The Court of Justice of the European Union (CJEU) said that whether or not a CTM could be said to have been put to "genuine use" within the EU was dependent on its use within the context of a particular market for the particular product or service. It was not dependent on that market extending across "territorial borders" within the EU, it said.
"[EU Community trade mark laws] must be interpreted as meaning that the territorial borders of the Member States should be disregarded in the assessment of whether a trade mark has been put to ‘genuine use in the Community'," the CJEU said in its judgment.
"A Community trade mark is put to ‘genuine use’ ... when it is used in accordance with its essential function and for the purpose of maintaining or creating market share within the European Community for the goods or services covered by it" with the essential function of a trade mark being "to guarantee the identity of the origin of goods or services for which it is registered," the Court added.
The CJEU was asked by a court in The Netherlands to assess whether use of a CTM in just one EU member country is sufficient to qualify as "genuine use" of the mark and if it is not, whether local use of a mark can ever be sufficient and under what circumstances. The CJEU was also asked whether 'genuine use' of a CTM should be determined without a consideration being made of national borders within the EU.
The Dutch court has been called upon to determine whether one company's use of a CTM within the Netherlands is sufficient for it to be classed as having been put to 'genuine use'. Under the EU's Community Trade Mark Regulation, CTMs which are not used for five years can be revoked.
The CJEU said that the Dutch court should come to its own conclusions in the case "taking account of all the relevant facts and circumstances, including the characteristics of the market concerned, the nature of the goods or services protected by the trade mark and the territorial extent and the scale of the use as well as its frequency and regularity".
The CJEU said that EU law makers had meant to prohibit the holding of trade marks that were not being put to genuine use as it said that non-use could impinge on market competition and unfairly restrict the free movement of goods and services. However, it said that consideration of the geographic scope of a CTM's use was just one consideration to be made when assessing whether use could be said to be 'genuine' but that use across borders was not essential.
"When assessing whether use of the trade mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether there is real commercial exploitation of the mark in the course of trade, particularly the usages regarded as warranted in the economic sector concerned as a means of maintaining or creating market share for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark," the CJEU said in its judgment.
"The territorial scope of the use is not a separate condition for genuine use but one of the factors determining genuine use, which must be included in the overall analysis and examined at the same time as other such factors," it added.
The CJEU also said that it was not necessary for Community trade marks to be used across a "substantial part" of the trading bloc.
"Whilst there is admittedly some justification for thinking that a Community trade mark should – because it enjoys more extensive territorial protection than a national trade mark – be used in a larger area than the territory of a single Member State in order for the use to be regarded as ‘genuine use’, it cannot be ruled out that, in certain circumstances, the market for the goods or services for which a Community trade mark has been registered is in fact restricted to the territory of a single Member State," the CJEU said. "In such a case, use of the Community trade mark on that territory might satisfy the conditions both for genuine use of a Community trade mark and for genuine use of a national trade mark."
"Whilst it is reasonable to expect that a Community trade mark should be used in a larger area than a national mark, it is not necessary that the mark should be used in an extensive geographic area for the use to be deemed genuine, since such a qualification will depend on the characteristics of the product or service concerned on the corresponding market," the CJEU said
"Since the assessment of whether the use of the trade mark is genuine is carried out by reference to all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark serves to create or maintain market shares for the goods or services for which it was registered, it is impossible to determine a priori, and in the abstract, what territorial scope should be chosen in order to determine whether the use of the mark is genuine or not," it said.