Quality label can constitute an EU trade mark, says EU court adviser

In a non-binding opinion issued in a case before the Court of Justice of the EU (CJEU), advocate general Melchior Wathelet considered whether a German cotton textiles industry association could prevent a towel manufacturer from using a quality label similar or identical to a trade mark it owned.

Verein Bremer Baumwollbörse (VBB) owns a trade mark for a 'cotton flower' sign. It puts in place licensing agreements with companies that allow those businesses to display the cotton flower mark on their products to signify that their products are "high quality goods made from cotton fibres". However, towel manufacturer Gözze used an identical or similar sign on a label attached to its products without VBB's permission, according to the published opinion.

VBB has accused Gözze of trade mark infringement, but Gözze has argued that the trade mark registered by VBB is invalid.

EU trade mark laws were updated in 2015. The revised rules provide for the registration of so‑called certification marks as trade marks. The relevant legislation which goes back to 1994, explicitly states that "trade marks which consist exclusively of signs or indications which may serve, in trade, to designate the … quality … of the goods" cannot be registered.

However, advocate general Melchior Wathelet said that labels of quality can nevertheless be eligible for trade mark protection. .

If a mark used as a label of quality fulfils "the essential function of a trade mark", by providing an indicating "simultaneously" of the quality of the goods and the origin of the mark is, then trade mark protection can apply, Wathelet said.

Just like other owners of registered trade mark, owners quality label can rely on trade mark law to prevent others using their mark if "such use … is liable to affect adversely one of the functions of the trade mark" and if there is a likelihood of confusion over the origins of the goods in the eyes of the consumer, Wathelet said.

Wathelet said that unlike the requirements which apply to certification marks, trade mark laws do not require organisations behind quality labels registered as ordinary trade marks to carry out "actual or periodic quality controls at its licensees" to ensure that "expectations relating to the quality which the public associates with the sign are being met" to defend against possible findings of invalidity or revocation, he said.

The formal judgment of the CJEU on the issue is not likely to be issued until some time in 2017. The CJEU is not bound to follow the opinions issued by its advocate generals, but it often does.

Intellectual property specialist Iain Connor of Pinsent Masons, the law firm behind Out-Law.com, said: "When the Court of Justice determines the case it may take the view that 'quality trade marks' need to fall into line with certification marks.  However, given the marks were registered as normal trade marks there is no reason why they should be subjected to different rules regarding invalidity and revocation as any other mark."