Does use of a trade mark within the UK constitute valid use within the EU to evidence enhanced distinctiveness of an EU trade mark?
The judgement of the Shopify vs Shoppi case has important implications for UK trade mark owners.
In a trade mark dispute between US company Mad Dogg Athletics and Czech company Aerospinning Master Franchising, the EU General Court has provided a helpful reminder of the vulnerability of a trade mark registration if the mark becomes a common name in the trade for a good or service which it is registered for.
Mad Dogg has been the proprietor of the EU registered trade mark SPINNING since 2000 for “audio and video cassettes”, “exercise equipment” and “exercising training”.
In 2012, Aerospinning applied to the European Intellectual Property Office (“the EUIPO”) to partially revoke Mad Dogg’s EU trade mark registration for SPINNING on the basis that ‘spinning’ has become the common name for exercise equipment and exercise training services.
In 2014, the Cancellation Division of the EUIPO revoked Mad Dogg’s rights to SPINNING for all of the goods and services covered by the registration.
Mad Dogg appealed and in 2016 the Fifth Board of Appeal of the EUIPO (“the BOA”) upheld the Cancellation Division’s decision in relation to “exercise equipment” and “exercising training”. The BOA found that ‘spinning’ had become generic for a certain type of exercise training, and the exercise equipment used for that training, in the Czech Republic.
Mad Dogg appealed to the General Court and claimed that the BOA had incorrectly assessed the evidence and erred in relation to the following points of law.
The relevant date
Mad Dogg argued that the relevant time for assessing whether the trade mark had become generic was the date when the decision responding to the revocation application is decided, rather than the date on which it is made.
The General Court rejected this line of argument and stated that the applicability of the ground for revocation must be examined in light of the factual and legal context on the date of application for revocation.
The relevant territory
Mad Dogg submitted that the BOA erred in limiting the relevant territory to the Czech Republic and envisaged that revocation could only succeed if the trade mark is perceived as a common name by the relevant public throughout the European Union, or at least an overwhelming part of it.
The General Court held that where an EU trade mark has lost all distinctive character in a limited part of the European Union, the mark is no longer capable of producing the effects of the EU Trade Mark Regulations.
Accordingly, transformation of a mark into a common name in a single Member State of the European Union is sufficient for its proprietor’s rights to be revoked in respect of the whole of the European Union.
The relevant public
Mad Dogg submitted that the BOA also erred as it limited the relevant public to end users of the goods and services, and did not take into account professional users.
On this point, the General Court agreed with Mad Dogg and found that the BOA was wrong to consider that professional customers were not part of the relevant public in relation to “exercise equipment” since indoor cycles are purchased by commercial operators of gyms, sports facilities and rehabilitation facilities. The General Court found that commercial operators play a central role in the “exercise equipment” market and have a decisive influence on the selection, by end users, of “exercise training” services. Accordingly, the BOA made an error of assessment.
The General Court held that this error justifies the annulment of the BOA’s decision in relation to “exercise equipment” and “exercising training”.
Subject to an appeal to the Court of Justice of the European Union, Mad Dogg’s registration was saved from cancellation in relation to “exercise equipment” and “exercising training”. However, Mad Dogg limited its appeal of the BOA’s decision to these goods and services. As the General Court was not asked to review the BOA’s decision in relation to “audio and video cassettes”, the decision to cancel the registration in relation to those goods stands.
The General Court has made it clear in this decision that an EU trade mark owner must have its rights revoked if, owing to the proprietor’s acts or inactivity, the trade mark becomes a common name even in only one Member State for the relevant goods or services.
This decision acts as an important reminder to trade mark owners of the need to take steps to protect the distinctiveness of their trade marks. This involves policing unauthorised third party use of marks, and also ensuring that their own, and any authorised third party, use of their marks is not carried out in a way that could lead to the marks becoming generic.
If you have any questions relating to this decision, best practice in trade mark use, or any other trade mark matter, please do not hesitate to get in touch with one of our attorneys.