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EU certification and collective marks

Roberto d'Erme / July 23, 2019
EU-certification-and-collective-marks

As a consequence of trade globalization and the access to a wider variety of goods and services, product quality has become a growing concern for consumers. This stems from the need to identify the source of the product, its manufacturing method and compliance with specific standards.

The same holds true for the supply of services and certification marks are used to fulfill this function - 120 countries worldwide register certification marks, of which 64 within the Madrid system. In addition, consumers have grown increasingly sensitive to the impacts that the production and consumption of products and materials have on the environment. Certification marks in the form of 'ecolabels' can demonstrate the producer's efforts to conform to international environmental requirements and are essential marketing tools for consumer fidelity.

The bill regulating EU certification marks (Chapter VIII, Section 2: Articles 83 to 93 of the EUTMR) came into force on October 1, 2017, differentiating them from EU collective marks (Chapter VIII, Section 1: Articles 74 to 82 of the EUTMR). Below is a summary of the main features of those rights.

Quality guarantee and right to use

Individual marks' essential function is to distinguish goods and services originating from one undertaking from those of other undertakings. Certification marks on the other hand, aim to certify that a good or a service complies with specific quality standards irrespective of their origin. These standards include permitted materials, manufacturing methods and service performances. Therefore, the purpose of certification marks is to distinguish certified goods and services from those that are non-certified.

Certification marks also have to be distinguished from collective marks, the latter signifying that a good or service originates from a member of a particular association. The collective mark is used by cooperating enterprises that have agreed to comply with defined quality standards for goods or services that share common characteristics. Similar to a certification mark, a collective mark informs the public about certain qualities of the goods or services for which it is used. The main difference between these two quality 'labels' is that certification marks are delivered by an independent organization competent to certify that a good or service meets the requirements.

Because the owner of a certification mark is not allowed to operate a business involving the supply of goods or services of the kind certified, the mark is "assigned" to authorized persons pursuant the regulations of use. If the target is a specific category of persons, objective criteria must be clearly set out in the regulation of use. Although Article 25 EUTMR on licensing applies to certification marks, this relationship differs from the typical licensee / licensor relationship because issues related to the owner's potential liability are involved. Moreover, a certification mark cannot be capable of distinguishing goods or services that are certified by the proprietor of the mark in respect to the geographical origin. Therefore, a certification mark can never be a geographical indication or the other way around. However, they are complementary.

On the other hand, collective marks are owned by associations ensuring compliance with the agreed standards. Hence, only members of those associations are authorized to use the collective mark as long as they meet the criteria set in the regulation of use. Different from certification marks, signs or indications that may serve to designate the geographical origin of the goods or services may constitute collective marks. In this sense, the scope of protection overlaps with the sui generis system for geographical indications protection.

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Certification marks aim to certify that a good or a service complies with specific quality standards irrespective of their origin. These standards include permitted materials, manufacturing methods and service performances. 

Nonetheless, a collective mark containing a geographical indication cannot be invoked against a third party who is entitled to use a geographical name, in accordance with honest practices in industrial or commercial matters. Also, pursuant to the regulation on quality schemes for agricultural products and foodstuffs (Article 14 of the Regulation (EU) No 1151/2012 of the European Parliament and of the Council of 21 November 2012), a collective mark containing a geographical indication must be refused if its application for registration is submitted after the date of submission of the registration application in respect of that geographical indication.

However the scope of protection of collective marks and geographical indications is different as outlined by the Darjeeling judgment (C-673, 674, 675/15 P, 20 September 2017, The Tea Board – Delta Lingerie (Darjeeling)) holding that the "geographical indication is a name that identifies a product originating in a specific geographical area, whose quality, reputation or other characteristic is essentially attributable to its geographical origin, and at least one of the production steps of which take place in the defined geographical area."

Although distinct in scope, collective marks are a useful tool for those cooperatives that are not able to meet the stricter requirements for registration of a geographical indication. It is worth noting that, unlike in the EU legal framework, the collective and certification marks schemes are used in certain EU countries in lieu of geographical indications, as long as the latter protection is not available. The Directive (EU) 2015/2436 expressly sets forth that member states are permitted to choose if they want to register geographical indications as collective marks or as certification marks (Articles 28 and 29). However, this does not constitute an exclusive right as it cannot be invoked against third parties entitled to use the same geographical indication.

Applications for registration – regulations of use

Any natural or legal person, including institutions, authorities and bodies governed by public law, may apply for EU certification marks. On the other hand, only associations and legal persons of public law are allowed to request the registration of collective marks. For certification and collective marks to be registered, they must comply with the same requirements needed for an individual mark. This means they do not have to fall within the absolute grounds for refusal set forth by article 7 EUTMR. In addition to and also with fewer derogations from the rules governing individual marks, an essential requirement for the registration of certification and collective marks is the regulations of use which has to be filed within two months of the application. For instance collective marks are not refused if containing geographical indications. Also additional grounds for refusal and for revocation and invalidity are provided for certification and collective marks. This article does not analyze the content of those provisions though.

Certification and collective marks both act as a guarantee of a specific level of quality or security. The standard to be certified linked to all the applied goods and services must be clearly defined within the registered regulations with a view to being understood by the relevant trade circles and market operators of the applicant's particular certification scheme.

Regulations of use are paramount for the legitimate use and legal protection of the certification and collective marks. It is imperative that standards be clearly defined and consistently applied for two main reasons. The first procedural reason is that the mark could be refused if the regulations of use are not clear and precise. On February 2019, after one year and a half from the system implementation, the EUIPO received 172 applications, hundred of which have been notified deficiencies concerning regulations of use.

The second reason belongs more to the purpose of the certification mark, which is to ensure the user's conformity to the owner's regulations and the consequent liability for nonconformity. Regulations of use of certification mark must contain, among others, conditions governing use of the mark, including sanctions, declaration that the applicant complies with the requirements, how the certifying body is to test those characteristics and to supervise the use of the EU certification mark. Yet, there is no need to detail all technical specifications. Guidelines on EU Certification Marks and Regulation of Use Template with drafting guidance are at disposal of applicants on the EUIPO website.

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Regulations are paramount for the legitimate use and legal protection of the certification and collective marks. It is imperative that standards be clearly defined and consistently applied. 

In the same vein, alongside other more general information, the regulations of use for collective marks need to list the persons authorized to use the mark, the conditions of the membership in the association and the terms of use, as well as sanctions in case of misuse. Regulations of use should contain strict requirements and foresee sanctions that should establish who is liable when a certified product is defective. According to Article 3 of the EU Directive 85/374/EEC on product liability, it can be argued that the certification and collective marks owners have joint responsibility with the producer. Hence, the mark's owner should have a right of redress by applying the sanctions foreseen in the registered regulations.

Should this be the case, the producer's trademark can be used in addition to the collective and certification marks, as a ‘liability' mark, so that non-compliant goods can be traced.

Conclusions

It is argued that certification and collective marks are key tools for sustainable consumption and production. Their goals are to safeguard the consumers' interest to opt for a product or service caring about their concern for environmental, health and food quality and safety.

The introduction of certification marks at the EU level offers businesses a legal tool protecting and fostering their commitment to quality and security. This is inferred by the fact that the owner has no interest in the turnover generated by the supply of the certified goods and services, as it cannot carry out the business involving that commercialization.

However, a certification mark is more difficult to obtain and can involve the owner's liability for nonconformity. Given the recent implementation of this right in the EU, it remains to be seen whether the EUIPO and the EU courts decisions will favor a simplification of the owner position. The merit of the new regulation is to set a dividing line between certification and collective marks, which creates two distinct and at the same time complementary guarantee rights. Unfortunately, this system is not adopted in all EU Member States and, as mentioned above, the EU laws make it an option for the Member States to provide a national registration procedure.

This will likely produce legal inconsistency at EU and national levels, as well as some lack of clarity as to the choice to be made between certification and collective marks. As an example, an EU certification mark cannot be converted into a national certification mark, if the Member State does not provide for its registration. In the same vein, a certification mark registered at national level containing a geographical indication of origin will not be accepted by the EUIPO.

Harmonization of national laws within the EU is needed, to build a common legal framework regulating guarantee marks in all the EU countries uniformly, taking into account the rules of the geographical indications sui generis system. This would bring more legal certainty to users of the system that would result in an optimization of their resources of time and money when it comes to choosing the most suitable protection for their rights.

This article was first published in The Trademark Lawyer Magazine, issue 4, 2019. 

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Posted by Roberto d'Erme

Roberto d'Erme has experience in Intellectual Property law, both in private practice and the public sector. He advises and proposes strategies to capture the value, protect and enforce IP rights. His expertise also includes advising on litigation matters, drafting and negotiating legal agreements and performing financial valuation of IP assets. Furthermore, Roberto d'Erme is involved in the protection of Geographical Indications and Designations of Origin.

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