The EU Court of Justice (CJEU) has sided with Audi in its dispute with a provider of spare parts in Poland (GQ) who sells radiator grilles containing an element designed for the attachment of the famous AUDI four-ring logo (Case C-334/22).
The judgment clarifies certain aspects of the 2017 EU Trade Mark Regulation, in particular regarding the functions of a trade mark.
No repair clause for trade marks
Addressing the substance of the questions referred by the Warsaw Regional Court, the CJEU pointed out that, unlike in design law, there is no “repair” clause for trade marks.
It said that the trade mark proprietor’s right to prevent a third party from using a sign under Article 9(2)(a) and (b) is reserved for “cases in which the use of the sign by a third party adversely affects or is liable to adversely affect the functions of the trade mark, which include not only the essential function of the trade mark, which is to guarantee to consumers the origin of the goods or services, but also its other functions, such as, in particular, that of guaranteeing the quality of that product or service, or those of communication, investment or advertising”.
The Court added that, following the Mitsubishi case, “use” refers “exclusively to active conduct on the part of the third party”. In this case, the grilles offered for sale by GQ did not originate from Audi and were not placed on the market with its consent. The shape of the grilles was either identical or similar to the Audi trade mark.
Use of the sign
If the national court finds that the shape of the grille designed for the attachment of the Audi emblem is identical to the AUDI mark, it will have to apply Article 9(2)(a). If it finds that the shape is similar but not identical, and that the spare parts are identical/similar to Audi’s, it will have to assess the likelihood of confusion under Article 9(2)(b). If it finds that the mark has a reputation and the shape of the grille is identical/similar to Audi’s trade mark, Audi can object to the grill under Article 9(2)(c).
The CJEU concluded:
“Article 9(2) and (3)(a) to (c) of Regulation 2017/1001 must be interpreted as meaning that a third party who, without the consent of the manufacturer of motor vehicles which is the proprietor of an EU trade mark, imports and offers for sale spare parts, namely radiator grilles for those motor vehicles, containing an element which is designed for the attachment of the emblem representing that trade mark and the shape of which is identical with, or similar to, that trade mark, makes use of a sign in the course of trade in a manner liable to affect one or more of the functions of that trade mark, which is a matter for the national court to ascertain.”
Article 14 defence
The Court was also asked whether the defendant’s use could be considered use to indicate the intended purpose of its product under Article 14(1)(c) of the Directive (as discussed in the recent Inditex case).
The Court noted that the limitation on the exclusive right applies “only where such use of that mark by the third party is in accordance with honest practices in industrial or commercial matters”. This was not the case here:
“The affixing of a sign identical with, or similar to, the trade mark on the goods marketed by the third party exceeds … the referential use referred to in Article 14(1)(c) of Regulation 2017/1001 and therefore does not fall within any of the situations covered by that provision.”
It therefore concluded:
“Article 14(1)(c) of Regulation 2017/1001 must be interpreted as meaning that it does not preclude the manufacturer of motor vehicles which is the proprietor of an EU trade mark from prohibiting a third party from using a sign identical with, or similar to, that trade mark in relation to spare parts for those motor vehicles, namely radiator grilles, where that sign consists of the shape of an element of the radiator grille designed for the attachment thereto of the emblem representing that trade mark, regardless of whether or not there is a technical possibility of attaching that emblem to the radiator grille without affixing that sign to it.”
What does this mean?
While it will be for the national court to rule on the facts of the case, the judgment is good news for Audi.
From a more general perspective, it provides further detail on the functions of a trade mark, which include guaranteeing the quality of goods/services, communication, investment and advertising, as well as the essential function of guaranteeing the origin of goods/services.
In particular, the Court stated that the investment function is adversely affected when a competitor “substantially impedes the proprietor’s use of its trade mark to acquire or maintain a reputation likely to attract or retain consumers”.
The further elucidation of the law on trade mark function is welcome and is likely to be helpful in many cases relating to EUTMs.