Ferrari Loses Race for 250 GTO Trademark: Risks Arising From Non-Use of Registered Trademarks
Ferrari 250 GTO, often hailed as the most expensive car in the world, was initially introduced by Ferrari in 1962. Only 36 models of 250 GTO were exclusively produced between 1962 and 1964. The fact that each buyer had to be personally approved by Enzo Ferrari only added to the exclusivity of this particular car model. Because of their exclusivity and the fact, that the existing models are still running, these models became something of a status symbol. One of these models was famously sold at Sotheby’s auction for $48.4 million in 2018, setting the world record for the most expensive car ever sold at auction. A different model of 250 GTO was allegedly sold privately in the same year for a whopping $70 million.
Even though the last 250 GTO models were produced in the sixties, Ferrari had only registered a 250 GTO trademark with the European Union Intellectual Property Office (“EUIPO”) in 2008. The trademark was registered for a 3D shape of 250 GTO (see below) for three classes: Class 12 (Vehicles), Class 25 (Clothing), and Class 28 (Games and playthings).
Source: EUIPO database
A dispute over this trademark started when a different car company named ARES Design, founded and run by a former Ferrari executive Dany Bahar, announced its plans to bring a modern interpretation of the classic 250 GTO model in 2018. Ferrari responded to this announcement by filing a preliminary injunction; in turn, ARES Design initiated proceedings with EUIPO on the cancellation of the GTO 250 trademark. ARES Design argued that Ferrari had filed the trademark application in bad faith and that, more importantly, Ferrari had not used the trademark for at least 5 years.
The latter argument of ARES Design relates to the so-called “use it or lose it” principle. Application of this principle with relation to EU trademarks is established by Article 58 (1) (a) of Regulation (EU) 2017/1001 on the European Union trade mark, which stipulates that EU trade mark can be revoked “if within a continuous period of five years, the trade mark has not been put to genuine use in the Union in connection with the goods or services in respect of which it is registered, and there are no proper reasons for non-use”.
While Ferrari argued that, due to exclusivity of GTO 250, occasional sale of products in question, spare parts or related maintenance should fulfill the use requirement, EUIPO Cancellation Division identified with the argument of ARES Design and ruled that registration of Ferarri’s GTO 250 trademark registration is partially revoked in its 12 (Vehicles) and 25 (Clothing) classes, as no use of the mark or proper reasons for non-use have been demonstrated in relation to these classes in the last 5 years. Use of GTO 250 trademark has been demonstrated in relation to class 28 (Games and playthings); therefore, Ferrari’s trademark to this class remains in force. It should be noted that Ferrari appealed this decision.
The revocation of 250 GTO trademark should allow for the introduction of modern adaptations of 250 GTO to be made by other companies. This case, among others (for example, see McDonald’s disputes regarding the use of ”Mc” and “Big Mac” trademarks) emphasizes the significance of the “use it or lose it” principle in the area of trademark protection. It can serve as a reminder to trademark holders that even the most known and established trademarks can be revoked if they are not put to genuine use without a good reason.