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30 Nov 2020
BY Delene Bertasso

Blown the budget on a Ferrari? Bad news… it’s just a car

A trade mark registration can be cancelled by what the law calls an “interested party” (generally an envious competitor) if that party can show that there was no genuine use of that trade mark for a continuous period of five years or longer. Two recent European judgments deal with non-use cancellation. Interestingly, both deal with sports car brands.

The first case involved Ferrari and its brand Testarossa. The trade mark Testarossa is registered in the EU for a broad specification of goods, covering motor cars and motor car parts. The trade mark had, however, only been used for a very narrow range of goods, what the court described as ”sales of high-priced second-hand luxury sports cars or parts for such cars.“ The pertinent question was whether such use was enough to keep the registration alive?

The court made some interesting findings:   

The use of a trade mark in respect of a narrow range of the goods covered by the registration may be enough, provided that consumers don’t perceive those goods as an independent sub-category of the goods for which the trade mark is registered.  

The court found that sports cars or high-performance cars do not constitute an independent sub-category of cars. While sports cars may indeed be capable of being used in motor sport, that is only one of the possible intended uses, said the court. Such cars are equally equipped for use on the roads (so for tootling along with the plebs, doing the shopping, dropping the children at school).

The court further held that the high price of sports cars does not play a role. The mere fact that the goods in respect of which a mark has been used are sold at a particularly high price and, consequently, may belong to a specific market is not sufficient for them to be regarded as an independent sub-category of the class of goods.”

The use of the mark Testarossa in respect of a small range of expensive high-performance cars was enough to keep the registration alive because these sports cars do not form an independent sub-category of cars. This is well worth remembering when next you encounter a high-performance car and your companion looks on enviously, say this:”It’s just a car.”

Re-selling second-hand goods put on the market under that trade mark will suffice, as will selling spare parts

By re-selling second-hand Testarossas (which had seemingly been inspected by Ferrari), Ferrari was using the trade mark. This is how the court explained it:

"It is true that the resale, as such, of a second-hand product bearing a trade mark, does not mean that the mark is being ‘used’ … that mark was used when it was affixed by its proprietor onto the new product when that product was first put on the market. However, if the proprietor of the trade mark concerned uses that mark, in accordance with its essential function which is to identify the origin of the goods for which it is registered, when reselling second-hand goods, such use is capable of constituting genuine use.”

The court also found that use of a trade mark constitutes genuine use when the proprietor sells replacement parts. Quoting from the earlier case of Ansul C40/01:”The fact that a mark is not used for goods newly available on the market but for goods that were sold in the past does not mean that its use is not genuine if the proprietor makes actual use of the same mark for parts that are integral to the make-up or structure of such goods, or for goods or services directly connected with the goods previously sold and intended to meet the needs of customers of those goods.”

Use for related services suffices

The court’s view was that use of the mark for services, such as maintenance, may be enough: “A trade mark is put to genuine use by its proprietor where that proprietor provides certain services connected with the goods previously sold under the mark, on condition that those services are provided under that mark”

This decision, is likely to be cited in future litigation in South Africa. While judgments of European courts are, of course, not binding, they are certainly persuasive.  

By strange coincidence

There was another EU judgment involving sports cars and non-use of trade marks, Polyfarmex S.A v EUIPO, a judgment of the General Court.

The issue here was whether the trade mark Syrena in class 12 was vulnerable to cancellation based on non-use. The court held that it was not, even though the proprietor was unable to provide invoices or other documentation proving use. The court was, however, influenced by the fact there had been talk in the media of a revival in production of the cars. It held that the fact that there had been both preparatory activity and advertising established that the car was about to be marketed, and was, in fact, available to order. 

The outlined judgments extend the ambit of use of trade marks that the courts may consider in non-use expungement applications which, if considered by our courts, may come to the welcome aid of proprietors facing an expungement application.

 

Delene Bertasso

IP | Trade Mark Attorney | Senior  Associate

dbertasso@ENSafrica.com

+27 83 399 6172