Lessons from Lidl on genuine trade mark use

How will the court approach the evidence needed to substantiate the genuine use of a registration? Catherine Wolfe, a partner at Boult Wade Tennant, considers whether the recent case of LidlSiftung & Co KG (Lidl) v Office for Harmonisation in the Internal Market (OHIM)  T-300/12 [2014] All ER (D) 93 (Oct) is part of a broader picture in relation to the enforcement of older trade mark registrations.

A brief background

The General Court of the European Union upheld the action brought by Lidl for the annulment of OHIM's decision to allow A Colmeia do Minho Ldª's opposition to to Lidl's FAIRGLOBE Community trade mark application.

fairglobe

What issues did this case raise?

This case is about evidence of genuine trade mark use. Essentially, the primary aspect of this case is the General Court’s critical commentary on the quantity and quality of evidence needed to substantiate the genuine use of a registration which is more than five years old and which has been asserted against a third party in an opposition. It fits well with Wedl & Hofmann v Reber: C-141/13. These cases are part of a broader picture in relation to the enforcement of older trade mark registrations—I see them both as part of a trend.

To what extent is the judgment helpful in clarifying the law in this area?

The judgment is extremely helpful because it serves as a clear warning to all practitioners. ‘Sample evidence’ will not suffice—it could be evidence of ‘token use’ rather than a small illustration of extensive use.

We had early clarification on the issue of adequate evidence from Kabushiki Kaisha Fernandes v Office for Harmonisation in the Internal Market (Trade Marks and Designs): T-39/01 [2003] IP & IT 290 [2002] All ER (D) 184 (Dec), which set out the exact criteria for showing proper evidence of use. The evidence, according to the Curia’s own summary, is supposed to consist of:

'[...] indications concerning the place, time, extent and nature of the use. Genuine use cannot be proved by means of probabilities or suppositions, but must be demonstrated by solid and objective evidence of effective and sufficient use of the trade mark on the market concerned.'

However, there has been comfort for trade mark registrants from La Mer Technology Inc v Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM): T-418/03 [2007] ECR II-125, [2007] All ER (D) 161 (Sep), from which it was taken that there is no de minimis level for the use, as long as it is completely genuine. That case was based essentially on ten invoices, which substantiated a registration, and which said in the decision:

‘88 Since those invoices are illustrative, they cannot represent the amount of actual sales of products bearing the trade mark.’

In the present case, by contrast, there are six invoices, relating to four specific acts of use (because four of the invoices are pairs from two dates). Further, not all the items within the invoices were under the mark, so the total sums on the invoices are not the total sums under the mark: and the judgment notes at para [27] that:

‘The smaller the commercial volume of the exploitation of the mark, the more necessary it is for the party opposing new registration to produce additional evidence to dispel possible doubts as to the genuineness of the use of the mark in question.’

Paragraph [55] notes that:

‘It is nevertheless necessary for a proprietor relying on invoices as evidence to submit a quantity of examples which makes it possible to discount any possibility of token use.’

To me, the most telling point is at paras [71] and [72], which reveals that ‘the opponent chose only to produce six invoices […he] had the opportunity to file further evidence’ but he did not do so. Accordingly, by para [77]:

‘There is no factor [ie no additional evidence filed to supplement the invoices] which makes it possible to off-set the deficiencies of the six invoices as proof of genuine use.’

Are there any grey areas or unresolved issues that practitioners should watch out for?

I am interested by the fact that these are cases where a proprietor is asserting his registration against a third party. For the opponent, the worst that can happen is that his challenge fails and the third party’s application reaches registration—his own registration is not at risk, and would have to be revoked separately by a revocation action.

Although the standard of proof is the same, I wonder whether the proprietor would have expected that same amount of evidence to have been deemed enough to sustain his registration against a revocation action, when the existing registration was on the line?

What are the implications for lawyers and what should they be mindful of when advising clients?

We need to be practical and commercial when attacking new applications. There may be an intention simply to delay the application while the parties negotiate—especially in a market as wide as the EU. There are often many ways to come to good terms between the parties.

In oppositions, the OHIM system rightly makes it very easy for the applicant to put the opponent to proof of use of older registrations, and this has become a routine step. In response to the proof-of-use challenge, which can come at a fairly early stage in the proceedings, the opponent ‘cannot be required to provide proof of every transaction which took place under that mark during the relevant period of five years’ (para [55]) which would be expensive and onerous. However, we must not forget that the opponent is not replying to the applicant within a negotiation context and, perhaps, wishing to keep his powder dry in negotiation—he is also filing a formal response at OHIM, on which he might later rely.

The opponent must therefore be careful to file at least an outline of total use at an early opportunity—for example, some invoices, brochures and product packaging for each year in question, sufficient to withstand the challenge of tokenism.

Are there any patterns or trends emerging in the law in this area? What are your predictions for future developments?

I believe that there is a general trend in Alicante and in Luxembourg to move away from the office and into the marketplace. Previously the system operated in a very high-level, pure and abstract sense, looking to protect the essence of a mark for the essence of its trade, with a typical practice of block capital filings for class headings.

As the Community Trade Mark Register has grown more crowded, even ‘cluttered’, we see a new trend towards filing exactly the mark of specific interest and in relation to exactly the goods of specific interest.

Thus, we are moving towards the US Patent and Trademark Office model where the marketplace is more closely tied to the Register. At the moment that is seen most clearly when testing registrations which are more than five years old (eg in this case and in Reber). I do not expect that OHIM will introduce a ‘bona fide intent to use’ requirement at filing, such as we have in the UK, but there are other levers which might be brought into play, to keep the shipping lanes of trade free from abandoned registrations or over-broad registrations.

I would like to see OHIM introduce a counterstatement system in oppositions, after the UK IPO pattern, so that the speculative applicant with no particular interest in his mark actually has to engage with the proceedings when he discovers that his application does, after all, disturb a third party. There is a hint of this in the present structure, because the owner of an older registration only needs to show use if the applicant engages with the opposition by requesting proof of use—but if the opposition is based on a recent registration or application, the applicant does not need to take any action at all and all the work must be done by the opponent. This is imbalanced.

Another strategy might be for OHIM to introduce a requirement for all registrants to confirm their name and address details on the register at regular intervals, with the sanction that an unconfirmed registration should not be enforceable in OHIM proceedings until it is confirmed. It is imbalanced that a party should file a mark across three full classes, and perhaps abandon his trade interest shortly after filing, but the process continues automatically to confer ten years’ worth of rights—perhaps even despite an undefended opposition—until the registrant chooses not to renew it. There should be a minimal requirement that the owner of an asset maintains an ongoing interest in it—even if it is simply a click-box system for the owner or his attorney.

Catherine Wolfe is a Registered Trade Mark Attorney and a European Trade Mark Attorney. She has served as President of the Institute of Trade Mark Attorneys (ITMA) as well as First Vice President, Second Vice President and Treasurer, since her election in 2004, and is a Fellow of the Institute. Catherine has filed applications in virtually every country in the world which has a Trade Mark Register, and has represented numerous clients, from private individuals to major corporations, in ex parte and inter partes hearings at the UK Trade Marks Registry. She has acted for many clients before OHIM and its Boards of Appeal, and has worked on several cases which were appealed to the Court of First Instance (now the General Court).

Originally published on WIPIT’s sister site, LexisPSL IP&IT.

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