IP Cases & Articles

Take Action to Prevent Trade Mark Genericism

Treating trade marks as common or generic terms undermines their essential function to inform consumers as to the origin of a product, which may result in loss of distinctiveness. Consider, for example, words such as “thermos”, “cellophane” and “escalator”, which were once registered trade marks but have been removed from the register in some countries for becoming the common denotation for the products covered by each trade mark.

The Court of Justice of the European Union (CJ) has delivered rare guidance on genericism in revocation actions in cases where the goods in respect of which a trade mark is registered are not all directed at the same consumers. In a preliminary ruling of the CJ (Case C-409/12 Backaldrin Österreich The Kornspitz Company v Pfahnl Backmittel GmbH, 6 March 2014), on referral from the Austrian Supreme Patent and Trade Mark Court, clarification was given on the interpretation of Article 12(2)(a) of Directive 2008/95/EC, which provides that a trade mark can be revoked where it has become a common name in the trade for a product or service, as a consequence of the acts or inactivity of the proprietor.

Background

Backaldrin was the proprietor of the registered Austrian word mark KORNSPITZ for various raw materials (baking agents; flour and preparations made from cereals...), intermediate goods (pre-formed dough) and finished goods (bakery goods and pastry confectionery) in class 30.

Under the KORNSPITZ mark, Backaldrin produced a baking mix which was supplied to bakers, who then made bread rolls which are oblong in shape with a point at both ends. Backaldrin consented to use of the mark KORNSPITZ by bakers in the sale and distribution of such rolls to customers. Pfahnl was one of Backaldrin’s competitors and, like most bakers, was aware KORNSPITZ was a registered trade mark. Pfahnl applied to revoke the trade mark on the basis that end users perceived the trade mark as the common name for a bakery product (the specific shaped bread roll). One reason cited for this perception was that bakers using Backaldrin’s mix do not generally inform their customers that KORNSPITZ is a registered trade mark, nor that the rolls are produced using that mix.

Initially, the Cancellation Division revoked the mark, however on appeal, the Austrian Supreme Patent and Trade Mark Court referred three questions to the CJ on the interpretation of Article 12(2)(a) in relation to the finished bakery goods, seeking clarification of, broadly:

1. The meaning of ‘common name in the trade’ and how that should be assessed where traders may perceive a sign as a trade mark, but not end users;
2. The meaning of ‘inactivity’ on the part of the trade mark proprietor, which may lead to a finding that a trade mark is generic; and
3. The extent to which a lack of equivalent names for a product may be relevant in such analysis.

A prime issue for the CJ regarding (1) was whose perception of the trade mark is important. In reaching a conclusion, the court referred to case C-371/02 Björnekulla Fruktindustrier AB v Procordia Food AB, in which it was held that the views of all end users and, in certain circumstances, those in the trade who deal with the product commercially, are relevant in determining whether a mark has become generic, although the perception of end users will generally be decisive. Citing the importance of a trade mark’s origin function, the court highlighted how the present case, subject to verification by the referring court, involved a loss of distinctive character from the point of view of end users. The court held that a trade mark might be revoked where it has become a common name according to the perception of end users alone (here, consumers buying bread products). Thus awareness on the part of sellers (here, the bakers) that the trade mark was distinctive could not preclude a finding that the mark was generic. It is now for the Austrian Supreme Patent and Trade Mark Court to assess the necessity for a survey of end users’ perceptions of the KORNSPITZ mark.

Secondly, the CJ classified ‘inactivity’ within the meaning of Article 12(2)(a) as including a lack of encouragement by a proprietor to ensure sellers make more use of a mark in commercial contact with customers, and instances where a proprietor is not ‘sufficiently vigilant’ in preserving the distinctive character of his trade mark. In the present case, described by the referring court as where the distributor did not inform its customers of the trade origin of the rolls at the point of sale, the Austrian Court will need to ascertain the extent to which Backaldrin took any initiative to encourage bakers and distributors to use KORNSPITZ in the marketing of their rolls to customers.

Lastly, the possible existence of alternative names for a product or service was deemed by the court to be irrelevant once a mark has become the common name in the trade for that product or service, since the fact remains that the trade mark has lost its distinctive character by becoming the common name.

Comment

This case provides clear guidance that end users’ views are important in assessing whether a trade mark may be held to be generic.

It remains to be seen which actions prove most successful in practice in influencing the views of end users to preserve the distinctive character of a mark, although trade mark owners should be proactive in influencing and monitoring the marketing of products by third parties using their brand, such as distributors, licensees or sellers.

Your usual D Young & Co representative will be able to advise you further in this regard.

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