December 10, 2018

December 10, 2018

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Ferrari "Testarossa" - The Great Importance For Trademark Owners Of Making Proper Use Of Trademarks

The facts of the case

Ferrari is a world famous Italian manufacturer of sports cars and is, inter alia, the owner of the German mark with priority of 22 July 1986 which is registered for goods in class 12, in particular “Apparatus for locomotion by land, air or water and parts thereof; engines for land vehicles; car accessories, namely trailer couplings, luggage racks, ski carriers, dirt traps, snow chains, wind deflectors, headrests, safety belts, child safety seats.”

Ferrari had already built a racing sports car called “Ferrari 250 Testa Rossa” in the 1950s. In 1991 Ferrari last built a model with the type designation “Testarossa”. This model achieved worldwide fame through the American television series “Miami Vice” in the 1980s and became an icon among motorsport fans. The “Testarossa” series model was one of the most common and most frequently produced of Ferrari with approximately 7,000 pieces worldwide. In recent years, the “Testarossa” sports cars have often been the subject of articles in well-known print media.

Ferrari offers its customers in its “Ferrari Classiche” division the maintenance, repair and restoration of used vehicles. The original spare parts for the “Testarossa” model, which are needed for this purpose, are manufactured by Ferrari itself. The maintenance, repair and restoration of the “Testarossa” vehicles is also offered in Germany via its partners. The corresponding spare parts for the sports car model “Testarossa” are supplied by the UK-based supplier distributed via the internet. In particular, this dealer offers so-called “service kits” consisting of various individual parts, among others under the name “Testarossa TR 85 Kits”,”Testarossa TR 90 Kits” and “512 TR Kits”.

The “Testarossa” mark is included in several invoices of the British supplier and is also used on various “Testarossa” operating and repair manuals. In addition, Ferrari issues certificates of authenticity for used “Testarossa” vehicles, which increase the resale value of the vehicles through its Ferrari Classiche department. The certification service is available from each national dealer. The designation “Testarossa” is given on all invoices for certification and on the certificate of authenticity itself.

Finally, the Ferrari runs a program for its own used cars on its website “www.ferrari.com” in the section “Ferrari approved”. This includes various guarantees, inspections or technical inspections and preparations for the sale of the vehicles. The used vehicles are offered for sale there as well as through official contractual partners of Ferrari.

A German entrepreneur who runs a company for toys applied for the German mark “testarossa”, inter alia, for drilling machines, tools, bikes and e-bikes as well as household appliances and fishing-gear. Ferrari opposed this mark with the consequence that the applicant has filed this cancellation action against Ferrari´s “testarossa” mark based on non-use.

The reasoning

While the EUIPO’s cancellation division had confirmed the right-maintaining use of the parallel trademark “Testarossa” (IR 910752) for “automobiles” (also this decision is not yet final), the German first instance court has decided that Ferrari has not sufficiently made use of its trademark and that therefore Ferrari must agree that its trademark has to be cancelled.

Pursuant to Sections 49 (1) and 55 (2) No. 1 of the German Trademark Act anyone may request the cancellation of a registered trade mark on grounds of revocation if the trade mark has not been used after the date of registration within an uninterrupted period of five years. German law requires that the trademark must have been used seriously in Germany by its proprietor for the goods or services for which it is registered. The use of the trade mark registered for goods or services is only sufficient if the use of the trade mark corresponds to the main function of the trade mark, i.e. to guarantee the origin identity of the goods or services to the trade by enabling it to distinguish these goods or services from goods or services of other origin. It is sufficient for this purpose, but it is also necessary, that the trade mark is used in a customary and economically reasonable manner for the goods or services for which it is registered. A symbolic use solely for the purpose of safeguarding the rights conferred by the trademark is not sufficient.  The court decided that it is not the case here.

The Düsseldorf first instance district court decided that the trademark of Ferrari has to be cancelled (Decision as of 2 August 2017 – Case no. 2a O 166/16 – juris). However, the decision in not yet final.

The repair, maintenance and certification services offered by Ferrari did not suffice the legal requirements of a customary use. The court ruled that the evidences submitted by Ferrari only proved that the repair, maintenance and certification services had been rendered under the mark “Ferrari”. It is not sufficient that the services are provided for Testarossa models without using the term Testarossa as a proof of origin for the services.

As on the marketing material and business letters the term “Testarossa” was only referenced in a purely descriptive matter but not as a proof of origin – the letter heading bore the term “Ferrari” – the court rejected that this as a prove a use.

Also, according to the court, the trade with used Testarossa sports car cannot be considered as a use of the trademark according to the court as the trademark rights have already been exhausted.

While the trade with spare parts may generally suffice as a proof of use for the trademark provided that it bears the trademark, this has not been the case here. According to the court the evidence submitted by Ferrari did not suffice as the spare parts either bore different terms such as “T/Rossa” or “Tr” which varied significantly from the registered trademark or only generated very limited revenue which the court did not consider to prove serious use.

Furthermore, the mere image advertisement on the internet is not a use of the trademark in the sense of the law as it only referred to Testarossa sports cars for which the trademark rights had been exhausted.

Moreover, contrary to the opinion of Ferrari, the court decided there are no indications that the Court of Justice of the European Communities by its decisions on the new understanding of functions of trademarks (ECJ – L’ Oréal/Bellure; ECJ – Google France and Google; ECJ 2011 – Interflora) has in any way altered its case law in relation to the requirements for an appropriate right-maintaining use of a trademark.

Importance for trademark owners

This decision emphasizes how important it is to use the trademark appropriately and that the legal requirements are strong. The mere reputation may not be enough. Especially in relation to well-established and famous brands with a long history but for which the core product is not manufactured anymore, it is even more important to take any steps necessary to maintain the trademark rights. This may include, inter alia, a new registration with a new five year grace period.

Copyright 2018 K & L Gates

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About this Author

Dr. Julia Goetz, KLGates, Berlin, attorney
Attorney

Dr. Julia Goetz is a counsel in the K&L Gates Berlin office. She focuses on a broad range of intellectual property law issues, especially with regard to copyright, patent and trademark law. She assists and represents national and international clients in the resolution of disputes before German courts with a focus on patent infringement proceedings. She also advises on complex licensing agreements, know-how transfers as well as on intellectual property aspects in M&A transactions. In addition, her experience includes advising clients in the area of information...

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