In a recent decision, the EUIPO Board of Appeal provided further guidance on what constitutes genuine use of a trade mark in relation to sales of replacement parts in the EU. The Board of Appeal held that genuine use cannot be established if the proprietor of the mark is not actively involved in the sale of the second-hand goods or their spare parts. The decision follows the 2020 CJEU decision in the Ferrari Spa v Du case, where the CJEU held that use of a trade mark amounts to genuine use if the trade mark holder sells second-hand goods directly.
Background to the case
Ferrari obtained an international registration (designating the EU) for the Testarossa brand in 2007. In 2016, Ferrari's Testarossa trade mark registration was partially revoked on the base of non-use for some of the goods in class 12. However, the mark remained on the register for automobiles.
Despite the fact that the Testarossa car has not been in production since the late 1990's, Ferrari claimed there is still great demand for the iconic car, which is one of the most sought after sports car by collectors. After both parties appealed the decision of the EUIPO Cancellation Division, the Board of Appeal handed down its decision in September 2023.
The Board of Appeal revoked the EU trade mark for all contested goods in class 12, including automobiles and replacement parts. Whilst a mark can be put to genuine use through second-hand sales and use in relation to spare parts, the Board of Appeal stated that simply being aware of second-hand sale by third parties is not sufficient to meet the standards of genuine use. Ferrari failed to show that they were directly involved in the sales of second-hand Testarossa cars or their replacement parts.
With regard to replacement parts, parts available on the market were mainly coming from other second-hand Testarossa cars, as production had ceased. None of the third parties involved in the second-hand sale of spare parts act on behalf of Ferrari. As such, the mark was found to not be functioning as an indication of origin.
Takeaways
This case is a reminder for brands that have stopped production of goods that are still highly sought after on the second-hand market that their trade mark may be vulnerable to cancellation. Right holders should be directly involved into second-hand sales (even by providing express consent) and partnerships with third parties in this space may be useful tools to keep a historical brand on the register.
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