ECJ preliminary ruling request regarding “cotton logo”: Does the use of a trade mark as a certification mark constitute a trade mark use?

On 15 December 2015, the Higher Regional Court of Düsseldorf submitted a request for preliminary ruling to the European Court of Justice (ECJ). The ECJ has to decide whether the use of an individual mark as a certification mark constitutes a use as a trade mark, and if so, whether a trade mark used in this way can be declared invalid or revoked if the owner of the mark does not carry out periodic quality controls (Case No. Higher Regional Court of Düsseldorf I-20 U 222/14, Case No. ECJ C-689/15).

The plaintiff in the underlying case, Verein Bremer Baumwollbörse, is the owner of the European Union trade mark set forth below, which is registered in Class 24 for textiles and textile goods etc.:

The plaintiff licenses its trade mark as “International Cotton Logo” to textile manufacturers which are only allowed to use the logo for high-quality goods manufactured with at least 95% cotton fibres. In practice, however, the plaintiff only controls the quality of the cotton products in exceptional cases.

The defendant is a textiles manufacturer. Its products include towels with the following hang tags (front and back):

The claimant sees the use of its “International Cotton Logo” on the hang tags of the defendant as a trade mark infringement and therefore demanded discontinuance of use, information and damages. The defendant filed a counterclaim for cancellation of the mark on the grounds of non-use, arguing that the claimant used its mark as a certification mark and therefore not as a trade mark.

The Regional Court of Düsseldorf found in favour of Verein Bremer Baumwollbörse and dismissed the claimant’s counterclaim. The Regional Court ruled that the level of similarity between the mark and the sign used by the claimant on its hang tags was so high that there was a likelihood of confusion. The court stated that the sign was being used as a trade mark because the public recognised the sign as an indication of origin and not merely as a graphic representation of the information “100% cotton”. The defendant’s defence of non-use therefore did not hold up either.

The defendant appealed against this decision. Although the Higher Regional Court of Düsseldorf confirmed in its decision that a likelihood of confusion existed, it stated, however, that the success of the action and of the counterclaim depended on whether the use of an individual mark as a certification mark constituted use as a trade mark in the meaning of Article 9 (1), Article 15 (1) of the European Union Trade Mark Regulation (EUTMR) and submitted this question to the ECJ for a preliminary ruling.

Higher Regional Court said that the “International Cotton Logo” was in fact understood by the relevant public as information indicating the quality of the cotton. In its opinion it was therefore questionable whether the use of the “International Cotton Logo” could fulfil a trade mark function recognised by the EUTMR. Although German law recognized a trade mark function of quality differentiation in the case of collective marks, the EUTMR did not contain such a provision. The General Court of the European Union did not see certification marks as being protected by the EUTMR. The Higher Regional Court noted, however, that such a certification mark could be used as a trade mark if the relevant public associated the idea of quality controls with the mark and if such were actually carried out. In the case of certification marks, the relevant public not only expected a certain quality of the goods, but at the same time also that they originated from a company which was committed to quality assurance and monitored accordingly. For this reason, the Higher Regional Court also submitted the question to the ECJ for a preliminary ruling of whether, if it is possible for a quality certification to be used as a trade mark, the mark can be cancelled if the owner of the mark does not guarantee that the quality expectations associated with the sign are met by carrying out regular controls on its licensees.

It remains to be seen how the ECJ will assess the questions submitted by the Higher Regional Court of Düsseldorf. It appears possible that the ECJ will rule that marks which are used exclusively as certification marks are not deemed to be used as trade marks. It is, however, likewise conceivable that the ECJ follows the Higher Regional Court of Düsseldorf and assumes that the origin function is also fulfilled in the case of marks used as certification marks, as long as the owner of the mark ensures that the licensees who use the certification mark comply with the quality requirements which the certification mark communicates to the relevant public. It is recommended that owners of signs which are used as certification marks already carry out such controls with respect to their licensees. Any company which uses certification marks should also ensure that the labelled goods also meet the relevant quality expectations to avoid any statutory liability on the grounds of unfair competition.