A recent ruling of the European Court of Justice is set to allow business owners to maintain the validity of protection of a Community Trade Mark (CTM) throughout the EU, by its use in a single member state.

Under EU law, if a CTM is not utilised for five years, it may be revoked. In 2011, 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 a judgment delivered in December 2012, the European Court gave a wide interpretation to the term ‘genuine use’. It 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 beneficial to SMEs and start-ups in the food and beverage sector who wish to protect their brand throughout Europe, but who opt to grow organically and who may not yet be operating on a European scale.

Contributed by: John Magee