Public authorities have monopoly in 'label', court rules

France

In its recently published decision in CERQUA v Monadia Sarl (Decision 434, September 23 2004), the Versailles Court of Appeal has upheld the first instance court's ruling that the use of the word 'label' ('certificate') in connection with the mark RECONNU SAVEUR DE L'ANNÉE (meaning 'recognized as flavour of the year') would mislead consumers into thinking that the mark had been awarded by an official certification authority.

Monadia Sarl, a company involved in consumer product testing, is the owner of the mark RECONNU SAVEUR DE L'ANNÉE - a collective mark that it grants to food products that have been recognized by consumers as having a particularly good flavour. The mark is relatively well known in France and is often used in association with the word 'label', in particular as part of the slogan 'label 100% saveur 100% consommateur' ('certificate 100% flavour 100% consumer').

CERQUA (Centre of Development of Farm and Food Quality Certifications), which promotes the famous LABEL ROUGE ('red certificate') - a certification mark for agricultural products -, filed an action against Monadia in 2001 claiming that the use of the word 'label' in the slogan 'label 100% saveur 100% consommateur' in association with the mark RECONNU SAVEUR DE L'ANNÉE would mislead consumers into believing that the mark had been awarded by an official certification authority for foodstuffs.

The Versailles Court of First Instance upheld CERQUA's claim and Monadia appealed.

The Versailles Court of Appeal affirmed. The question before it was whether, pursuant to Articles L 640-2, L 643-1 and L643-2 of the French Rural Code, the word 'label' is a sign of identification that may only be awarded by an official entity to certify that food or any other unprocessed agricultural product is of a high level of quality.

Monadia argued that (i) the word 'label' cannot be monopolized (even by public authorities), and (ii) its use of the mark RECONNU SAVEUR DE L'ANNÉE in combination with the word 'label' was not misleading the public because it is the public itself that selects the products that bear the mark.

The appellate court affirmed the first instance ruling. It considered that Monadia's use of the word 'label' (i) is misleading, and (ii) amounts to parasitism as it takes unfair advantage of the goodwill associated with the LABEL ROUGE certification mark.

Accordingly, the court ordered that Monadia:

  • pay €30,500 in damages;

  • publish the decision in three magazines (at a cost of €3,000 per publication) as well as on the homepage of its two websites; and

  • pay €6,000 towards CERQUA's legal costs.

This decision implies that the use of 'label' as a mark or as part of a slogan is entirely reserved to public authorities, even though it is widely used as a sign or trademark in commerce. Any use by an unauthorized third party may be held misleading and amounting to parasitism, at least in respect of foodstuffs. It will be interesting to see whether the decision is extended to other products or even services. However, it is unclear whether it complies with EU law.

Eric Schahl, Inlex Conseil, Paris

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