On 6 March 2014 the Court of Justice of the European Union (CJEU) published its eagerly awaited decision on the alleged genericism of the Austrian trade mark “KORNSPITZ”. With this judgment the court specified the standards which apply for the loss of the distinctive character of a trade mark. The court held the perception of the end users, and not of the traders, is decisive.*
Austria had referred this question to the CJEU as part of the “KORNSPITZ” trade mark conflict. The Austrian company Backaldrin owns a word trade mark “KORNSPITZ” and has been producing a baking mix “KORNSPITZ” which it supplies for bakers. The bakers turn that mix into a bread roll which has a very specific shape. Backaldrin also consented to the use of the trade mark “KORNSPITZ” by those bakers and their foodstuff distributors.
Pfahnl Backmittel, a competitor of Backaldrin, applied to revoke the “KORNSPITZ” trade mark. They claimed the word is perceived as the common name of a bakery product, and referred in particular to the perception of the end users. Further, they argued the bakers using the baking mix of Backaldrin would neither inform their customers about the trade mark nor about the special baking mix used for the products.
The Austrian Patent Office ordered the complete revocation of the “KORNSPITZ” trade mark but Backaldrin appealed. The Court of Appeal proposed to uphold the revocation decision for raw materials and intermediate products. Regarding the finished products (bakery goods/pastry confectionary) it sought clarification via a preliminary ruling from the CJEU. The question is whether a trade mark is liable to revocation if that mark has become the common name for the product, not according to the perception of the sellers (bakers/foodstuff distributors), but to the end users of the product.
The Court referred to the function of a trade mark as an indication of origin. This function will not be served if end users perceive “KORNSPITZ” as a common name. The judges pointed to the fact that bakers and foodstuff distributors do not inform their customers about the trade mark registration “KORNSPITZ”. Further, Backaldrin had not taken any action to ensure the recognition of “KORNSPITZ” as a trade mark by the sellers. The understanding of the sellers can also be taken into account by a Court in deciding on the loss of distinctive character. However, the end users’ perception is the decisive one.
With this decision the CJEU reminds all trade mark owners to take precautions to avoid a trade mark becoming a generic term. On the basis of this decision, trade mark owners will have to focus on the perception by end users, which will often be ensured only by introducing appropriate provisions about use in licence or distribution agreements.