Austria: The Kornspitz story explained
The Kornspitz was invented by the company Backaldrin as a new bakery product several decades ago together with the creation of the German-coined name, since then protected as trade mark in Austria. The name consists of the word "Korn", meaning "grain", referring to the dark dough made out of grain and "spitz", meaning "pointed", referring to the two pointed ends of the elongated and rolled bakery product. It has become one of the most popular bakery products in Austria which everyone knows under the name "Kornspitz", sold every day, although sometimes other designations are used.
As explained also by the CJEU in C-409/12 the trade mark owner sells under the mark a baking mix to bakers who produce with it that product and sell it under Kornspitz to end-users and foodstuff distributors who likewise sell it under Kornspitz to their customers. But there are also bakers that produce "Kornspitz" out of their own similar baking mixes without using Backaldrin's intermediate products.
The Austrian trade mark Kornspitz was attacked by the competitor Pfahnl in 2010 on the basis that Kornspitz had lost its distinctiveness and became a common denomination of a bakery product. Cancellation was requested for the goods "flour and preparations made from cereals, baking agents, preformed doughs also deep frozen for the manufacture of pastry confectionery" as well as "bakery goods, pastry confectionery, also prepared for baking". The first instance cancelled that mark as requested. Although the bakers and foodstuff distributors mostly know about the trade mark protection (there are about 1,500 bakers in Austria) but they sell the product without any reference to that fact and the origin of the intermediate product, the mix, from the trade mark owner. Therefore, the millions of end-consumers take "Kornspitz" as a general denomination of that popular product. In appeal the proceeding were stayed in 2012 for the preliminary ruling of the CJEU which was given on March 6 2014, (C-409/12).
The case was then returned to the Appeal Court in Vienna which decided at the end of 2014 that the cancellation was upheld for the end products sold to end-consumers, namely "bakery goods, pastry confectionery, also prepared for baking", but reversed for the other products only sold to bakeries. It based its decision on the facts established by the first instance and a witness deposition that the trade mark owner had from the beginning no intention to teach end consumers on the origin of the products (made from its mix) and did in no way instruct the bakers to present to them "Kornspitz" as an individual protected trade mark. The very few warning letters sent to some of the bakers using their own mix had no influence on the development of that new coined word to a general designation for the end products and are irrelevant in view of the ruling of the CJEU that here the understanding of the end-consumers counts alone irrespective of the knowledge of the bakers. On that basis also entries in dictionaries and Wikipedia do not count since end-consumers do not consult those before nearly daily buying a "Kornspitz". In respect of the raw materials and intermediate products the situation is, however, the opposite. These are products mainly sold to bakers which in their great majority know about the trade mark and associate it with Backaldrin. Therefore, there is no proof for a development in the direction of the trade mark becoming generic.
This decision has now been finally upheld by the Austrian Supreme Court. It stated that the Appeal Court has rightly refrained from ordering an opinion poll among the end-consumers since all the judges belong to these circles concerned and can therefore judge on the basis of their general experience of life that the facts found are true, namely that "Kornspitz" has become the general denomination for that bakery product in Austria. Since the CJEU has found that the lack of any attempt by the trade mark owner to bring the bakers to educate the end-consumers to view the trade mark as a sign of origin fulfils the notion of "inactivity", the partial cancellation is founded.
The defence that a partial cancellation would lead to a massive deterioration of the trade mark for the remaining goods was rejected since this would go directly against the finding of the CJEU that the development of a general designation in the minds of the end-consumers together with the fact that the trade mark owner did from the beginning take no steps to position its trade mark for these end-consumers as a sign of origin and thus this development was due to its inactivity alone are the criteria for a lawful (partial) cancellation.
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