When a trademark has become known to the point of becoming the common designation by the public of a type of product or service, this is not without consequences. Some will see it as a sign of supreme recognition and unquestionable notoriety, others will fight against this usage considering that it is a serious infringement of their brand.
While the position of trademark owners is divided on the subject, the law is particularly clear on the legal consequences of a trademark that has fallen into common parlance.
Indeed, trademark law allows the owner to have a monopoly of exploitation on his valid trademark, but this right is not without conditions. It can only exist if the trademark is likely to distinguish the goods and services of a company from those of its competitors, and thus to guarantee to the consumer that the goods or services of the same trademark have the same origin.
These limits to trademark rights must be fully understood and apprehended by rights holders since an important economic asset is at stake. One of the risks comes from the owner himself, who, by his actions (or lack of actions) may lose his rights on his trademark when the latter becomes the common designation of the product or service in question. It is the lapse for degeneration.
The texts that define what degeneracy is are the following:
- Article L.714-6 A of the Intellectual Property Code states that “the owner of a trademark that has become the common name in commerce for a product or service shall forfeit his rights“.
- Article 20 of Directive (EU) 2015/2436, paragraph A, on the other hand, states that “The owner of a trademark can be deprived of his rights when, after the date of its registration, the trademark:
(a) has become, through the activity or inactivity of its owner, the common name in the trade for a product or service for which it is registered“.
At what point can the trademark be considered to have become the usual designation in the trade of the product or service? And how is the fact or responsibility of the holder assessed?
A TRADEMARK THAT HAS BECOME THE COMMON NAME IN THE TRADE FOR THE PRODUCT OR SERVICE
It is necessary to distinguish between ab initio invalidity , which occurs when the mark is not considered distinctive at the time of filing, and invalidity for degeneration.
In order to determine whether a trademark is subject to cancellation, the first question to ask is whether it has become the common name in commerce for the product or service.
When we say we drink a PINA COLADA or have a BOTOX session, do we feel like they are brands or do we use these terms in a generic sense?
Trademarks that become words in everyday language and lose their brand value
Thus, with respect to the VINTAGE trademark (registered for clothing, among other things), the Paris Court of Appeals considered that ” the term ‘VINTAGE’ [est] widely used as a word in everyday language either as a qualifier or as a common name, in the clothing, ready-to-wear, jeanswear and sportswear sectors of activity, in the press, has become the usual and inevitable name for a style of clothing articles with an old-fashioned or “retro” inspiration “and pronounced the lapse for degeneration of this mark (CA Paris, 4ème Ch., Section A, April 20, 2005, RG n°04/03753).
The brand BOTOX (registered in particular for anti-ageing preparations) had the same fate since it was considered by the Court of Cassation, that the Court of Appeal had rightly considered that ” the sign “botox” is commonly used to designate the product itself (botulinum toxin) and not the origin of the product, so it was not used as a trademark “(Cass., Com., 1er July 2008, RG n°07-13.349).
A color was also considered by the Courts as having lost its trademark function, it is the pink color of CANDIA (Pantone 212), registered for milk and dairy products. The Court of Cassation confirmed a decision of the Court of Appeal of Lyon and considered that “The companies belonging to the dairy business use a fuchsia pink color which, without being identical to the pantone pink color 212, is a very close shade that does not allow a consumer of average attention to make a distinction.
Under these conditions, “the court of appeal […] finding widespread use of a sign distinguished from it only by details imperceptible to that public, referred exactly to the public with whom the mark was intended to perform its function as a designation of origin and, finding widespread use of a sign distinguished from it only by details imperceptible to that public, justified its decision that the mark had lost its distinctive character.” (Cass. Com., July 10, 2007, RG n°06-15.593).
Most of the decisions rendered in this area apply the text perfectly.
However, the above-mentioned VINTAGE and CANDIA decisions went a little further and may be indicative of a trend in case law to go beyond the legal definition. In fact, neither CANDIA’s pantone pink 212 color nor the term VINTAGE designate the product as such but rather one of its characteristics. Thus, in the CANDIA decision, reference is made to the ” widespread use of a sign ” rather than to a sign that has become the usual designation of the product.
Under these conditions, regardless of the type of mark, whether it is a word mark, a figurative mark or a color mark, if the Courts consider that it has become the usual designation in the trade of the product or service, or that the use of the sign has become widespread and has thus caused the mark to lose its distinctive character, the first condition required by the law is considered by the Courts to be met.
Thus, the trivialization of one’s trademark, conveyed by the general public as well as in the press, can have particularly prejudicial consequences for the owner.
What is the relevant audience to consider?
In order to determine whether a trademark has become the common name in the trade of a product or service, the Courts take into account the perception of consumers or end-users but also, depending on the characteristics of the market concerned, the perception of professionals, such as sellers (CJEU, 3th Ch., March 6, 2014, Case. C-409/12).
In the field of pharmaceutical products, this can play a significant role, as the European Court of First Instance noted when it considered that a sign could continue to ” exercise its indication-of-origin function when an intermediary has a decisive influence on the buyer’s purchase decision, so that his knowledge of the indication-of-origin function of the mark enables the communication process to succeed “. The Tribunal concludes ” in view of the influence exercised by the professionals in question on the purchasing decision of the final consumers, the fact that the latter would still perceive the function of indication of origin of the contested mark is insufficient to defeat the application for revocation in view of the importance of the perception of the said professionals”. (TUE, 5th Ch., 18 May 2018, Case T-419/17).
More recently, in a decision declaring the degeneration of the brand CITY STADES (registered for transportable sports facilities), the Cancellation Division of the EUIPO considered that, as these are very expensive products, the relevant public is made up of the main customers, i.e. local authorities and municipalities (EUIPO, Cancellation Division, November 29, 2021, Case C-48/999).
Moreover, in a case involving the famous The Paris Court of First Instance held that the designation of the product by the general public was not sufficient to characterize the degeneration, in the absence of sufficient evidence of “degeneration”. used in commerce, both by consumers and by professionals ” (TGI Paris, 3thCh., 2ème Sec., November 18, 2018, RG n°10/08785).
The relevant public, in the context of a degenerate application, will therefore not only be the consumer or end-users but also, depending on the characteristics of the product or service and the market, the professional of the products or services concerned.
In addition, in the event of a request for of a European Union trademark, it is important to know that the revocation of the trademark is not a matter of mark can be pronounced if it has become generic in only one member state (TEU, 9th Ch., November 8, 2018, Case. T-718/16, and in the same sense EUIPO, Cancellation Division, November 29, 2021, No. C 48 999).
ASSESSMENT OF THE HOLDER’S ACT OR RESPONSIBILITY
The responsibility of the holder is clearly one of the criteria included in both the French and Community texts. If the Intellectual Property Code refers to ” a trademark that has become [du titulaire] the designation customary in the trade of the product or service”, the directive provides that forfeiture for degeneration may occur “by reason of the activity or inactivity of its holder”.
This direct responsibility of the owner makes sense since, as a trademark owner, he must ensure that his trademark constitutes and continues to constitute an indicator of origin. Otherwise, its trademark can no longer constitute a valid trademark conferring a monopoly enforceable against third parties.
As the Paris Court of First Instance considered in the CADDIE decision as being an “obligation” for the owner to oppose the use of its trademark as a synonym for cart (TGI Paris, 3ème Ch., October 29, 1997), the Courts will constantly perform this analysis in order to conclude, or not, that the owner is responsible for the degeneration of the trademark.
Very recently, in the PIERRADE decision, the Court of Cassation confirmed the decision of the Court of Appeal of Lyon which considered that the owner of the PIERRADE trademark (registered in particular for cooking appliances) should not be deprived of his rights for the following reasons
- the owner had obtained several convictions of third parties on the basis of infringement,
- he was opposed to the insertion of the word “pierrade” in“L’Officiel du scrabble”,
- it had sent several formal notices, and had ” pursued with some rigor the largest distributors or resellers of household appliances using this brand without authorization “,
- he communicated the existence of the “Pierrade” brand.
Under these conditions, the holder is considered to have ” has exercised genuine and sufficient vigilance to prevent its mark from becoming a common term of trade for cookware “(Cass. com., May 18, 2010, RG n° 09-14.615, and in the same sense TGI Paris, 3rd ch. 3rd sect., May 16, 2014, RG n° 12-10245).
The PEDALO brand was also able to escape degeneration due to the ” very large number of procedures committed to the protection of the trademark, the large number of warnings and notices sent to the press, to professionals in the nautical sector as well as to dictionary editors reveal that he acted to ensure that the trademark PEDALO would not be perceived by the public as a generic designation for light float boats driven by a pedal wheel “(CA Aix-en-Provence,2nd Ch. Civ., January 9, 2006, RG n°03/06469 and in the same sense CA Aix-en-Provence,2nd Ch. Civ., January 14, 2010, RG n°08/09209)
In the PLACO case, the Court of Appeals, upholding the decision of the district court, held that the trademark owner did not have “any right to use the trademark. ceases to take legal action against third parties who, in its opinion, make unlawful use of its trademarks ” and had multiplied ” communication campaigns in the general public and professional press to remind people that Placo is a registered trademark that cannot be used as a common name “. Under these conditions, it was concluded that ” these multiple interventions illustrate PLACOPLATRE’s desire to defend its trademark and to oppose a customary designation of goods and services under this term ” (CA Bordeaux,1st Ch. Civ., September 24, 2019, RG n°17/05270).
Case law shows that the owner of a trademark that is widely used by third parties, and can be considered to have become the common name in commerce for a product or service, can escape degeneration if he takes sufficient and proportionate action.
The Courts assess the sufficiency of the actions based on the type and quantity of the actions. Thus:
- sending formal notices or warnings is important but may be considered insufficient,
- agreements with third parties who recognize the rights and undertake to cease exploiting the trademarks will necessarily be taken into account,
- oppositions and legal actions may be necessary, or even indispensable in some cases.
For a long time, it was important for registrants to justify having also acted against dictionaries, magazines and newspapers. The basis of the action was discussed in case law.
Now, Article 12 of Directive (EU) 2015/2436 and Article L. 713-3-4 of the Intellectual Property Code provide in somewhat similar terms that if ” the reproduction of a mark in a dictionary, encyclopedia or similar reference work, in printed or electronic form, gives the impression that it is the generic term for the goods or services for which it is registered “If the owner applies for a change, the publisher is obliged to indicate that it is a registered trademark no later than the next edition of the work.
It is therefore essential for the rights holder to be able to justify that he has acted regularly and to keep evidence of the actions taken.
EFFECTIVE DATE OF TERMINATION
Under Article L. 716-3 of the Intellectual Property Code: ” Lapse shall take effect on the date of the request or, at the request of a party, on the date on which a ground for lapse occurred . The provisions of Directive (EU) 2015/2436 of December 16, 2015 regarding the effects of disqualification (Article 47) make similar provisions.
Under these conditions, and very logically, none of the actions and proceedings initiated after the action for lapse for degeneration will be taken into account in the assessment of the latter.
WHO IS COMPETENT TO PRONOUNCE ON THE DEGENERATION OF THE FRENCH AND EUROPEAN UNION TRADEMARKS?
As far as French trademarks are concerned, since the provisions of the Trademark Package, depending on the circumstances, the INPI or the Courts can declare the revocation of a trademark on the basis of degeneration.
The INPI has exclusive jurisdiction to hear applications for revocation filed on a principal basis.
The Courts will still have jurisdiction when the claim for revocation is filed as a counterclaim in the context of ongoing legal proceedings (often on the basis of infringement), or when the claim is related to an action that falls within the jurisdiction of the Court of Justice.
In the case of European Union trademarks, the European Union Intellectual Property Office (EUIPO) is also competent when the application is filed as a principal. Failing that, the national courts of the European Union (in France the Judicial Court of Paris) will be responsible for the dispute.
Brands must necessarily take action and avoid getting carried away by their success.
If becoming a well-known brand is the goal of any project creator, protecting the most essential asset of its success must also be a priority.
In law, the answer could not be clearer: the owner incurs direct liability subject to sanction on his title when the mark has degenerated, i.e. when it has become the usual designation in the trade of its product, of its making. The liability of the owner is generally considered as acquired by the Offices and Courts if he does not act in a proportionate way to the infringements that are made to his mark.
With the growing importance of digital, and in particular of the Internet and social networks, it is essential not to be satisfied with traditional monitoring of brand registers, but to actively monitor the various media and to take actions adapted to each use. It is also necessary to keep the proof of the different actions in order to be able to oppose them more easily to a third party who would try to obtain the cancellation of his mark for degeneration.
Whether or not the operational and legal teams agree on the issue, it is essential to avoid trivializing a brand that has become very successful. It is undoubtedly for this reason that brands such as KARCHER or MECCANO regularly oppose the attacks and communicate on their actions!
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