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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Aiwa Co. Ltd v Aiwa Corporation [2019] EWHC 3468 (Ch) (13 December 2019) URL: https://www.bailii.org/ew/cases/EWHC/Ch/2019/3468.html Cite as: [2019] EWHC 3468 (Ch) |
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COURT
OF JUSTICE
CHANCERY APPEALS (ChD)
![]() ![]() Rolls Building, 7 Rolls Buildings Fetter Lane, London EC4A 1NL |
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B e f o r e :
____________________
![]() ![]() ![]() ![]() |
Appellant |
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- and - |
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![]() ![]() ![]() | Respondent |
____________________
Charlotte Blythe (instructed by Edwin Coe
LLP) for the Respondent
Hearing date: 21st November 2019
____________________
VERSION
OF JUDGMENT APPROVED
MR JUSTICE MANN:
Introduction
The relevant statutory law
"(3) The useconditions
are met if
(a) within the period of five years ending with the date of publication of the application the earlier trade mark has been put to genuine use in the United Kingdom by the proprietor or with hisconsent
in relation to the goods or services for which it is registered, or
(b) the earlier trade mark has not been so used, but there are proper reasons for non- use."
I have emphasised the important words for present purposes.
"46(1) The registration of a trade mark may be revoked on any of the following grounds-
(a) that within the period of five years following the date ofcompletion
of the registration procedure it has not been put to genuine use in the United Kingdom, by the proprietor or with his
consent,
in relation to the goods or services for which it is registered, and there are no proper reasons for non-use;
(b) that such use has been suspended for an uninterrupted period of five years, and there are no proper reasons for non-use
Again, I have emphasised the words around which the application turned. The questionconsidered
by the hearing officer was whether the evidence established "genuine use by the proprietor or with his
consent."
The structure of the decision
"18. With this [viz
remarks about the applicable dates] in mind, the respective periods for which I need to
consider
genuine use of Party A's [ie Limited's] marks are [the periods summarised above]."
That suggests that he is going on toconsider
the question of "genuine use".
"25) Mr Davis submitted that the evidence shows third parties offering for sale second-handAIWA
items. These items would have been produced by Party A's predecessor in title up to 2008 and include some much older, in one case from the mid-1970s. Mr Davis referred me to the
comments
of Arnold J in London Taxi. Arnold J described the issue he was
considering
in the following terms:
"220. [ ] an issue which arises in the present case is whether sales of usedvehicles
bearing the trade mark by the trade mark proprietor [my emphasis] are sufficient to
constitute
genuine use of the trade mark. [ ]"
26) After some analysis, Arnold Jconcluded
(at para 223) that this was a difficult question in law and that "it is one which would ultimately have to be resolved by the CJEU". He did not have to try and answer the question in that case and, therefore, declined to do so.
27) I acknowledge that there may be circumstances where second-hand sales may be sufficient for a finding of genuine use. However, the facts of the current case are sufficiently different to those before Arnold J, in particular, the fact that in London Taxi the second-hand sales were made by the proprietor. In the current case, if there are any second-hand sales, they are by third parties unrelated to the proprietor (being Party A). Unlike in London Taxi, the sales were not made with the proprietor'sconsent.
This is a requirement as set out in both section 6A(3)(a) and section 46(1)(a) of the Act. These sections state that the use
condition
is satisfied where, in the relevant period, use of the mark is made by the proprietor or with his
consent.
Whilst I recognise that such use may be a moot point yet to be decided by higher authority, on a plain reading of the Act, it is my
view
that such third party use cannot
constitute
genuine use because it is not use by the proprietor or with its
consent.
For this reason, I dismiss Mr Davis' submission that it makes no difference that the re-seller is a third party who does not have the
consent
of the proprietor."
The underlinings in those paragraphs are the hearing officer's. Mr Davis criticises the finding as toconsent
as being a mere statement without reasoning, and says that the hearing officer did not make a relevant finding. That being the case, he says, this
court
should make the finding in a
considered
fashion and
come
to the
conclusion
that there was
consent
by the proprietor to a genuine use in the form of second-hand sales.
"28) In addition, Ms Blyth pointed out that Arnold J, havingconsidered
the findings of the CJEU in Ansul BV
v
Ajax Brandbeveiliging BV [2003] RPC 40 ...that dealt with the issue of after-sales services such as the sale of accessories or parts in respect of the goods in which use was claimed to qualify as genuine use as well as after-sales servicing and repair)
concluded
(at para. 226) that the CJEU's reasoning was "rather specific to the facts of that case [and that] it cannot be
concluded
from this that simply re-selling used goods bearing a trade mark either definitely does or definitely does not amount to genuine use of that trade mark". Therefore, the answer is dependent on the facts of the case, and as I have already stated in the previous paragraph, the facts of the current case do not lead me to
conclude
that the second-hand use relied upon amounts to genuine use."
"45) I have found that individually, the second-hand sales by third parties and the claimed service support by SonyCorporation
does not amount to "genuine use". Further, I have also found that the activities undertaken by Party A, within the relevant periods, do not amount to "genuine use". Mr Davis submitted that I should not look at each category of claimed use in isolation, but that I should stand back and look at the evidence as a whole, and that when I do so, I should
conclude
that it illustrates genuine use during the relevant periods. I agree that it is appropriate that I look at the evidence as a whole, but even when doing so the sum of the evidence does not amount to an illustration of genuine use, in the UK, of Party A's
AIWA
marks during the relevant periods.
46) In summary, the use shown is insufficient for me toconclude
that there has been genuine use within the meaning of Section 46 of the Act or that proof of use has been demonstrated for the purposes of section 6A of the Act."
The basis of the appeal
Consent
and second-hand sales
(i) Theconcept
and nature of
consent
was the same whether the question was non-use, exhaustion of rights or infringement. In this respect he relied on Einstein Trade Mark [2007] RPC 23, a decision of Mr Geoffrey Hobbs QC sitting as The Appointed Person.
(ii) When SonyCorporation
put its marked goods on the market in the UK it exhausted its rights. That
concept
involved implied
consent
to onward sales in the UK (with the result that sales thereafter
could
take place without infringement).
(iii) That impliedconsent
to onward sales was also capable of being, and was, a
consent
to genuine use of the mark in the
course
of onward sales, including second-hand sales.
"12. Exhaustion of rightsconferred
by registered trade mark
(1) A registered trade mark is not infringed by the use of the trademark in relation to goods which have been put on the market in the European Economic Area under that trade mark by the proprietor or with hisconsent."
"Exhaustion of the rightsconferred
by a Trade Mark
(1) The trade mark shall not entitle the proprietor to prohibit its use in relation to goods which have been put on the market in theCommunity
under that trade mark by the proprietor or with his
consent."
"47 theconsent
may be implied, where it is to be inferred from facts and circumstances prior to, simultaneous with or subsequent to the placing of the goods on the market outside the EEA which, in the
view
of the national
court,
unequivocally demonstrate that the proprietor has renounced his right to oppose placing of the goods on the market within the EEA."
" must be expressed positively and that the factors taken into account in finding impliedconsent
must unequivocally demonstrate that the trademark proprietor has renounced any intention to enforce his exclusive rights."
"A rule of national law which proceeded upon the mere silence of the trademark proprietor would not recognise impliedconsent
but rather deemed
consent.
This would not meet the need for
consent
positively expressed required by
Community
law."
"The rules stated in Art. 10(3) of the Directive and Art. 15(3) of the CTMR is reflected in the provisions of Art.7(1) of the Directive and Art.13(1) of the CTMR relating to exhaustion of rights. The latter Articles provide for exhaustion of the rightsconferred
by registration of a trade mark in circumstances where goods are "put on the market under the trade mark by the proprietor or with his
consent".
I do not see how use of a trade mark in relation to goods "put on the market" in the United Kingdom "by the proprietor or with his
consent"
![]()
could
be sufficient, in principle, to satisfy the requirements for exhaustion without also being sufficient, in principle, to support a claim for protection defined by reference to use or to defeat an application for revocation on the ground of non-use. I therefore think it is appropriate to adopt and apply the same basic
concept
of use "by the proprietor or with his
consent"
in all three
contexts."
"Genuine use"
"219. I would now summarise the principles for the assessment of whether there has been genuine use of a trade mark established by the case law of theCourt
of Justice, which also includes
Verein
Radetsky-Order
v
Bundervsvereinigung Kamaradschaft 'Feldmarschall Radetsky' (C-442/07) [2008] ECR I-9223; [2009] ETMR 14 and Centrotherm Systemtechnik GmbH
v
Office for Harmonisation in the Internal Market (Trade Marks and Designs) (OHIM) (C-609/11) EU:C:2013:592; [2014] ETMR 7 , as follows:
(1) Genuine use means actual use of the trade mark by the proprietor or by a third party with authority to use the mark: Ansul [2003] R.P.C. 40 at [35] and [37].
(2) The use must be more than merely token, that is to say, serving solely to preserve the rightsconferred
by the registration of the mark: Ansul at [36]; Sunrider [2006] ECR I-4237 at [70];
Verein
[2009] ETMR 14 at [13]; Centrotherm [2014] ETMR 7 at [71]; Leno Merken [2013] ETMR 16 at [29].
(3) The use must beconsistent
with the essential function of a trade mark, which is to guarantee the identity of the origin of the goods or services to the
consumer
or end user by enabling him to distinguish the goods or services from others which have another origin: Ansul [2003] R.P.C. 40 at [36]; Sunrider [2006] ECR I-4237 at [70];
Verein
[2009] ETMR 14 at [13]; Silberquelle [2009] ETMR 28 at [17]; Centrotherm [2014] ETMR 7 at [71]; Leno Merken [2013] ETMR 16 at [29].
(4) Use of the mark must relate to goods or services which are already marketed or which are about to be marketed and for which preparations to secure customers are under way, particularly in the form of advertising campaigns: Ansul [2003] R.P.C. 40 at [37]. Internal use by the proprietor does not suffice: Ansul at [37];Verein
[2009] ETMR 14 at [14]. Nor does the distribution of promotional items as a reward for the purchase of other goods and to encourage the sale of the latter: Silberquelle [2009] ETMR 28 at [20][21]. But use by a non-profit making association can
constitute
genuine use:
Verein
at [16][23].
(5) The use must be by way of realcommercial
exploitation of the mark on the market for the relevant goods or services, that is to say, use in accordance with the
commercial
raison d'κtre of the mark, which is to create or preserve an outlet for the goods or services that bear the mark: Ansul [2003] R.P.C. 40 at [37][38];
Verein
[2009] ETMR 14 at [14]; Silberquelle [2009] ETMR 28 at [18]; Centrotherm [2014] ETMR 7 at [71]. *645
(6) All the relevant facts and circumstances must be taken into account in determining whether there is realcommercial
exploitation of the mark, including: (a) whether such use is
viewed
as warranted in the economic sector
concerned
to maintain or create a share in the market for the goods and services in question; (b) the nature of the goods or services; (c) the characteristics of the market
concerned;
(d) the scale and frequency of use of the mark; (e) whether the mark is used for the purpose of marketing all the goods and services
covered
by the mark or just some of them; (f) the evidence that the proprietor is able to provide; and (g) the territorial extent of the use: Ansul [2003] R.P.C. 40 at [38] and [39]; La Mer [2004] FSR 38 at [22][23]; Sunrider [2006] ECR I-4237 at [70][71], [76]; Centrotherm [2014] ETMR 7 at [72][76]; Reber EU:C:2014:2089 at [29], [32][34]; Leno Merken [2013] ETMR 16 at [29][30], [56].
(7) Use of the mark need not always be quantitatively significant for it to be deemed genuine. Even minimal use may qualify as genuine use if it is deemed to be justified in the economic sectorconcerned
for the purpose of creating or preserving market share for the relevant goods or services. For example, use of the mark by a single client which imports the relevant goods can be sufficient to demonstrate that such use is genuine, if it appears that the import operation has a genuine
commercial
justification for the proprietor. Thus there is no de minimis rule: Ansul [2003] R.P.C. 40 at [39]; La Mer [2004] FSR 38 at [21], [24] and [25]; Sunrider [2006] ECR I-4237 at [72]; Leno Merken [2013] ETMR 16 at [55].
(8) It is not the case that every provencommercial
use of the mark may automatically be deemed to
constitute
genuine use: Reber EU:C:2014:2089 at [32]."
"Still less are such acts calculated to create or maintain a share of the market for the goods."
And at paragraph 234, where he summarised hisconclusions,
he said:
"(vii)
To my mind, the key
consideration
is the nature of the activity relied upon. Even assuming that the sales of used
vehicles
![]()
constituted
use of the CTM, this simply amounted to recirculation of goods which had already been put on the market under the CTM long beforehand. Moreover, the average price achieved was a fraction of the price of a new taxi at the time (in the region of £30,000). This did not help to create or maintain a share of the market for
vehicles
bearing the CTM. On the
contrary,
production of those
vehicles
had long since ceased and been superseded by the production of later models. Moreover, even the sales of used
vehicles
dried up."
(i) Whether the mark amounts to realcommercial
exploitation of the mark on the market for the relevant goods or services, that is to say, use in accordance with the
commercial
raison d'κtre of the mark, which is to create or preserve an outlet for the goods or services that bear the mark.
(ii) Is the use of the mark deemed to be justified in the economic sectorconcerned
for the purpose of creating or preserving market share for the relevant goods or services.