Use your trade marks, or lose them: the Ferrari Testarossa case study
Ferrari has recently had its EU trade mark registration for ‘Testarossa’ revoked in relation to automobiles and toy cars (amongst other things).
The Ferrari Testarossa was first produced in 1984. ‘Testarossa’, which means ‘red head’ in Italian, is an allusion to the red-painted valve covers of the car’s mid-mounted, 12-cylinder engine. Regarded as a cultural icon of the 1980s, the car was popularised by the TV series Miami Vice, which featured an iconic white Testarossa driven by the Ferrari-loving Detective Sergeant James ‘Sonny’ Crockett.
The EU Intellectual Property Office’s Fifth Board of Appeal (the ‘Board’) ruled against the Italian sports car manufacturer in two separate decisions relating to applications for revocation filed by Kurt Hesse, head of a toy company named Autec AG. Under EU trade mark law, if a registered trade mark is not put to genuine use in the EU for a continuous period of five years in connection with the goods or services for which it is registered, an application can be made to revoke it.
No genuine use in connection with automobiles
The Board ruled that Ferrari had not put the ‘Testarossa’ mark to genuine use in connection with automobiles for a continuous period of at least 5 years. Ferrari had not sold any new cars under the ‘Testarossa’ mark during the relevant time period, the last production being more than 30 years ago.
Ferrari submitted evidence of resale of second-hand Testarossa cars by third parties. However, short of active involvement by Ferrari in the third-party resale process (e.g. by entering into licensing arrangements with third party resellers), these resales of second-hand cars would not amount to genuine use of the mark by Ferrari.
Ferrari also argued that the use of the ‘Testarossa’ mark in relation to replacement parts amounted to use in relation to automobiles. This argument was, however, rejected by the Board. Most of the parts on the market are second-hand parts taken from the ‘slaughter’ (i.e. dismantling) of other cars, and are sold by independent traders who do not act on behalf of Ferrari. Furthermore, the economic value of these parts (e.g. ‘Testarossa Oil Filter’ for EUR 30.16) is much lower and disproportionate compared to that of an automobile. In addition, the use of ‘Testarossa’ in relation to such parts is merely descriptive: it simply informs consumers that the part in question is intended for Testarossa cars, but does not indicate who the part originated from.
No genuine use in connection with toy cars
Ferrari was not able to show genuine use in connection with toy cars, either.
There was no evidence that Ferrari made its own toy cars. Ferrari submitted evidence of licensing contracts with various toy manufacturers which purportedly showed that Ferrari had granted these manufacturers licences to use the ‘Testarossa’ mark in relation to the manufacture of scale model cars. However, the contracts did not contain any references to the ‘Testarossa’ mark or scale model cars.
The Board was unwilling to give Ferrari the benefit of the doubt as to whether the toy cars from these manufacturers were made under licence from Ferrari. It looked at the history of the toy car market, and observed that it was originally built by independent producers of toy cars, with their own trade marks and reputation in making scale models of cars, using the car’s trade mark only in a descriptive sense (i.e. as an indication that the toy car is a scale miniature of the car, rather than as an indication that the toy car originates from or is licensed by the car manufacturer). It is only recently that car manufacturers have entered this market by licensing their trade marks to toy manufacturers and producing toy cars as merchandising goods.
The Board also noted previous case law where Autec AG (the toy company headed by the applicant for revocation) had used Opel’s ‘Blitz’ logo on the grill of its toy cars, and was found not to have infringed Opel’s trade mark as the use of the logo on toy cars was considered to be merely descriptive in nature. All things considered, the Board was not willing to assume that the relevant consumer, seeing a scale model car, would think that it is made under licence by the original car manufacturer.
Takeaways
These two decisions against Ferrari show that an active trade mark licensing strategy can not only generate additional revenue (through the payment of royalties by licensees), but can also be very helpful in the context of defending a mark against revocation for non-use.
Owners of registered marks for legacy products who wish to maintain their registrations (registered marks are formidable deterrents to would-be infringers, and are generally easier to enforce than unregistered rights in trade marks) may wish to enter into licensing arrangements with trusted third parties via properly-drafted licence agreements.
How we can help
Irwin Mitchell's team of experienced trade mark lawyers and attorneys can help you register, protect and exploit your intellectual property. We can help with trade marks registered in the UK, the European Union or worldwide. Further information visit our website here.
