In Kurt Hesse v Ferrari S.p.A. - R 334/2017-5 and R 343/2017-5, the iconic TESTAROSSA trade mark has been revoked, with third-party second-hand sales of Testarossa automobiles deemed not to constitute genuine use of the mark, according to the EUIPO.

Background

Ferrari S.p.A. filed and registered TESTAROSSA for goods in classes 12 (including “vehicles”) and 28 in 2007.

Kurt Hesse, head of a toy company named Autec AG, applied to register the mark Testa Rossa in the EU for various goods including classes 12 and 28 in 2014. Ferrari opposed the Hesse “Testa Rossa” applications, and Hesse then applied to revoke all class 12 goods of the Ferrari registration in 2015.

A question for the Cancellation Division (‘CD’) was whether use of the mark in the second hand car market could amount to genuine use in the EU, in circumstances where Ferrari had not sold any cars or spare parts under the Testarossa brand.

The CD held it could - the cars were traded in the relevant period and were recognised by the relevant public as originating from Ferrari.

Both parties then appealed the decision from the CD. Hesse sought to strike out automobiles, arguing that marks had been exhausted and use in the second-hand market could not amount to genuine use, and that Ferrari also had not used the mark to create or maintain a market for them. Ferrari appealed, arguing that it had proved use for spare parts/components and engines, which was sufficient to prove use.

The CJEU held that a trade mark can be used genuinely when second-hand goods are resold by the proprietor, and that use in respect of some goods (i.e. spare parts/components and engines) in a category was sufficient to maintain the category as a whole (i.e. automobiles).

The case was then referred back to the Board of Appeal (‘BoA’).

Decision

Ferrari submitted evidence of resale of second-hand Testarossa cars by third parties. However, these resales were deemed not to amount to genuine use of the mark by Ferrari.

Ferrari argued it had proved use for spare parts/ components and engines, however this argument was ultimately rejected by the BoA, who stated that the mark had been exhausted and use in the second-hand market could not amount to genuine use.

Further arguments by Ferrari included third party reference to TESTAROSSA, which they claimed did not amount to descriptive use. However much of the use in the second-hand car/parts market and in media reports was indeed held to be descriptive, not evidence of Ferrari creating a position of its own in the market. For example, the descriptive mention of a vehicle model in repair invoices is not infringing and thus couldn’t be held to preserve Ferrari’s rights.

Take-Homes

The case is particularly helpful for EU trade mark owners in better understanding the requirements (and risks) associated with genuine use of trade marks, in particular use in any second hand goods markets. Such use will often be limited in the majority of circumstances, as was found in this case.

Continuing to use a trade mark in relation to the actual goods / services registered is crucial from a brand protection and enforcement perspective, and being able to support any claims of genuine use with appropriate evidence is key.