Europe’s top court has ruled that businesses need only use a Community Trade Mark (CTM) in one EU member state in order to maintain the validity of its protection throughout the entire EU.

Under EU law, if a CTM is not utilised for five years then it may be revoked. A Dutch court referred a question to the European Court of Justice as to whether a company’s use of a CTM only within the Netherlands could constitute ‘genuine use’ and so validate the EU-wide protections which accompany a CTM and prevent its revocation.

In giving a wide interpretation to the term ‘genuine use’, the European Court stated that a CTM is genuinely used “when it is used in accordance with its essential function and for the purpose of maintaining or creating market share within the European Community for the goods or services covered by it”.

The overriding principle is whether there is any “real commercial exploitation” of the CTM, and not simply whether there is a cross-border element to its use.

Commercial Implications

The decision means that businesses can enjoy European-wide protection for their brand despite only operating in a relatively minor capacity.

This will undoubtedly be of advantage to SMEs and start-ups who wish to protect their business throughout Europe, but who opt to grow organically and may not yet be operating on a European scale.

Contributed by John Magee.