December 8, 2015

Community trade marks: sofa, so good?

Community trade marks

The case: Sofa Workshop v Sofaworks Ltd [2015] EWHC 1773 (IPEC)

The case was brought by Sofa Workshop, a retailer of sofas and other furniture. Sofa Workshop owned two CTMs for SOFA WORKSHOP covering goods and services relating to various forms of furniture and accessories. Sofa Workshop alleged that Sofaworks, another retailer of sofas, infringed the two CTMs as well as claiming passing off.

Sofaworks’s defence was that the CTMs were invalid arguing that SOFA WORKSHOP is descriptive and lacking in distinctive character and, even if they were valid, the CTMs were liable to be revoked for non-use on the basis that there had not been genuine use of the marks within the European Community.

Genuine use within the European Community

The first issue that the court dealt with was whether the requirement for genuine use had been satisfied. A trade mark is generally deemed genuinely used if it is being used in more than one member state.

The court agreed that Sofa Workshop had put its CTMs to genuine use on an extensive scale in the UK in the five-year period before the counterclaim for revocation, but there was no evidence that any of its advertising was directed at consumers outside the UK. While Sofa Workshop had made one non-UK sale in Copenhagen, there was no evidence that this was in response to any marketing in Denmark. The judge held that the CTMs had not been used in order to maintain or create market share within the EU, and consequently the CTMs should be revoked.

Descriptive CTMs?

The court went on to consider whether the term SOFA WORKSHOP was descriptive of the goods/services. The court took the view that both of the CTMs consisted exclusively of signs which may serve in trade to designate a characteristic of the goods claimed and were therefore invalid. In defence, Sofa Workshop argued that its SOFA WORKSHOP mark had acquired distinctiveness through use and that the CTMs should remain validly registered as a result, even though the mark has inherently descriptive character. The court held that to succeed in this argument, Sofa Workshop would have to show that its mark had acquired distinctiveness in all member states where English is widely used. It could not do so and the court dismissed the argument.

Passing off

Sofa Workshop did succeed in its claim for passing off, as the court found that the name ‘Sofaworks’ was substantially similar to Sofa Workshop and as such constituted a misrepresentation causing material damage to the established goodwill of Sofa Workshop.

What does this mean for businesses which have or plan to register CTMs?

This decision of what constitutes genuine use of a Community Trade Mark is significant. If followed, it means that use of a Community Trade Mark in one country alone is not sufficient to defeat a revocation action on the grounds of non-use and maintain the registration(s) where the market for the goods or services in question is European-wide.

This leaves businesses with a tricky decision to make. While the territorial reach and the costs of registering a CTM are undoubtedly attractive, businesses should be aware that CTMs may be more vulnerable, particularly if there is no immediate intention to trade beyond a single member state. Where faced with the revocation of a CTM, it may be wise to consider converting the CTM into a national mark in the jurisdictions where it has been put to genuine use.

Additionally, trade mark owners should also be mindful not to use their marks in a descriptive sense, as doing so may open the mark up to challenge on the basis that it is descriptive or generic and therefore invalid.

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