Place of use – wrong standard?

Standard International Management v EUIPO - Asia Standard Management Services (The Standard) T-768/20
 

Introduction

In a rare case of the General Court going against the Board of Appeal’s decision, a luxury hospitality operator sought to retain their EUTM despite rendering the services outside the relevant territory.  
 
This case notes the importance of taking into account advertising and offers for sale which constitute acts of use in the assessment of the genuine use of an EU trade mark.
 

Background – Standard Hotels

Standard International Management LLC (SIM) operates a group of boutique hotels. The first Standard Hotel was opened in Hollywood and attracted a number of high profile investors including actors Leonardo DiCaprio, Cameron Diaz and Benicio del Toro.
 
In June 2009, Hotelsab LLC (predecessor in title to SIM) applied to register the following mark as an EUTM:

EUTM No. 008405243 “THE STANDARD”

This EUTM covered a wide range of goods and services including “Parking valet services” in Class 39; “Providing meeting/convention room facilities for educational conventions” in Class 41; “Hotel, restaurant, bar, cafe, cocktail lounge services; providing banquet and social function facilities for special occasions; catering services; personal valet services; providing meeting/convention room facilities for other type conventions” in Class 43; and “Barber shop/beauty salon services” in Class 44.
 
The EUTM achieved registration in 2011, but in October 2018 Asia Standard Management Services Ltd filed an application for revocation of the registered trade mark for all goods and services on the grounds of the mark not being put to genuine use.

First instance and appeal

The EUIPO Cancellation Division revoked the mark in its entirety. A subsequent appeal was dismissed by the Board of Appeal (BoA).
 
It is worth mentioning that, in both instances, SIM filed a very significant amount of evidence. In dismissing the appeal, the BoA found that the EUTM had not been put to genuine use, as hotel and ancillary services were not provided in the EU. The BoA found that the majority of sales took place in the US and that’s where the significant use of the mark hailed from. Furthermore, the BoA noted that some advertisements, promotional campaigns aimed at customers located in the European Union. However, the BoA considered that the evidence is insufficient to demonstrate that the mark had been put to genuine use in the EU. Furthermore, such use was irrelevant since the EUTM didn’t cover e.g. Class 35 advertising services and Class 39 travel agency services.
 

General Court - Proving genuine use in the EU

SIM disagreed with the BoA’s rationale and sought annulment of the decision before the General Court (GC).
 
The GC found that the BoA was wrong to find that the identified use of the EUTM did not constitute genuine use in the EU. The BoA confused the place of provision of the service with the place of use of the mark. Furthermore, just because SIM’s hotels and ancillary services were situated in the US didn’t mean that genuine use couldn’t take place in the EU. In that regard, and interestingly, the GC went on to cite Articles 9(3)(b) and (e) EUTMR (which deal with infringing uses of an EUTM), and found that an EUTM owner may prohibit a third party from offering for sale or using the sign on business papers and in advertising. By analogy, the GC found that such uses could also constitute genuine use of an EUTM. Therefore, the evidence provided by SIM including offers for sale and advertising, which were taking place in the EU, should not have been dismissed. Concludingly, the GC ruled that use outside EU cannot be relevant (Leno), but the acts of use of the contested mark seeking to promote and to offer for sale such services could count as genuine use of the trade mark (also in line with EUIPO Guidelines).
 
Furthermore, the GC dismissed the BoA’s finding that such use would equate to ‘advertising’, ‘booking’, ‘travel agency’ or ‘sale[s]’, which were not services covered under the EUTM. The evidence reflected use of the EUTM in connection with registered hotel and ancillary services, by means of advertisements and offers for sale.
 

Going deeper - place of use requirements have been met, but is this enough?

The EUIPO took an interesting position before the GC. It did acknowledge that the BoA wrongly confused the place of provision of the service with the place of use of the mark. However, it considered that this error was not sufficient to lead to the annulment of the contested decision, and contended that use of a mark for hotel services available outside the European Union required a “more sustained effort” on the part of SIM. I read this as an attempt to get the action dismissed on the basis that the evidence failed to meet “extent of use” requirements, even if “place of use” requirements were met. The GC swiftly dismissed this, since the reasoning of the BoA was rooted in an error, and it was not for the Court to review the evidence under a scope differing from that of “place of use”.
 
That being said, the case will be brought back to the BoA, and SIM may still face difficulty in ensuring that the EUTM remains protected. Some of the use correctly falls within the EU, but is this enough to demonstrate that SIM has seriously tried to acquire a commercial position in the EU, therefore satisfying “extent of use” requirements? The EUIPO’s position before the GC indicates that the answer to that is “no”.
 

Conclusion

While the decision offers some relief for brand owners and hotel operators in the hospitality sector, the General Court focused on the “place of use” requirement. Advertisements and offers for sale in the EU can meet this requirement, even if the services are ultimately rendered in a third country. However, it remains to be seen whether such use is sufficient to satisfy “extent of use” requirements. Therefore, the General Court’s decision should be taken with a pinch of salt.
 

Key takeaways

• Advertisements and offers for sale constitute acts of use in the assessment of the genuine use of an EUTM in the EU, even if the actual services are rendered outside the relevant territory.

• Moreover, these are not necessarily Class 35  advertising services. In this particular case, they were found to advertise hotel services in Class 43, and potentially ancillary services.

• The question remains whether this will be deemed a sufficiently “sustained effort”.

• Looking at the number of documents filed before the Cancellation Division and the BoA, it is clear that SIM has spent significant resources to maintain its position, and it is uncertain whether they will succeed in the end.

• Consider carefully whether the EU will be a territory where real and effective use of your mark will take place within 5 years of seeking to register an EUTM. Defending alternative positions will be very costly down the line.

For more information, please contact Associate Fernando Di Blasi or your usual Kilburn & Strode trade mark advisor.