Ferrari in the fast lane in Testarossa trade mark tussle

In a decision that will be particularly welcomed by brands in the automotive sector, the European Court of Justice (CJEU) has ruled in favour of Ferrari in the long-running battle over its “Testarossa” trade mark, based on ongoing use of the iconic mark in relation to second hand vehicles and spare parts.[i]  

This ruling explores some important issues on the meaning of “genuine use”, offering some reassurance to trade mark owners that iconic brands can continue to be protected even after production has been discontinued.    

Background

Between 1984 and 1996, Ferrari sold sports cars under the “Testarossa” name and produced a further one-off version in 2014. It is one of the most mass-produced Ferrari models in the history of the Italian manufacturer. To protect the iconic brand, Ferrari had registered figurative trade marks for “Testarossa” covering various goods/services in Class 12, including for vehicles and their parts.

Under the Trade Marks Directive, a trade mark is liable to revocation (i.e. cancellation and loss of rights) if it has not been put to genuine use for a continuous five-year period and there are no proper reasons for non-use.[ii]

In 2017, an application was made in Germany for revocation of Ferrari’s two “Testarossa” trade marks owing to lack of genuine use between 2011 and 2016. During that period, Ferrari had used the marks to identify replacement parts and accessories of high-priced luxury sports cars previously sold under those trade marks. Ferrari also claimed that it had resold used vehicles bearing those marks.

The Regional Court of Düsseldorf initially held that Ferrari had not made genuine use of the marks and that they should therefore be revoked. Ferrari appealed to the Higher Regional Court, which subsequently referred a number of questions to the CJEU for preliminary ruling.

CJEU decision

Ruling in favour of Ferrari, the CJEU set out guidance on a number of issues concerning the scope of “genuine use”. Most notably:

1. A trade mark should be regarded as having been put to “genuine use” in connection with all the goods in the category it has been registered “if it has been used only in respect of some of those goods, such as high-priced luxury sports cars, or only in respect of replacement parts or accessories of some of those goods.” This applies unless it is apparent that a consumer who wished to buy those goods would perceive them as an “independent subcategory” of goods for which that mark was registered. 
2. Genuine use of a trade mark can be established even if the relevant goods are only produced and sold in small numbers.
3. A trade mark is capable of being put to genuine use by its owner when that owner resells second-hand goods put on the market under that mark.
4. The burden of proving that the trade mark has been put to genuine use still lies with the owner.

The case will now return to the referring German court for final ruling. However, the CJEU’s acknowledgment that "very high-priced luxury sports cars" was not an independent subcategory suggests that Ferrari’s use of the Testarossa marks in relation to spare parts for luxury cars will be sufficient to demonstrate genuine use across the whole class of goods.

Comment

This decision is particularly relevant to the automotive sector, providing welcome clarification that rights in iconic car brands can be maintained even after widespread production has stopped, with a relatively low threshold needed to demonstrate “genuine use”. The impact of this decision will also extend to other luxury brand owners, indicating that trade marks for discontinued or legacy products may continue to be valid where the owner continues to provide small numbers of goods in part of a registered category, or sells second-hand goods under the mark.

However, brand owners will nevertheless need to remain vigilant once the relevant five-year period has elapsed and the notion of “use it or lose it” remains an area of risk for historic trade marks.