Is it deceptive to use a designer’s name in a trade mark if the designer is no longer with the company?

Does a trade mark consisting of the name of its founder become deceptive and, therefore, liable for revocation, if the founder leaves the company? This question is at the heart of Advocate General (‘AG’) Emiliou’s Opinion in PMJC (C-168/24).

Background

Fashion company JEAN-CHARLES DE CASTELBAJAC, S.A. owned various trade marks for the sign ‘JC de CASTELBAJAC’, including French trade mark no. 023201616 inter alia for ‘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 infringement of the ‘JC de CASTELBAJAC’ trade marks that PMJC had acquired. 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 due to deceptiveness 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’) into French law. According to the latter provision:

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 Court of Justice of the EU (‘CJEU’) for guidance in order to determine whether the Court of Appeal’s decision complied with Art. 20(b) TMD:

Must […] Article 20(b) [TMD] […] 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 Advocate General’s opinion

AG Emiliou analysed the Emanuel judgment (case C-259/04, IPKat here and here) since this is the only guidance from the CJEU on the issue of deceptive use of a trade mark consisting of the name of the company’s founder (so called patronymic trade mark).

There, the CJEU found that the severance of the link between the designer and the company owning and using the patronymic trade mark does not in itself render the trade mark deceptive because the characteristics and qualities of the goods covered by the trade mark remain guaranteed by the trade mark owner.

The Emanuel judgment contained some passages that could be interpreted as meaning that deceptive conduct with respect to the designer’s involvement in the creation of the goods cannot constitute a ground for revocation. Upon a closer analysis of the decision, AG Emiliou found that the Emanuel decision did not determine the response to the question referred.

Turning to the interpretation of Art. 20(b) TMD, the AG found the wording of this provision to be sufficiently broad to cover all types of (deceptive) uses. It does not have to be limited to the quality, nature or geographic origin of the goods and services. The deception can also concern the actual designer of the goods or their creative origin.

AG Emiliou considered the other two grounds for revocation (non-use and the mark having become the common name of the goods/services) and concluded that all of them have in common that the trade mark does not fulfil the origin function any longer. He concluded that the misleading use of a patronymic mark in relation to the good’s creative origin may give rise to revocation for deceptive use.

The AG held that the basic rule is that the severance of the link between the patronymic trade mark and its designer does not lead to revocation unless further circumstances exist. He reasoned that the use of patronymic marks is a widespread practice in all sectors of commerce and that the public concerned is well aware that, behind every patronymic mark, there is not necessarily a fashion designer of that name.

AG Emiliou applied a rather strict standard for finding deceit. It must be based on a solid body of evidence demonstrating that the trade mark has lost its capacity to fulfil its essential function, due to a deceit or a serious risk thereof. The evidence must show conduct that aims at creating a false impression of links between the goods and the initial designer. Further, the trade mark owner’s conduct has to be of such intensity, extent or logic so as to lead to the conclusion that the target public can no longer be reasonably expected not to assume that the initial designer has been involved in the design of the specific goods.

The AG brings the example of an advertising campaign that features the designer and falsely implies the designer's actual involvement in the artistic supervision of the goods.

He concluded that:

[Art. 12(2)(b) TMD] must be interpreted as not 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.

To determine whether such use of a trade mark must be considered as misleading, within the meaning of those provisions, it must follow from the evidence adduced that the trade mark at issue can no longer fulfil its essential function of indication of origin, in particular because the conduct of its proprietor actually creates a false impression, in the mind of the target public, of association between the goods covered by the trade mark and the designer or when the use of the trade mark brings about a sufficiently serious risk of such deceit, and where the target public can no longer be reasonably expected not to assume that the given designer has been involved in the design of the specific goods covered by the trade mark.

AG Emiliou found this result to be in line with the protection of intellectual property under Art. 17(2) of the Charter of Fundamental Rights of the EU.

Comment

The Opinion confirms the basic rule established in Emanuel, namely that the continued use of a patronymic trade mark after the departure of the designer is not sufficient to constitute deceit. Further circumstances must exist.

It is also correct to apply a relatively high threshold for revoking a trade mark for deceptive use. Isolated instances cannot be sufficient to cancel an intellectual property right. Rather, a systematic and permanent misleading use should be required. Isolated instances can be dealt with by unfair competition law (e.g. misleading advertising).

What I struggle with is the AG’s condition that the trade mark must no longer fulfil its essential function of indicating the origin of the goods. The origin function is certainly the holy grail of trade mark law. Nevertheless, a patronymic trade mark can still be perceived as an indication of the commercial origin of the goods even if the owner launched an advertising campaign creating the false impression that the initial designer continues to be involved in the goods’ design process. The designer of the goods can be (and often is) different from the entity responsible for the goods in their entirety. Likewise, revocation due to non-use does not require the trade mark to loose its origin function. The mark will be revoked merely because it has not been genuinely used for a consecutive period of five years but not because it is not capable of indicating the commercial origin anymore. If that were true, resuming use after five years of non-use could not save the trade mark from revocation since one of the conditions for ‘genuine use’ is that the mark is used in accordance with its main function to indicate the commercial origin of the goods/services.

Let us see what the CJEU has to say about the reference. 

The picture is by Ksenia Chernaya and used under the licensing terms of pexels.com.