No red face for Ferrari in non-use challenges to its Testarossa trademarks
The Ferrari Testarossa is one of the most famous and mass-produced Ferrari models ever. However, the Testarossa model was only produced and sold until 1996. After 1996, Ferrari merely sold second-hand Testarossa models and some replacement and accessory parts for Testarossa models that were previously sold .
In a dispute involving Ferrari’s ‘TESTAROSSA’ trademarks, registered among others for vehicles, motor cars and parts thereof, land vehicles and parts thereof, the German Regional Court of Düsseldorf decided that the sale of second-hand Testarossa models and replacement and accessory parts for these models does not constitute proof of genuine use of its ‘TESTAROSSA’ trademarks in relation to the abovementioned goods. Hence, Ferrari’s ‘TESTAROSSA’ trademarks were declared revoked.
Ferrari appealed this decision before the German Higher Regional Court of Düsseldorf, who took the view that the extent of use demonstrated by Ferrari could well be sufficient to establish genuine use of its ‘TESTAROSSA’ marks, especially taking into account the fact that Ferrari used these marks in respect of replacement and accessory parts for high-priced luxury sports cars which are typically only produced in small numbers and since the use of a mark does not always have to be extensive in order to be genuine.
However, the appeal court raised among others the following questions:
- whether account must be taken of the particular case of the ‘TESTAROSSA’ marks, since they were not registered in respect of high-priced luxury sports cars and parts thereof, but for a broad category of goods covering among others vehicles, motor cars and parts thereof;
- whether the use of the ‘TESTAROSSA’ trademarks for replacement and accessory parts for Testarossa models sold in the past is sufficient to also evidence use of the marks for vehicles and motor cars; and
- whether the resale of second-hand Testarossa models could be considered as genuine use of the ‘TESTAROSSA’ trademarks, since the rights to the mark should be considered exhausted for these second-hand cars.
Therefore, on November 8, 2018, the appeal court requested a preliminary ruling from the Court of Justice of the EU (CJEU). The CJEU rendered its judgement on October 23, 2020, the relevant reasoning of which can be summarized as follows:
1. Sports cars and luxury cars are no independent subcategories of cars.
According to the CJEU, a trademark registered in respect of a category of goods such as vehicles and motor cars must be regarded as having been put to genuine use in connection with all the goods in that category, even if it has been used only in respect of some of those goods, such as high-priced luxury sports cars.
2. A trademark registered in respect of a category of goods, such as vehicles, motor cars and parts thereof must be regarded as having been put to genuine use in connection with all the goods in that category, even if it has been used only in respect of replacement parts or accessories of these goods.
According to the CJEU, it follows from its previous case law that the use of a registered trade mark in respect of replacement parts forming an integral part of the goods covered by that mark is capable of constituting genuine use, not only for the replacement parts themselves but also for the goods covered by that mark. The CJEU is of the opinion the fact that Ferrari used its ‘TESTAROSSA’ marks in respect of replacement parts and accessories for ‘very high-priced luxury sports cars’ is not sufficient to establish that it has used those marks in respect of only some of the goods covered by these trademarks. This concept of a ‘particular market segment’ is not, as such, relevant to the assessment of whether these goods fall within an independent subcategory of the category of goods in respect of which the marks are registered. It is not apparent that a consumer who wishes to purchase those replacement parts and accessories will perceive them as an independent subcategory of the category of goods concerned, being vehicles, motor cars and parts thereof.
3. The resale of second-hand goods under a trademark by the owner of that trademark can be considered genuine use of that trademark.
According to the CJEU, a trademark is capable of being put to use in respect of goods already put on the market under that trademark. The fact that the proprietor of the trademark cannot prohibit third parties from using his trade mark in respect of goods already put on the market under that mark does not mean that he cannot use it himself in respect of such goods.
This CJEU judgement is particularly relevant as it confirms not only that use of a registered trademark for part of the goods covered by that trademark (e.g. spare parts for luxury sports cars) may well be sufficient as evidence of genuine use for all the goods (e.g. vehicles) as long as the relevant consumer does not perceive these goods as belonging to a different subcategory of goods, but also that the selling of second-hand goods by the trademark owner could constitute genuine use of that trademark, although the right of this trademark owner to prohibit third parties from using this trademark in respect of such second-hand goods are exhausted.