used in respect of some of those goods, or in respect of replacement parts of some of those goods (unless a consumer who wished to purchase those goods would perceive them as a separate, independent sub-category of the relevant category of goods in concern).

This ruling also serves to confirm that the relevant criterion to apply in identifying and defining a coherent sub-category of goods or services is the ‘purpose and intended use’ of the goods or services themselves. The mere fact that the goods are sold at a high price and, as a result, may belong to a specific market was not sufficient for the CJEU to regard them as an independent sub-category of the class of goods in respect of which that mark was registered (i.e. motor vehicles). Rather, the fact that the goods were “high-priced luxury sports cars” helped Ferrari establish genuine use of the mark despite limited sales: the use of the mark was not found to be token given the very high price points of the goods in concern.