On 6 March 2014, the Court of Justice of the European Union (CJEU) handed down its judgment in Case C-409/12 Backaldrin Österreich The Kornspitz Company GmbH v Pfahnl Backmittel GmbH in response to a request for a preliminary ruling from the Austrian courts. This case, which concerns the Austrian trade mark “KORNSPITZ”, addresses the issue of genericism, which is the scenario where a trade mark ceases to function as an indication of a particular trade origin and instead becomes the common everyday name for the product or service in question.
Under the provisions of European Community law, as also under the law of some other jurisdictions, the registration of a trade mark may be revoked, inter alia, on the ground that, in consequence of acts or inactivity of the proprietor, it has become the common name in the trade for a product or service for which it is registered. Such was the fate of, for example, the words “escalator”, “aspirin” and “linoleum”, all of which began life as registered trade marks and which have subsequently become generic, having entered the current language as the everyday names for the objects themselves. It is important to note from the wording “acts or inactivity of the proprietor” that the issue of the genericism of a trade mark is directly linked to the behaviour of its owner who therefore has a duty to be vigilant in policing the use of the trade mark and ensuring its continued distinctiveness, failing which the trade mark owner runs the risk of contributing to its demise.
The particular facts of the KORNSPITZ case are that the trade mark owner, Bachaldrin, whose KORNSPITZ mark is registered in respect of various goods including bakery products and raw materials such as flour, produces a baking mix which it supplies to bakeries which then make bread rolls and sell the finished product to customers under the name KORNSPITZ.
Whilst the baking trade is aware that KORNSPITZ is a registered trade mark belonging to Bachaldrin, this information is not communicated by the bakers to the end customers who believe that KORNSPITZ is simply a type of bread roll and are not aware that the name is indicative of bread rolls manufactured from a baking mix originating from a particular undertaking. Bachaldrin had been aware of this lack of communication by the bakers and had not taken steps to address it. Pfahnl Backmittel, a competitor of Bachaldrin, applied to revoke the KORNSPITZ registration on the basis that the word KORNSPITZ is used, both by the trade and by consumers, to designate a particular type of bread roll and is thus not capable of functioning as an indication of commercial origin.
The case centred around the question of whether the trade mark owner’s conduct amounted to “inactivity” such as to render his trade mark liable to revocation. It also considered inter alia whether, for such a scenario to occur, it was necessary for the trade mark to have become generic from the point of view of both the trade (in this case the bakers) and also end customers. These were amongst the questions put to the CJEU by the Austrian Court when it asked for a preliminary ruling on the relevant Sections of the Trade Mark Directive 2008/95 EC.
The CJEU ruled that for a trade mark to be liable to revocation, it is not necessary for it to have become the common name in the trade and that such liability will also arise where the trade mark has become the common name from the point of view solely of end users of the product. It further ruled that a trade mark owner’s conduct may be classed as “inactivity” if he does not encourage traders to make more use of the mark in marketing the product in respect of which the mark is registered. The case will now be referred back to the Austrian Court for a decision to be made on the facts following the CJEU’s ruling.
The main lesson to be learnt from this case is that trade mark owners should be proactive in preventing their marks from becoming generic in order to avoid the risk of the marks being revoked and their exclusive rights being lost. Trade mark owners must not only avoid generic use of the mark in their own advertising and marketing, and also educate their employees and licensees to do likewise, but should also ensure that both direct customers and end users are made aware of their trade mark rights and act accordingly in order to avoid the risk of genericism. Trade mark owners should likewise monitor use of their trade marks in media and dictionaries and should seek cessation of any generic use and publication of an erratum.
It is recommended that trade mark owners ensure that all employees, licensees and any other persons permitted to use their marks observe the following guidelines for correct trade mark use:
- Trade marks are adjectives which should be followed by a noun – e.g. KLEENEX tissues
- Trade marks should not be used as nouns, e.g. kleenex, or as verbs
- Trade marks should be distinguished from the surrounding text, for example by being capitalised completely (KLEENEX tissues) or used with initial capitals (Kleenex tissues) or in quotes (“Kleenex” tissues) or italics (Kleenex tissues).
- Trade Marks should not be hyphenated, pluralised, abbreviated, or used in the possessive form.
- The symbol ® should be used to indicate that a trade mark is registered
- The letters ‘TM’ may be used to indicate a trade mark for which an application is pending registration or an unregistered trade mark in which the proprietor is claiming common law rights.
If a trade mark owner becomes aware that any of his trade marks are being improperly used by others, action should be taken immediately to ensure that such misuse does not recur.