Modest Use Not Enough in Intimate Apparel Case

When it comes to fending off OHIM proof of use challenges, modest use may not be enough. This is the message from the CFI's recent decision in Sonia Rykiel création et diffusion de modèles v OHIM (Cuadrado SA) (Case T-131/06). In Sonia, proof of very low sales of ladies' slips and petticoats over 13 months in the midst of the relevant 5-year period was regarded as no more than token use. Avoiding the opponent's mistakes may help others relying on small amounts of use to sustain earlier rights in CTM proceedings.

Sonia Debuts

Cuadrado S.A., a Spanish company, had relied on an earlier Spanish word mark for SONIA for articles of clothing in opposing a CTM for a logo depicting the stylised word SONIA above the words SONIA RYKIEL for bags and clothing in Classes 18 and 25.
The applicant challenged Cuadrado to prove use, but the request was overlooked and the opposition was upheld in Class 25. On appeal, the case was referred back to the Opposition Division to request the proof of use, which it duly did. The Opposition Division found use of SONIA for ladies' slips and petticoats, but decided, on reflection, that there was no likelihood of confusion. Subsequently, the Board of Appeal reversed the finding on confusion and upheld the opposition in Class 25.
The applicant appealed to the Court of First Instance, arguing that Cuadrado had not proved genuine use for any goods and that the opposition should, therefore, have been dismissed.

Modest Use Assessed

Cuadrado had filed minimal evidence of use, comprising copies of only 9 invoices from the relevant 5-year period, all dated within 13 months of each other in the midst of the relevant period. It also filed copies of packaging and labelling and a related printing invoice from outside the relevant period.

The sales evidenced were very low, comprising only 85 items of ladies' slips and petticoats at a value of €432. The opponent had filed no further evidence indicating its overall volume of sales during the relevant period. The copies of packaging and labelling in themselves did not address this failing and did not, in any event, prove that there had been genuine use of the mark during the relevant period. The invoice relating to the printing of packaging and labelling was irrelevant, as it was dated outside the relevant period and did not go to the issue of use for the registered goods.

The Court observed that even very modest use could constitute genuine use. It noted in particular the decision in LA MER (Case T-418/03) where a small amount of use over 33 months, based on just 10 invoices, was regarded as genuine use. However, the Court observed that in that case, the low sales volume had been offset by regular use over an extended period. In this case, Cuadrado could not benefit from such considerations, since its own very low sales took place over a much more concentrated period of 13 months.

In the context of the goods in this case, Cuadrado's sales were particularly low. Ladies' undergarments were not normally expensive or luxury goods, but were rather everyday goods sold at reasonable prices. Taking this into account, a very low level of sales like that evidenced by Cuadrado was not, in the Court's view, sufficient to create or maintain market share in those goods in Spain as required by the ECJ's decision in Ansul (Case C-40/01).

Comment

The use in this case was so small that some might have thought the CFI's finding was a foregone conclusion. However, the fact that both the Opposition Division and the Board of Appeal differed from the CFI demonstrates that where minimal use is concerned, the outcome may be far from certain.

Cuadrado did not file any evidence relating to its overall volume of sales, and the CFI therefore had only the evidenced 85 unit sales to go by. If Cuadrado had made more sales overall during the relevant period, it would have done well to have filed some evidence of them to support the nine invoices. It could, for example, have filed a supporting declaration from a director or other company officer exhibiting company accounts or otherwise attesting to overall sales volume during the relevant period. Had it done so, the invoices may have been regarded as merely a sample of invoices relating to a larger number of sales over the relevant period. As it was, though, the invoices represented the only sales that the CFI could assume had been made in that period.
The fact that Cuadrado's invoices were concentrated over a 13-month period rather than spread out over the entire 5-year period, or at least over a substantially longer portion of it, was also undermining. It is clear from LA MER that low sales can be offset by length and regularity of use over an extended period. Where sales were in fact concentrated in a particular period, then supporting evidence explaining why will be important, together with other evidence tending to show that even such concentrated use is sufficient, in the context of the relevant market, to create or maintain market share in the goods.

It is clear that a right owner must take more care over proving minimal use in order to dispel the inherent doubts that it represents genuine use capable of creating or maintaining market share. Mark owners who find themselves in this position would do well to scour their records for sample invoices covering, as far as possible, the whole of the relevant 5-year period, and to ensure that their evidence includes documents relating to overall sales volume as well as information on the market in the goods if it is argued that small sales are sufficient. Keeping an archive for important brands including sample invoices and dated examples of packaging and labelling, as well as annual turnover and advertising figures broken down by country, is a big step toward making a little go a long way.