On June 8, 2017, the European Court of Justice (‘ECJ’) (Case C‑689/15), decided that the requirement of right- prevailing/genuine use of individual EU trademarks registered by legal entities, or associations licensing its trademarks, ensure that certain quality standards–either humanitarian or technical–be met.
This decision will impair the business model of these certifying entities in Europe as their current EU trademark portfolio is likely not fit for the new standards set by the ECJ.
Verein Bremer Baumwollbörse (‘VBB’) is holder of a visual trademark depicting a cotton flower, which VBB licences to manufacturers of cotton products as a sign of quality of cotton fibres used. German textile manufacturer W. F. Gözze Frottierweberei used VBB’s cotton flower on its products without being a VBB licensee. VBB filed infringement proceedings with the District Court of Duesseldorf and Higher District Court of Duesseldorf. The Higher District Court of Duesseldorf referred two questions to the ECJ, in particular, whether the use of a trademark as quality statement by third parties can constitute ‘use’ as a trademark as required under the EU Trade Mark Regulation No 207/2009.
In a nutshell, the ECJ held in its decision that such use of a trademark by members or licensees does not meet the requirement of right-prevailing use of traditional/individual trademarks and—if the licensor itself does not use the trademarks for the goods or services applied for—these trademarks are subject to cancellation.
According to the ECJ, the “genuine use”’ requirement of a trademark within the meaning of Regulation No 207/2009 means that such trademark has to be used in accordance with its essential function, which is to guarantee the identity of origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services. The requirement of use in accordance with the essential function of indicating origin reflects the fact that, while a mark may also be used to fulfill other functions, such as that of guaranteeing the quality of that product or service or that of communication, investment or advertising, it is nevertheless subject to the sanctions provided for in that regulation where it has not been used in accordance with its essential function for an uninterrupted period of five years.
The ECJ held that where the use of a trademark, despite certifying the composition or quality of the goods or services, does not guarantee to consumers that the goods or services come from a single undertaking under the control of which they are manufactured or supplied and which, consequently, is responsible for the quality of those goods or services, such use is not made in accordance with the function of indicating origin. Even the fact that the respective license agreement may enable the trademark holder to verify that its licensees meet its standards only implies, at most, that the trademark holder certifies a certain quality (eg, the quality standard like materials used), which is not sufficient for a right-prevailing use.
The new “EU certification mark”
In that regard, it is important news that as of October 1st, 2017, the EU will offer a new type of trademark, the “EU certification mark”, which allow a certifying institution or organisation to permit adherents to the certification system to use the mark as a sign for goods or services complying with the certification requirements. There will be a new segment ‘EU certification marks’ introduced to the Regulation No 207/2009:
Article 74a – EU certification marks
- An EU certification mark shall be an EU trade mark which is described as such when the mark is applied for and is capable of distinguishing goods or services which are certified by the proprietor of the mark in respect of material, mode of manufacture of goods or performance of services, quality, accuracy or other characteristics, with the exception of geographical origin, from goods and services which are not so certified.
- Any natural or legal person, including institutions, authorities and bodies governed by public law, may apply for EU certification marks provided that such person does not carry on a business involving the supply of goods or services of the kind certified.
Article 74b – Regulations governing use of the EU certification mark
- An applicant for an EU certification mark shall submit regulations governing the use of the certification mark within two months of the date of filing.
- The regulations governing use shall specify the persons authorised to use the mark, the characteristics to be certified by the mark, how the certifying body is to test those characteristics and to supervise the use of the mark. Those regulations shall also specify the conditions of use of the mark, including sanctions.
- The Commission shall adopt implementing acts specifying the details to be contained in the regulations referred to in paragraph 2 of this Article. Those implementing acts shall be adopted in accordance with the examination procedure referred to in Article 163(2).
Article 74e – Use of the EU certification mark
Use of an EU certification mark by any person who has authority to use it according to the regulations governing use referred to in Article 74b shall satisfy the requirements of this Regulation, provided that the other conditions laid down in this Regulation with regard to the use of EU trade marks are fulfilled.
Read the complete ECJ judgment of June 8, 2017 (Case C‑689/15)
Read the full text of REGULATION (EU) 2015/2424 implementing the EU certification mark.