ESG labels protected as certification marks: five years of practice with this new kind of trademark

As ESG labels become more and more commonplace, companies should not overlook that the certification seal to be used in relation to the certified products should also be actively protected by applying for a properly registered trademark.

Different trademark functions

Practice has increasingly shown how important it is to distinguish between the different functions of trademarks. If the trademark will identify the origin of a product, the most common category of all trademarks, namely the individual mark, is the right choice. An individual trademark has the function of distinguishing the goods and services of one undertaking from those of other undertakings. On the other hand, collective marks have been known for a long time. The function of such category of trademarks, which are registered by entities of an associative nature, is to distinguish the goods or services of the members of the association from those of other undertakings.

While collective marks sometimes will also serve the function of a quality seal, because several trade associations require their members to meet certain standards, another function of trademarks is to certify certain characteristics of goods or services. In the past there was no category of marks to serve this function.

Since 2017, however, the category of certification marks has been added to harmonised EU trademark law. A certification mark distinguishes goods or services that are certified by the proprietor of the mark in respect of material, mode of manufacture of goods or performance of services, quality, accuracy or other characteristics, from goods and services that are not so certified.

In its Gözze (C-689/15) decision the CJEU has already clarified that it is essential to use trademarks according to their function. The practical sanction for choosing the wrong trademark category relates to the requirement that (after an initial grace period) the trademark owner has to prove genuine use of its trademark in order to enforce it or if a third party files an action for cancellation due to non-use. In Gözze the CJEU made clear that use not corresponding to the trademark function cannot meet the use requirement. Thus, an individual trademark may be revoked if its actual use does not designate the origin of the products coming from a specific company but rather certifies certain characteristics of products originating from third parties.

Specifics of certification marks

Certification marks not only differ in their function, but also in some more formal aspects. One important difference is that the owner of a certification mark cannot run a business involving the supply of the goods and services of the kind certified (duty of neutrality).

Furthermore, a certification mark cannot be used to certify the geographical origin of goods and services. It has been noted that there is already sufficient special protection for geographical indications (GI) for foodstuffs and agricultural products at the European level, and the EU Commission already made a proposal to soon extend GI protection in a similar way to craft and industrial products (CI GIs or non-agri GIs). Nevertheless, under the GI system the origin of the product from the geographic region is not sufficient, but its quality or reputation has to be essentially attributable to its geographical origin.

When it comes to the application of certification marks, regulations governing the use of the mark must be provided that contain the characteristics of the goods or services to be certified, the conditions governing the use of the certification mark, and the testing and supervision measures to be applied by the owner of the certification mark.

In practice, the specific requirements for registration of certification marks require extensive preparation of the application and many open questions relating to this young category of trademarks remain unresolved.

authors: Christian Schumacher, Marie Hornyik