Authors
Chris Benson

Christopher Benson

Senior counsel

Read More
Simon Jupp

Simon Jupp

Senior associate

Read More
Authors
Chris Benson

Christopher Benson

Senior counsel

Read More
Simon Jupp

Simon Jupp

Senior associate

Read More

9 April 2020

Brands update - April 2020 – 2 of 8 Insights

Are second hand sales use of a registered trade mark?

  • IN-DEPTH ANALYSIS

Aiwa Co. Limited v Aiwa Corporation

This case relates to an appeal from a decision of a hearing officer of the UKIPO.

The marks at issue all consist of the word AIWA in various styles. The products covered by the registrations can be summarised as being "audio, radio and television apparatus, and other electronic apparatus". The marks were formerly owned by Sony Corporation, but there have been no retail sales of new goods using that mark since 2008.

In 2017, Aiwa Limited was set up in order to re-establish the brand after having acquired the marks from Sony Corporation. A different company, Aiwa Corporation, filed its own application to register an Aiwa mark in July 2017. Aiwa Limited opposed the registration based on its already registered marks.

Aiwa Corporation then commenced revocation proceedings based on non-use of Aiwa Limited's registered marks, and relied on the same non-use in defence of the opposition proceedings.

The main question before the hearing officer was whether or not non-use had been established or, more precisely, whether use with the consent of the proprietor had been established in the relevant period. He considered whether the evidence that he received of second-hand sales of Aiwa products amounted to use (in the trade mark sense).

The hearing officer came to the conclusion that no genuine use with the consent of the owner had been shown in respect of any of the claimed goods and services so far as second-hand sales were concerned. He ordered the revocation of Aiwa Limited's marks and dismissed the opposition against Aiwa Corporation's new mark.

Aiwa Limited appealed.

Appeal

The Court dismissed the appeal.

First, it held that the hearing officer's decision could not stand.

It is possible to prevent the registration of a mark on the basis of an existing registered mark which has been registered for 5 years or more if the "use condition" is met. This is met if:

"within the period of 5 years ending with the date of publication of the application the earlier trade mark has been put to genuine use in the UK by the proprietor or with his consent in relation to the goods or services for which it is registered."

The hearing officer had automatically assumed that the absence of the proprietor's consent to the second-hand sales meant that there was no genuine use of the mark. He had failed to consider whether there was consent by implication, and he had not considered any other factors relevant for genuine use set out in case law guidance (London Taxi case).

Genuine use and use by the proprietor or with the proprietor's consent were two separate elements that should have been considered separately. The Court held that the hearing officer's decision could not stand and both elements fell to be reconsidered.

Consent and second-hand sales

It was accepted by the Court that implied consent was sufficient for the purposes of the relevant statutory provisions involved. However, consent to the original marketing of the products under the AIWA brand in the UK did not amount to implied consent to second-hand sales.

Consent gave rise to an exhaustion of rights conferred by the registered mark, but it did not play a part in defining the lawful quality of use after that.

Genuine use

It was not possible to come to a general conclusion as to whether second-hand sales of branded goods amounted to genuine use of a mark for the purposes of revocation or preserving the mark in opposition proceedings. Each case depends on its facts.

Mr Justice Arnold (as he was then) summarised the principles on "genuine use" in the London Taxi case. The Court applied those principles in the present case. It considered the most significant for the purposes of this case were:

  • Whether the mark amounted to real commercial exploitation of the mark on the market for the relevant goods or services and created or preserved an outlet for the goods or services that bore the mark.
  • Whether the use of the mark was justified in the economic sector concerned for the purpose of creating or preserving a market share for the relevant goods or services.

The limited evidence Aiwa Limited had provided as to advertisement and second-hand sales in the relevant 5 year period did not demonstrate a level and nature of activity that was capable of maintaining a market share for goods bearing the mark or preserving an outlet for the goods or services that bore the mark. That was not the purpose of the use or the effect of what had happened.

The advertisement and sales were advertising and selling goods that had been marketed some time before when the original purpose was fulfilled, and there was no longer a relevant market share to maintain.

Therefore, the second-hand sales did not amount to genuine use.

Call To Action Arrow Image

Latest insights in your inbox

Subscribe to newsletters on topics relevant to you.

Subscribe
Subscribe

Related Insights

paint-pots
Brands & advertising

easyJet opposes Easy Nurse at the UKIPO

13 July 2020
IN-DEPTH ANALYSIS

by Christopher Benson

Click here to find out more
crayons
Brands & advertising

The General Court looks at distinctiveness of the XOXO mark

13 July 2020
QUICK READ

by Christopher Benson

Click here to find out more
newspapers
Brands & advertising

Superman knocks out Superzings in EUIPO opposition

30 June 2020
QUICK READ

by Christopher Benson

Click here to find out more