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Genuine Use of Coffee: Coffee based or Coffee flavored?

April 18, 2022
Registered as Trademarks

By Ananyaa Banerjee and Titiksha Sinha

Monster Energy Co. is an energy drink company based in Corona, California, whose two registered marks (MONSTER and MONSTER ENERGY in Class 30) were revoked by the Cancellation Division in October, 2019 after revocation was filed by Frito-Lay Trading Company, an American subsidiary of PepsiCo, contending that the marks had not been put to ‘genuine use’ within a continuous period of five years. The same was upheld by the Second Board of Appeal of EUIPO dated October 05, 2020 and recently in November, 2021, the General Court (European Union) also dismissed Monster Energy Co.’s Application[1].

The case is an interesting read as it deals with the principle of classification of a finished product in one class and its exception when the product is a ‘multipurpose composite object’ having multiple functions. Further, it again brings to light the requirement of “genuine use” for protection of trade mark in the European Union.

What is genuine use of a trademark?

What is “Genuine Use”? Genuine use of a trade mark is where the mark is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services; genuine use does not include token use for the sole purpose of preserving the rights conferred by the mark.[2]

Facts of the Case

Subject Matter- Monster Energy’s Trade Marks (hereinafter referred to as “contested marks”) in the EUIPO:

Trade Mark Registration No. Registration Date Class/Goods
MONSTER 9492158 April 19, 2011 Class 30: Coffee based beverages and coffee based beverages containing milk.

Class 32: Non-alcoholic beverages, namely energy drinks and energy drinks flavored with coffee, all enhanced with vitamins, minerals, nutrients, amino acids and/or herbs

MONSTER ENERGY 9500448 April 19, 2011 Class 30: Coffee based beverages and coffee based beverages containing milk

 

Revocation filed by Frito Lay & Decision-

Grounds of Revocation:

Revocation was filed on April 25, 2017 contending that the contested marks had not been put to ‘genuine use’ within a continuous period of five years in respect of the goods in Class 30 i.e., “coffee-based beverages”.

 

Decision:

  • Cancellation Division: Revoked the contested marks in respect of Class 30, as Monster Energy was able to prove use only in connection with energy drinks under Class 32. The decision was appealed by Monster Energy.
  • Second Board of Appeal of EUIPO: Dismissed the appeal and upheld the decision of Cancellation Division on two main grounds:
  • The list of ingredients as given on Monster Energy’s ‘x-presso monster’ goods were not commonly used in coffee-based beverages in Class 30, but were found in energy drinks in Class 32.
  • Presence of the wording ‘coffee energy’ on the goods indicated that the real function and/or purpose of the goods is to serve as coffee-flavored energy drinks, and not coffee based.

After the Second Board of Appeal of EUIPO dismissed the Appeal, Monster Energy then took the matter to the General Court.

Monster Energy’s Arguments & Reasoning of the General Court:

Issue 1: Board of Appeal failed to regard that a product can be correctly classified and put to genuine use, in more than one class if it is of composite nature.

Arguments in Support:

  • A multi-purpose composite object may be classified and put to genuine use, in all the classes that correspond to any of its functions or intended purposes. For example, an auto-injector pen with adrenaline named ‘epipen’ was classified in both Class 5 and 10. Thus, a consumer might purchase ‘x-presso monster’ goods because he/she wishes to consume a “coffee-based” drink in Class 30, and another might purchase it because he/she wishes to consumer an “energy drink” in Class 32.
  • The goods are “coffee-based” under Class 30 as the term ‘x-presso’ is a play on the term ‘espresso’, the term ‘coffee’ is written in bold on the front, product description states ‘espresso coffee drink with milk’ and coffee is one of the ingredients.

Reasoning of the General Court:

  • The general principle is that dual classification of the same product is not possible, until and unless it’s a multi-purpose composite object, having various functions/purposes. A multi-purpose composite object consists of a number of components, each of which have an independent and distinct market value and can be marketed individually. In the present case however, the ‘x-presso monster’ goods are inseparable homogenous products which have only one function i.e., to serve as ‘energy drinks’ in Class 32 (even though coffee-flavored), and are not multi-purpose composite object.
  • With respect to the indications on the goods, the court held that the word ‘coffee’ is written along with the word ‘energy’ on the packaging, the description ‘espresso coffee drink with milk’ is placed on the back in a non-prominent position in small characters, and the ingredient coffee in itself, one of the many ingredients that the drink contains. Therefore, the same will be interpreted by the consumers as a reference to the flavoring used in the energy drinks, and not as an indication that the same as coffee-based.

 

Issue 2: Board of Appeal gave undue weight and significance to the shared characteristics of the goods under Class 30 with the energy drinks in Class 32.

Arguments in Support:

  • Board of Appeal attributed more weight to the fact that ‘x-presso monster’ goods contain L-carnitine, taurine etc., rather than the fact that they also contain coffee.
  • Board of Appeal related the term ‘high caffeine content’ given on the packaging to energy drinks, rather than corresponding to ‘coffee-based’ drinks.
  • Board of Appeal emphasized on ‘coffee energy’ but did not refer to the term ‘expresso coffee drink with milk’.

 

Reasoning of the General Court:

  • The ingredients in ‘x-presso monster’ goods are same as commonly found in energy drinks rather than traditional coffee-based beverages.
  • ‘High caffeine content’ is not required for coffee-based beverages from a regulatory point of view.
  • ‘Coffee energy’ clearly highlights the benefits of the goods as ‘energy drink’, whereas the term ‘expresso coffee drink with milk’ is not prominent and given at the back.
  • Coffee-flavored energy drinks are found on the same shelves as other energy drinks of various flavors i.e., mango, kiwi etc.

 

Issue 3: Board of Appeal did not take the manufacturing process into account.

 

Argument in Support:

The goods contain 1.3% coffee extract yet, the Board of Appeal has wrongly complained that it is not clearly indicated whether products are brewed or manufactured.

 

Reasoning of the General Court:

Board of Appeal cannot be criticized for having referred to the difference between goods which are brewed, like coffee-based beverages, and those which are not, like energy drinks in which various ingredients such as L-carnitine or taurine are combined. The function and purpose of the ‘x-presso monster’ goods meet the definition of an energy drink given in Encyclopedia Britannica.

 

Decision of the General Court:

 

In light of the reasoning given above, the Application was dismissed and Monster Energy was ordered to pay the costs.

Conclusion

It was confirmed that Monster Energy’s ‘x-presso monster’ goods are coffee-flavored and not coffee-based and therefore, their genuine use lies in Class 32 and not Class 30. Since Monster Energy failed to provide use of the ‘x-presso monster’ goods in Class 30 i.e., coffee-based drinks, the registration for the same was revoked. Monster Energy had wrongfully argued their product to be a ‘multi-purpose’ one, despite it being a homogenous product. A better understanding and clarity of their goods composition could have saved Monster Energy from this ordeal. Therefore, it is important to know whether your product has multiple functions, or a single function. The same will help in proving genuine use of the trade mark registration for the goods applied for, and also in understanding the ramifications of not being able to do so.

If we compare, the concept of “genuine” use in Europe is similar to the concept of “material” use in India, though in practice, India is much more flexible. In India, the “use” of the trade mark may be non-physical but must be material, that is meaningful[3]. Thus, in Europe where the use must be genuine and more merely a token use, there is no such threshold set in India to establish the use of a registered trade mark. In Kabushiki Kaisha Toshiba v Toshiba Appliances Co. & Ors[4], the Hon’ble Supreme Court of India had held that, mere advertising without actually promoting any goods or services cannot amount to genuine use of the trade mark. However, if a registered trade mark is used on the internet or on a website, it may be considered genuine usage if it is used in conjunction with the ability to supply products or services in India. In this case, despite a government ban that prevented goods from being imported into India, a single instance of Toshiba advertising in India, combined with the company’s global reputation, trademark registrations for the TOSHIBA brand, and marketing, gave the company’s trademark immunity from cancellation.

Titiksha Sinha, Associate at S.S. Rana & Co. has assisted in research of this article.

[1]https://curia.europa.eu/juris/document/document.jsf;jsessionid=D28D4A324A9DD07C62AC5AE29C72FCD6?text=&docid=249041&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=1093340

[2] Sunrider v OHIM – Espadafor Caba (VITAFRUIT), T‑203/02, EU:T:2004:225

[3] Hardie Trading v. Addison Paints, Appeal (civil)  5307-11 of 1993

[4] CIVIL APPEAL N1O. 3639  OF 2008, (Arising out of SLP (C) No.5542 of 2006)

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