TRADE MARKS: USE IT OR LOSE IT
It is becoming increasingly important that registered trade marks are used in order to maintain their validity and their ability to be enforced against third parties.
This page highlights general principles primarily as regards United Kingdom (UK) and European Union Trade Marks (EUTM)*; much of it will also apply, in broad terms, to other jurisdictions, but there are differences between countries. For advice in a particular situation please refer to your usual contact at Mewburn Ellis LLP.
There are four main reasons:
In rare circumstances failure to use may not be fatal if there is a valid reason for non-use – see below.
Use needs to be genuine commercial use and not just token use, and needs to be in the country in which the mark is registered; in the case of an EUTM, a reasonable amount of use in one EU country may suffice depending upon the country concerned. The amount and frequency of use will depend upon the nature of the goods or services; for example the sale of two or three cases of tinned food over a five year period would probably not be considered sufficient, whereas the sale of two or three ships would. For many countries, applying the mark in a given country to goods for export counts as use, even if the goods are not put on the market in that country.
It is not sufficient to assert that the mark has been used, or just produce a catalogue or a price list showing the mark in question. There needs to be a clear chain of documentation showing use of the mark in relation to the goods / services for which the mark is registered. For example, an invoice may show a stock code but not indicate the goods or the mark; it may be necessary also to produce a catalogue or a data sheet to show exactly what was sold and how the mark was used. It will probably also be necessary to indicate the turnover in the goods / services concerned.
If there has been valid use on some of the goods / services, then such use will be ineffective as regards the remaining goods / services, unless they are closely related. So if the mark is registered for cakes and soft drinks, and the only use is on lemonade, then the use would normally be considered use in relation to soft drinks in general, but not in relation to cakes.
In some circumstances, there may be a justifiable reason why the mark cannot be used. For example, if the mark is to be used in relation to a pharmaceutical product and approval for the pharmaceutical has been sought in good time from the appropriate regulatory authority but has not yet been granted, this may be accepted as a valid reason for non-use. However if product bearing the mark simply did not sell, this would not be a valid reason.
If a trade mark registration is used by a subsidiary of the company owning the registration, this relationship may be sufficient for some jurisdictions without the requirement for a licence or other documentation, as the owner has control over the subsidiary. In other jurisdictions, even with such a relationship, it may be necessary for there to be a licence so that the use accrues to the benefit of the trade mark proprietor.
However the reverse situation does not apply. If a mark is owned by a subsidiary, and the use is by a parent company (or a fellow subsidiary) then there will probably need to be a licence, as the trade mark owner will not otherwise have control over the use of the mark, given the nature of the corporate relationship.
Although for many countries the period after which a registration becomes vulnerable to attack on the grounds of non-use is typically five years, in some countries this can be shorter (often being three years). The level and type of use that is required to maintain the validity of a registration can also vary from country to country.
It is very important to regularly review your trade mark portfolio, for each registration asking:
While carrying out a review, one should also ask:
* formerly known as Community Trade Mark (CTM)
This information is simplified and must not be taken as a definitive statement of the law or practice