Authors: Kristina Vilkiene, Assistant to Attorney at Law at METIDA, Violeta Sutkiene, Associated Partner, Head of the Trademark and Design Division at METIDA
Trademark is a powerful weapon granting its proprietors exclusive rights in a competitive struggle. As soon as an individual or a company acquires the rights to a particular mark for certain goods or services, other persons cannot use an identical or similar sign in a particular market. Consequently, the trademark receives the exclusive rights, which can be seen as a mean of competition restriction.
The Law on Trade Marks of the Republic of Lithuania envisages that the proprietor of a registered trademark has an exclusive right to prevent all third persons not having his consent from using in the course of trade any sign which is identical with or similar to the registered mark in relation to goods or services which are identical with those for which the mark is registered. The law also states that enhanced protection is applied to widely known trademarks or trademarks with reputation. It is important that the protection for these trademarks applies to dissimilar goods and (or) services.
The proprietor of a trademark can forbid the following:
- affixing the sign to goods or to the packaging thereof;
- offering the goods or putting them on the market or stocking, renting, lending or in any other form disposing of them for these purposes under that sign, or offering or supplying services thereunder;
- using the sign on business papers and in advertising;
- manufacturing the sign or keeping specimens thereof with the intention of performing any of.
However, the protection of the exclusive rights given to the proprietors is not absolute. Since, as mentioned before, the registration of a mark and the exclusive rights granted can be seen as factors partially limiting a competition, the proprietor of the mark is given some duties. One of the duties is a requirement to use this mark.
While neither the European Union nor the national trademark law anticipates the use as a condition for registration of a mark, the use is anticipated as a trademark registration support condition. As registered trademarks and the exclusive rights resulting on their basis are growing they are subject to additional requirements which are designed to limit the possibility for proprietors of ‘sleeping’ trademarks to restrict the competition.
The Directive 2008/95/EB of the European Parliament and of the Council of 22 October 2008 to approximate the laws of the member states relating to trademarks (codified version) states the following (preamble paragraph, point 9):
In order to reduce the total number of trade marks registered and protected in the Community and, consequently, the number of conflicts which arise between them, it is essential to require that registered trade marks must actually be used or, if not used, be subject to revocation.
The Trademark Law anticipates that the court can terminate trademark’s registration if any interested person requests that. This also applies if the proprietor of the mark has not actually marked his goods or services with his trademark in the Republic of Lithuania within five years after the issue of the certificate of the trademark registration or within five years from the granting date of international trademark in the Republic of Lithuania, or if the mark has not been used for five years in a row unless the use of the mark was prevented by serious and beyond the circumstances of the proprietor’s will.
What is considered as usage?
Given the current general policy, legislation and court practice, the usage is an essential condition to continue the validity of the trademark registration. However, no legislation anticipates what is considered as an acceptable use, therefore the use of the trademark must comply with the general criteria formed in court’s practice.
Hence, a very important question arises: what usage is considered to be appropriate and sufficient?
Generally, it is required for the trademark to be used as it is registered, and for such goods and (or) services that it is registered for. On the basis of the trademark law, the appropriate use of trademark is such that differs in its elements, but does not alter the distinctive characters as well as indicates goods or their packaging in the Republic of Lithuania solely for export purposes.
The Community legislation and court practice provide additional requirements for the use of the Community trademark. When evaluating the use of the Community trademark a problem is due to the territory of mark’s use and its scope in relation to the Community, since the Community trademark is protected in all 28 member states.
According to the previous criteria formed by the court’s practice, it was enough for the Community trademark to be used at least in one of the member states. However, as mentioned, the number of cases is increasing where the trademarks are registered as Community trademarks, but are used only in one member state. In other words, by the extent of its use in this case, the Community trademark is more consistent with the function of the national trademark registered only in one member state. Yet, this type of registration of the Community trademark limits the use of the identical or similar trademarks in the remaining 27 member countries.
In this regard, the court practice has been changing by consolidating that the trademark must be used in a substantial part of the Community territory. On the other hand, even the use in a fairly limited area may be considered appropriate in light of all the other circumstances of the case, since the territory of the trademark’s use is only one of several factors that must be evaluated. In this way, even the use of the mark in a single member country or part of its territory would be considered sufficient provided that the other conditions of ‘genuine use’ are met. In other words, a trademark use cannot be of mere local significance.
What use is considered to be ‘genuine’?
On 4th December 2013 OHIM (Office for Harmonisation in the Internal Market) President approved the new version of the OHIM Guidelines for the examination of the Community trademarks and registered Community designs (effective from the 1st February, 2014) which contains and summarises recent practice on the adequacy of the usage.
It should be noted that during the assessment of the adequacy the use of the trademark, its proprietor’s commercial success or economic strategy are not evaluated. Also, this assessment is not intended to limit the possibilities for trademark protection only to marks that are used on a large scale (the decision of the 8th July, 2004 in case T-334/01, HIPOVITON, §32 and the decision of the 8th July 2004 in case T-203/02, VITAFRUIT, §38).
Explanations and evidence of the use of the trademark must include information on the use of the trademark territory, time, scope and nature, as well as goods and services. This evidence may include packaging, labels, price lists, catalogues, invoices, photographs, advertisements in the press, written approvals by other entities (such as Chamber of Commerce or similar), etc.
As mentioned, no act provides criteria that define adequacy of the use. Instead they are formed by the courts, and in particular in the practice of the Court of Justice.
In MINIMAX case (11th March, 2003) it was established that:
- Genuine use means an actual use of the trademark;
- The simulation use intended only for the mark’s protection and registration maintenance will not be considered as genuine use;
- Genuine use must comply with the main function of the trademark – to distinguish one manufacturer’s goods or services from another manufacturer’s goods or services;
- In order to state a genuine use, the mark has to be used in regards to specific goods or services on the market, and not just in the internal company communications;
- Genuine use must be related to the already produced goods or provided services, or to the intended to be produced and provided goods or services according to the company’s ongoing preparations, including distributed advertising;
- Assessing the certainty of the use, all circumstances must be evaluated, in order to determine whether the use is genuine, and in particular whether the intention of such use is to create and maintain an appropriate market part of the goods or services;
- The circumstances that are important in assessing the use of a mark must include the specific characteristics of the market and the volume of the use as well as its intensity;
- Given the other criteria, in order for the use to be considered genuine, it does not have to be meaningful in terms of quantity, because it depends on the specific goods or services and the peculiarities of their markets.
In LA MER case (27th January 2004, C-259/02, LABORATOIRE DE LA MER) the court expanded the criteria set in MINIMAX case and additionally established, that:
- The question whether the use of the trademark is sufficient to create or maintain a market of the specific goods or services depends on several factors and must be assessed individually in each case. Important circumstances are the characteristics of the goods and (or) services, the use of the trademark frequency or regularity, the information whether the mark is used for marking all identical goods or services of a particular manufacturer or only for some of them, as well as any other information that the proprietor of the mark can provide.
- The use when only one client uses the trademark by importing the goods for which the trademark is registered may be considered sufficient if it can be proved that such import is actually commercially justifiable in respect to trademark’s proprietor.
Evidence in support of the above stated circumstances must be sufficient and objective (the decision of the 18th January 2011 in case T-382/08, VOGUE). At the same time the court has held that it is not possible to abstractly identify and evaluate what quantitative criteria should be selected to decide whether the use is sufficient. Therefore, an additional assessment principle was formed: if a particular trademark’s use performs a real commercial purpose, even the minimal use of the trademark may be considered sufficient for the specific goods or services and their markets’ peculiarities (the decision of the 23rd September 2009 in case T-409 / 07, ACOPAT; the decision of the 2nd February 2012 in case ARANTAX).
In other words, if the use of a specific trademark is not merely ostensible, if it does not seek merely to record the fact of mark’s use, and thus eliminate the risk due to non-use, it, having in mind all the circumstances, will be evaluated as an appropriate and genuine use.
This is particularly true in cases where goods or services are very expensive or specific and their sale or supply is not merely symbolic. In these cases the evidence of high volume of sales cannot be required (the decision of the 4th September 2007 in case R 0035/2007-2 , DINKY).
Part 2 of the 22nd rule of the Regulation (EC) No 2868/95 implementing Council Regulation (EC) No 40/94 on the Community trademark, states that the necessary instructions and the evidence to prove the use consist of data on the opposed trademark use for goods and services, for whose marking the trademark was registered and which serve as a basis for an opposition, the place, time, extent and nature, and these data confirming evidence. These usage conditions are cumulative (the decision of the 5th October 2010 in case T-92/09 , STRATEGI ), which means that while arguing about the use merely a statement of a fact is not sufficient, the use must be proved according to each of these criteria. Whether the use in terms of space, time, scope and nature is sufficient is evaluated on the collective basis of all provided evidence. A separate evaluation of the various relevant factors when examining each of those individually is not appropriate (the decision of the 17th February 2011 in case T-324/09, FRIBOI).
The evidence supporting the adequacy of the use may be indirect, for example, evidence of the relevant part of the market, the import of goods, raw materials for the production or packaging materials supply to the trademark proprietor, goods’ expiration date. This evidence is evaluated in conjunction with other available evidence.
On the other hand, it is important to note that during the assessment of the evidence for the use the specific goods or services’ peculiarities must be taken into account, for instance, in some markets it may be common not to indicate the place goods time, extent and nature of the use in the labeling on the sampling. In these cases mandatory circumstances can be proved with other evidence.
Every provided piece of evidence is evaluated in terms of time and space to determine whether it confirms the use of the mark within the required five-year period in a given area. The date and place specified in the orders, invoices and catalogues are especially carefully evaluated. On the other hand, even if the specific piece of evidence does not display a date, it can be accepted in an assessment in conjunction with other evidence, which possesses a date (the decision of the 17th February, 2011 in case T-324/09, FRIBOI). This applies to those cases where in a particular market or sector the samples of goods or services have no date references (the decision of the 5th September 2001 in case R 0608/2000-4, PALAZZO – an ice cream menu does not usually have a date).