1. 

Trade marks have a defining impact not only on our economic system and purchasing behaviour. Subtly but unmistakably, they have also put their stamp on our language. Some trade marks have shaped our perception of an object to such an extent that they have entered our vocabulary as the name for the object itself. ( 2 )

2. 

A change in the meaning of a trade mark is not without problems for its owner. In accordance with Article 12(2)(a) of Directive 2008/95/EC ( 3 ) (‘the Directive’), a trade mark is liable to revocation if, in consequence of acts or inactivity of the proprietor, it has become the common name in the trade for a product in respect of which it is registered. The present case provides the Court with an opportunity to clarify further the conditions governing this ground for revocation. In particular, it raises the questions of which class of persons must come to perceive the trade mark as the name for the product, when inactivity becomes relevant and whether the availability of equivalent alternative names for the product constitutes a condition of the trade mark’s liability to revocation. While the Court adopted a basic position on the issue raised in the first of the aforementioned questions in Björnekulla Fruktindustrier ( 4 ) and made its initial comments on the second question in Levi Strauss, ( 5 ) it is to a large extent charting new territory when it comes to the third question.

3. 

Those questions have arisen in a dispute concerning the validity of the trade mark ‘Kornspitz’ between the trade mark proprietor, Backaldrin Österreich The Kornspitz Company GmbH (‘Backaldrin’), and its competitor, Pfahnl Backmittel GmbH (‘Pfahnl’). While the trade mark has possibly become the generic name for a particular type of bakery product for consumers, the same is not true for bakers.

4.

Article 2 of the Directive ( 6 ) stipulates which signs may be used as trade marks:

‘A trade mark may consist of any signs capable of being represented graphically, particularly words, including personal names, designs, letters, numerals, the shape of goods or of their packaging, provided that such signs are capable of distinguishing the goods or services of one undertaking from those of other undertakings.’

5.

Accordingly, Article 3(1) of the Directive provides:

‘1.   The following shall not be registered or, if registered, shall be liable to be declared invalid:

…

…

6.

Article 12(2)(a) of the Directive proves as follows:

‘2.   Without prejudice to paragraph 1, a trade mark shall be liable to revocation if, after the date on which it was registered:

7.

Paragraph 33b(1) of the Austrian Markenschutzgesetz (Law on the protection of trade marks) (‘the MSchG’), which transposes Article 12(2)(a) of the Directive, provides:

‘Any person can apply for a trade mark to be cancelled if, after the date on which it was registered, in consequence of acts or inactivity of the proprietor, it has become the common name in the trade for a product or service in respect of which it is registered.’

8.

Backaldrin is the proprietor of the Austrian word mark ‘KORNSPITZ’ (No. 108725), which is registered with priority from 13 December 1984 in Class 30 of the Nice Classification ( 7 ) both for bakery goods, pastry confectionery, also prepared for baking, and for raw materials and intermediate products (such as flour and dough) used for the manufacture of such products. The present proceedings are concerned only with the trade mark’s registration for (finished) bakery goods, not for raw materials and intermediate products.

9.

Under the trade mark ‘Kornspitz’, Backaldrin produces a baking mix, made from various types of flour and wholemeal, linseed and salt, which it supplies primarily to bakeries. The bakeries then add water, milk and yeast, and shape and bake the finished bakery product, which both they and the food retailers that they supply sell, with Backaldrin’s consent, as ‘Kornspitz’.

10.

According to the findings of the referring court, the end product manufactured by the bakeries has a typical taste and shape. The parties are in dispute as to how uniform the bakery product is. Backaldrin maintains that, through the use of a recipe, the provision of training and the issue to bakeries of non-exclusive licences for use of the trade mark, it ensures a uniform product with a uniform shape which is free from the addition of any further ingredients other than those mentioned in the foregoing paragraph. Pfahnl, on the other hand, maintains that bakeries are free to manufacture the bakery product as they wish and are not under the control of Backaldrin. This leads to extensive variations in the shape of the end product and the ingredients added to it.

11.

The bakery product sold under the ‘Kornspitz’ trade mark is very well known to end consumers in Austria and is available nationwide. According to Backaldrin, it supplies the baking mix to 1200 out of the 1500 bakeries in Austria as well as to many bakeries abroad.

12.

According to the lower court’s findings, which Backaldrin contests on appeal, the vast majority of end consumers consider ‘Kornspitz’ to be the name of a class of bakery products rather than an indication of origin from a specific undertaking. Competitors and bakeries, on the other hand, are aware that ‘Kornspitz’ is a trade mark.

13.

According to the referring court’s findings, the bakeries supplied by Backaldrin do not usually inform their customers that the bakery product at issue is manufactured from a baking mix obtained from Backaldrin.

14.

Backaldrin itself carries out activities to market and advertise its trade mark. As regards protection of the trade mark against third-party interference with the rights connected with the trade mark, the referring court held that no significant number of such acts of interference has been established. According to the findings of the Cancellation Division, Backaldrin had taken no action or had taken action only belatedly against bakeries in only four cases in which the latter had sold a product as ‘Kornspitz’ without having produced it from Backaldrin’s baking mix.

15.

Pfahnl contends that Backaldrin did not monitor the market for abuses of its trade mark rights. It maintains that the term ‘Kornspitz’ appears in the 40th edition of the Österreichisches Wörterbuch (Dictionary of the German language in Austria) and in a list of Austrianisms on Wikipedia. Backaldrin, on the other hand, argues that advertising is made available to bakeries, that the latter occasionally draw attention to the trade mark by using an ‘®’ symbol or the word ‘Kornspitz’ and that no dictionary mentions the word without reference to its status as a trade mark. Furthermore, it argues, consumers in urban areas with large bakeries and subsidiaries, in particular, are aware that bakery products are not manufactured on the premises.

16.

On 14 May 2010, Pfahnl applied to have the trade mark ‘Kornspitz’ cancelled in respect of both bakery goods and the corresponding primary products, on the basis of Paragraph 33b(1) of the MSchG. On 26 July 2011, the Cancellation Division of the Austrian Patent Office ordered the cancellation of the trade mark in respect of all the aforementioned products. It is against that order that the appeal brought by Backaldrin before the referring court is directed.

17.

In support of its application for cancellation, Pfahnl claimed that the term ‘Kornspitz’ is now used by manufacturers, consumers and traders to designate a bakery product made from brown flour which is pointed at both ends. It is not therefore capable of distinguishing Backaldrin’s products from those of other manufacturers.

18.

As regards the trade mark’s registration in respect of raw materials and intermediate products, Backaldrin argues in response that cancellation is precluded not least by the fact that bakeries and food retailers continue to understand ‘Kornspitz’ to be a trade mark. As regards its registration in respect of end products, Backaldrin contests the view that bakeries, food retailers and consumers understand the trade mark as a generic term. In its opinion, even if consumers have ceased to be aware of the existence of a trade mark, the fact that bakeries and food retailers are aware of the term’s status as a trade mark prevents it from developing into a generic name. Cancellation of the trade mark is also precluded, it argues, by the availability of alternative names for the bakery product, such as ‘Knusperspitz’, ‘Kerni’, ‘Bio Urkornweckerl’, ‘Kornstange’, ‘Kornweckerl’ or ‘Alpenspitz’. Backaldrin further submits that the cancellation of the trade mark constitutes an unjustified interference with its fundamental right to property.

19.

In its request for a preliminary ruling, the Oberster Patent- und Markensenat (Supreme Patent and Trade Mark Court), when examining the question whether the trade mark at issue has become a common name, draws a distinction between the various products in respect of which the trade mark has been registered. In so far as the trade mark is registered for raw materials and intermediate products, it considers that the market consists mainly of bakeries and food retailers, who are aware of the term’s status as a trade mark. To that extent, cancellation is precluded and the decision of the Cancellation Division of the Austrian Patent Office must be amended, there being no need for a reference for a preliminary ruling.

20.

As regards its registration in respect of ‘bakery goods’ and ‘pastry confectionery’, however, the market for the product consists primarily of end consumers. According to the findings of the lower court, which are contested by Backaldrin, end consumers regard ‘Kornspitz’ as designating a specific class of bakery product. According to the referring court, the case-law of the Court of Justice does not make it clear whether it is possible for a trade mark to develop into a generic name where the sign is understood to be a generic term by consumers but not by traders or intermediaries. That proposition is rejected by legal commentators writing in German and Austrian case-law.

21.

The referring court takes the view that the case-law of the Court of Justice might support the inference that the way in which intermediaries understand the term is relevant only if it influences the end consumer’s decision to purchase. In the present case, however, bakeries have, according to the referring court, no interest in drawing attention to the fact that they use a baking mix and do not work ‘traditionally’. Their knowledge does not therefore affect the consumer’s decision to purchase. If, however, taking that approach a stage further, account were taken only of the consumer, successful trade marks would actually be more liable to revocation than any others. In addition, revocation of the trade mark for bakery goods would jeopardise the trade mark for the baking mix, since any loss of the trade mark for bakery goods would thereafter have the effect of allowing competitors to describe the intended use of the primary product as being ‘for Kornspitze’. The referring court argues that it is questionable whether this is compatible with the protection of intellectual property as a fundamental right.

22.

The referring court also asks whether Backaldrin can be accused of relevant inactivity. It finds that inactivity or delayed action in four cases of infringement of a trade mark is not such as to have been a cause of the trade mark’s transformation into a generic name. The question is, however, whether Backaldrin should have required bakeries to sustain the trade mark or should itself have portrayed the trade mark more intensively as an indication of origin.

23.

Finally, the referring court points out that Austrian case-law considers a trade mark which is still regarded as such by the trade to be none the less liable to revocation on public interest grounds in the case where end consumers view the trade mark as the common name for the product and there is no alternative name available to traders. In that event, traders need to have the freedom to make use of the name.

24.

In the light of the foregoing considerations, on 11 July 2012, the Oberster Patent- und Markensenat stayed the proceedings and referred the following questions to the Court of Justice of the European Union for a preliminary ruling pursuant to Article 267 TFEU:

25.

Written observations have been submitted by Backaldrin, Pfahnl, the Federal Republic of Germany, the French Republic, the Italian Republic and the Commission.

26.

At the hearing on 29 May 2013, oral argument was presented by Backaldrin, Pfahnl, the Federal Republic of Germany and the Commission.

27.

As so often in trade mark law, the key to finding an answer to the questions raised by the referring court lies in the function which the protection of a trade mark performs. It follows from recital 11 in the preamble to the Directive and the settled case-law of the Court that the main function of the protection afforded by a trade mark is to guarantee the mark as an indication of origin. A trade mark enables the consumer or end user to identify the origin of the marked goods ( 8 ) and to distinguish them from goods of other origin. ( 9 ) What matters here is not that the consumer should be able to identify the ‘physical’ producer of the goods, that is to say the undertaking which, itself, produces the goods. ( 10 ) This would not be consistent with the reality of today’s economic system, which is based on a division of labour and in which products are manufactured under licence in complex production chains. The trade mark serves rather to guarantee that the goods are manufactured under the control of an undertaking (the proprietor of the trade mark). ( 11 )

28.

If, however, a trade mark is primarily intended to serve as an indication of the origin of a product, in the sense of the undertaking controlling the manufacture of that product, it follows, in accordance with Article 2 of the Directive, that the only signs that may be used as a trade mark are those which are capable of distinguishing the goods of one undertaking from those of other undertakings. Signs which are devoid of any such distinctive character cannot be registered. ( 12 ) Such distinctive character is lacking, for example, in signs which have become customary in the current language or in the bona fide and established practices of the trade as a means of designating the goods themselves. Their registration is precluded by Article 3(1)(d) of the Directive. ( 13 ) Article 3 of the Directive concerns cases in which the trade mark fails from the very outset to perform its function as an indication of origin. However, a sign which did not become customary as the generic name for a product until after it was registered as a trade mark, and is no longer understood by the relevant public as being an indication of origin, also lacks distinctive character. Article 12(2)(a) of the Directive provides that such trade marks are liable to revocation, subject to certain conditions. ( 14 )

29.

The provisions cited constitute a coherent scheme of rules which must be interpreted in the context in which they arise. In this regard, account must be taken not only of the case-law concerning the Directive and Directive 89/104/EEC, ( 15 ) which it replaced, but also of the case-law concerning the Community Trade Mark Regulation, which contains similar provisions. ( 16 )

30.

Although it stands to reason that a trade mark which has developed into a generic name should be liable to revocation on the ground that it has ceased to perform its function as an indication of origin, one must not lose sight of the fact that that ground for revocation has a serious consequence for the trade mark proprietor – one far more serious than the non-registration of a generic name as a trade mark at the beginning of its economic existence. The fact that a trade mark enters the current language as the term for the product itself is evidence ultimately of the success generated by the hard work, often over many years, of the trade mark proprietor, whose product has, in the eyes of the world, become the embodiment of the type of product itself. Indeed, in many cases, the trade mark proprietor created a new type of product through a particularly innovative product, whose name thereby became the designation of the type of product itself.

31.

The legislature was thus called upon to undertake a fundamental balancing of interests. In this regard, account had to be taken, on the one hand, of the interest of the public and of competitors in having the freedom to use a term which is no longer associated with a particular origin in the minds of the relevant class of persons and the monopolisation of which compels competitors to avoid it – in some cases in favour of an artificial-sounding alternative. On the other hand, account had to be taken of the interest of the proprietors, whose trade marks also enjoy protection as intellectual property under Article 17(2) of the Charter of Fundamental Rights and Article 1 of the First Additional Protocol to the European Convention on the Protection of Human Rights and Fundamental Freedoms. ( 17 ) By balancing those interests, the legislature considered that the transformation of the trade mark into the common name of a product can be relied on against the proprietor thereof only where that transformation is due to his action or inaction. ( 18 )

32.

Accordingly, Article 12(2)(a) of the Directive requires, as an objective element, that the trade mark has become the common name in the trade for the product or service in respect of which it is registered. As a subjective element the provision requires that that development occurred in consequence of acts or inactivity of the proprietor of the trade mark.

33.

The present proceedings provide the Court with an opportunity to clarify both those conditions further. The first and third questions referred concern the objective element of liability to revocation, which I shall examine first; the second question, on the other hand, concerns the subjective element of liability to revocation.

34.

By the first question, the referring court wishes to ascertain the class of persons for which a trade mark must have become the common name for a product in order for the objective element to be satisfied and for the trade mark to be liable to revocation under Article 12(2)(a) of the Directive. The court asks in particular whether it is sufficient in this regard that end consumers no longer understand the name as being an indication of origin, while traders continue to understand it as such but do not normally disclose the indication of origin to end consumers.

35.

Backaldrin, the Federal Republic of Germany, the French Republic and the Commission take the view that, in situations such as that in the present case, both consumers and intermediaries must be taken into account as the relevant class of persons. Pfahnl and the Italian Republic consider that, in the present case, consumers alone must be taken as the point of reference.

36.

Before turning to the issue of the relevant class of persons, however, I must address an argument put forward in this connection by Backaldrin and the Federal Republic of Germany.

37.

Backaldrin and the Federal Republic of Germany take the view that the examination of the way in which the understanding of the trade mark has been transformed, such that it is now perceived as a common name, must take as a point of reference not only its function as an indication of origin but also the quality or guarantee function which a trade mark performs, that is to say whether the class of persons concerned associates particular characteristics and consistent quality with the product sold under the trade mark in question.

38.

The Commission rejected that view at the hearing. In its opinion, if all the functions performed by a trade mark were taken into account in the context of Article 12(2)(a) of the Directive, liability to revocation would be excluded and there would therefore be no scope for the provision’s application. In its submission it argues that the consequence of organising the manufacturing process in such a way as to grant licensees freedom in the conduct of their affairs must be a corresponding response on the part of consumers, not the loss of the trade mark.

39.

It is beyond question that, in addition to their aforementioned principal function – as an indication of origin ( 19 ) – trade marks perform a number of other tasks. ( 20 ) The Court has made it clear in its case-law that the trade mark proprietor may rely on his exclusive right under Article 5(1)(a) of the Directive not only where there is an adverse effect on the function of the trade mark as an indication of origin but also where there is an adverse effect on the function of guaranteeing the quality of a product or that of communication, investment or advertising. ( 21 ) The Court has not yet given a ruling on whether those functions also have a role to play in the assessment of whether a sign has become a generic name.

40.

The quality function is not relevant to such an assessment.

41.

This follows first of all from a proper understanding of the quality function itself. A trade mark allows an undertaking to invest in the quality of its product. After all, it enables consumers to identify the undertaking responsible for manufacturing the product and, on the basis of their experience, to reward good-quality manufacturers by buying their product and penalise lower-quality manufacturers by not patronising them. ( 22 ) In this sense, a trade mark serves as a sign of the consistent characteristics of a product. ( 23 )

42.

The quality function thus presupposes that a trade mark performs its function as an indication of origin. Advocate General Jacobs rightly pointed out in this regard that trade marks ‘may, by virtue of their origin function, be valuable assets, encompassing the goodwill attached to an undertaking (or one of its particular products)’. ( 24 ) It protects the expectations which the consumer attaches to an undertaking’s product, not the expectations which he attaches to a term understood by him as being a generic name. If the trade mark no longer fulfils its origin function because it has become the generic name for the product, it can no longer fulfil its quality function either.

43.

If, on the other hand, the assessment of a trade mark’s transformation into a generic name were also to be carried out by reference to the quality function, that is to say if such a transformation were to be deemed not to exist in the case of trade marks which have lost their origin function but have retained their quality function, Article 12(2)(a) of the Directive would never be applicable, as the Commission has rightly pointed out.

44.

That is the case because, first of all, consumers also associate certain consistent characteristics with any given generic name (not only with trade marks). A croissant in the shape of a baguette or without a particular taste would not be a croissant. A table with a vertical top would not be a table.

45.

Secondly, the quality function does not protect the expectation of a particularly high quality, but only the expectation of a certain quality. The consumer may associate trade mark A with outstanding products, trade mark B with lower-quality products and trade mark C with variable-quality products. ( 25 ) Hence, it is entirely unclear at what point a quality function which is isolated from the origin function should cease to be fulfilled.

46.

It must therefore be concluded first of all that, in cases involving a trade mark’s transformation into the generic name for the product in question, account is to be taken only of the trade mark’s function as an indication of origin.

47.

On the basis of the trade mark’s function as an indication of origin, it must now be determined which class of persons is relevant, in the context of Article 12(2)(a) of the Directive, to the assessment of whether a trade mark has become the common name for a product.

48.

The Court looked at that question in Björnekulla Fruktindustrier. The dispute forming the subject-matter of the main proceedings in that case concerned a trade mark for chopped pickled gherkins which, according to surveys, had become a generic term for consumers but not for the grocery, mass catering and food stall sectors.

49.

The Court interpreted Article 12(2)(a) of Directive 89/104/EEC, which was then in force and is essentially identical to Article 12(2)(a) of the Directive, on the basis of its wording, scheme and objectives. It stated that the whole aim of the commercialisation process is the purchase of the product by consumers and end users. The role of the intermediary consists in detecting, anticipating, increasing or directing the demand for that product. Accordingly, the Court held that, ‘in cases where intermediaries participate in the distribution to the consumer or the end user of a product which is the subject of a registered trade mark, the relevant classes of persons whose views fall to be taken into account in determining whether that trade mark has become the common name in the trade for the product in question comprise all consumers and end users and, depending on the features of the market concerned, all those in the trade who deal with that product commercially’. ( 26 )

50.

The parties to the proceedings draw different conclusions from that case-law for the purposes of the present case. Backaldrin, the Federal Republic of Germany, the French Republic and the Commission take the view that, depending on the features of the market concerned, bakeries form part of the relevant class of persons in the present case. The French Republic and the Commission consider it to be decisive in this regard that bakeries are involved in the choice of products made by customers. The French Republic points out that, by deliberately not disclosing to consumers the status of the name in question as a trade mark, bakeries exert an even greater influence over the decision of consumers to purchase. The Federal Republic bases its argument on the fact that the product is processed by the bakeries. The Commission further states that the influence of the intermediaries increases in proportion to their influence on the product. Backaldrin argues that, in the case of products which are sold to the end consumer unpackaged and which offer almost no scope for drawing attention to trade mark rights, the view held by traders carries much weight. In general, they submit, a trade mark becomes a common name only in the case where the sign is perceived as an indication of origin only by an entirely insignificant proportion of the relevant class of persons.

51.

Pfahnl and the Italian Republic, on the other hand, consider that, in the present case, bakeries do not form part of the relevant class of persons. Pfahnl argues that bakeries have no influence over the decision to purchase made by consumers, who choose bakery products independently and without advice. Furthermore, they contend, a bakery is not an intermediary; it manufactures the product and, in so doing, makes its work easier by using a baking mix. The Italian Republic considers the view held by bakeries to be irrelevant, since their awareness of the name’s status as a trade mark has no influence over the decision to purchase made by end consumers.

52.

In accordance with the case-law cited above, with which I concur, the assessment of whether a trade mark has become the generic name for a product must take as its point of reference, primarily, the views of consumers, but also, ‘depending on the features of the market’, the views of those in the trade who deal with the product commercially. The question therefore arises as to which features of the market are important.

53.

The wording of Article 12(2)(a) of the Directive, which Advocate General Léger carefully interpreted in Björnekulla Fruktindustrier, ( 27 ) provides no guidance in this regard.

54.

Although the legislative context of the aforementioned provision supports the inference of arguments to the effect that the focus of the assessment must be the end consumer, it offers no indication of which market features must be present in order for those in the trade also to form part of the relevant class of persons.

55.

In connection with the systematic interpretation of that provision, it should be borne in mind, as stated above, that Article 3(1)(d) of the Directive precludes the registration of trade marks ‘which consist exclusively of signs or indications which have become customary in the current language or in the bona fide and established practices of the trade’. That ground for refusal of registration – a special case of lack of distinctive character (Article 3(1)(b) of the Directive) – may be overcome, in accordance with Article 3(3), by the acquisition of distinctive character.

56.

The wording of Article 3(1)(d) of the Directive (‘current language’or‘bona fide and established practices of the trade’) appears to classify a term as a generic term where it is regarded as such by consumers or by the trade. ( 28 ) This would support the proposition that, for the purposes of an assessment to the effect that a term has become a generic term, it is generally sufficient that the change in meaning has taken place in the minds of consumers. That proposition is in particular also supported by the fact that, when assessing questions concerning distinctive character, the Court has repeatedly taken as its point of reference the consumer, that is to say the average consumer, reasonably well-informed and reasonably observant and circumspect. ( 29 ) However, there are examples of cases in which the Court has included traders in the relevant class of persons. ( 30 )

57.

The purpose of the aforementioned provision is therefore decisive for determining what are the market features, in the presence of which account is also to be taken of those in the trade who deal with the product commercially, when it comes to assessing whether a trade mark has become a generic name.

58.

As I have already stated, the main function of the trade mark is as an indication of origin. In the context of the sale of a product, the trade mark gives information on the origin of the product. The trade mark thus forms part – like language generally – of a process of communication, in this case between vendors and purchasers. That communication process produces its intended result and the trade mark fulfils the function justifying its existence only where both parties involved in the communication ‘understand’ the trade mark, in the sense that they are aware of its function as an indication of origin. If either party considers the trade mark to be a generic name, the information which the trade mark was intended to convey is not transmitted. It is thus generally sufficient, for the purposes of satisfying the objective element of liability to revocation under Article 12(2)(a) of the Directive, that consumers consider a trade mark to be a generic name. That is what the Court meant when it held that, in general, ‘the perception of consumers or end users [plays] a decisive role’, ( 31 ) since the aim of the commercialisation process is the purchase of the product.

59.

That process of communication between vendors and purchasers makes readily apparent the features which a market must exhibit in order for an intermediary to be relevant to the assessment of the generic nature of a trade mark. After all, a trade mark may, despite the purchaser’s lack of awareness that the name is a trade mark, continue to perform its function as an indication of origin where an intermediary exerts a decisive influence over the purchaser’s decision to purchase and the intermediary’s knowledge of the trade mark’s function as an indication of origin thus leads to the success of the communication process. That is the case where it is customary in the relevant market for the intermediary to give advice which has a decisive bearing on the decision to purchase or where the intermediary actually makes the decision for the consumer himself, as is the case with pharmacists and doctors in relation to medicinal products available only on prescription. ( 32 )

60.

There is no such decisive influence over the decision to purchase in the present case. The customers of a bakery make their decision to purchase without any decisive advice or influence over the decision to purchase.

61.

The fact that, by acquiring certain baking mixes, bakeries play a part in the decision made by customers does not support a different conclusion. The acquisition of a baking mix exerts no influence over the acquisition of the finished bakery product. The latter is a different product which is manufactured by the bakery from the primary product and is offered to the customer under licence.

62.

The decision that bakeries make as regards their own product offer and the fact that their customers are not made aware that the name of a bakery product is a trade mark also have no crucial influence over the consumer’s decision to purchase that product. As stated above, such an influence would presuppose that bakeries fulfil the trade mark’s function as an indication of origin, in other words that they influence the consumer’s decision to purchase during the process of sale between the vendor and the consumer. In the present case, however, the bakeries manufacture the finished product themselves only under licence. They therefore stand on the side of the manufacturers, not the consumers. Although the restriction of the range of products on offer and the non-disclosure of the status of the product name as a trade mark do in effect influence the consumer’s decision to purchase, the bakeries do not thereby exert any influence over that decision to purchase from the point of view of the purchaser, but rather from the point of view of the vendor.

63.

European trade mark law is by no means exceptional in relying on the consumer as the decisive point of reference for assessing whether a trade mark has become generic. In the United States of America, Judge Learned Hand held long ago that the decisive factor was the consumer’s understanding of the word in question. ( 33 ) The Court of Justice of the Andean Community, too, when assessing whether a trade mark has become a generic name, takes as its point of reference the consumer’s understanding of that mark, as the consumer is the ‘target of trade mark protection’. ( 34 )

64.

The Austrian Oberster Gerichtshof, on the other hand – even after the Court’s decision in Björnekulla Fruktindustrier – relies in principle on a ‘comprehensive determination of the understanding of all classes of persons who are confronted with the trade mark’, which, in addition to end consumers, also includes manufacturers and traders. The argument it cites in this regard is that end consumers are readily inclined to use trade marks as generic names. ( 35 )

65.

I am not convinced by that argument. Although consumers do often use trade marks as generic names, they are none the less generally aware of the status of such names as trade marks, which is not sufficient to satisfy the objective element of liability to revocation. Cases in which the consumer has lost all awareness of a name’s status as a trade mark are relatively rare. Where such a case does arise, however, the trade mark no longer fulfils its function as an indication of origin. It is not clear why, in such a case, the onset of the development of a trade mark into a generic name, in other words the objective element of liability to revocation, must be made artificially more difficult by using as the relevant class of persons for comparison purposes a group with a particularly acute awareness of trade marks. Nor is such a requirement justified by the need to protect the trade mark proprietor’s right to property as a fundamental right. This right is already taken into account by the fact that existence of the objective element alone does not render the mark liable to revocation.

66.

Nor, finally, does another consideration of the referring court change the interpretation of the provision, namely that in case of a revocation of the ‘Kornspitz’ trade mark in respect of finished bakery products competitors could, in accordance with Article 6(1)(b) of the Directive, designate baking mixes as being ‘for the manufacture of Kornspitze’, in which event Backaldrin’s registered trade mark for baking mixes would lose some of its value. The risk that the trade mark for the primary product will lose value as a consequence of the revocation of the trade mark for the end product follows from the decision to register the trade mark for both product categories and from the specific structure for producing and distributing the end product, in particular the fact that it is manufactured by bakeries which are licensed to sell it under the trade mark. The trade mark proprietor itself made those decisions and thereby created the risk associated with them. The trade mark proprietor is, however, protected by the fact that revocation of the trade mark is excluded if the mark’s transformation into a generic name is not the consequence of its acts or inactivity.

67.

In the light of all the foregoing, the answer to the first question must be that Article 12(2)(a) of the Directive must be interpreted as meaning that the relevant class of persons for assessing the question whether a trade mark has become the common name in the trade for the product in respect of which it was registered consists primarily of consumers and end users. Depending on the features of the market, account must also be taken of those persons in the trade who deal with that product commercially. Features indicating that the latter should also be taken into account are present in particular where the relevant traders exert a degree of influence over the end consumer’s decision to purchase. In so far as that is not the case, a trade mark has become the common name for the product in respect of which it is registered where it is understood as such by end consumers, even though traders who manufacture the product themselves from a primary product of the trade mark proprietor and sell it under the trade mark with the trade mark proprietor’s consent are aware that the name is an indication of origin but do not generally disclose this to the end consumer.

68.

By its third question, the referring court seeks to ascertain whether the liability to revocation of a trade mark which, in consequence of acts or inactivity of the proprietor, has become a common name for consumers, but not in the trade, presupposes that there are no equivalent alternative names for the product itself, with the result that end consumers have to use that name.

69.

According to the findings of the Oberster Patent- und Markensenat, the background to that question lies in the case-law of the Austrian Oberster Gerichtshof. In accordance with that case-law, the transformation of a trade mark into a generic name is in principle excluded so long as traders continue to understand it as a designation of origin. The position is different, however, where traders do not have an equivalent alternative to a trade mark which, from the point of view of end consumers, has become a generic name. ( 36 ) Although, in the view of the referring court, that condition finds no support in the wording of the Directive, it allows an appropriate balance to be struck between the trade mark proprietor’s property right, which is also protected as a fundamental right, on the one hand, and the general interest in the availability of signs designating products and services, on the other.

70.

In Backaldrin’s view, the development of a trade mark into a generic name is excluded where alternative names for the product are available. This must also be assumed to be the case where the alternative names for the trade mark are not equivalent in every respect, in particular as regards the extent of their use.

71.

Pfahnl considers the aforementioned requirement to be irrelevant to the assessment of the liability of a trade mark to revocation. It has no basis in the wording, context or objectives of the Directive. The Commission supports this view.

72.

The French Republic, too, does not regard the availability of alternative terms as being a condition of the capacity of a trade mark to develop into the generic name for the product, although it is ready to concede the indicative value of that fact. The Italian Republic considers the absence of alternative names to be no more than a ‘risk factor’ which may contribute towards a trade mark’s development into a generic name.

73.

I take the view that, for the purposes of examining the liability of a trade mark to revocation, there is no need to consider whether equivalent alternative names for the product itself are available to traders.

74.

It must be clarified first of all in this regard what the referring court means when it states that there ‘are no equivalent alternatives’. It cannot mean that a synonym must objectively ‘exist’. Language is a social phenomenon, not an objectively defined space. A term spontaneously invented (by the trade mark proprietor) cannot constitute an ‘equivalent alternative’. The meaning of a word is, after all, defined by its use in the language. ( 37 ) Although, once introduced, a term is subject to the evolution of language usage, it cannot simply be changed by design. Whether a word constitutes an ‘alternative’ for another word, indeed whether that word is ‘equivalent’ at all, is therefore determined by the linguistic community, not by a court. The linguistic community may understand what at first sight appears to be an ‘equivalent’ word differently, or refuse to use it altogether. The criterion must therefore be understood as referring to synonyms for the term which have been introduced into the current language as it is actually used. This is also consistent with the understanding of the Austrian Oberster Gerichtshof, which speaks of an ‘alternative term which is in use’. ( 38 )

75.

However, such a criterion is not provided for by, or compatible with the purpose of, the wording of the aforementioned provision. The liability to revocation which results from the development of a trade mark into the common name for a product is, in accordance with my foregoing submissions, justified by the fact that the trade mark can no longer fulfil its function as an indication of origin. Liability to revocation is the means by which the legal order responds to the public‑interest requirement that the sign be freely usable (‘requirement of availability’). ( 39 ) Evidence of a public-interest requirement that the sign be usable, which may be less pressing where other signs are available for the same purpose, is not, however, a statutory condition of liability to revocation. The only statutory condition is that the trade mark should have become the common name for a product. This issue is, however, independent of the question whether synonyms have been introduced into the current language.

76.

Finally, the argument to the effect that the criterion under consideration in this question for a preliminary ruling is necessary in order to ensure that the trade mark proprietor’s property is protected as a fundamental right, must be dismissed. As has already been stated, the legislature fulfilled its duty to strike a balance between the public interest and the trade mark proprietor’s fundamental rights by requiring, for the purposes of a trade mark’s liability to revocation, not only that the trade mark should have become the generic name for the product in question but also that the conditions comprising the subjective element of liability to revocation as provided for in Article 12(2)(a) of the Directive should be satisfied. There is no room in this regard for any further unwritten criteria in the objective element of such liability.

77.

The answer to the third question must therefore be that it is irrelevant to the assessment of the liability of a trade mark to revocation whether end consumers have to use the name in question because there are no equivalent alternatives.

78.

The second question raised by the referring court concerns the subjective element of liability to revocation as provided for in Article 12(2)(a) of the Directive, that is to say, the question whether the change in the meaning of the sign is attributable to the trade mark proprietor. The referring court wishes to ascertain in this regard whether inactivity may consist in the mere fact that the trade mark proprietor remains inactive even though the traders selling its product do not disclose to customers that the name is a registered trade mark.

79.

Backaldrin takes the view that the reply to that question must be in the negative. Inactivity is relevant where the trade mark proprietor fails to take action against the unjustified use of the trade mark by third parties. In the present case, however, Backaldrin allowed its customers, bakeries, to distribute the bakery products at issue under the ‘Kornspitz’ trade mark under a non-exclusive licence. In its submission, to oblige bakeries to inform purchasers of the bakery product at issue that the ‘Kornspitz’ name is a trade mark is unusual and unreasonable in the fresh food trade. The making available of advertising material which can be displayed in bakeries should be sufficient.

80.

Pfahnl, the French Republic, the Italian Republic and the Commission, on the other hand, consider that the question must be answered in the affirmative. A trade mark proprietor must be sufficiently vigilant also with regard to the protection of the distinctive character of its trade mark and use all the means at its disposal in the course of trade to ensure that the mark does not develop into a generic name. It must therefore urge bakeries to disclose its trade mark. The French Republic considers failure to do so to be an indication of relevant inactivity.

81.

In accordance with Article 12(2)(a) of the Directive, the transformation of a trade mark into the common name for a product does not in itself render the trade mark liable to revocation. Rather, the transformation must have occurred ‘in consequence of acts or inactivity’ of the trade mark proprietor. In this respect, the wording of the provision contains no restriction on the relevant inactivity that is capable of causing a trade mark to become a generic name.

82.

In Levi Strauss, the Court had occasion to comment on the kind of inactivity which is sufficient for the purposes of the subjective element of the provision at issue. It held that ‘… inactivity may also take the form of a failure on the part of the proprietor of a mark to have recourse to Article 5 in due time, for the purposes of applying to the competent authority to prevent third parties from using the sign in respect of which there is a likelihood of confusion with that mark, since the purpose of such applications is precisely to preserve the distinctive character of the mark in question’. ( 40 ) The use of the word ‘also’ shows that the Court considered the situation it described as being merely an example of relevant inactivity.

83.

The extent of the trade mark proprietor’s duties can be determined more accurately by reference to the meaning and purpose of the provision. The Directive is intended to strike a balance between the interests of the trade mark proprietor and those of other economic operators in the availability of signs. Consequently, the protection of the trade mark proprietor’s rights is not unconditional, and the trade mark proprietor must show himself to be vigilant with regard to the protection of his trade mark. ( 41 ) As I see it, this applies not only to defending the trade mark against infringement but also to the risk of a trade mark becoming a generic name. The duty of vigilance requires the trade mark proprietor to observe the market and take reasonable steps to protect his trade mark from developing into a generic name.

84.

It is for the national courts to determine in each individual case what measures it is appropriate and reasonable for the trade mark proprietor to take. Examples of such measures can be found both in the practice of OHIM and in academic literature. They include advertising, placing warnings on labels (or placards placed alongside the product which specify the product’s name) or persuading dictionary editors to give an indication in the entry for a word that that word is a trade mark. ( 42 ) The trade mark proprietor himself must avoid using the trade mark as a generic name ( 43 ) and take reasonable steps to combat such use by others, while drawing the attention of traders to the fact that the name of the product is a trade mark. ( 44 ) In cases where a licence to use the trade mark has been issued, the trade mark proprietor must, here too, take reasonable steps to protect the trade mark, such as laying down conditions to that end in the licence and, within reason, monitoring compliance with those conditions.

85.

The answer to the second question must therefore be that there is inactivity within the meaning of Article 12(2)(a) of the Directive where the trade mark proprietor does not take reasonable steps to protect his trade mark from becoming a generic name. These include bringing influence to bear on his licensees to achieve that result.

86.

For the reasons set out above, I propose that the Court answer the questions referred as follows: