UK: Abandoned Vessels in the Shipping Lanes of Trade

Last Updated: 15 April 2005
Article by Lindsey Wrenn

Originally published April 2005

In December 2004, the High Court resumed hearing the case of La Mer Technology Inc v Laboratories Goemar SA. The case is important because it deals with the question of what is considered 'genuine use' of a registered trade mark in a non-use revocation action. The case further builds on the principles laid down in the well known Ansul decision of the European Court of Justice (ECJ).

In the words of Justice Jacob, who originally heard the case on 19 December 2001, the case deals with the 'abandoned vessels in the shipping lanes of trade', an analogy to registered trade marks, which can be cancelled, on the basis that they have not been used for over five years.

Case history

On 19th June 2001, Dr W J Trott, a Principal Hearing Officer acting on behalf of the Registrar of Trade Marks, partially revoked two United Kingdom Trade Mark Registrations comprising the words LABORATORIE LA MER on the basis of non-use following revocation applications by La Mer Technology Inc.

The two registrations covered 'perfumes and cosmetics containing marine products; all included in Class 3' and ' pharmaceutical, veterinary and sanitary products, dietetic products for medical use; all included in class 5 and all containing marine products.'

There was no dispute on the facts of the case between the parties. Goemar, the proprietor of the two registrations, was based in St Malo, France and specialised in the sale of seaweed products. In the relevant period under consideration it was accepted that the only use Goemar had made of the trade marks concerned in the UK was in relation to sale of £800 of products, accepted to fall within the specification of the Class 3 registration. The sales had been made to a UK importer, but the importer had gone out of business before the products were sold to the purchasing public. The point of contention between the parties was whether Goemar's limited use of the trade marks was sufficient to partially maintain the registrations.

La Mer appealed the Hearing Officer's decisions and the appeal was originally heard by Justice Jacobs on 19 December 2001. He allowed the appeal in relation to the remainder of the goods of the Class 5 registration, so that registration was wholly revoked, and in the case of the remainder of the goods for the remaining Class 3 registration referred seven questions to the ECJ for consideration.

This resulted on 27 January 2004 in a so-called Order of the Court given by the ECJ. Here the Court considered that answers to six of the seven questions could be deduced from the full Court's judgement in Case-40/01 Ansul [2003] I- 2439 delivered on 11 March 2003 (subsequent to the delivery of the reference) and the answer to the seventh question left no room for reasonable doubt.

So what impact did the Ansul decision have on this case? And were there any points left to be decided?

The Ansul Decision

The Ansul decision was summarised in paragraph 27 of the Order of the Court, which stated:

'.... the Directive must be interpreted as meaning that there is 'genuine use' of a trade mark, where it is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services; genuine use does not include token use for the sole purpose of preserving the rights conferred by that mark. When assessing whether use of the trade mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether the commercial use of the mark is real in the course of trade, particularly whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services, the characteristics of the market and the scale and frequency of use of the mark. When it serves a real commercial purpose, in the circumstances cited above, even minimal use of the mark or use by only a single importer in the Member State concerned can be sufficient to establish genuine use within the meaning of the Directive.'

The Ansul case established four key principles to be considered when the question of whether the use of a trade mark is to be deemed 'genuine use':

  1. The use of the trade mark must not be token with the sole purpose of maintaining the rights in the registration,
  2. There is no 'de-minimus' level of use. Minimal sales of goods or services under the trade mark can be sufficient to maintain the registration,
  3. Sales of goods and services under the trade mark must, however, be sufficient to create or maintain market share in the sector concerned,
  4. Bearing in mind the third principle cited above, internal use of the trade mark is not considered sufficient to create or maintain market share in the sector concerned. The trade mark must be visible to consumers within the market.

Back to Laboratorie La Mer

There was no question in the La Mer case that the use of the trade marks concerned was 'token use'. It appeared to be accepted between the parties that the £800 pounds worth of sales were true commercial sales and had not been made merely with a view to maintain rights within the registrations. Further, Ansul made it clear that if the circumstances of the case dictated then £800 pounds worth of sales could be deemed sufficient to maintain a registration, there is no 'de-minimus' level of sales for the use of the mark to be deemed genuine. However, principles 3 and 4 are where the parties diverged.

La Mer Technology argued that the £800 pounds worth of sales had not been made to the final users of the products concerned, but simply to an importer of the product. La Mer argued that such use was 'internal use' and could be likened to the transfer of products internally within the proprietor. The sale of products to the importer did not create or maintain market share in the ultimate market for such goods. Goemar argued the opposite, that the mere fact that a sale had taken place in the UK in the relevant period was sufficient for such use to be deemed genuine.

The verdict

The judge found for La Mer Technology Inc and the Class 3 registration was revoked in its totality.

Sales merely to the importer were not to viewed as external use to the ultimate consumer of the products concerned. The mere intention that sales of product carrying the mark will be made to the ultimate consumer of the product is not sufficient to deem such use as 'genuine'. Therefore, the use Goemar had made of the mark was held not to be sufficient to create or maintain market share in the sector concerned.

Lessons to be learned

Although many of the questions raised by the La Mer decision were adequately answered in Ansul, La Mer appears to have established the important principle that use of a trade mark must be made to the ultimate consumer of the product, and sales of product carrying a mark to importers, distributors and 'middleman' who sell that product, may well not be sufficient to defend a trade mark registration against a non-use revocation attack.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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