Ferrari Loses its Trademark to a Toy Company in Germany

Written By: Ashka Vora

The iconic brand ‘ferrari’ has lost a legal battle to protect their exclusive right to use the mark ‘Testarossa’ in Germany.  In its recent decision, the German Court has ruled that ‘Ferrari’ no longer has exclusive trademark rights on their most popular ‘Testarossa’ cars.

Ferrari´s German trade mark ‘Testarossa’ was registered in 1990 for Land, air and water vehicles and parts thereof.  On 03.12.2015, Autec AG, a German Toy Company aspiring to use the term ‘Testarossa’ for their products ranging from e bikes, bicycles to electric shavers, launched an action  for cancellation of Ferrari’s registration on the ground that Ferrari was no longer using the ‘Testarossa’ mark and hence they should no more be able to prevent others from using it. As per German Trademark Act, anyone can demand for the deletion of a registered trademark if the trademark is not used for five years.  Ferrari in its defense argued that they were still using the mark for after sale maintenance services, repair services, certification services and spare parts manufacturing. Hence, they should be able to retain their exclusive rights. The court refused the argument of Ferrari. The court observed that the maintenance and repair services are provided primarily under the brand name ‘Ferrari’ and not ‘Testarossa’.  Manufacturing of spare parts could be considered as a proper use for saving their trademark but the court held that Ferrari failed to prove that the scope of their spare part business was sincere. By looking at the quantum, frequency and overall circumstances of selling spare parts in Germany, the court could not conclude that by manufacturing and selling spare parts, ‘Testarossa’ would like to secure the original market opened up by their car models.  The court observed that mere symbolic use of trademark only to retain the rights given under trademark cannot be permitted. On this reasoning of lack of genuine use of mark, the court ruled to cancel the trademark registration of Ferrari. This decision reinforces the fundamental principle of trademark law i.e. in order to enjoy exclusive rights on the brand name, one has to use it actively and mere registration is not enough.

This decision is an warning for owners of all marks that are no longer in genuine commercial use. The decision demonstrates that the entities should be quite vigilant in actively maintaining their trademark.  As of now the Italian Sports Car Makers do not have exclusive right on ‘Testarossa’ brand name in Germany. But the matter is not over yet. Ferrari has the option to go for appeal where it will have to prove actual genuine use of the mark to prevent it from getting cancelled. There are other tricky questions too which will have to be addressed with time. Since ‘Testarossa’ is a popular name, it will be important to check whether the sale of ‘E-bikes’ under that name would confuse consumers to believe that they are associated with Ferrari brand. It will be interesting to see the future trends, twists and turns in this case. But one thing is quite certain now i.e. no matter how big or successful the entity is at one point of time, without genuine and active use of the trademark, one may even lose it. ')}