What’s in a name? The CJEU will tell us

Fashion brands are often named after their founder and chief designer. But what happens to the trade marks if the founder retires, dies or sells the company without continuing to work for it? Can the trade mark become deceptive and if so, under what circumstances? This question lies at the heart of a preliminary reference to the Court of Justice of the EU (‘CJEU’) from the French Court de Cassation (case C-168/24).

Background

The fashion company JEAN-CHARLES DE CASTELBAJAC, S.A. owned various trade marks for the sign ‘JC de CASTELBAJAC’, including French trade mark no. 023201616 for various goods and services, inter alia ‘clothing for women, men and children’. The company was named after its owner, Mr. Jean-Charles de Castelbajac, who also designed the goods.

Due to insolvency proceedings of JEAN-CHARLES DE CASTELBAJAC, S.A., its trade marks were assigned to PMJC SAS (‘PMJC’) in 2011/2012. Mr. Jean-Charles de Castelbajac agreed to work for PMJC until 31 December 2015.

In 2018, PMJC brought proceedings against Mr. Castelbajac for infringing the ‘JC de CASTELBAJAC’ trade marks PMJC acquired in 2011/2012. Mr. Castelbajac filed a counterclaim for revocation of the ‘JC de CASTELBAJAC’ trade marks on the grounds that PMJC had been using them in a deceptive manner from the end of 2017 to the beginning of 2019. Mr. Castelbajac argued that PMJC created the impression that he was still involved in the design of the goods by using the trade marks for clothing, which incorporated a design to which Mr. Castelbajac owned the copyright. PMJC was found to infringe his copyright twice.

The Court of Appeal of Paris revoked PMJC’s trade marks for being deceptive under Art. L. 714-6(b) of the Code de la Propriété Intellectuelle (French Intellectual Property Code), which implements Art. 20(b) of Directive (EU) 2015/2436 (‘TMD’) (and the previous Art. 12(2)(b) of Directive 2008/95/EC with almost identical wording) into French law. According to these provisions:

A trade mark shall be liable to revocation if, after the date on which it was registered:

as a result of the use made of it by the proprietor of the trade mark or with the proprietor's consent in respect of the goods or services for which it is registered, it is liable to mislead the public, particularly as to the nature, quality or geographical origin of those goods or services.

PMJC appealed to the Court de Cassation.

The reference for a preliminary ruling

The Court de Cassation asked the CJEU for guidance in order to determine whether the Court of Appeal’s decision complied with Art. 20(b) TMD and Art. 12(2)(b) of Directive 2008/95/EC:

Must Article 12(2)(b) of Directive 2008/95/EC […] and Article 20(b) of Directive (EU) 2015/2436 […] be interpreted as precluding the revocation of a trade mark consisting of the surname of a designer on the grounds that it is used after the assignment in such a way as to make the public actually believe that that designer is still involved in the design of the goods bearing the mark, when that is no longer the case?

The referring court mentioned the CJEU judgment Emanuel (case C-259/04, IPKat here and here), which dealt with a similar situation. There, the CJEU held that it is in principle not deceptive to register the name of a designer as a trade mark (in that case ‘ELIZABETH EMANUEL’) and use this mark even if the designer has no connection with the products sold under the trade mark anymore. The CJEU reasoned that

[48] […] even if the average consumer might be influenced in his act of purchasing a garment bearing the trade mark ‘ELIZABETH EMANUEL’ by imagining that [Elizabeth Emanuel] was involved in the design of that garment, the characteristics and the qualities of that garment remain guaranteed by the undertaking which owns the trade mark.

[49] Consequently, the name Elizabeth Emanuel cannot be regarded in itself as being of such a nature as to deceive the public as to the nature, quality or geographical origin of the product it designates.

[50] On the other hand, it would be for the national court to determine whether or not, in the presentation of the trade mark ‘ELIZABETH EMANUEL’ there is an intention on the part of the undertaking which lodged the application to register that mark to make the consumer believe that Ms Emanuel is still the designer of the goods bearing the mark or that she is involved in their design. In that case there would be conduct which might be held to be fraudulent but which could not be analysed as deception for the purposes of Article 3 of Directive 89/104 [the predecessor to Art. 4(1)(g) TMD] and which, for that reason, would not affect the trade mark itself and, consequently, its prospects of being registered.

According to the CJEU, merely continuing the use of the designer’s name as a trade mark after their departure from the company does constitute neither an absolute ground for refusal/invalidity under Art. 4(1)(g) TMD nor a ground for revocation under Art. 12(2)(b) of Directive 2008/95/EC.

PMJC argued that it follows from the Emanuel judgment that any conduct on its part intended to make the consumer believe that Mr. Castelbajac is still the designer of the goods cannot affect the trade mark itself, even if it were held to be deceptive. The first instance court and the Advocate General at the Court de Cassation agreed with this position.

The Paris Court of Appeal, however, found that the CJEU did not explicitly apply the reasoning cited above to the ground for revocation under Art. 12(2)(b) of Directive 2008/95/EC but only to the absolute ground for refusal under Art. 4(1)(g) TMD. Therefore, Art. 12(2)(b) of Directive 2008/95/EC can apply in situations where a trade mark consisting of a designer's name is used to make the public believe that the designer is still involved in the design of the goods when that is no longer the case.

Against this background, the referring court was unsure how to interpret Art. 20(b) TMD and Art. 12(2)(b) of Directive 2008/95/EC.

Comment

Here are some initial thoughts:

1. As the wording of Art. 267 of the Treaty on the Functioning of the EU suggests, references for a preliminary ruling may only concern the interpretation of EU law but not its application to a specific set of facts (case C-222/78 at para. 10). The question referred to the CJEU does not seem to be about the interpretation of Article 12(2)(b) of Directive 2008/95/EC and Article 20(b) TMD but rather their application to the facts of the case. Nevertheless, the CJEU will give a ruling because it rejects references only in very limited circumstances (summarised in Inditex, case C-361/22 at para. 29, IPKat here).

2. The question of misleading use must be assessed from the point of view of the relevant public. Therefore, it is for the national courts to determine how the relevant public perceives a trade mark and whether that perception is in line with reality.

The fundamental question of the case seems to be how consumers perceive a person’s name when used on goods as a trade mark. I.e. do they believe that this person is (still) involved in the creation of the goods? The answer to that is probably no. Founders and designers of fashion brands like Hugo Boss and Karl Lagerfeld passed away but their names live on as popular trade marks. It also seems unlikely that anyone believes Tommy Hilfiger or Marc Jacobs to design or even sign-off on all the goods sold under their marks.

3. As a consequence, and as the CJEU seems to have suggested in the Emanuel judgment, further circumstances for misleading use are necessary than the mere continued use of the designer’s name as a trade mark.

The interesting question is whether isolated instances (such as two infringements of copyright) are sufficient or whether a systematic and permanent misleading use necessary.

And is there a quota of how many people must consider the trade mark to be misleading?

The answer to the first question probably depends on the effect of the misleading use on the relevant public. Did it change the consumers’ perception of the trade mark in a way that they believe the goods to have certain characteristics which they do not, in fact, possess? An infringement of copyright, even if it happened twice, appears unlikely to have such an effect. It seems a stretch to argue that consumers knew the original and the copy and connected them. Even if they did, the misleading character is rather the result of the fact that Mr. Castelbajac continued to sell clothes under his name than acts of PMJC.

As to the question whether a particular quota of consumers is necessary for establishing a misleading character, one could look at other grounds for revocation, in particular that the trade mark has become the common name in the trade for a product or service in respect of which it is registered (Art. 58(1)(b) EUTMR). This requires that the vast majority of people considers the trade mark to be the common name of the goods or services (case T‑220/23 at para. 36). Considering the severity of the revocation, this seems to be justified also for misleading use. Isolated instances of misleading actions can be tackled by Artt. 6 and 7 of the Unfair Commercial Practices Directive, at least vis-à-vis end-consumers. Such isolated deceptions do not seem to warrant the revocation of a trade mark right as such.

It will be interesting to see what the appointed Advocate General has to say and how the CJEU decides the matter. Stay tuned!

The picture is by Markus Reiter and used under the licensing terms of pixabay.com.