Use of a Trademark is an Obligation
Although a trademark is primarily associated with the exclusive rights which give a right holder a monopoly to prevent any third party from using the same or a similar mark for identical or similar goods or services without its consent, the trademark right also arises a significant obligation. The right-holder has an obligation to use the trademark for the goods and services for which it has been registered, if they wish to maintain its validity.
The general rule, prescribed by the Law on Trademarks of the Republic of Serbia as well, is the rule of revocation due to non-use. A trademark is subject to revocation if the trademark holder or a person authorized by them has, without valid reasons, failed to put the trademark to genuine use on the domestic market for the goods or services to which it relates, for an uninterrupted period of five years, starting from the date of registration, or from the date the trademark was last used.
Although most legal systems, including the European one, recognize the five-year period of non-use as the applicable timeframe for this type of trademark revocation, exceptions do exist. Trademark protection in Russia may be terminated due to non-use over an uninterrupted period of three years, and the same applies in Canada.
Arguments in Support of Proving Trademark Use
For the purposes of evidentiary proceedings initiated upon a request by an interested party for the revocation of a trademark on the grounds of non-use, the trademark holder is required to prove that the trademark has been used, i.e., that the trademark has been genuinely used to designate the goods or services for which it has been registered.
In this context, the use of a trademark shall be understood to include the following acts:
The following shall not be considered as the use of a trademark:
The trademark holder is not required to prove continuous use throughout the aforementioned five-year period. However, certain factors will be relevant for assessing whether the use qualifies as genuine, such as the extent of use (i.e., the quantity of goods sold or services provided), the duration of the use, the nature of the goods or services, the needs and size of the market, and other similar circumstances.
Moreover, the trademark need not be used directly by the right holder, but may also be used by a person authorized by the right holder. Therefore, the previously mentioned acts of use undertaken by an authorized third party shall also be considered relevant evidence of use.
This leads to a justifiable legal question. What form of authorization granted to a third party is sufficient for the acts of use performed by that party to be regarded as relevant for the purpose of proving trademark use in revocation proceedings? Should such authorization be explicit and given in a specific form, or can it also be implied?
The most recent European case law offers an interesting perspective on this issue.
Ferrari Testarossa
Although the Ferrari Testarossa model has not been manufactured since 1996, Ferrari, in early July, won a legal battle after several years and succeeded in maintaining the validity of its Testarossa trademark.
How is this possible, considering that the only obligation of a trademark holder is to use the mark in the market for the registered goods and services, and that the sanction for failing to do so is the potential revocation of the trademark due to non-use?
The iconic Ferrari Testarossa was introduced in 1984 and was produced until 1996, including its upgraded versions — the 512 TR (1991–1994) and the F512 M (1994–1996). Although Ferrari discontinued production of this model, it remains highly valued among collectors and classic sports car enthusiasts and can still be found on the second-hand market at extremely high prices.
The German toy manufacturer Autec AG filed a request for the revocation of the Testarossa trademark due to non-use for vehicles, spare parts, components, accessories, and model cars, ten years ago, claiming that the trademark had not been used continuously for a period of five years in connection with the goods for which it was registered. Ferrari based its defense on the argument that, although the Testarossa model was no longer in production, it is still in great demand on the collectors’ market, and that the sale of used vehicles and spare parts is carried out by authorized parties with the implied consent of the trademark holder.
Although the decision of the EUIPO Board of Appeal was negative to Ferrari — reasoning the fact that the car is still being sold in the second-hand market does not constitute genuine use of the trade mark, and there was not sufficient evidence that the third parties selling the cars had the express consent from the trademark holder, the General Court of the European Union, in its judgment delivered in early July this year, overturned the decision of the Board of Appeal and maintained the validity of the Testarossa trademark, despite the fact that new vehicles have not been manufactured since 1996.
In the ruling on this case, the General Court of the European Union adopted several noteworthy positions which will undoubtedly serve as a precedent for future decisions concerning the preservation of vintage brands. Firstly, the sale of used Testarossa vehicles, spare parts, and accessories by authorized distributors implies the consent of the trademark holder to use the mark. By the same reasoning, the sale of Testarossa model cars and toys by third parties was deemed to have occurred with the implied consent of the trademark holder, given that the use of the mark, to which the right holder did not object, implies a commercial origin that is associated with the trademark owner. For this reason, the sale of second-hand vehicles, spare parts, and model cars by third parties, even if not originating directly from the trademark holder, but carried out with their implied consent, constitutes the use of the trademark sufficient to maintain its validity.
Rather than a Conclusion
We have seen that a trademark is not only a right but also arises an obligation to use the mark in the market to designate the goods and services for which it has been registered, either by the trademark holder or by a person authorized by them. The purpose of the use requirement and the sanction of revocation due to non-use is to safeguard the principles of a free market and fair competition, and to prevent the creation of monopolies where there is no actual commercial use of the mark.
In the event of revocation proceedings due to non-use, the trademark holder or the person authorized by them bears the burden of proving that the mark has been used to designate the registered goods or services. What qualifies as acts of use, and what does not, how such use is to be proven, and whose use may be deemed relevant for evidentiary purposes are legal standards which, although derived from statutory provisions, are further shaped through practical application on a case-by-case basis.
Author:
Bojana Veselinović, Senior Associate
Email(s): bojana.veselinovic@prlegal.rs; legal@prlegal.rs;