The proof of use of a trademark for services rendered outside the territory in which it is registered

Spain: The scenarios in which proof of use can be required have increased. Thereby, in opposition, invalidity and revocation proceedings, the party being attacked can request the proof of use of the other party’s trademark (in addition to the revocation procedure for lack of use and as a defense in the scenario of the infringement).

the trademarkDespite the fact that the obligation to use a trademark was already established in our law, with the amendment of the Trademark Act approved by the Royal Decree 23/2018 (which implements Directive 2015/2436 in Spanish law), the scenarios in which proof of use can be required have increased. Thereby, in opposition, invalidity and revocation proceedings, the party being attacked can request the proof of use of the other party’s trademark (in addition to the revocation procedure for lack of use and as a defense in the scenario of the infringement).

This is a consequence of the nature of the trademark law itself

An exclusive right that is justified and conditioned to the fulfilment of the functions that it must serve, in particular, as an indicator of the business origin of the service. If it is not effectively used in the market, the trademark could hardly act as an indicator of origin.

Although it seemed that we already had a solid basis on the obligation of use, globalization together with the digitalization of business activities has meant that issues that seemed to have been overcome, such as the territoriality of use, are once again entering the debate. In fact, in terms of IP law, there is a strong principle of territoriality. However, the distribution of goods has embraced the Internet as a new channel of supply, distribution or even service provision.

The debate on trademarks registered for service provision is particularly problematic. One example of such scenario could be services that are offered on the Internet, even if they are distributed in that way, but which are provided outside the territorial scope of the trademark. More specifically, an accommodation service offered on the Internet when the hotel is located outside the territory where the trademark is registered.

In such situation, the priority may be to determine which actions may constitute relevant use of the trademark (enjoyment, advertising, marketing), and then to address the effect of the place of performance regarding the obligation to use.

As it has been stated by case-law (CJUE 11/03/2003 – Ansul) there is genuine use of the trademark when, in accordance with its essential function (to identify goods or services as originating from an entrepreneurial source), it is used in order to create or preserve a market for the identified services. This means to conclude business transactions for the services identified with the sign, which assumes the meeting of supply and demand regardless of the place of enjoyment of the service by its purchaser. Accordingly, the enjoyment of the service is a consequence of the transaction itself, which is the act of use par excellence, since it is that which enables the sign together with the service to operate as an indicator of business origin.

Concerning the mere advertising use or the offer of the service in the market, the CJEU (Ansul) has determined that the commercialization of the service after such offers must be imminent in order to be considered relevant for the purpose of using the trademark. Consequently, the relevant acts of use are the commercialization of the service, or its advertisement whether its sale is imminent. It should be recalled that the marketing must not be onerous or in return for a price in order for such use to produce effects (CJUE 9/12/2018 – Radezki).

However, the acts of use of the trademark and the conditions under which they can fulfil its essential function, and thus justify the exclusive right, must be addressed according to the law’s requirements: real and effective.

These adjectives seek to reinforce the conditions of the acts of use. Use is qualified as real, to exclude apparent, fictitious or sporadic transactions. Therefore, it must be external and continuous. It must also be effective, i.e. of an appropriate intensity considering the circumstances of each case, among others, duration and nature of the service, price, market practices, size of the company, etc. (CJUE 25/03/2009 Budweiser; SSTS of 22/01/200 and 18/06/2010; SAP ofMadrid of 27/02/2000). This adequate intensity must be proven in a concrete and objective manner (Budweiser). In conclusion, there must be an appropriate sales figure. However, it is not a question of proving business success (CJUE 23/02/2006 – Ponte Financiaria; SAP of Madrid of 20/03/2015).

In this context, it is worth considering (when the service is rendered in a territory other than that of the trademark) whether transactions or advertising accessible from the territory where the trademark is registered could serve to prove the use of it. It seems that nothing can object to the affirmative answer. However, such acts of use must be also real and effective. In essence, the use must be external, non-apparent, continuous, with an appropriate intensityconsidering the circumstances and in the territory of the trademark.

There is no doubt that the Internet is a transnational marketing and advertising tool. However, the role of advertising has been particularly controversial in these cases, as Internet advertising (websites, social networks, Google Ads, tour operators) is accessible from anywhere in the world. However, it is not sufficient for the purposes of proving use in the territory of registration that advertisements have been distributed on it. Otherwise it would be possible to prove the use of a trademark in any country just by offering the services over the Internet. The same applies to the possibility of making transactions on the Internet involving the trademark.

The tourism sector and, in particular, the hotel industry are very present on the Internet. Moreover, internet has become the main channel for advertising and specially for the distribution of this kind of services.

The EUIPO had the opportunity to give its opinion in relation to the “Mantra Resort, Spa & Casino” located in Punta del Este (Uruguay). It concluded that, despite the evidence of certain sales in the UK and Spain and the offer of the services on travel websites in the Netherlands, Germany and Italy, the proper use of the trademark in the EU was not sufficiently proven in terms of creating or maintaining sales of the hotel services in the relevant territory (Cancellation Decision No 13471 of 28/09/2018, Mantra-Vidaplan).

This same line has been followed by the Commercial Court Nº2 of Barcelona in its recent ruling nº 435/2019 of December 23 (appealed against in the AP of Barcelona Section 15) in which it considers that “the key issue is to know the use that was made of such advertising from Spain in order to be able to establish whether it was sufficiently intense. This would be determined by the number of visits that these webs received from users in Spain and the number of reservations that were managed from our country, for the hotel in Mexico”.

If we recall that the proof of use of the trademark must be precise and objective, the number of impacts of such advertising and the number of sales of the service, both in the territory of registration, must be proven in these cases.

Thus, in terms of advertising, impacts of AdWords campaigns, Twitter profiles, Facebook, Instagram (proving that there are users of the relevant territory), visits to the owner’s own website (from the territory where the trademark is registered), etc. Regarding the provision of the services, documents of transactions from digital tour operators (Booking, Atrapalo, Expedia, Oyster, etc.), agencies or even from the proprietor of the trademark, which prove that there are consumers from the territory of registration. It should be stressed that sales made to consumers in third countries cannot be considered as relevant for the purposes of using the trademark in the territory of registration, since it is in this territory where a market must be created and maintained, regardless of whether using on line or off line distribution channels.

In conclusion, the weighting of the circumstances to assess whether there has been use of the trademark with the appropriate intensity required in the territory where it is registered, can only be carried out with that type of evidence (concrete and objective).


authorsJosé Garrido, Partner, DA Lawyers
Cristina Hernández, Lawyer, DA Lawyers
DA Singular Lawyers, S.L.P.

    • September 2020
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