The Court of Justice of the European Union clarifies the situations when a mark becomes generic and what amounts to “acts or inactivity” on the part of the proprietor of the mark.

Backaldrin is proprietor of the Austrian mark KORNSPITZ, registered, inter alia, for “flour and preparations made from cereals; bakery goods; baking agents, pastry confectionery, also prepared for baking; pre-formed dough […] for the manufacture of pastry confectionery”. It produces a bakery mix which it supplies to bakers who produce a bread roll oblong in shape with a point at both ends. The buyers of these mixes know that KORNSPITZ is Bachaldrin’s mark. However, the end consumers are not made aware by Backaldrin or the bakers that KORNSPITZ is a mark.

Pfahnl, a competitor of Backaldrin, requested the revocation of the mark KORNSPITZ on the ground that it had become the common name for the products, as provided for in Article 12 (2) lit a Directive 2008/95/EC (Trademarks Directive) and in Section 33b Austrian Trademarks Act. The Austrian Patent Office granted the request. Backaldrin appealed to the “Oberste Patent- und Markensenat”. That tribunal, competent to review Patent Office decisions, considered that the revocation was in error as regards goods addressed to commercial customers. However, as regards goods addressed to end consumers, it decided to refer a series of questions to the European Court of Justice:

  1. Has a trademark become “the common name [in the trade] for a product or service” within the meaning of Article 12 (2) lit a Directive 2008/95/EC, where
    1. although traders know that the mark constitutes an indication of origin they do not generally disclose this to [end users], and
    2. (inter alia) on those grounds, [end users] no longer understand the trademark as an indication of origin but as the common name for goods or services in respect of which the trademark is registered?
  2. Can the conduct of a proprietor be regarded as “inactivity” for the purposes of Article 12 (2) lit a Directive 2008/95 simply if the proprietor of the trademark remains inactive notwithstanding the fact that traders do not inform customers that the name is a registered trademark?
  3. If, as a consequence of acts or inactivity of the proprietor, a trademark has become the common name for [end users], but not in the trade, is that trademark liable to be revoked if, and only if, end consumers have to use this name because there are no equivalent alternatives?

The Court gave the following answers:

  1. Article 12 (2) lit a Directive 2008/95/EC must be interpreted as meaning that, in a case such as that at issue in the main proceedings, a trademark is liable to revocation in respect of a product for which it is registered if, in consequence of acts or inactivity of the proprietor, that trademark has become the common name for that product from the point of view solely of end users of the product.
  2. Article 12 (2) lit a Directive 2008/95/EC must be interpreted as meaning that it may be classified as “inactivity” within the meaning of that provision if the proprietor of a trademark does not encourage sellers to make more use of that mark in marketing a product in respect of which the mark is registered.
  3. Article 12 (2) lit a Directive 2008/95/EC must be interpreted as meaning that the revocation of a trademark does not presuppose that it must be ascertained whether there are other names for a product for which that trademark has become the common name in the trade.

Remarks

As regards the first question, the Court had to take a position, for the first time, as to the relevance if any of differences in the perception of a mark by end consumers and by commercial circles. In the earlier BOSTONGURKA case decided in 2004 (Björnekulla Fruktindustrier, C-371/02), the Court had held that when judging the question whether a mark has become generic the opinion of all relevant sectors, including not only end consumers but also intermediaries and sellers, must be taken into account. Here, however, the Court concludes that the opinion of the end consumers is decisive (emphasis added):

[29] However, as the Court pointed out in paragraph 24 of the judgment in Björnekulla Fruktindustrier, in general, the perception of consumers or end users will play a decisive role. It must be held, in line with what the Advocate General stated at points 58 and 59 of his Opinion, that in a case such as that at issue in the main proceedings, which is, subject to verification by the referring court, characterised by the loss of distinctive character of the trademark concerned from the point of view of the end users, that loss may result in the revocation of that trademark. The fact that the sellers are aware of the existence of that trademark and of the origin which it indicates cannot, on its own, preclude such revocation.

It is interesting to note that in this case not only the claimant Backaldrin, but also the German and the French Governments and the European Commission took the view that a revocation was excluded as long as the commercial users knew that KORNSPITZ was a trademark. The Court did not really give reasons or an explanation why only the end users are decisive. A comparative law approach to the issue – which the Court usually avoids – would have shown that in the majority of Member States in a case such as the present one the mark would not have been revoked – “Luxembourg locuta – causa finita”.

The second question had not previously been an issue in any Court of Justice case, and there is very little recent national case law on the nature of the “obligation” of the trademark proprietor to be or become active in the prevention of the degeneration of his mark to a “common name”. Backaldrin had apparently never required of the bakers that they use KORNSPITZ as a mark or point out to end consumers that KORNSPITZ is a mark. The Court classified this as “inactivity” within the meaning of the applicable provisions. This should send a message to all trademark proprietors whose marks are at risk of becoming generic – “inactivity” actually means what it says. They must positively act when such a risk appears – if they rest on their past performance, it may already be too late.

As regards the third question, it appears correct that the absence or presence of alternative names for the respective product does not have any influence, as a matter of law, on the question whether a mark has become generic. Nevertheless, in practice it would appear easier for a trademark proprietor to take action against the generic use of his mark if alternatives are readily available.