England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
MR JUSTICE BLACKBURNE

		Royal Courts of Justice Strand, London, WC2A 2LL
		29 July 2005

Lord Justice Mummery :

Introduction

1. This appeal is about the application of the "genuine use" provisions in articles 10 and 12 of the Trade Marks Directive EEC/89/104 (the Directive), which were implemented in section 46 of the Trade Marks Act 1994 (the 1994 Act). At an earlier stage in these proceedings and in advance of rulings by the European Court of Justice on the interpretation of the Directive, Jacob J identified the question as what amount and kind of use will suffice to prove that a mark has been put to genuine use? See [2002] FSR 790 at 801.
2. The question arises in proceedings for the revocation of a registered mark (LABORATOIRE DE LA MER) on the ground of non-use of the mark for a period of five years or more prior to the revocation proceedings. The use relied on by the registered proprietor of the mark was importation into the United Kingdom of a modest quantity of goods bearing the mark, but, for reasons explained later, there is no evidence that the goods bearing the mark ever reached consumers or end-users of the goods in the UK market. I have found the question whether there was "genuine use" of the mark a difficult one, on which my views have fluctuated in the course of the appeal.
3. On 22 March 2003 the Court of Justice delivered judgment in Ansul BV v. Ajax Brandbeveiliging BV [2005] Ch 97 (Ansul) ruling on the interpretation of articles 10(1) and 12(1) of the Directive. The judgment came (a) after Dr WJ Trott (acting for the Registrar of Trade Marks) had heard the proceedings for revocation of the registered trade mark and, having observed (paragraph 37) that it was not "an easy decision to make," dismissed them (19 June 2001) on the ground that the use was real and enough to amount to genuine use of the mark during the relevant period; and (b) after Jacob J made his order on the hearing of the appeal from the Registrar referring a number of questions of interpretation to the Court of Justice under Article 234 of the Treaty (19 December 2001). The reference was made on the ground that a ruling of the Court of Justice was necessary to enable the court to give judgment on the appeal. The rulings requested related to the factors which should be taken into account when deciding whether a mark had been put to "genuine use " in a Member State within the Directive. Jacob J made it clear that, left to himself, he would decide that this was a case of genuine use and would dismiss the appeal accordingly.
4. On 27 January 2004 the Court of Justice (Third Chamber) gave its decision on the reference by Jacob J: [2004] FSR 38. The rulings were included in a reasoned order (Article 104(3) of its Rules of Procedure) rather than in a judgment, as the Court of Justice thought that the answers to the questions could be clearly deduced from its judgment in Ansul.

This appeal

5. This appeal is brought by Laboratoires Goëmar SA(Goëmar) from the order of Blackburne J dated 21 December 2004. The hearing of the appeal from the Registrar was resumed after the reasoned order of Court of Justice. It took place before Blackburne J, as Jacob J had been appointed to the Court of Appeal in the interval between his reference and the response of the Court of Justice.
6. Blackburne J allowed the appeal by La Mer Technology Inc (a US company which is part of the Estee Lauder Cosmetics Group) against the Registrar's decision dismissing its proceedings for revocation of Goëmar's mark. Blackburne J revoked Goëmar's registered trade mark as of 27 March 1998 for non-use. The trade mark (No B 1,402,537-LABORATOIRE DE LA MER) had been applied for on 10 October 1989 and on the Register since 7 February 1992 for "perfumes and cosmetics containing marine products; all included in Class 3."
7. Blackburne J concluded that there had been no "genuine use" of the mark in the United Kingdom within section 46 of the 1994 Act by Goëmar during the relevant period of five years before the application for revocation. In brief, he held that genuine use of the mark required that it come to the attention of the end-users and consumers during the relevant period; that the acts of importation during the relevant period by an independent importer into the United Kingdom of goods bearing the mark did not by themselves amount to genuine use of the mark; and that the proven use by the registered proprietor during the relevant period was not sufficient to create a market share for the goods protected by the mark.
8. This appeal is brought with the permission of Neuberger LJ given on 11 February 2005

The facts

9. Goëmar is a French company specialising in seaweed products from its base in St Malo. It appointed a small enterprise with which it had no connection, Health Scope Direct Ltd (formerly Meadow Breeze Ltd) of the Old Brewery, Banff on the Moray Firth in Scotland as its agent in the United Kingdom. The agent traded as "Health Scope Direct" until it ceased business and was struck off the register of companies on 21 October 1997.
10. Limited sales of the relevant products bearing the mark were made by Goëmar pursuant to five separate repeat orders placed by Health Scope Direct. The orders amounted to £800 in all. The sales took place over the six month period between 14 November 1996 and 16 May 1997. There were five deliveries of goods. The bulk of the deliveries were made on or about April 1997. The products imported were within the class 3 registration. They were packed in containers bearing the mark with recommended retail prices of roughly between £5 and £30 each.
11. There was no evidence of any sales of the goods to members of the public as consumers or end-users. The agent had been making preparations to sell the products by appointing members of the public as sub-agents selling via private parties, based on the "Tupperware " model, but there was no evidence that this method of sale to the public ever got off the ground.

The rulings of the Court of Justice

12. Articles 10 and 12 of the Trade Marks Directive EC/89/104 and section 46 of the 1994 Act govern the revocation of trade marks on the ground of non-use. As an implementing provision section 46 must be construed so as to be compatible with the Directive, as interpreted by the Court of Justice. A mark is liable to revocation if, within 5 years of registration, it has not been "put to genuine use" in the United Kingdom in relation to the relevant product.
13. Article 10 states-

"1. If, within a period of five years following the date of the completion of the registration procedure, the proprietor has not put the trade mark to genuine use in the Member State in connection with the goods or services in respect of which it is registered, or if such use has been suspended during an uninterrupted period of five years, the trade mark shall be subject to the sanction provided for in this Directive, unless there are proper reasons for non-use."

14. Article 12 states that a trade mark shall be liable to revocation if it has not, within a continuous period of five years, been put to genuine use in the Member State in connection with the goods in respect of which it is registered and there are no proper reasons for non-use. The evident purpose of the power of revocation for non-use is to prevent the Register from being cluttered up with unused marks, which would obstruct later traders wishing to use the marks and would create unnecessary conflict and confusion between the registered trade marks of traders and manufacturers of goods.
15. As the provisions of the Directive were implemented in similar terms in section 46 of the 1994 Act, I shall follow the example of Jacob J in working from the Directive rather than the 1994 Act. The relevant provisions must be given the same meaning in both measures.
16. The questions referred to the Court of Justice by Jacob J sprang from doubts voiced before him about the interpretation of "put to genuine use" in article 10: in particular, what criteria or factors should be taken into account in deciding whether a mark has been put to genuine use, what types of use can be considered and specifically whether importation by a single importer could count as genuine use.
17. The Court of Justice in Ansul and in the reasoned order in this case described the approach that should be followed by national courts in assessing whether there has been genuine use of the mark in the relevant period. Judgments of the Court of Justice on references under article 234 are not, of course, like the judgments of national courts which decide cases and from which it is possible to extract a ratio. I mention this obvious feature of the interpretative rulings of the Court of Justice because during argument there was the advocates' natural tendency to scrutinise closely the language of particular passages in Ansul and in the reasoned order which suited their respective arguments. The judgments of the Court of Justice on article 234 references must be read in a wider context. The accumulation of rulings develops a body of jurisprudence on the interpretation of EC legislation. This differs from the common law method of building up a body of case law from binding judicial precedents. The judgments of the Court of Justice should not be read or applied too literally. The Court of Justice does not decide the cases coming before it. Its judgments are part of a continuing conversation between the Court of Justice and national courts. The legal learning generated by this process flows, after the fashion of a roman fleuve, from the Court of Justice into the national courts of Member States.

Ansul

18. Let us begin with Ansul, to which the Court of Justice looked in answering the questions posed in the La Mer reference. The Court of Justice said (paragraph 35 of Ansul) that "Genuine use means actual use of the mark." This is not altogether surprising, as trade marks are made for and matter in markets, in which goods and services are bought and sold and in which their different origins need to be identified and distinguished.
19. The Court of Justice expounded the concept of genuine use:

"36. "Genuine use" must therefore be understood to denote use that is not merely token, serving solely to preserve the rights conferred by the mark. Such use must be consistent with the essential function of a trade mark, which is to guarantee the identity of the origin of the goods or services to the consumer or end–user by enabling him, without any possibility of confusion, to distinguish the product or service from others which have another origin.

37. It follows that "genuine use" of the mark entails use of the mark on the market for the goods or services protected by the mark and not just internal use by the undertaking concerned. The protection the mark confers and the consequences of registering in terms of enforceability vis-a-vis third parties cannot continue to operate if the mark loses its commercial raison d'etre, which is to create and preserve an outlet for the goods or services that bear the sign of which it is composed, as distinct from the goods or services of other undertakings. Use of the mark must therefore relate to goods or services already marketed or about to be marketed and for which preparations by the undertaking to secure customers are under way, particularly in the form of advertising campaigns. Such use may be either by the trade mark proprietor or, as envisaged in article 10(3) of the Directive, by a third party with authority to use the mark.

38. Finally when assessing whether there has been genuine use of the trade mark, regard must be had to all the facts and circumstances relevant to establishing whether the commercial exploitation of the mark is real, in particular whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark.

39. Assessing the circumstances of the case may thus include giving consideration , inter alia, to the nature of the goods or service at issue, the characteristics of the market concerned and the scale and frequency of use of the mark. Use of the mark need not therefore always be quantitatively significant for it to be deemed genuine, as that depends on the characteristics of the goods or service concerned on the corresponding market."

Reasoned order in La Mer

20. The questions in La Mer, which were, of course, framed without the benefit of the subsequent judgment in Ansul, sought rulings about the extent of use, the amount of use and types of use that can be considered when deciding whether a mark has been put to genuine use in a Member State. The Court of Justice considered the questions together on the basis of paragraphs 35 to 39 of Ansul (see paragraphs 18 and 19 of La Mer) and continued:

"20. It follows from those considerations that the preservation by a trade mark proprietor of his rights is predicated on the mark being put to genuine use in the course of trade, on the market for the goods or services for which it was registered in the Member State concerned.

21. Moreover, it is clear from para. [39] of Ansul that use of the mark may in some cases be sufficient to establish genuine use within the meaning of the Directive even if that use is not quantitatively significant. Even minimal use can therefore be sufficient to qualify as genuine, on condition that it is deemed to be justified, in the economic sector concerned, for the purpose of preserving or creating market share for the goods or services protected by the mark.

22. The question whether use is sufficient to preserve or create market share for those products or services depends on several factors and on a case by case assessment which is for the national court to carry out. The characteristics of those products or services, the frequency or regularity of the use of the mark, whether the mark is used for the purpose of marketing all the identical products or services of the proprietor or merely some of them, or evidence which the proprietor is able to provide, are among the factors which may be taken into account.

23 Similarly, as emerges from paras.[35]-[39] of Ansul set out above, the characteristics of the market concerned, which directly affect the marketing strategy of the proprietor of the mark, may also be taken into account in assessing genuine use of the mark.

24. In addition, use of the mark by a single client which imports the products for which the mark is registered can be sufficient to demonstrate that such use is genuine, if it appears that the import operation has a genuine commercial justification for the proprietor of the mark."

The judgment of Blackburne J

21. The judge held that the proven use of the mark in the five years preceding the application for revocation fell short of genuine use. He summarised his reasons for that conclusion in two paragraphs.

"39. The use relied upon is the purchase, by five deliveries over a period of five months, of £800 worth of products bearing the mark by the intended UK distributor with a view to their sale to the public. There is nothing, however, to indicate that the products were ever offered for sale (let alone sold) to members of the public (as end-users or customers) or that other steps (whether by advertising or otherwise) were taken to bring to the public's attention the existence of the mark as a means of distinguishing these products from others having another origin so as even to start to create for them a share in the market for cosmetic products of this or a similar kind.

40. The fact that £800 worth of products bearing the mark were imported into the United Kingdom and, it seems, paid for by the importer who, whether as agent or as distributor, was to put them on the market with a view to their sale to end-users, but, in the event, never did so, does not qualify as "genuine use." It no more qualifies for genuine use than it would if the importation relied upon had been by a subsidiary or branch of Goëmar established in this country. As Mr Mellor observed, such use has all the attributes of internal use. Internal use does not qualify as "genuine use" precisely because it does not expose the goods (or services) carrying the mark to the relevant market for them so as even to start the create or maintain a share in that market for such goods or services. The fact that in paragraph 24 of the reasoned Order, the European Court of Justice said that "use of the mark by a single client which imports the products, for which the mark is registered can be sufficient to demonstrate that such use is genuine" does not determine the issue in Goëmar's favour. Consistent with its invariable practice the Court was careful not to deal with the facts of this case, merely to provide guidance on the applicable law. Whether in a given case there is genuine use is for the domestic court to decide in the light of the European Court's guidance. In any event, the Court went on in paragraph 24 to add "if it appears that the import operation has a genuine commercial justification for the proprietor of the mark." I agree with Mr Mellor that that qualification is to be read as a reference back to the general requirements (concerned with the maintenance or creation of a market etc) set out in Ansul and referred to earlier in the reasoned order"

Discussion

Token use

22. Token use of a mark does not count as genuine use. Contrary to the tenor of some of his excellent submissions Mr James Mellor, appearing on behalf of La Mer, has never contended that this was a case of token use by Goëmar, "serving solely to preserve the rights conferred by the mark."
23. Although token use of a mark is obviously not genuine use, it would be illogical to assert that every case of non-token use qualifies as genuine use. Ansul and the reasoned order in this case are clear that, even if the use is not token, it is still necessary to consider other factors in order to decide whether or not the use of the mark is genuine. For example, internal use by the registered proprietor may not be token or sham, but it will fail to qualify as genuine use because it is internal only.

Internal use

24. Internal use by the registered proprietor does not count as genuine use. Mr Mellor contended that the use relied on by Goëmar was akin to internal use . I am unable to agree. The sales by Goëmar to Health Scope Direct and the importation of the products into the United Kingdom were events external to Goëmar. There was no suggestion in the evidence that the transactions were otherwise than at arm's length. Although the quantities involved were modest and although there was no evidence of sales on by the importer to consumers and end-users, that does not mean that the use of the mark in the United Kingdom was internal or akin to internal use by Goëmar. The result of the sales was that goods bearing the mark were in different ownership in different hands in another country.

Use by single Importer

25. The question of the use of the mark by an importation by a single importer into a Member State was specifically raised in the reference, as it was a special feature of the facts in this case. The answer given in paragraph 24 of the reasoned order was that such use "can be sufficient to demonstrate that such use is genuine." The act of importation of goods can constitute putting the goods bearing the mark on the market in the country to which they are imported. The crucial question is what type or kind of market use is in fact sufficient in the particular case. I now turn to the question of use of the mark on the market for the goods bearing the mark. This is the narrow, but critical, difference between the parties.

Market use

26. The sources of the disagreement are the references in Ansul ...paragraph 36) to "the consumer or end user," to "use of the mark on the market for the goods" (paragraph 37) and (paragraph 38) to whether the use is viewed as warranted in the economic sector concerned "to maintain or create a share in the market for the goods or services protected by the mark." The reasoned order (paragraph 22) refers to the use which is "sufficient to preserve or create a market share for those products."
27. Mr Tritton criticised the judge's reasoning and conclusions on this point. The essence of his argument was that the sales of the products bearing the mark made to a person who imported them into the United Kingdom were sufficient to count as genuine use. No quantitative or qualitative threshold had to be met. What mattered was the purpose of the registered proprietor in the sales of the goods bearing the mark to the UK importer. Goëmar's purpose was to use Health Scope Direct as an outlet to the market in the United Kingdom for the goods bearing the mark. Why else, he asked, would Health Scope Direct be importing the goods unless it was concerned with trading in the goods in the UK?
28. Mr Tritton submitted that the judge erroneously applied the rulings of the Court of Justice. He pointed out that Ansul was not concerned with the issue arising here, namely the sufficiency of non-token use of a mark and whether the mark came to the attention of the end user or consumer. Ansul did not decide that the mark must have come to the attention of the end user or consumer. The issue in Ansul was whether, in deciding whether there has been genuine use, the use of the mark is made in order to create or preserve an outlet, as distinct from use for the purpose of maintaining the rights in the mark. That was relevant to the issue whether the use of the mark was real use of the mark.
29. In this case the object of Goëmar in relation to the use of the mark in the United Kingdom was "in order to" create an outlet. That was sufficient to qualify as genuine, being commercially justified in the market concerned. The Court of Justice had not held that it was necessary to create a retail outlet for the consumer or end user. It was sufficient to have the purpose of doing so in relation to the use that was made. That purpose was present in the sale and importation of the goods into the United Kingdom.
30. Against those contentions Mr Mellor argued that Blackburne J correctly applied the interpretation of the Directive by the Court of Justice. The relevant market share related to consumers and end users of the goods. The mark was never used by the proprietor during the relevant five year period in the retail market in the United Kingdom. In those circumstances there was no actual or real use of the mark at all in the United Kingdom. The judge correctly concluded that there was no genuine use and was right to revoke the registration.

Conclusion

31. After some hesitation I have reached a different conclusion from Blackburne J on the application of the Directive, as interpreted in Ansul and La Mer, to the rather slender facts found by Dr Trott.
32. Blackburne J interpreted and applied the rulings of the Court of Justice as placing considerably more importance on the market in which the mark comes to the attention of consumers and end users of the goods than I think they in fact do. I agree with Mr Tritton that the effect of Blackburne J's judgment was to erect a quantative and qualitatitive test for market use and market share which was not set by the Court of Justice in its rulings. The Court of Justice did not rule that the retail or end user market is the only relevant market on which a mark is used for the purpose of determining whether use of the mark is genuine.
33. Trade marks are not only used on the market in which goods bearing the mark are sold to consumers and end users. A market exists in which goods bearing the mark are sold by foreign manufacturers to importers in the United Kingdom. The goods bearing the La Mer mark were sold by Goëmar and bought by Health Scope Direct on that market in arm's length transactions. The modest amount of the quantities involved and the more restricted nature of the import market did not prevent the use of the mark on the goods from being genuine use on the market. The Court of Justice made it clear that, provided the use was neither token nor internal, imports by a single importer could suffice for determining whether there was genuine use of the mark on the market.
34. There was some discussion at the hearing about the extent to which Goëmar was entitled to rely on its intention, purpose or motivation in the sales of the goods bearing the mark to Health Scope Direct. I do not find such factors of much assistance in deciding whether there has been genuine use. I do not understand the Court of Justice to hold that subjective factors of that kind are relevant to genuine use. What matters are the objective circumstances in which the goods bearing the mark came to be in the United Kingdom. The presence of the goods was explained, as Dr Trott found, by the UK importer buying and the French manufacturer selling quantities of the goods bearing the mark. The buying and selling of goods involving a foreign manufacturer and a UK importer is evidence of the existence of an economic market of some description for the goods delivered to the importer. The mark registered for the goods was used on that market. That was sufficient use for it to be genuine use on the market and in that market the mark was being used in accordance with its essential function. The use was real, though modest, and did not cease to be real and genuine because the extinction of the importer as the single customer in the United Kingdom prevented the onward sale of the goods into, and the use of the mark further down, the supply chain in the retail market, in which the mark would come to the attention of consumers and end users.
35. This result is compatible with the various post-Ansul decisions on genuine use cited to the court. They included decisions of the Court of First Instance (see, for example, VITAFRUIT T-203/02 8 July 2004, VITAKRAFT T-356/02 6 October 2004 and HIPOVITON T-334/01 8 July 2004); the decision of the Appointed Person (Mr Richard Arnold QC) in POLICE TM [2004] RPC 35; and of the Board of Appeal in SAND CTM R 40/2004-1 6 September 2004 and PICKWICK CTM R 335/2004-1 28 February 2005.
36. I do not find it necessary to express any concluded view on an argument advanced by Mr Tritton that article 10(2)(b) of the Directive regarding export from the United Kingdom of goods bearing the mark would be rendered nugatory and ineffective by Blackburne J's decision that, for genuine use, the mark must have come to the attention of the consumer or end user.

Result

37. I would allow the appeal, set aside the order for the revocation of the registration of the mark and restore the order of the Registrar.

Lord Justice Neuberger:

38. I agree. However, because there is a dispute as to the effect of the reasoning of the European Court of Justice, and because the outcome of this appeal might strike some people as a little surprising in light of the facts, I wish to add a little to what Mummery LJ has said.
39. Following the guidance given by the European Court in Ansul and La Mer, there is a substantial measure of common ground between the parties as to the nature of the "genuine use" of a mark required by Article 10 of the Trademarks Directive. It is agreed that use which is merely internal to the registered proprietor's undertaking (or, presumably, to that of his licensees or agents), or use which is "merely token, serving solely to preserve the rights conferred by the mark" (to quote from paragraph [36] of the judgment in Ansul) will not suffice. What divides the parties is whether use which is neither internal nor token can nonetheless be excluded from the concept of "genuine use", either because it has not come to the attention of end-users and consumers, or because it is insignificant in the context of the relevant market.
40. The guidance given by the Court of Justice in paragraphs [36] to [39] of its judgment in Ansul is set out in full in paragraph [19] in the judgment of Mummery LJ. To my mind, that guidance leads to the conclusion that any use of a trademark which is "consistent with [its] essential function" as described in the second sentence of paragraph [36], but not where that use is "token" or "internal", will constitute "genuine use" within Article 10.
41. In his attractive submissions, Mr Mellor suggested that, on a fair reading of the four paragraphs in Ansul, the Court of Justice was saying that, in addition to the use not being token or internal, it had to be substantial or at least significant, and/or it had to be communicated to end-users of the goods or services in respect of which the mark was registered.
42. Although the four paragraphs in Ansul are not entirely easy to analyse in all respects, I do not think that they justify the imposition of either requirement. So far as the second sentence of paragraph [36] is concerned, it does no more than summarise the fundamental purpose of a trademark, thereby explaining why token or internal use is insufficient to amount to "genuine use". That point is then expanded in paragraph [37]. Paragraph [38], and the first sentence of paragraph [39], are in my view concerned with giving guidance to domestic tribunals when they are called upon to decide, in a particular case, whether the use of a trademark is genuine or whether it is internal or token. They do not, to my mind, impose an additional requirement of substantial, or even significant, use; that is, I think, tolerably clear from the structure and wording of the four paragraphs. In particular, while the point is to some extent one of impression, and it is dangerous to be semantically analytical, I have in mind the first three words of paragraph [37], the use of the word "assessing" in paragraph [38], and the closing sentence of paragraph [39].
43. Subject to one point, I believe that what was said by the Court of Justice in paragraphs [20] to [24] in La Mer (set out in paragraph [20] of the judgment of Mummery LJ) supports this conclusion. In particular, in paragraph [21], it is made clear that "minimal" use will not of itself disqualify the use from being "genuine".
44. It is true that in paragraph [22] in La Mer, the Court of Justice suggested that the question was "whether use is sufficient to preserve or create market share", which, at least at first sight, might suggest that, in order to be genuine, the use of the mark must be such as to achieve a significant market share. However, it seems to me that such a reading is plainly inconsistent with what was said elsewhere by the court in Ansul and in La Mer itself. Furthermore, as Mr Tritton points out, the words "sufficient to preserve or create market share" are perfectly capable of being read as meaning use which is sufficient for the purpose of preserving or creating market share. In the light of the observations of the Court of Justice in Ansul and elsewhere in La Mer, I consider that that would indeed be the correct reading of those words.
45. The notion that the use of the trademark must be substantial or significant before it qualifies as "genuine" seems to me to run into two difficulties in any event. The first is that it does not involve attributing the word "genuine" its natural meaning, although this point of course potentially substantially weakened by the fact that the equivalent word used in the text in Article 10 in other languages may carry with it a slightly different meaning.
46. Secondly, once one imposes a requirement of significance or substantiality, it becomes potentially difficult, time-consuming, and expensive to decide whether, in any particular case, that requirement is satisfied. In this connection, Mr Tritton made a fair point when he suggested that the introduction of a test of significant use could lead to detailed arguments about the precise nature and extent of the market in which a particular trademark is to be used, as well as a detailed enquiry in many cases as to the precise nature and extent of the use of the particular mark over the relevant 5 year period. I do not regard that as a particularly desirable out come.
47. Although the use of the instant mark within the jurisdiction can be said to be close to exiguous, I do not think it could be characterised as de minimis. Even if it could be so characterised, I do not consider that that concept would be a useful or helpful one to invoke or apply, even if it had not been effectively ruled out by the European Court.
48. I turn to the suggestion, which appears to have found favour with the Judge, that in order to be "genuine", the use of the mark has to be such as to be communicated to the ultimate consumers of the goods to which it is used. Although it has some attraction, I can see no warrant for such a requirement, whether in the words of the directive, the jurisprudence of the European Court, or in principle. Of course, the more limited the use of the mark in terms of the person or persons to whom it is communicated, the more doubtful any tribunal may be as to whether the use is genuine as opposed to token. However, once the mark is communicated to a third party in such a way as can be said to be "consistent with the essential function of a trademark" as explained in paragraphs [36] and [37] of the judgment in Ansul, it appears to me that genuine use for the purpose of the directive will be established.
49. A wholesale purchaser of goods bearing a particular trademark will, at least on the face of it, be relying upon the mark as a badge of origin just as much as a consumer who purchases such goods from a wholesaler. The fact that the wholesaler may be attracted by the mark because he believes that the consumer will be attracted by the mark does not call into question the fact that the mark is performing its essential function as between the producer and the wholesaler.
50. In the present case, the use of the mark can fairly be described as exiguous, and it might not have been surprising if Dr. Trott had concluded that the use was not "genuine", on the basis that it was no more than token. However, he did not so find, the Judge was not invited to make such a finding, and, very properly, Mr Mellor has not suggested that such a conclusion is one which he could advance before us. In any event, it is fair to record that, at least on the evidence that I have seen, there is nothing to suggest that the use of the mark, slight as it was, amounted to token use.
51. Finally, I should mention the Judge's suggestion that the use of the mark relied on in this case was effectively internal, and therefore could not qualify as genuine. As Mummery LJ has explained, the use of the mark relevant for present purposes related to five separate occasions, and in relation to a small quantity of goods. However, that does not assist on the question of whether or not the use was internal. The essential point is that the occasion was a transaction between the proprietor of the mark as seller of the goods, which were sold and shipped pursuant to an arm's length apparently bona fide sale, to an independent wholesaler in this country. Such a sale cannot, in my view, be characterised as a transaction internal to the proprietor's organisation.
52. In these circumstances, I have reached the same conclusion as Mummery LJ, with whose reasoning I respectfully agree.

Mrs Justice Black:

53. I agree.