Court of Justice of European Union (CJEU) Holds that Territorial Borders of EU Member States Must Be Disregarded in Determining Use of Trademarks
The Court of Justice of the European Union (CJEU) has held that the territorial borders of EU member states must be disregarded in determining whether a trademark has been put to genuine use in the European Community. Use of a European Community trademark in a single EU member state may not necessarily be sufficient, although there is no need for a trademark use to extend throughout an extensive geographic area for the use to be deemed genuine. Leno Merken BV v. Hagelkruis Beheer BV,  C-149/11 (Dec. 19, 2012).
Leno owned a European Community trademark for the word mark ONEL covering services in Classes 35, 41 and 42 and opposed a later application by Hagelkruis to register the word OMEL as a Benelux trademark in Classes 35, 41 and 45. Hagelkruis requested that Leno furnish proof of use of the trademark in accordance with Article 15 of Regulation 207/2009 which provides that a trademark becomes vulnerable to revocation for non-use if its owner has not put it to genuine use in the European Community for an uninterrupted period of five years. In response, Leno provided proof of use in only one EU member state, the Netherlands.
The Benelux Office for Intellectual Property rejected the opposition on the ground that Leno had not shown that it had put the ONEL trademark to genuine use during the five-year period preceding Hagelkruis’ application for OMEL. Leno appealed the decision to the Regional Court of Appeal in The Hague, which stayed the proceedings to refer a number of questions on genuine use to the CJEU.
It was common ground between the parties that the two trademarks were similar, that they were registered for identical or similar services and that use of the later mark OMEL was liable to give rise to a likelihood of confusion with ONEL. The parties also agreed that Leno had put its mark to genuine use in the Netherlands. However, the parties disagreed on the interpretation of “genuine use” as referred to in Article 15, in particular, on the extent of the territorial area that was required for such use.
The CJEU interpreted Article 15 as meaning that the territorial borders of EU member states should be disregarded in assessing whether a trademark has been put to genuine use in the European Community.
The CJEU further concluded that a trademark was put to genuine use when it was used in accordance with its essential function and for the purpose of maintaining or creating market share within the European Community for the goods or services covered by it. It was for national courts to assess whether the conditions for genuine use were met, taking into account all the relevant facts and circumstances, including the characteristics of the market concerned, the nature of the goods or services protected by the trademark and the territorial extent and the scale of use as well as its frequency and regularity. Territorial scope of use was not a separate condition for establishing genuine. Rather, it was only one of the factors to be taken into account in the overall assessment of genuine use.
The CJEU noted that there was some justification for thinking that a European Community trademark should, on the basis that it enjoyed more extensive territorial protection than a national trademark, be used in a larger area than the territory of a single member state in order for use to be regarded as “genuine.” However, it could not be ruled out that, in certain circumstances, use in the territory of a single member state could satisfy both the conditions for genuine use of a European Community trademark and genuine use of a national trademark. There was no need for the trademark to be used in an extensive geographic area for it to be deemed genuine.
Practice Note: The CJEU noted that the assessment of whether use of a trademark is genuine must be carried out by reference to all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark serves to create or maintain market shares for the goods or services for which it was registered. Accordingly, the CJEU found that it was impossible to determine in the abstract what territorial scope should be chosen in order to determine genuine use and declined to lay down a de minimis rule, leaving national courts to appraise all the circumstances of disputes on a case by case basis.