“Some use” of trademark by bankrupt company does not solve lack of use issue

In Jobo Limited v Riccadomus Group SRL (Court of Rome, 12th June 2012) the court determined that certain activities by a bankruptcy trustee did not constitute "use" of the bankrupt company’s trademark. Activities which were deemed insufficient included renewing the trademark and sending cease-and-desist letters to purported infringers.

Facts
The interim order stemmed from a case on the merits regarding the original request by Jobo Limited to determine the description and extent of use of goods bearing the IMCO WATERLESS trademark, with the possibility of issuing an injunction and other penalties. By means of the interim proceedings, Jobo sought to ascertain its trademark rights and obtain a declaration of revocation for non-use of the Italian trademark by defendants RD SRL and Riccadomus SRL. The defendants counterclaimed that Jobo’s trademark should be cancelled according to other grounds under Italian law.

Since use of the trademark for the same class of goods was not in dispute, the interim judge focused on the arguments relating to cancellation and revocation.

The case involved two competing identical trademarks for the same category of goods: “kitchenware and utensil sets”. In 1975 the predecessor to Nathesy Srl was granted the right to the Italian trademark IMCO WATERLESS. In 2005 Nathesy filed for bankruptcy and the Italian mark was subsequently sold in 2011 to Futursaving srl, which in turn licensed it to the defendants, RD and its commercial partner Riccadomus.

Since 1979 Jobo has owned the international trademark IMCO WATERLESS, which was originally registered with the Benelux Office for Intellectual Property.

In 2011 Jobo’s licensee brought an action against Futursaving to revoke the Italian trademark for non-use for a five-year period (2005 to 2010). Subsequently, Jobo joined the action against Futursaving, and as an additional claim sought a declaratory judgment that the trademark was owned by Jobo.

Decision
From a procedural point of view, the court observed that Jobo had made two assertions: 

  • A request for a declaration of revocation of the Italian trademark. 
  • The argument that if there was late use by RD and Riccadomus, this did not rehabilitate the trademark and thus did not affect the registration and use of the international mark by Jobo.

The court discussed at length the fact that the Italian trademark was not used for a period of five years from the date of Nateshy’s bankruptcy filing in October 2005 until October 2010. Indeed, the court placed great weight on the fact that the bankruptcy trustee reported the lack of any tangible goods sold or commercial activities carried out by Nateshy, as well as the non-existence of a contract for the sale or transfer of the trademark.

In addition, the court noted that within this five-year period, there had been correspondence in the form of cease-and-desist letters from the bankruptcy trustee to other parties that used the trademark. However, the court held that this correspondence did not constitute actual use of the trademark by the trustee. As a result, there was no constructive use of the trademark by the owner. The court stated that the same was true regarding activities related to the renewal of the registration of the trademark. It also concluded that the bankruptcy of the trademark holder did not satisfy the “legitimate reason” excuse for lack of use to prevent revocation under Italian law.

Further, the court rejected the defendants’ counterclaim that Jobo's international trademark must be cancelled. The court applied the provisions of Italian law which state that a trademark cannot be cancelled if the senior trademark expired more than two years (or three years for a collective mark) previously, or could be considered to be revoked for non-use before the commencement of the initial cause of action – as in the present case.

The court further noted that the bankruptcy trustee for Nateshy had made no claim against Jobo or its international trademark at any time during the five-year period commencing from the date of the declaration of bankruptcy. Thus, the defendants had acquiesced by tolerating Jobo's use of the trademark.

In conclusion, the court stated that the defendant’s bankruptcy, as well its lack of financial means, could not be regarded as “proper reasons” for non-use to avoid revocation of the trademark. Furthermore, the cease-and-desist letters sent by the bankruptcy trustee, as well as the renewal of the trademark, could not be regarded as adequate distinctive use of the trademark.

Comment
This decision is important for trademark practitioners and owners in Italy, where a trademark owner's bankruptcy or other insolvency procedure as a valid reason for non-use has been subject to inconsistent decisions. It is understood in European law that circumstances which arise outside the trademark owner’s control constitute proper reasons for non-use. This decision is important because it confirms that a lack of financial means, including bankruptcy, is treated as an objective wilful act – as it is often an undesired consequence of the trademark owner's conduct – and is not a proper reason justifying non-use. Further, certain minimal activity by the bankruptcy trustee does not change the outcome.


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