The European Court of Justice of the EU (CJEU) has ruled that Ferrari can retain the trademark rights to the Testarossa brand, even though production of the iconic sports car was discontinued in the 1990s. The court overturned a previous cancellation ruling, finding that the continued manufacture of vehicle parts fulfils the requirements for trademark use, as Theo Visser explains.
Back in 2017, German toy manufacturer Autec, challenged the Testarossa trademark in the German courts, on the basis that Ferrari no longer fulfilled the obligation for trademark use, given that it had not manufactured the Testarossa car model for more than 20 years.
Under EU trademark law, a trademark registration is vulnerable to cancellation action if the holder of that trademark has not used it for a consecutive period of five or more years. (For more on this topic, read our article 'Trademarks and the obligation of use'.)
Ferrari held two registrations in Germany and Switzerland for the Testarossa brand name, both of which were revoked by the German court on the basis of Autec's arguments. (Germany and Switzerland established an agreement in 1892 whereby use in one country counts as use in both countries.)
Ferrari appealed against the decision to the Düsseldorf Higher Regional Court, the highest court of the Land of North Rhine-Westphalia, which referred the question of trademark use to the CJEU.
Parts, resale and the obligation of use
Ferrari sold a sports car model under the designation Testarossa between 1984 and 1991, and successive models (512 TR and F512 M) until 1996. In 2014, Ferrari produced a further copy with the Ferrari F12 TR model. In the period relevant to the assessment of trademark use, Ferrari also used the brands to designate some parts and accessories for the luxury sports cars previously retailed under those brand names.
Use does not always have to be extensive, especially when it comes to expensive sports cars that are usually only produced in small numbers. However, according to the German court, it was doubtful whether such information should be taken into account in the case of Testarossa, as the mark was not registered for luxury sports cars specifically, but for cars in general and parts thereof. The judge was of the opinion that, if it is necessary to verify whether the brands have been in genuine use on the mass market for cars and parts thereof, it must immediately be clear that this is not the case.
Likewise, the earlier court did not agree that the retail of second-hand vehicles bearing the brand, constituted a new use of the brands, since Ferrari's trademark rights were exhausted after the products bearing those brands were placed on the market for the first time, and Ferrari cannot prohibit the resale of those products.
The CJEU perspective
In its ruling, the CJEU found to the contrary that:
- A trademark registered in respect of a category of goods and replacement parts thereof must be regarded as having been put to ‘genuine use’, in connection with all the goods in that category and the replacement parts thereof, even if it has been so used only in respect of some of those goods; for example, such as high-priced luxury sports cars, or only in respect of replacement parts or accessories of some of those goods. This applies, unless it is apparent from the relevant facts and evidence that consumers wishing to purchase those goods will perceive them as an independent subcategory of the category of goods for which the mark concerned was registered
- A trademark is capable of being put to genuine use for the resale of second hand goods, so long as its owner “actually uses that mark, in accordance with its essential function which is to guarantee the identity of the origin of the goods for which it was registered, when reselling second-hand goods”; and
- A trademark is put to genuine use where its owner provides certain services connected with the goods previously sold under that mark, on condition that those services are provided under that mark.
The CJEU preliminary ruling thereby overturned the 2017 ruling by the German court, and Ferrari is back in the battle to retain ownership of the Testarossa brand name.
For additional guidance on trademark use requirements, please speak to your Novagraaf attorney or get in touch below.
Theo Visser is an IP Consultant at Novagraaf in the Netherlands.