The much debated question of what constitutes genuine use of a CTM reared its ugly head once again in Europe’s General Court in a recent case TVR Automotive Ltd v TVR Italia Srl. (T-398/13) involving an opposition to TVR Italia’s CTM application for the logo shown on this page.
Background to the Proceedings
For those readers who are not familiar with the brand; TVR is a high-end, British sports car marque with an expensive price tag to match.
In 2007, TVR Italia sought registration of the TVR logo shown for a wide range of mainly car-related goods and services in Classes 12, 25 and 37. TVR Automotive’s predecessor in title, Muadib Beteiligung (“Muadib”) opposed this based on inter alia an earlier CTM registration for TVR registered on 14 April 1998 covering “motor car and parts and fittings therefor” in Class 12 (“the earlier CTM”) and an earlier UK registration for TVR covering goods and services in Classes 9, 11, 25 and 41 (“the earlier UK mark”).
During the opposition proceedings, TVR Italia put Muadib to proof of use of the earlier CTM (granted in April 1998) in Class 12 during the period January 2003-January 2008. Proof of use was not requested in respect of the earlier UK mark because this registration, granted in February 2004, was still in its 5 year non-use grace period as at the relevant date, namely the publication date of TVR Italia’s CTM application (28 January 2008).
Muadib filed several documents appended to a witness statement provided by their UK trade mark attorney in support of its genuine use of the earlier CTM. All the evidence related to the use of the mark in the UK and included printouts from Wikipedia describing the history of the name and trade marks TVR and the TVR logo, articles taken from the BBC News website, articles taken from The Telegraph national newspaper, articles taken from the Autocar website, reviews of TVR models that appeared in specialist car magazines, undated and dated promotional documents produced for specific TVR car models, undated and dated technical specifications and UK price lists produced for specific TVR car models, promotional documents produced for the online auction of the last ever manufactured TVR Cerbera which took place in August 2006, extracts from the website of the TVR Car Club which showed a variety of accessories for sale and evidence that the TVR car model was advertised at various motor shows.
Notably, however, the evidence of use did not include any sales figures or invoices. It was also admitted that in 2006 orders for cars fell from 12 per week to just two and production of TVR cars ceased altogether at the end of 2006 because of insolvency, although there was an attempt to revive production during 2007 and 2008.
OHIM’s Opposition & Cancellation Divisions’ Decisions and Subsequent Appeals
OHIM’s Opposition Division partially upheld the opposition. As regards the proof of use filed, the Opposition Division concluded that Muadib had shown genuine use of the earlier CTM in respect of “sports cars and parts and fittings therefor”.
TVR Italia appealed the partial refusal of its CTM application and also filed an application with OHIM for the revocation of Muadib’s earlier CTM in respect of all the goods in Class 12 covered by that mark. The Board of Appeal stayed the opposition appeal proceedings pending a decision on the application for revocation.
OHIM’s Cancellation Division rejected the application for revocation on the ground that Muadib had furnished proof of genuine use of the earlier CTM during the relevant period. TVR Italia appealed this decision, which the Board of Appeal dismissed on the grounds that the appeal had been filed out of time.
On the conclusion of the Cancellation appeal proceedings, the Board of Appeal then issued its decision relating to the opposition proceedings. The Board upheld TVR Italia’s appeal concluding that the evidence of use filed by Muadib was not sufficient proof of its genuine use of either their earlier CTM or their UK registration. The Board therefore rejected the opposition also based on the earlier UK trade mark right because of its non-use, even though proof of genuine use of that mark had not been requested by TVR Italia and could not in fact have been requested (given that it was still in its non-use grace period at the date the opposed CTM application had been published).
Appeal to the General Court
Perhaps not surprisingly, TVR Automotive, which had by then acquired ownership of the earlier CTM and UK registrations, appealed the Board’s decision to the General Court on the following grounds:
1. The Board was not entitled to assess the evidence of use in relation to the earlier UK registration;
2. The Board should have followed the Cancellation Division’s decision as regards the question whether there had been genuine use of the earlier CTM during the relevant period as the periods of use under discussion in both proceedings overlapped;
3. The Board was incorrect in concluding that the earlier CTM had not been put to genuine use during the relevant period.
The General Court (“GC”) upheld the appeal in respect of two of the three grounds.
The GC held that:
1. The Board was not entitled to make an assessment of the proof of use in relation to the earlier UK mark;
2. OHIM should not ignore the findings made in a final cancellation decision where there are opposition proceedings relating to the same subject matter that are based on the same grounds and evidence. However, in this case, the Board was entitled not to follow faithfully the considerations and conclusions set out in the Cancellation Division’s decision because the proof of use periods in both sets of proceedings were not identical;
3. The use of the earlier CTM was not token use and had been made to create or preserve an outlet for TVR sports cars. Even though there were doubts as to the use of TVR after the summer of 2006, the mark had been put to genuine use for at least a part of the relevant five year period. Use didn’t have to be continuous.
The GC reiterated previous case law that the purpose of the proof of use provisions is not to assess the commercial success or to review the economic strategy of an undertaking, nor is it indeed to restrict trade mark protection to undertakings which have made large scale use of their marks.
The GC’s decision is rather surprising as the Court at no point considered the limited geographical use of the mark (in the UK only) and the outcome is the opposite to that reached by the UK Intellectual Property Enterprise Court (IPEC) in its controversial decision in the Sofa Workshop case (The Sofa Workshop Limited v Sofaworks Limited;  EWHC 1773), which was handed down a month before the GC’s decision in TVR.
Regular readers of Make Your Mark will recall that we reported the Sofa Workshop decision in the Snippets section in the Autumn 2015 edition.
Briefly, in Sofa Workshop, the IPEC Judge, His Honour Judge Hacon, held that Sofa Workshop’s widespread use of their house mark SOFA WORKSHOP in the UK alone in relation to furniture, did not sustain its CTM registrations and revocation was ordered. Following a thorough review of all the leading case law in the area of genuine use in the Community, Hacon (HHJ) concluded that Sofa Workshop’s use only in the UK (even though this was substantial and widespread) was insufficient to “maintain or create market share within the Community for the goods and services covered by the marks”.
We doubt the GC’s decision in the TVR case is a game-changer as regards proving genuine use of a CTM registration, given that this case concerned high performance sports cars, which are sold in a market that is characterised by relatively low demand, by production to specific order and by the sale of a limited number. Whether or not a mark has been put to genuine use in the Community is still likely to depend on all the relevant facts and circumstances including the characteristics of the market concerned, the nature of the relevant goods and services, the territorial extent and scale of the use and the frequency and regularity of the use. However, the TVR decision does provide some comfort to CTM owners which manufacture or sell high-end or bespoke goods in a niche market in just one EU country.