On 15 March 2021, for the first time in its history, the Supreme Court revoked a trademark under section 33c of the Trademark Act for misleading the public retroactively to 2014 (4 Ob 221/20h).
The defendant was the owner of the EU trademark (EUTM) PAUSCHA AUSTRIA – SINCE 1875, shown in Figure 1.
Figure 1: PAUSCHA AUSTRIA – SINCE 1875 EUTM
Mr Pauscha founded the barrel bindery Pauscha in 1875. The barrel bindery was a family business that was located in Wolfsberg, southern Austria for over a century. The barrels were manufactured according to a specific technique.
The Pauscha enterprise was subject to several restructuring measures. In 2014 Pauscha Fassbinderei GmbH registered the EUTM PAUSCHA AUSTRIA – SINCE 1875 for goods in class 20 (mainly wood barrels, especially for wines) and services in classes 37 and 40 (relating to repair, maintenance and woodworking of barrels).
Pauscha Fassbinderei GmbH went bankrupt in 2014 and the EUTM as well as the domain were sold to the defendant, an Italian company. The defendant built a new manufacturing site in Wolfsberg, where the barrels were manufactured according to a different technique than that previously applied by the Pauscha family. The type and tradition of producing wine barrels is of great importance for buyers, especially winemakers, as the manufacturing method affects the taste of the wine.
The plaintiff requested the revocation of the EUTM PAUSCHA AUSTRIA – SINCE 1875 with effect from 7 April 2014 on the grounds that it was misleading.
The Vienna Commercial Court revoked the EUTM PAUSCHA AUSTRIA – SINCE 1875. Upon the defendant's appeal, the Vienna Appellate Court confirmed the decision, arguing that the trademark was to be revoked pursuant to article 58(1)(c) of the EU Trademark Regulation (2017/1001) because the defendant had neither been the universal successor to the Pauscha family business nor had it adopted its manufacturing method.
The Supreme Court concurred with the lower courts' decisions. In reference to the European Court of Justice's decision in Elisabeth Emanuel (C-259/04), it stressed that the trademark must per se be capable of misleading the public as to the nature, quality or geographical origin of the branded product to be revoked on the basis of article 58(1)(c) of the EU Trademark Regulation. The suitability to mislead must result solely from the use of the trademark and thus from the sign itself. Information outside the sign (eg, in advertising) or specific types of use (eg, omissions or informative additions) must be disregarded. Therefore, the Supreme Court rejected the defendant's argument that the EUTM could be used with a reference to the new owner and by omitting the addition "since 1875" because:
- the defendant had used the addition "since 1875" in ads; and
- omissions and explanatory notes were not part of the trademark itself.
The Supreme Court further found that misconceptions of the public about company-related deceptions cannot in principle lead to the revocation of a trademark. However, this is not the case if the public associates a particular quality with the company assumed to be behind the trademark that the goods or services no longer have.
According to the Supreme Court, the use of a trademark with an indication of tradition (eg, "since 1875") is misleading if the use of the trademark subsequently leads to misconceptions on the part of the public as to the quality characteristics of the marked product. The public's perception of the meaning of an EUTM (as such) is important when assessing the trademark's ability to mislead. The EUTM in this case combined the family name "Pauscha" with the indication of tradition "since 1875" and thus referred to the approximately 150-year family tradition of the Pauscha family in the production of the wooden barrels. Such a long tradition in barrel-making would be associated by the public with particular perceptions of the quality of the designated products, which were based on the facts that:
- a particularly large amount of experience could be drawn on; and
- the production process and the quality characteristics determining the production process had proven themselves over many decades.
In this sense, it is also recognised in case law that the public associates special experiences and quality expectations with references to long-standing traditions.
The Supreme Court found that the indication of tradition ("since 1875") thus related not only to the continuity of the company, but also to the craft tradition of the Pauscha family in the production of the Pauscha barrels and thus to specific quality characteristics of this product. The Supreme Court held that according to the public's perception, the production method and the stave thickness of the Pauscha barrels were decisive for the compliance with these quality characteristics, especially since the construction method was decisive for the taste of the wine. Since the defendant did not produce Pauscha wooden barrels, but barrels according to the tradition of the current Italian owner family, the Supreme Court held the trademark to be misleading and therefore revoked it.
This is the first decision of the Supreme Court concerning the revocation of a trademark for misleading the public. Since there is little case law relating to article 58(1)(c) of the EU Trademark Regulation, it is a welcome clarification of the prerequisites for this ground of revocation.
Trademark owners that designate their products with a trademark which refers to a long-standing tradition or certain product properties should therefore keep in mind when making changes to the products whether this might create a misconception in the mind of the targeted public.
For further information on this topic please contact Claudia Csáky at GRAF ISOLA Rechtsanwälte GmbH by telephone (+43 1 401 17 0) or email ([email protected]). The GRAF ISOLA Rechtsanwälte GmbH website can be accessed at www.grafisola.at.