Uncertainty ahead for quality signs

The CJEU issued a decision (C-689/15) concerning the genuine use of individual trade marks used as so-called “quality signs” (ie, signs which indicate a certain quality in a product). The decision held that such marks must also be used as indicators of origin in order for use to be genuine. This provides much-needed clarity for rights holders whose quality signs are protected as individual trademarks for certain goods or services, rather than registered as certification marks. Especially since some jurisdictions (including Germany) do not recognise certification marks.

Background

The decision must be seen in the context of the recent introduction of the EU certification mark in the recent overhaul of EU trademark law, as well as current registration practice for quality signs in countries which do not recognise national certification marks.

In Germany, due to the lack of a category for certification marks, quality signs are often registered as individual and/or collective trademarks. These trademarks are available not only for specific goods or services but also for certification services.

CJEU decision

The referring Appeal Court of Düsseldorf had raised the question of whether the use of an individual mark as a quality sign could constitute genuine use in relation to the goods for which it is used. CJEU found that generally the use of an individual EU trademark as a quality sign could not be considered genuine use. However, this would change if the trademark also guaranteed to consumers that the designated goods originated from a specific undertaking under whose control the goods were manufactured and which was responsible for their quality – as this serves to indicate the origin of the goods. In such a case the trademark owner would have exclusive rights over the mark if there was likelihood of confusion, in accordance with Article 8(1)(b) of the EUTMR.

CJEU argued that genuine use of an individual trademark requires a mark to be used as an indicator of origin. Therefore, it was necessary that the trademark guaranteed the identity of origin of the marked goods or services to the consumer by enabling him or her, without confusion, to distinguish the goods or services from others of a different origin. This main function must not be confused with other possible functions (eg, ensuring quality). In this respect, a mutual application of the provisions regarding collective and quality marks was not permitted.

Consequently, neither genuine nor trademark-like use could be approved in accordance with the essential function of an individual trademark if it was used for the sole purpose of acting as a label of quality for the designated goods rather than guaranteeing, in addition, that the goods originated from a single undertaking under whose control they were manufactured and which was responsible for their quality.

CJEU further clarified that insufficient monitoring of the certified quality by the rights holder did not amount to deception of the public in terms of Article 7(1)(g) of the EUTMR. This was only the case if the sign per se was capable of deceiving consumers.

Conclusion

CJEU differentiates between individual trademarks on the one hand, and collective and certification marks on the other with regard to the relevant requirements of genuine or trademark-like use. This is striking since the decision was rendered under the old EU trademark regime which had no specific provisions on certification marks. However, the Court’s explicit reference to the new Article 74 (EU Collective Marks) EUTMR means that the decision remains relevant to the reformed regime.

The decision could have significant consequences for owners of quality signs which are registered as individual (rather than certification) trademarks for certain goods. While these trademarks will not necessarily be revoked if the rights holder or its licensees use them as quality signs in trade, it might be taken from the decision that the rights holder must prove that the public perceives its sign not only as an indication of a certain quality of the certified product but also as an indication of the manufacturer which is responsible for the quality of the goods. Consequently, substantial evidential difficulties could arise in many cases.

If revocation does occur, rights holders are left with the possibility of registering their signs as EU certification marks, national quality marks (if provided by the relevant legal system) or as national individual trademarks for certification services.

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