Trade mark rights IN THE RED!

Trade mark rights IN THE RED! Automotive team member, Rachel Havard considers the CJEU’s recent judgement on genuine use of Ferrari’s TESTAROSSA trade mark.


The concept of “use it or lose it”

We all probably need a bit of nostalgia in our lives, more than we ever did, and brand names/trade marks play a big part in our memories of when and where we were at our happiest, regardless of whether you happen to be a trade mark attorney!

In the world of trade mark protection, however, there is the problem that you lose it if you don’t use it.

EU trade mark legislation, likewise applicable to UK trade mark law, provides that:

‘A trade mark shall be liable to revocation if, within a continuous period of five years, it has not been put to genuine use in the Member State in connection with the goods or services in respect of which it is registered, and there are no proper reasons for non-use

So many 1980s brand names have come and gone, many becoming no more than retro T-shirt motifs today.  In areas such as consumer electronics, for example, there has been the difficulty that a brand name still enjoys historical goodwill and is well remembered by many as an indicator of commercial origin of those goods, but there has arguably been no genuine trade mark use for a significant period, such that registration of the trade mark cannot be defended against in the face of a third party challenge on non-use grounds.

In the automotive sector, vehicle make and model names likewise come and go.  Some manufacturers revive old model names after long periods of absence; some may perpetuate use of a particular model name by application of it to each new generation of that model; others will have iconic model names which have not been used as trade marks for new vehicles for many years, or even decades.

Also to consider is the principle of “trade mark exhaustion”, which means that a trade mark owner cannot object to use of its registered trade mark by others to refer to specific goods which it, the trade mark owner, has already put on the market in the EU.


The Ferrari Testarossa

The Testarossa was a sports car model sold by Ferrari from 1984 to 1991.  Those looking for some of that 1980’s nostalgia might cast their minds back to TV crime drama Miami Vice in which this car was very much one of the stars (but it was white not red!).

In 1987, Ferrari secured an International trade mark registration of the mark:

AA Thornton - Testarossa mark

for the class 12 goods of ‘Vehicles; apparatus for locomotion by land, air or water, in particular motor cars and parts thereof’ and, in 1990, a German national trade mark registration of the same mark for ‘Land vehicles, aircraft and water vehicles and parts thereof; motors and engines for land vehicles; car components, i.e. tow bars, luggage racks, ski racks, mudguards, snow chains, air deflectors, head restraints, seat belts, child safety seats’.

The Regional Court, Düsseldorf, Germany ordered cancellation of the above rights on grounds of a lack of genuine use of the mark during a continuous period of 5 years in Germany and Switzerland.

Ferrari appealed the decision of the lower German court to the Higher Regional Court, Düsseldorf, Germany, who in turn referred certain questions to the Court of Justice of the European Union (CJEU).   The CJEU has now issued its judgement.


The CJEU’s judgement

Since ceasing production of the Testarossa in the 1990s, Ferrari had used the trade mark “to identify replacement and accessory parts of very high-priced luxury sports cars previously sold under those trade marks”. 

Against the background of earlier case law, it would seem highly questionable whether genuine use could be said to have occurred for the full range of goods covered by Ferrari’s trade mark registrations.  However, the CJEU has ruled 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, such as high-priced luxury sports cars, or only in respect of replacement parts or accessories of some of those goods, unless 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”


Use only on spare parts or niche goods

The CJEU said that:

 “the fact that a mark is not used for goods newly available on the market but for goods that were sold in the past does not mean that its use is not genuine, if the proprietor makes actual use of the same mark for component parts that are integral to the make-up or structure of such goods, or for goods or services directly connected with the goods previously sold and intended to meet the needs of customers of those goods”.

The above is highly significant, as it shows that sales of spare parts under a registered trade mark can amount to genuine use of the mark even insofar as it is registered for broader goods, such as complete vehicles.

Further, the CJEU did not see high-priced luxury sports cars as an independent subcategory of goods covered by the registrations in question.  It noted that so-called “sports cars” could also have other, everyday uses, aside from motorsports.  Similarly, the word “luxury” could be relevant to several types of cars and so would not amount to an independent subcategory.   As such, the use which had occurred could amount to genuine use of the trade mark in favour of its continued registration for the broader category of goods.


Use on second hand goods

The CJEU also ruled that:

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”.

Ferrari had exhausted its rights to prevent third parties from using the mark to refer to second hand vehicles; however, use by Ferrari of its own mark to itself sell second hand goods could still amount to genuine use to defend its trade mark registration.

In this context, the CJEU saw the trade mark as still performing its essential function of guaranteeing the commercial origin of the goods, namely vehicles, for which the mark was originally registered.


Provision of services connected with goods previously sold

The CJEU ruled that provision of “certain services connected with the goods previously sold under that mark” could also amount to genuine use, but “on condition that those services are provided under that mark”.


The road ahead

The above case will now be returned to the German courts to apply the CJEU’s answers.  Meanwhile, the CJEU’s judgement gives some very welcome clarification of what might amount to genuine use of a registered trade mark, especially for those in the automotive sector, but potentially for owners of luxury or “retro” trade marks in other sectors too.

Of particular significance is the indication that use of a trade mark on spare parts may be sufficient to preserve a mature registration for much broader, complete goods.  There is also the indication that sale of second hand goods may still amount to genuine use if this is guaranteeing the original commercial origin of those goods.

This is ground breaking stuff, and probably still not reason to throw your existing trade mark protection and preservation strategies out of the driver’s window –  just like driving a Testarossa, you should continue to handle those strategies with care!


If you would like to discuss this topic, or another trade mark issue, you can contact the writer, or a member of our trade mark team.

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