Trademark Use of Petroleum-related Products Wholesale Operators by Retail Distributors under Royal Decree 1085/2015
Maria Vilas / Fabrizio Miazzetto
Last December 5th of 2015, the Royal Decree 1085/2015, of 4 December, on promotion of biofuels (in Spanish) (hereinafter Royal Decree) was published in the Spanish Official Journal.
The aim of this instrument is the promotion of the use of biofuels and other renewable fuels with transportation purposes in accordance with European Directives 2009/28 and 2015/1513 on petrol and diesel quality. Furthermore, this instrument is also aimed at the promotion of the use of renewable energy coming from renewable sources. The main target is to reach the European goal of achieving that the renewable energies are 20% of the energy consumed in 2020.
In terms of Intellectual Property, the Third Additional Provision sets forth the possibility for owners of retail distribution facilities of petroleum-related products to inform about the origin of the fuel they supplied in accordance with art. 43.5 of of Law 34/1998 of October 7, of the hydrocarbon sector (hereinafter Hydrocarbon Law) that establishes the possibility to inform as to the origin of the petroleum-related products commercialized by these establishments, ruling on the correct information that should be communicated thereto and the conditions of use of third parties’ trademarks.
This provision aims at achieving two goals: a) that the information given to the consumers about the source of the fuel supplied by the retail distribution facilities is true and accurate; b) protecting the trademark rights of the wholesale operators and retail distributors that supply independent stations.
In particular, the provision states as follows:
“Third additional provision. Information on the source of the fuel in retail distribution facilities of independent petroleum-related products.
Pursuant to article 43.5 of the Law 34/1998, of 7 October, the owners of the retail distribution facilities of petroleum-related products, which do not belong to the distribution network of a wholesale operator, shall be able to provide information about the source of the fuel they commercialize by means of advertising the wholesale operator or distributor to which they acquire the fuel. In this case, they shall imperatively indicate the acquisition date, product, amount expressed in cubic meters and company name of all the wholesale operators and distributors from which fuel has been acquired, at least, within the last sixty days. Likewise, they shall be able to include trademarks, logotypes or other distinctive signs belonging to such operators and distributors, solely in the event of prior authorization in written by the owner of such trademarks, logotypes and distinctive signs”.
Pursuant to this provision, the compulsory information required to the owners of retail distribution facilities of petroleum-related products to invoke the possibility of reporting about the source of the commercialized fuel would be the following:
- acquisition date,
- product,
- amount expressed in cubic meters, and
- company name of all the wholesale operators and distributors to which fuel has been acquired, at least, within the last sixty days.
Nonetheless, as it can be deducted from the literal meaning of the provision and from the explanatory memorandum of the Royal Decree, the use of trademarks and other distinctive signs owned by third parties shall be possible solely in the event of prior authorization in written by the owner of such trademarks. Therefore, the possibility of publishing the information about the source of the commercialized fuel does not entitle the owners of the independent distribution facilities to advertise and take advantage of an operator´s trademark image without having express authorization thereof.
The aforementioned seems to collide with the content of article 37 of the Trademark Act 17/2001, of 7 December (in Spanish), which states some limitations to the ius prohibendi of the trademark holder when the use of third-party signs is necessary to indicate the sort, quality, quantity, destination, value, source, geographical origin… or any other similar features of the product or service, as long as such use is carried out in accordance with the legal practices concerning industrial and trade matters.
These limitations to the trademark right is based on the will of finding a point of balance between, on the one hand the protection of the trademark holders and the protection of the advertising function of the trademark, and, on the other hand, the market and consumers´ protection. For this reason, although the general rule considers unlawful the use of third-party trademarks or signs with advertising purposes, the case law which interprets the referred provision and its analogue, article 6.1 of Directive 89/104/CEE (article 14 of Directive 2015/2436 of December 16, 2015), considers lawful the use of alien trademarks with descriptive purposes provided that such use is necessary in order to indicate the origin of the product or service and as far as such use complies with the trade legal uses.
In the well-known CJEU Judgment of 23 February of 1999, C-63/97, “Bayerische Motorenwerke AG (BMW) y BMW Nederland BV”, the owner of an independent repair shop in which BMW cars were repaired, advertised that he was “specialized in BMW”. BMW declared that this action could not fall within the exception stated in article 6, point 1, letter c), of the Directive, thus, this should be understood as an infringement of BMW´s exclusive right. The decision of The Court of Justice considered the necessity of providing more accurate information to the client of the repair shop. In this sense it was upheld that “if an independent businessman carries out the maintenance and repair of BMW cars or if such businessman is actually specialized in this, such information, in practice, cannot be provided to his clients without making use of the BMW trademark”. The Court considered in this case that the need of offering the consumers complete and appropriate information about the use of the product prevails over the trademark holder´s rights.
Moreover, the CJEU case law provides the necessary guidelines to determine in which cases the needed use of a third-party’s trademark follows the path of the legal provisions concerning industrial or trade matters. So, in the case examined by the Judgment of the CJEU of 17 March of 2005, C-228/03, “Gillette”, the Gillette Company sued LA-Laboratories because of the selling of exchangeable razor blades including in the packaging the wording “this blade is adjustable to every Parason Flexor and Gillette Sensor handle”. The Gillette Company understood that such mention may lead the consumers to believe that there was any kind of link between their company and the defendant company. With regards to the advertising use of an alien trademark, the CJEU stated that it must be allowed since it is necessary to provide the public complete and accurate information about the use of the product and provided that (i) this information cannot be provided in any other way whatsoever, (ii) complies the analogous obligations of the comparative advertising, (iii) it does not create the impression that there is a business connection with the trademark holder and (iv) the product is not presented as an imitation or copy of the alien trademark product.
Although the wording of the 3rd Additional Provision of the Royal Decree 1085/2015 seems to exclude the limitations set forth in article 37 of the Trademark Act- including the case that the alien trademark is used with descriptive purposes- we understand that this does not necessarily imply a contradiction of such Act and does not either undermine the case law issued by the CJEU on this matter.
The legislator has considered that the information that can be provided by the owners of independent retail distribution establishments (petrol stations) consists of mentioning “the company name of all the wholesale operators and distributor to which the fuel has been acquired”. The legislator understands that this information is enough for the public to have relevant information about the commercialized product and excludes, therefore, that any alien trademark can be a mean of information for this purposes.
In other words, the legislator understands that a complete and understandable information can be provided about the product´s features without using alien logotypes (i.e. informing about the company name of the wholesale operator). It shall be recalled that in the relevant sector the use of alien trademarks would mean immediately the existence of a business relationship between the non-authorized establishment and the trademark holder. Therefore, the use of an alien trademark is prohibited unless express authorization is made.
Note that unlike previous drafts, the final text of the Royal Decree does not make any express reference to the fact that the use of third parties´ trademarks shall comply with the Trademark Act. Nevertheless, we understand that such Act or, where appropriate, the Unfair Competition Act shall be applicable in cases of a use of a sign non-authorized by the holder, or in cases in which there is confusion about the product´s origin.
Likewise, we understand that article 110 r) of the Hydrocarbon Law can be applied by analogy. This provision sanctions the marketing of liquid biofuels under a trademark image which does not correspond with the real source or identity of such products. The use of alien signs in the biofuels marketing that leads to confusion about the source, shall be considered a serious infringement and shall be accompanied by a penalty from 60.101€ to 601.012 €.
The Royal Decree entered into force on 5 December of 2015, this is the day after its publication in the Spanish Official Bulletin, except for articles 1 to 3 and First Additional Provision which entered into force on 1st January of 2016. The Third Additional Provision, subject matter of this post, and the second final provision took effect on 3 February of 2016.
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