Legal News & Analysis – Asia Pacific – Singapore – Intellectual Property

Where an applicant sought to establish earlier use of a mark by relying only on six invoices covering only a short period and indicating only a small number of sales, held that this was not sufficient evidence of genuine prior use.

 
— European Drinks v OHIM, Joined cases T-495/12 to T-497/12, (Europe, European Court of Justice, 5 June 2014)

 
Facts

 
The applicant, European Drinks SA, contested the decision made by the Office for Harmonisation in the Internal Market (Trade Marks and Designs) (“OHIM”) to allow the applications for registration of Community trademarks involving figurative signs of “Dracula”, alleging an infringement of article 42(2) and (3) of Regulation No 207/2009 (the “Regulation”). The intervener, SC Alexandrion Grup Romania Srl, sought to register the following figurative signs in classes 33, 35 and 39 (for, among other things, alcoholic beverages, advertising, packaging and storage of goods):

(Click to Enlarge)

European Drinks SA filed notices of opposition under Article 41 of the Regulation to the registration of the above marks, claiming that another mark was registered back in 31 August 1995 in Romania and that was similarly used in the alcoholic beverages industry. The earlier national figurative mark is shown below:

(Click to Enlarge)

As evidence of use of the Earlier Mark, European Drinks SA adduced six invoices dating from 2 February to 24 April 2009, a photograph, and a copy of a promotional text. However, the OHIM dismissed the actions, holding that the documents filed did not demonstrate any genuine use of the Earlier Mark on the following grounds:

• The six invoices covered only a period of two and a half months;
• Each invoice only indicated a sale of 432 units of the products in question bearing the name of the Earlier Mark;
• No information had been supplied as to the identity of the companies mentioned in the invoices or shed any light on the relationship between them and the applicant;
• The photograph of a bottle and the promotional text showed a use of the Earlier Mark in a form which significantly altered the distinctive character of the sign; and
• The verbal element “Dracula” set out on the invoices and on the promotional text did not make it possible to determine whether it referred to the sign as used or as registered.

Decision

 
The European Court of Justice found that the Board of Appeal was correct to find that the applicant had not sufficiently demonstrated the extent of the use of the Earlier Mark and that accordingly, the action as a whole must be dismissed.

 
The Law

 
The Court first noted at the outset that the legislature had considered that there is no justification for protecting an earlier trademark, except where it is actually used. Evidence of use must concern the place, time, extent, and nature of use of the earlier trademark.

 
Further, the Earlier Mark must have been put to genuine use if it is to be capable of being used in opposition to a trade mark application, This is satisfied if the mark has been used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which was registered. It was noted that genuine use does not include token use for the sole purpose of preserving the rights conferred by the mark and that it has to be used publicly and outwardly.

 
The following are the assessment criteria stated by the Court:

• The facts and circumstances relevant to establishing whether the commercial exploitation of the mark is real, particularly whether such use is viewed as warranted in the economic sector in order to create or maintain a share in the market;
• The nature of those goods or services concerned;
• The characteristics of the market; and
• The scale and frequency of use of the mark.

 
As to the extent of the use of the earlier trade mark, regard must be had to the commercial volume of the overall use, as well as length of the period during which the mark was used and the frequency of use.

 
In its holistic assessment, the Court opined that a low volume of goods marketed under that trademark might be offset by a high intensity or a certain constancy over time in the use of the trade mark. In addition, the turnover and the volume of sales of the goods under the earlier trade mark cannot be assessed in absolute terms but in relation to factors such as volume of business, production or marketing capacity, or the degree of diversification of the undertaking using the trade mark.

 
If the volume of sales of items bearing the mark were limited, more evidence would be necessary to dispel doubts as to the genuineness of the use of the trademark. Moreover, solid and objective evidence of effective and sufficient use of the trademark must be shown.

 
The Court’s Reasoning

 
The marketing period for the products referred to in the invoices was particularly short in that it was less than three months. The duration and frequency of the use adduced did not support the conclusion that the products bearing the name of the Earlier Mark were marketed continuously over the relevant period. The Court thus agreed that genuine use of the Earlier Mark had not been made out.

 
The six invoices adduced in this case showed successive sales between the same companies, namely Scandic Distilleries and SC TGIE, but no information had been provided with regard to their identities. Further, there had been no mention of their mutual relationship, or of any relationship between Scandic Distilleries and the applicant. In this regard, the Court found that the nature of the relationship between Scandic Distilleries and the applicant had not been clarified.

 
Further, the applicant had not proved that Scandic Distilleries’ use of the Earlier Mark should be regarded as having been made with the consent, tacit or otherwise, of the applicant, and it did not establish that the mark had been used publicly or outwardly.

The Court also examined the volume of goods sold. The six invoices showed an overall sales volume of 2,592 units of the products concerned bearing the name of the Earlier Mark and by factoring in the reported duration of use, a sales frequency of 900 units per month was established. This use was small in terms of quantity with regard to the relevant market. In that light, the Court reached the conclusion that those sales figures are insufficient in establishing effectively the presence of the Earlier Mark on the Romanian market and that the sales volume is marginal bearing in mind the average monthly consumption of vodka on the Romanian market.

 
Consequently, the Court dismissed the applicant’s action.

 
Our Comments / Analysis

 
This case highlights the importance of using the trade mark once it has been registered, and ensuring that such “use” is beyond a token use of the mark. In Singapore, as in the European Union, all relevant circumstances must be taken into account in assessing whether there is genuine use, including the nature of the goods or services, the characteristics of the market concerned, and the scale and frequency of the use of the mark. Use of the mark in Singapore includes applying the trade mark to goods or to materials for the labelling or packaging of goods in Singapore solely for export purposes.

For further information, please contact:

Chung Nian Lam, Partner, WongPartnership
[email protected]

Jeffrey Lim, Partner, WongPartnership
[email protected]

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