Ruling favours Ferrari in trade mark dispute

Brand owners do not have to use trade marks they have registered in every market segment falling within the class of goods the marks are registered under to prove that those marks have been put to 'genuine use' and thereby avoid their rights in those marks being revoked, the EU's highest court has ruled.

In a recent ruling of particular relevance to businesses in the automotive sector, the Court of Justice of the EU (CJEU) also confirmed that car manufacturers can rely on evidence of the second-hand sale of their vehicles to demonstrate the 'genuine use' of their trade marks.

EU trade mark law provides for the potential revocation of trade mark rights in the event the rights holder cannot prove that they have put their trade marks to 'genuine use'. Those provisions seek to avoid businesses having an unfair monopoly over brands they do not use.

In the case before it, the CJEU had to consider whether Ferrari had put its 'Testarossa' trade mark to 'genuine use', after the car manufacturer's rights to continue using the mark was challenged before the courts in Germany. The legal challenge focused on the claim that Ferrari's use of the Testarossa trade mark was limited to within the high-priced luxury sports car market, and that this was not sufficient to demonstrate 'genuine use' of the market across the broader vehicles class of goods under which the mark had been registered, which referred in particular to 'motor cars and parts thereof'.

However, the CJEU said that a trade mark must in general be regarded as having been put to ‘genuine use’ … in connection with all the goods" within the category of goods it has been registered "if it has been so used only in respect of some of those goods, such as high-priced luxury sports cars, or only in respect of replacement parts or accessories of some of those goods". The exception to this is if it is "apparent from the relevant facts and evidence that a consumer who wishes to purchase those goods will perceive them as an independent subcategory of the category of goods in respect of which the mark concerned was registered", the court ruled.

The CJEU also said that, under EU trade mark law, "a trade mark is capable of being put to genuine use by its proprietor when that proprietor resells second-hand goods put on the market under that mark".

In a further finding that will be welcomed by Ferrari, the CJEU confirmed that "a trade mark is put to genuine use by its proprietor where that proprietor provides certain services connected with the goods previously sold under that mark, on condition that those services are provided under that mark". Ferrari had argued that its provision of replacement and accessory parts for its Testarossa models, as well as maintenance services for those vehicles, were evidence of its use of the Testarossa trade mark.

Florian Traub, specialist in brand protection and intellectual property law at Pinsent Masons, the law firm behind Out-Law, said: "This is not only a win for Ferrari, but the CJEU’s decision will also come as a relief to owners of iconic brands that are still very much present in the consumer’s mind even after production has ceased. Trade mark owners will, however, still have to remain vigilant in collecting and submitting the right evidence in revocation proceedings, and the CJEU’s decision should not be mistaken as a free pass in that respect."