9 April 2020
Brands update - April 2020 – 6 of 8 Insights
UK and EU trade mark registrations are vulnerable to revocation if they have not been put to genuine use on the goods and services for which they are registered within any continuous period of 5 years from the date of registration, unless there are proper reasons for non-use. This provision ensures that the Register does not become cluttered with trade marks that have not been used.
One question is whether the COVID-19 pandemic could constitute a proper reason for non-use of a trade mark sufficient to stave off a revocation action. Here we will see that the answer varies depending on the particular circumstances of the case.
The concept of proper reasons is interpreted quite narrowly in the UK and EU. The reason or 'obstacle' must be beyond the control of the trade mark owner and have a sufficiently direct relationship to the trade mark so as to make use impossible or unreasonable. Obstacles such as manufacturing difficulties, recessions, funding difficulties and business disagreements are generally considered insufficient, as they are a normal part of doing business and can usually be overcome with a change of strategy.
Conversely, national restrictions on marketing, import and export restrictions (such as trade embargos), force majeure events, and prolonged illnesses (for individuals) are all likely to be considered proper reasons. Similarly, where the trade mark owner has done all it can to try to overcome the obstacle in question – such as determinedly pursuing regulatory approval for a product or putting considerable resource into developing a new manufacturing process – proper reasons are often found.
In one case, a trade mark owner had made considerable efforts to try to license its trade mark, but the continuous threat of revocation proceedings had made it impossible for it to do so. This was considered a proper reason for non-use. On the whole, proper reasons are usually held where there is an abnormal or unforeseeable situation in the industry or market, or some temporary but serious disruption affecting the trade mark owner's business which is beyond its reasonable control.
However, it should be remembered that proper reasons for non-use will only be found if it is shown that, in the absence of the obstacle, there could and would have been genuine use of the trade mark in the relevant 5 year period. This is because 5 years is already considered a generous period of time in which to use a mark, particularly given modern commercial practices. Proper reasons will generally not be found where a trade mark was not used for a considerable period of time before the obstacle arose, or the trade mark owner had done little to prepare for use or to try to overcome the alleged obstacle until late in the 5 year period.
COVID-19 will obviously generate numerous obstacles for trade mark owners in putting their marks into use. Problems may arise in the development, manufacturing, approval, supply and marketing of products, or the development and launch of new services. Given the gravity of the pandemic and its impact, a much greater array of obstacles will potentially be considered proper reasons for non-use.
Difficulties in licensing a product or a service and financial difficulties (given their severity) might well be considered sufficient. Much will depend on the precise obstacle, what (if anything) the trade mark owner has done to try to overcome it and, critically, what preparations for use had been made before the pandemic arose.