The EU law's approach to the obligation to use of trademark will be firstly analysed within the framework of the CJEU judgments (Court of Justice of the European Union) in terms of its precedents in this article. Thereafter, we will address the issue with regard to differences under US law.
1-The Judgments of CJEU on the Obligation to Use of Trademark
According to the precedent of CJEU, the purpose of regulations requiring the use of trademarks¹ is to minimize the disputes that may arise owing to trademarks that are not used, rather than to force the success of trademarks in commercial life or to ensure legal protection solely to trademarks that achieved widespread commercial use².
In EU law, in order to revoke a trademark, it shall be examined whether the trademark has been used or not, and third parties shall initially request the revocation thereof. Or else, a request of revocation for non-use cannot be rendered³.
The use of an individual trademark not to distinguish goods or services from each other, but as a quality indicator, such as a guarantee mark, is not considered as the use of trademark in accordance with the main function thereof. As such, in a precedent, it was decided that the main function of an individual trademark is distinctiveness, and in this respect, the use of an individual trademark as a quality indicator such as a guarantee mark, not to distinguish goods and services from each other, shall not be deemed as use of trademark⁴.
In a case that is the subject of a decree of CJEU, the trademark proprietor uses the WELLNESS trademark on textile goods and also offers beverages with the words WELLNESS-DRINK as a gift to the purchasers thereof. In such cases, it was decided that the use of trademark merely on promotional goods could not be considered as an independent use as per the function of trademark in terms of beverages⁵.
The use of the sign constituting the trademark in a trade name or business name cannot be regarded as the use of trademark, for such uses do not refer to goods or services, but to businesses or merchants. In this sense, the use of the sign in commercial life is not considered sufficient for the genuine use of trademark; it is sought to be used in relation to goods or services⁶.
Furthermore, the placement of the “®” sign next to the title on company invoices does not, by itself, purport that the sign is used as a trademark. In determining whether the sign is used as a trademark or a business name or trade name, the manner of use and its position on the goods are important. For instance, the claim that the sign NATURE'S VARIETY, being very small on the back or at the bottom of the canned food, used as a trademark was not approved on the grounds that consumers would not comprehend it as a trademark, instead as the name of the producer company⁷.
The use of a trademark together with another trademark may in some cases constitute genuine use (Co-Branding). Such Co-Branding is mostly encountered in the automobile or textile markets. In a precedent on this issue, it is stated that the characteristic feature of the luxury shoe market is the presence of the designer's name on the product, and it is ruled that the use of the luxury shoe trademark along with the designer's trademark shall also be considered as the use of trademark⁸.
In the Ansul v. Ajax case, CJEU sets out the fundamental criteria for genuine use. In the said precedent, it was ruled that in order for the use of a trademark to be considered as genuine use, there shall be a direct or related use of the goods or services on the market and it shall aim at creating or protecting a specific market⁹.
Having said that, the determination of genuine use shall not be based on the intentions or considerations of the trademark proprietor. The assessment in this respect shall be made according to tangible, objective criteria. Even if the trademark proprietor's intention is to actually use the trademark in commercial life, there is no genuine use if the trademark has not been effectively launched to the market; the sign has not become permanent in the eyes of the consumer despite the sufficient time; and consequently, the trademark has not fulfilled its function of indicating the source of the goods or services¹⁰.
The use of trademark on invoices, its presence in search engines, its appearance in the catalogs of the company does not, in and of itself, purport that the trademark has been genuinely used. The evidential value of such documents is considered to be rather low. In particular, the documents that do not contain a date and refer to the trademark are guiding; they shall solely be taken into consideration if they are backed by other evidence¹¹.
In the event of the sales data in the invoices coincides with the labels on the goods, this data may be evidence of the use of trademark¹². In this regard, it is stated that all drugs in the pharmaceutical sector are listed in special encyclopedias on pharmaceutical products every year and that the inclusion of a trademark therein does not in itself indicate that it is used¹³.
In a business where goods are offered for sale only over the internet, it is sufficient if the trademark appears on the website, online catalogs or e-mail orders; the goods sold or their packaging does not necessarily have to bear the trademark¹⁴.
Article 64 of the EU Trademark Regulation¹⁵ stipulates that the trademark proprietor shall prove that the trademark has been used or that there are justifiable reasons for non-use. Indeed, it is accepted that during the grace period of five years after the registration, the trademark cannot be revoked due to non-use; and that the trademark proprietors can inhibit new registration requests that constitute a likelihood of confusion without having to prove that they have used the trademark during this period¹⁶.
The grace period of five years is deemed a reasonable period in Art. 5/c of the Paris Convention¹⁷ and three years in Art. 19 of TRIPS¹⁸.
As per EUIPO Guidelines for Trademark Examination, justifiable reasons for non-use shall be narrowly interpreted. Bureaucratic obstacles are not considered to be sufficient impediments, unless they are directly connected to the trademark and the use of trademark depends on the successful completion of administrative procedures. For instance, the trademark proprietors cannot be reasonably expected or required to change its company strategy and sell their goods in the sales channels of their competitors¹⁹.
In order for an obstacle to constitute justifiable reason, it shall be beyond the control of the trademark proprietor and there shall be a direct relationship between this obstacle and the impossibility or meaninglessness of using the trademark²⁰. If the use of trademark is prohibited by the court owing to a lawsuit in dispute or as a requirement of the bankruptcy proceedings, this decision constitutes a justifiable reason for non-use²¹.
CJEU does not regard the change of trademark proprietor as a justifiable reason. The obligation to use of trademark genuinely within five years is implemented irrespective of who owns the trademark²².
In a precedent of CJEU, it held that the restrictions during the Covid-19-Pandemic period would not constitute a justifiable reason for non-use. In that decree, although the applicant argued that he was unable to use his trademark for 79 days throughout the restrictions and that the revocation request filed during that period should not have been accepted, the General Court stated that this 79-day period could not be considered as a justifiable reason for non-use of trademark as it was a relatively short period of time within the five-year period requiring proof of use. In addition, it concluded that, since most of the period to which the restrictions related was during the low season, i.e. outside May-September, there was no unlawfulness in relation to the date on which genuine use of the contested mark had to be proved²³.
In a decree by the EUIPO Board of Appeal, it ruled that official authorisation procedures do not constitute a justifiable reason not to use a trademark under certain circumstances. In the aforementioned decree, a requst of revocation for non-use was filed on July 24, 2019 for a trademark registered on September 29, 2011. The trademark proprietor expressed that he could not use his trademark due to the technical examinations and tests required by the government since the registration. In response, the Board ruled that the necessary official authorisations and tests started at least four years after the registration of the disputed trademark; that it is not mandatory to file an application at an early date for a product that is likely to undergo technical examinations and tests in the future; that it is the trademark proprietor's liability to calculate the time between the date when the product prototype is ready for technical examination, authorisations and placing on the market, and that this situation cannot be considered as an independent obstacle arising beyond the control of the trademark proprietor. Further, the Board stated that during this period, the trademark proprietor did not provide any evidence that it was legally prevented from promoting the vehicles in any way, such as publicity regarding the launch of the vehicle, press release, pre-sale agreement, contact with potential customers, and that the use of trademark may be possible with such attempts, but in the present case, there was no indication of an intention to start using the trademark within the relevant time period²⁴.
Article 18/2 of the EU Trademark Regulation provides that the use of trademark with the consent of the proprietor shall be deemed to be use by the trademark proprietor. However, pursuant to this provision, the existence of a license agreement per se does not indicate that the relevant trademark is actually used in the market. The trademark shall also be actually used by the licensee obtaining the right to use trademark with the license agreement²⁵.
In establishing whether the use of a trademark with different elements shall be considered as use, two cases shall be evaluated. Firstly, it shall be determined in which aspects the sign used is distinctive from the registered trademark, and secondly, it shall be examined whether these differences alter the distinctive character thereof²⁶. The use of trademark or the ring surrounding the trademark in a different colour ²⁷; the use of trademark in colour despite registered in black and white²⁸ are considered within the scope of the use of trademark²⁹.
The trademark proprietor may have severally registered different forms of the trademark. In a dispute in which both a shape trademark and a different form (shaded logomark) in which the word placed inside the shape is used, and the trademark proprietor uses merely the trademark with the writing inside, it was approved that this is a different use of the first shape trademark³⁰. In this respect, the first form trademark cannot be revoked by claiming that it has not been used. In the different use of trademark, it is not important whether the different use is severally registered or not³¹.
Whether the use of trademark only on certain goods may be regarded as use in terms of the entire class is disparately assessed depending on whether the scope of the class is broad or narrow³². If the scope of the class in which trademark is registered is very broadly defined in the classification system, so that it can in fact be divided into various subcategories (e.g. furniture), the mere use of trademark on a particular type of product (e.g. chairs) does not mean that it is used in respect of the whole class³³. In this case, it is accepted that the broadly defined class will be divided into various subcategories and the trademark will be protected only in terms of the subcategory that includes the goods or services in which it is specifically used. This issue is notably essential in evaluating whether the trademarks registered in the field of pharmacy and used in medicines manufactured for a single disease are used in the category of pharmaceutical preparations³⁴.
Nonetheless, if the class in which the trademark is registered is already sufficiently limited, no further subclassification is required. In this case, in order to be able to refer to the trademark is used in this class, it is requisite to prove that it is used in a manner to cover all of the goods or services within the narrow scope. Yet, this case shall not be understood as a requiring the trademark proprietor to prove that the trademark is used in all sorts of goods or services within the scope of category in commercial life. It is considered sufficent to demonstrate that the trademark is used on certain goods that adequately represent a category³⁵.
In a preliminary ruling where CJEU was asked for its opinion in a dispute concerning EU law, CJEU emphasized that the burden of proof regarding the genuine use of trademark is on the trademark proprietor according to Article 19/1 of the EU Trademark Directive³⁶, but it also stated that the applicant seeking revocation is not completely relieved of the burden of proof; it shall concretize the facts underlying its allegation as much as possible³⁷.
In conclusion, notwithstanding CJEU sets out certain criteria in its precedents, each dispute shall be surely considered under the present circumstances.
2-Differences in US Law
In the US trademark law, the “first user” trademark system is applied³⁸. According to this system, the first user of a trademark in commerce has generally superior rights over subsequent users of the same or similar trademark. Under the first user system, an enterprise may obtain trademark protection by solely using trademark in commerce without having to register it with the United States Patent and Trademark Office (USPTO). Nevertheless, by registering trademark with the USPTO, the trademark proprietor has the opportunity to claim nationwide protection; use the “®” symbol, and benefit from legal presumptions of ownership of trademark.
In contrast, EU law implements the “first-to-file” trademark system. In other words, the first applicant to the European Union Intellectual Property Office (EUIPO) has superior rights over those who subsequently seek to use the trademark, regardless of whether they actually use the trademark in commerce. Under the first-to-file system in the EU, enterprises requesting trademark protection shall register their trademarks insofar as possible with a view to having the priority over potential competitors in the market.
There are also some differences in the trademark examination process between the EU and the US. One of the main differences is that while the EUIPO examines both procedural and substantial aspects of trademark applications, the USPTO mostly examines the application in terms of substantiality. For instance, the EUIPO observes the compliance with the technical requirements of the trademark registration process as well as the fulfillment of formal requirements, i.e. duly fulfillment of the classification of goods or services. By the same token, it conducts a substantive examination of the distinctiveness of trademark and its similarity to existing registered trademarks. On the contrary, the USPTO focuses particularly on the distinctiveness of trademark sought to be registered and the likelihood of confusion with already registered trademarks.
Moreover, in US law, the opposition period is thirty days from the publication of the trademark application, which may be extended up to six months, whereas in EU law, the opposition period is three months from the publication of the trademark application and this period cannot be extended.
In the US, a trademark proprietor shall use its mark in commerce in order to enjoy the protection resulting from the trademark registration. This requirement is a common feature of the trademark registration process in the US. When filing a trademark application, enterprises shall declare their legal grounds for registering their trademark nationwide. There are multiple filing options, and enterprises shall perform the whole legal requirements for their selected filing method. There are essentially two types of applications for trademark registration in the US. These are “use in commerce” and ‘intent-to-use’. The “use in commerce” application must include the date of the first use of trademark and that of first use in commerce in the United States. In the “intent-to-use” application, there shall be evidence of use of trademark when the opposition period expires, or an additional period of up to six months after the termination of the registration period may be granted in order to submit such evidence.
Under the Lanham Act, the main trademark statute in the US, a trademark may be revoked if the trademark proprietor fails to use trademark in commerce for a continuous period of three years. In addition, if a third party brings an action to enforce its trademark rights, it may be required to demonstrate that it is used trademark in commerce in connection with the relevant goods or services.
In the European Union, a trademark proprietor shall use the trademark in commece within the EU in order to enjoy the protection resulting from the registration. However, there is a five-year grace period after registration during which the trademark proprietor is not required to prove the use in commerce. At the end of this period, if trademark has not been used in connection with the relevant goods or services, it may be unguarded to revocation. There is no requirement for a trademark to have been previously used in commerce while applying for or registering a trademark in the EU³⁹. That is to say, a European Union trademark may be registered for goods or services even if the proprietor is not currently using trademark or has no intention to use it in the future. Having said that, if an EU trademark has not been used for five consecutive years, third parties may request for revocation based on the obligation of use by filing a request before the European Intellectual Property Office.
The main difference between the EU and US systems is that in the US, the actual use (namely genuine use in EU law) of the trademark in commerce is rather important while obtaining trademark rights. In the EU, this is insignificant, save for a trademark may acquire distinctiveness through descriptive use. Furthermore, in the EU one may register a trademark even if one does not intend to use it. In the US, one may register a trademark if one proves that it has been used. In addition, in the US, the authorisations arising from the trademark right shall be used in order to be exercised. Evidence of use of trademark shall be submitted at the trademark renewal every ten years. In the EU, trademark registration and renewal only requires a payment of fee.
The importance of use of trademark is more essential. Hence, in the US, it is possible to obtain trademark rights merely by using the trademark in commerce prior to registering the trademark, even though it grants more limited authorisations than registered trademarks, whereas, in the EU, trademark rights may solely be obtained through registration. On the other hand, although some EU countries acknowledge trademark rights based on use, the requirements for obtaining such rights are very high. In this regard, the use of trademark is not the only criterion, but the recognition of the trademark and goodwill are also crucial.
References and citations are listed below.
Click here for Part 1, which contains detailed information on the purpose and conditions of the obligation to use a trademark under Turkish law:
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