Trade marks: Use on the internet, principle of territoriality and requirement of genuine use: an inevitable tension
In an appeal decision dated 12 February 2021, the Barcelona Court of Appeal reversed a first instance judgment which cancelled on grounds of non-use Spanish trade mark registration No. 3064579 for “Ikonik hotels”, registered for advertising (class 35) and hotel reservations services (class 43). The appeal decision revoked the cancellation and held that the trade mark had been genuinely used.
- In June 2018, High Tech Hotels & Resorts, S.A. (the “Plaintiff”) brought non-use cancellation proceedings against Agincourt 2008, S.L. (the “Defendant”) seeking cancellation of the Spanish Ikonik trade mark registration (registered in June 2013) on grounds of non-use, which had been used to challenge an EU trade mark application filed by the Plaintiff at the EUIPO.
- Between June 2013 and June 2018 (the “Relevant Period”), the Defendant had not run any hotel with the Ikonik brand in Spain, but was running a hotel with said brand in Puebla (Mexico).
- The Defendant belongs to the Hotusa Group, which owns and runs hotels under different brands, and was planning to launch a new hotel chain under the Ikonik brand. The first hotel being in Puebla (Mexico), and the second one to be launched in Salamanca (Spain) in January 2019.
- In spite of the delay in launching the Ikonik brand, the Defendant kept on investing in the Salamanca project and paying instalments to the architects responsible for the construction of the hotel building.
- Within the Relevant Period, (i) the Hotusa website included the Ikonik brand among the Group’s brands; (ii) the Ikonik Puebla Hotel had its own website (www.ikonikhotelpuebla.com) and active accounts on Facebook, Twitter and Instagram; (iii) the Defendant advertised the Ikonik Puebla Hotel through the Google Adwords referencing service; (iv) the accommodation services of the Ikonik Puebla Hotel were offered to the Spanish consumers through different lodging reservation platforms, such as Atrápalo or Booking; and (v) the Defendant used the Ikonik brand in its stand in the International Tourism trade fair “FITUR”.
The first instance
The first instance judgment allowed the cancellation action on grounds of non-use arguing that the Defendant had not submitted conclusive evidence of genuine use of the sign in connection with the relevant services and within the Relevant Period. According to the first instance judge, because the hotel with the Ikonik brand was not located in Spain, but in Mexico, the Defendant should have submitted evidence of the degree or intensity of the advertising use from Spain within the Relevant Period.
The appeal decision and its conclusions
The Court of Appeal followed the relevant factors set out by the CJEU in Minimax and pointed out that it was not possible to prescribe a quantitative threshold by which to determine whether use was genuine or not; when it serves a real commercial purpose, even minimal use of the trade mark can be sufficient to establish genuine use (C‑416/04 P Sunrider and T-409/07 Acopat). The Court also deemed the works performed by the architects as a preparatory act of use and emphasised that the acts of advertising may be deemed as genuine use if followed by the commercialisation of the services under the trade mark in the Relevant Period and territory.
Further, the Court made interesting remarks regarding the interpretation of acts of use on the Internet and its tension with the principle of territoriality and the requirement of genuine use.
With regards to genuine use, the Court held use would be relevant if the acts of advertising on the Internet are followed by acts of offering services on the Internet with the sign, and the fact that the Ikonik Puebla Hotel was also being commercialised through platforms should be deemed a relevant factor, even if said use might be deemed as use with the consent of the rights holder (CJEU, Judgment 2 July 2020, C-684/19, mnk advokaten).
As for the territoriality aspect, the Court stressed that in determining whether the use of the Ikonik sign on the Internet had a commercial effect in Spain, the following circumstances should be considered: (i) the Defendant had shown that it was doing, or had undertaken significant plans to do, business in Spain; (ii) the connection of an offer of services with the Spanish consumer, with prices in euros, and (iii) the fact that the offers were made in Spanish, the official language of the whole territory of Spain.