In which way and to what extent does the trademark of a product, which basically is no longer actively sold on the market, have to be used in order to preserve the trademark’s rights in the sense of Section 26 German Trademark Act? Düsseldorf Regional Court extensively addressed this issue in its August 2, 2017 ruling (2a O 166/16) against car maker Ferrari, which was ordered to consent to the cancellation of its “Testarossa” trademark.
The “Testarossa” brand has an almost legendary sound, especially among car enthusiasts, and was used to designate Ferrari sports cars produced between 1984 and 1991. Other names were then used for subsequently developed vehicles of this type. And exactly that is now the problem that Ferrari is facing.
Ferrari referred to the fact that the trademark had been legitimately used by means of maintenance, repair, spare parts manufacture and supply, authenticity certification, and the trading with second-hand “Testarossa” branded vehicles. The regional court, however, held that it did not consider this to be use in a way that ensured that rights were maintained.
Maintenance, repair, and certification of authenticity is not deemed use of the trademark that would preserve its rights since Ferrari did not offer those services under the “Testarossa” trademark, but for vehicles of the “Testarossa” brand. The services themselves were performed under the name of “Ferrari Classiche.” There was therefore only non-infringing trademark designation given, but not trademark use.
In addition, trade in second-hand “Testarossa” vehicles is not considered use to ensure that rights are maintained, since the trademark rights for such vehicles that had previously been placed on the market by the trademark holder were exhausted, Section 24 Trademark Act. Also, the maintenance and authenticity certification of used vehicles of the “Testarossa” brand and their subsequent sale would not qualify as return to the market.
With regard to the trade in spare parts that Ferrari referred to, the regional court, in principle, acknowledged the existence of an activity that would ensure that rights are maintained, if this trade had been performed under the “Testarossa” name. Ferrari was unable to convince the regional court in the proceedings, however, that this occurred in the past to a serious extent. Ferrari had only sold a small number of spare parts as a “Testarossa kit” generating annual revenue of a few thousand euros. According to the regional court, the overwhelming portions of spare parts and repair services were, however, performed solely under the Ferrari umbrella brand, so that “Testarossa” was actually used only to designate a “marginal portion of Ferrari’s extensive offering.”
Ferrari was thereby said to have expressed that it did not base its “financial progress and its commitment to securing market share” on marked “Testarossa” branded goods and services.
Irrespective of whether or not the decision will be affirmed in the appellate instance, it shows once again that the holders of formerly well-known trademarks that still have considerable attraction and value, must strictly ensure that any use is not only symbolic, but proven to be serious. Otherwise, particularly in a sector such as the automotive industry, where brands may be revived even after decades, as demonstrated by Maybach, Mini, VW Beetle, and Bugatti, a painful loss of trademark rights may be looming.