In a case involving trade mark infringement brought by Audi, the German manufacturer of luxury cars, against a wholesaler of spare car parts, the Advocate General of the Court of Justice of EU (CJEU) has delivered an opinion in favour of the latter. The decision is a contrast to a recent decision of the German Supreme Court. In this decision, the German Supreme Court held that the sale of a specific radiator grille for an Audi A6 infringed Audi’s trade mark. We consider the recent Advocate General opinion and its impact for the car industry.
Audi is the owner of EU Trade Mark (EUTM) Number 000018762 for the figurative mark below, which protects amongst other goods and services, the following goods in Class 12: “Land, air and water vehicles and parts thereof (not included in other classes), including engines for vehicles.”
The defendant in the case, is a seller of spare car parts to distributors. Between 1986 and 2017, the defendant advertised and offered for sale on its website radiator grilles designed for old Audi models from the 1980s and 1990s. Those radiator grilles included, like the original ones, a carved space for inserting and mounting Audi’s well-known EUTM, pictured above. Audi began instituting court proceedings against the defendant in 2017, claiming trade mark infringement. Audi sought an injunction in May 2020 from the Regional Court of Warsaw to prohibit the defendant from importing, offering, marketing, and advertising non-original radiator grilles bearing a sign identical with, or similar to, its EUTM. Before deciding the case, the Regional Court of Warsaw referred several questions to the CJEU for a preliminary ruling, including the two questions below.
(1)(a) Does Article 14(1)(c) EUTMR prevent Audi from prohibiting a third party from using in the course of trade a sign which is identical or confusingly similar to its EUTM, regarding spare car parts (radiator grilles) where that sign constitutes a mounting element for a car accessory?
(1)(b) What evaluation criteria should be used to determine whether the use of the EUTM is consistent with honest practices in industrial and commercial matters?
Answer to Question 1(a)
In the opinion of Advocate General Medina, it is important to bear in mind that the aim of spare car parts is to replace the originally assembled parts ie spare parts are primarily intended to restore the original appearance of the repaired car. There are, for example, design right exceptions to facilitate the secondary market for spare parts.
In the Advocate General’s opinion, only a radiator grille designed as conceived in the original radiator grille, makes it possible to replicate the car’s original appearance. Unlike other types of spare parts such as wheel rims and hubcaps, a radiator grille, due to its front position in the bodywork of the car, cannot achieve a full restoration of a car’s appearance unless it is identical to the original product. In light of these considerations, the CJEU could exclude the mere silhouette of Audi’s EUTM, as part of a “faithful reproduction of an original radiator grille and with the sole technical purpose of inserting and mounting Audi’s emblem,” from fulfilling the functions of a trade mark. The use of the sign by the defendant, therefore, did not serve the function of exclusively identifying or referring to the goods or services as being from Audi; it served a technical function and not a designation aim.
In addition, consumers of radiator grilles must be able to obtain information that the spare part is suitable or intended for cars of a particular manufacturer. That being said, the answer to question (1)(a), according to the Advocate General, is that Article 14(1)(c) EUTMR does not allow a seller of spare car parts ie radiator grilles, to market those parts where they include an element for inserting and mounting Audi’s emblem. In particular, where the shape of the element in question is identical with, or confusingly similar to, Audi’s EUTM.
Answer to Question 1(b)
In the event of disagreement with her answer to question 1(a), and on the question of the criteria to be used to determine whether the use of the EUTM is consistent with honest practices in industrial and commercial matters, Advocate General Medina noted that it is for the national Court to assess this. However, she went on to state that three specific elements are of particular importance:
- The use could not entail the ‘discrediting or denigration’ of Audi’s EUTM.
- The defendant must take necessary steps to indicate that the products were manufactured by it and to ensure they will not be regarded as imitations or reproductions of the original parts.
- A manufacturer or seller of spare parts is subject to a duty of diligence to ensure compliance with honest practices in industrial or commercial matters by downstream users.
The case will now revert to the Regional Court of Warsaw. An interesting aspect of the case is the evident interplay between trade mark law and design law. For example, the EU Regulation governing rights conferred by EU designs provides an exception specifically for spare car parts. The EU Regulation states that design protection does not extend to a design which forms part of a complex product, and which is used for the purpose of the repair of that complex product so as to restore its original appearance. There is no equivalent provision in EU trade mark law and hence Audi could not have brought a claim for design infringement under the same facts. This was recognised by the Advocate General who warned that attention should be paid to the consequences of a decision on EU trade mark law which might also impair the aims of design law. The purpose of the exemption in EU design law is undoubtedly to broaden the choice for consumers of spare parts between independent and non-independent manufacturers.
For more information and expert legal advice on the impact of this case and how it affects your business, please contact a member of our award-winning Intellectual Property team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.