UK: Use In One Country Now No Longer Enough To Show Genuine Use Of A CTM?

Historically one of the biggest selling points of the Community Trade Mark (CTM) system since its inception has been that while it provides a trade mark owner with the opportunity to obtain a single trade mark registration covering all member states of the European Union (EU), the owner only need to show the mark is in use in a single EU country to maintain its pan-EU rights. The recent case in the UK's Intellectual Property Enterprise Court, Sofa Workshop v Sofaworks, contradicts that view.

The case concerned a claim for trade mark infringement and passing off (a breach of unregistered trade mark rights) by Sofa Workshop Ltd against Sofaworks Ltd on the basis of the former's rights in the mark SOFA WORKSHOP and the latter's use of the mark SOFAWORKS. While the claimant was successful on passing off grounds it had its CTM registrations cancelled on grounds of descriptiveness and, most interestingly, on non-use grounds.

Previous case law of the Court of Justice of the European Union in historic cases such as Sunrider and La Mer Technology had held that even minimal use of marks in a single part of a single member state of the EU could constitute genuine use of a national trade mark registration of an individual EU country. The question of genuine use of a CTM registration was discussed in Leno Merken BV v Hagelkruis Beheer BV (C-149/11) [2013] E.T.M.R. 16 which held that the "territorial borders of Member States (of the EU) should be disregarded" in the assessment of whether there has been genuine use of CTMs.

In this particular case it was held that the SOFAWORKS mark had been used extensively in the UK but it was found there was no use in other countries. The judge held that because use was confined to the UK the CTMs in question should be cancelled for non-use in the EU.

In reaching this decision the judge referred to the Leno Merken case mentioned above which had separately stated that use in a single member state may not be wide enough to constitute genuine use in the EU of a CTM even if there may be circumstances (such as the size of the market for the goods in question) in which this would constitute genuine use of a CTM. The judge held such circumstances did not apply in this case and therefore cancelled the marks in question.

It is very difficultto reconcile the decision in this case with the ratio decidendi of the Leno Merken case which states that "territorial borders should be disregarded" when assessing the question of genuine use of a CTM. The Leno Merken case had also indicated that the geographical scope of use was only one of several factors to be taken into account and should be considered in conjunction with all the circumstances of use whereas the judge here insisted it was necessary requirement to satisfy in its own right. This finding also seems particularly onerous given that use of the SOFA WORKSHOP mark was on a significant scale in the UK (one of the largest member states in the EU). The decision suggests use of a CTM in two of the smallest countries of the EU (for example Malta and Luxembourg) on a much smaller scale, could stand a better chance of constituting genuine use of a CTM simply because it covers more than one member state. Because of these inconsistencies the reasoning of this decision may well not be followed in future cases.

It is certainly the case that the decision goes against established practice and decisions at the Community Trade Mark office concerning trade mark non-use cancellation applications which have long supported the view that use in one member state is sufficient to constitute genuine use of a CTM.

An appeal may be unlikely because the claimant was successful on other grounds but even so it is still difficult to treat this decision as binding on future cases because of its divergence from the standard interpretation of genuine use for CTMs provided in other similar cases. Neverthless the decision does illustrate why in some cases obtaining national trade mark registrations in key territories of the EU alongside CTM registration can be beneficial.

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