Websites and Company Names Not Necessarily Earlier Rights

Simply owning a prior website or domain or company name does not give rise, on its own, to a right to invalidate a later CTM. So held OHIM's Cancellation Division recently in an application by Karl Biederer to invalidate a CTM for MEDIFORM Logo of Outumuro Campos (Case 1591 C). The decision highlights some useful practice points for those relying on unregistered rights in challenging CTMs.

Biederer Attacks

Outumuro Campos applied to register the MEDIFORM Logo as a CTM for business services in Class 35 on 27 May 2003. The CTM was duly registered.

In March 2006, Karl Biederer applied to invalidate it on the basis that, under Articles 8 (4) and 52 (1) (c) of the CTMR, he had acquired rights in a non-registered trade mark or other sign used in the course of trade of more than mere local significance, namely the company name "mediform-cz" in Germany and the Czech Republic, prior to the date on which the CTM was filed, and that Biederer enjoyed the right under national law to prohibit the use of the CTM in those countries.

In support, Biederer filed evidence of the registration of the German company name on 26 May 2003, one day before the CTM was filed, and of the use of the company name on the Internet from 10 May 2003, 17 days before the CTM was filed. Biederer also argued that the CTM had been filed in bad faith under Article 51 (1) (b) CTMR because, analogous to the concept of constructive notice, Biederer's use on the Internet was there for all to see and should have been detected through due diligence pre-application enquiries by Outumuro Campos.

No Meddling with MEDIFORM

Use in the course of trade pre-dating the challenged CTM was a requirement for Biederer to succeed. Unfortunately, Biederer's evidence met neither this substantive, nor this chronological, criterion.

In assessing whether Biederer had used the "mediform-cz" name in Germany or the Czech Republic prior to the filing of the CTM, the Cancellation Division applied a test akin to the "genuine use" approach employed in proof of use and non-use challenges and derived from the ECJ's decision in Ansul (Case C-40/01). It asked in effect whether the use shown was sufficient, taking all relevant factors into account, to create or maintain market share in the relevant markets, namely Germany and the Czech Republic.

Biederer fared badly. His 17-day advance on Outumuro Campos on the Internet did him little good, since he had failed to provide any evidence of the extent to which the relevant website had been accessed by the public in the 17 days preceding the filing of the CTM. Overall hit figures were not helpful since they did not indicate how many hits pre-dated the filing. The mere existence of a website was not sufficient on its own to prove prior use of the claimed company name in the course of trade. Evidence that the website had attracted hits in a number sufficient to constitute genuine use-namely, use sufficient to create or maintain market share-would be needed.

Moreover, the mere registration of a domain name, and the registration of the company name in Germany one day prior to the filing of the CTM, were mere administrative acts which did not, in themselves, amount to actual commercial use.

A declaration filed by Biederer was given little weight in the absence of any supporting evidence tending to show use in the course of trade pre-dating the filing of the CTM.
Biederer's argument that the CTM had been filed in bad faith was likewise dismissed, on the basis that failing to search the Internet for potentially conflicting use by others did not, by generally accepted commercial standards, rise to the level of fraud or dishonest intent. Indeed, Biederer's allegation was criticised as poorly argued and containing little more than "suppositions."

Comment

The Cancellation Division's apparent equation of "used in the course of trade" to "genuine use" under the Ansul principles is intriguing. One wonders whether it can be the whole story of what such use entails.
Genuine use under the Ansul test requires proof of use sufficient to create or maintain market share in the goods or services at issue. This seems right in the context of registered trade marks, whose essential function is to indicate source and for which there is no public policy justification for continued protection in the absence of such a role.

In the case of an unregistered mark or sign, however, the situation may be different. Company names, domain names and unregistered trade marks do not confer monopoly protection as broad as that conferred by a registered trade mark, and the public interest in imposing a strict "genuine use" test in order to assess whether the rights pre-date a CTM is accordingly diminished. In such circumstances, "used in the course of trade" should arguably have a lower threshold than "genuine use." 

A company or domain name should not be regarded as "used in the course of trade" by the mere virtue of its registration, because registration on its own is manifestly not commercial use. However, the fact that a website has been placed on the Internet and is available is arguably evidence of use in the course of trade even if it does not attract many, or indeed any, hits. The use derives from the owner's actions in making the website available under a particular domain name, not the uncontrollable actions of third parties who may or may not decide to access the site.

If the Cancellation Division had applied this approach, the existence of Biederer's website in the 17-day period preceding the CTM filing may well have been regarded as use in the course of trade. However, Biederer may still have lost the case because in the absence of evidence of a reasonable number of hits in that period, the website may have been regarded as of no more than mere local significance. Moreover, he would still have needed to show that his rights would have entitled him to prohibit the use of the CTM in the relevant countries under national laws, and the extremely modest level of Biederer's pre-filing use, and its close proximity to the filing date, must have made such an outcome unlikely at best. 

For those relying on unregistered rights in the E.U. to challenge CTMs in opposition or invalidation proceedings, Biederer's experience provides some useful lessons. Mere administrative acts will never be enough to constitute earlier unregistered rights, whatever the national laws may provide, since E.U. law requires that the earlier sign have been "used in the course of trade." Proof of actual commercial use pre-dating the CTM will be required.
Moreover, for now, that proof must be on a par with evidence in a proof of use challenge, and must therefore address the time, place, extent and nature of the use with a view to proving that it was sufficient to create and/or maintain market share in the relevant goods or services. What is sufficient for a luxury service may not be sufficient for everyday consumer products, and the nature of the goods or services must therefore be taken into account.

It is nevertheless highly questionable whether it is right to transpose the Ansul principle of "genuine use" into quite different proceedings involving different questions and public policy issues. While the MEDIFORM criteria should be noted and applied for now, they may not stand for long when they are eventually challenged.