Green Trademarks vs. Green Claims Directive - Are “environmental trade-marks” at risk of being canceled?

Environmental sustainability has been a decisive purchasing criterion for many consumers for years. Companies are therefore trying to communicate the sustainability of their products with green-looking trademarks. It is already difficult to register these green trademarks. The Green Claims Directive (GCD), which was passed at first reading in the European Parliament in March 2024 and adopted in principle by the Council of Ministers on June 17, 2024, poses further challenges for trademark applicants and owners, for which they must be prepared in order to avoid losing their trademarks or falling into competition law traps.

The term “sustainable consumption” was introduced into the political debate at the United Nations Conference on Environment and Development in Rio de Janeiro in 1992. In 1994, the Swiss ecologist Mathis Wackernagel invented the ecological footprint as a measure of the environmental compatibility of individual lifestyles. The oil company BP then made it known worldwide in 2004.

This development can also be seen in consumer purchasing behavior. Since the start of the coronavirus pandemic in 2020 at the latest, consumers have been buying more consciously and sustainably, putting pressure on companies to introduce their own ESG compliance strategies.

Many companies are responding to this demand by communicating their environmental efforts to consumers or business partners via brands that are literally “organic”, “green”, “eco-friendly” or “sustainable”. Applications for these so-called “green trademarks” expressing sustainability have been increasing rapidly since 1996. In its Green EU Trademarks Report, the European Intellectual Property Office (EUIPO) notes an average annual growth in green trademarks of 13% from 1996 to 2013 and 10% from 2015 to 2022, with a slight decline only from 2022 to 2023.

The new Green Claims Directive and other new regulations on environmental advertising could now put a stop to this triumph of green trademarks.

Green Claims Directive against unsubstantiated environmental claims

In March 2024, the European Parliament adopted the Green Claims Directive on environmental product information requirements drafted by the Commission as part of the European Green Deal. The second reading is planned for fall 2024; the trilogue phase is currently underway. If all EU institutions agree, the requirements will become binding two years later at the latest, i.e. probably from the beginning of 2026.

The Green Claims Directive sets uniform Europe-wide standards for information requirements and the verifiability of environmental claims. These must be sufficiently substantiated on the basis of a list of criteria. The communication of environmental claims then requires certain information to be made available physically or online. In addition, accredited, mandatory certification schemes will be introduced, which must independently certify environmental claims and environmental labeling schemes in advance so that they can be used by companies in communication with customers.

The Green Deal is supplemented by the Directive on Empowering Consumers for Environmental Change (EmpCo Directive), which has already been adopted. EmpCo prohibits general environmental claims without concrete verifiable content (e.g. “environmentally friendly”, “green” or “bio-based”), as well as advertising with climate neutrality if this is at least partially achieved through offsetting measures, and finally advertising with future environmental performance without a detailed and realistic implementation plan, as well as sustainability labels that have not been independently certified or approved by a government agency. The Green Claims Directive therefore goes one step further as far as verifiers for environmental labelling schemes, third-party conformity assessment bodies, are concerned. These must not only be independent, but also accredited.

With the Green Deal, the EU Commission is redefining the rules for environmental advertising. At the same time, it could extend the scope of examination for green trademarks.

Where can the Green Claims Directive become relevant?

The Green Claims Directive refers to the definition of an environmental claim in Article 2 No. 1 of the EmpCo Directive. This also includes trademarks as possible carriers of an environmental claim. This is also emphasized by the EU Parliament in its proposed amendments adopted in spring 2024. Recital 33, which refers to important information about the environmental performance of the product that consumers need in order to make informed decisions, explicitly includes taglines and trademarks as additional criteria alongside “the wording, imagery and overall product presentation, including the […] layout, choice of colours, images, pictures, sounds, symbols, […] or labels”. The EU Parliament would also like to see trademarks explicitly mentioned in recitals 18 and 43.

It is clear that trademarks must therefore be measured against the Green Claims Directive throughout their entire life cycle. This applies to trademark applications and their possible use.

Green trademarks in the application

For trademarks to be registered by the European offices, they must not be descriptive or deceptive and must also be distinctive. The Green Claims Directive is intended to prevent a discrepancy between product information and reality. It would therefore make sense to first look for the effects of the directive in relation to the deceptiveness of a trademark. Green trademarks can promise environmental aspects in relation to the goods and services labeled with them that are not true. The benchmark for the question of when a trademark is deceptive could be significantly increased by the new directive.

In fact, a refusal of a trademark application due to its allegedly deceptive character can only be considered if the deception is obvious, i.e. if the trademark name itself or in combination with the list of goods and services do not match. However, the examiners of the offices cannot normally conclude from the application alone whether the environmental statement is actually true or not. In the vast majority of cases, this will only become apparent from the actual use. The Green Claims Directive cannot change this. Although it prohibits unsubstantiated environmental claims, it can only be determined whether there is sufficient evidence in relation to the specific product in conjunction with the information provided and the necessary certificates.

In practice, applications for so-called green trademarks are most frequently rejected under the current legal situation because they are descriptive. For example, the offices refused to register the signs “EcoTrend” (R2769/2019-4), “ECOLAB” (R0644/2015-4) and “EcoPerfect” (R1658/2010-1). In the case of “EcoPerfect”, the EUIPO states that the application contains a clear factual assertion that the goods applied for in class 21 are ecologically sound. It is therefore an exclusively descriptive indication for the goods applied for, which must be kept freely available for competitors.

However, even if the signs are not (only) descriptive, they often lack distinctive character. For example, the EUIPO refused registration of the figurative mark “SAVETHEOCEAN” (R1799/2019-5) and the word mark “SAVE OUR EARTH NOW” (R1198/2008-4). The application for the word mark “Green Steam” (W01775114) was recently refused on the grounds that the relevant public would only perceive the sign as purely laudatory information about the fact that these goods are involved in a sustainable process of generating energy from pressurized steam. Although the rejection can still be contested, it is representative of the EUIPO's current decision-making practice.

In contrast, the figurative marks “Climate neutral” (EUTM 017938139), “Climate Positive” (EUTM 018362342) and “CARE 4 CLIMATE” (IR 1264881) were considered distinctive and non-descriptive. The EUIPO was also convinced by applications with a less direct message. Examples include “re!Newed - BETTER THAN NEW” (EUTM 018867060) and “REWOOLUTION” (EUTM 018016172). Green trademarks can therefore generally be successfully registered if they have descriptive but also distinctive elements. This is often the case when word elements are combined with distinctive figurative elements or neologisms are created that enable the trademark to function as an indication of origin and still specifically convey an environmental message to consumers.

Green trademarks in use

The Green Claims Directive is not expected to bring any changes to the registration of green trademarks. However, it may impact the actual use of a green trademark.

Under the current competition law, advertising with ambiguous environmental protection terms such as “climate neutral” or “environmentally friendly”, which are not explained in more detail in a direct context, is not permitted. In its climate-neutral ruling (“Klimaneutral-Urteil”), the German federal court (BGH) recently stated that a reference to sources of information outside of advertising is not sufficient to protect consumers from being misled. This standard will be further tightened by the EmpCo Directive (see above). The Green Claims Directive will go one step further. The use of specific environmental claims without prior certification by an accredited verifier will become impossible.

The use of registered trademarks will therefore be measured against three sets of regulations in the future: Competition law, the EmpCo Directive and the Green Claims Directive (whereby, as things stand at present, it can be assumed that these directives will be implemented in Germany through amendments and additions to the law against unfair competition, UWG). According to the then applicable definition, an environmental claim, regardless of its form, is essentially a statement or representation, which is not mandatory under EU law or national law, which expressly or implicitly states that a trademark or trader has a positive or no impact on the environment or is less harmful to the environment than other trademarks or traders or that its impact has improved over time.

Green trademarks without a doubt fall under this definition: affixing the “climate neutral” trademark (see above) to a product has the same effect as advertising climate neutrality on a pack of fruit gums as in the “Klimaneutral” ruling of the BGH. However, this also applies to less obvious signs if an environmental statement can be inferred from them despite sufficient distinctiveness.

Until the EmpCo and Green Claims Directive come into force or are implemented, it will be sufficient to provide such a mark with an appropriate explanation of its meaning in the immediate vicinity of the mark. From 2026 at the latest, the use of such a trademark will be prohibited throughout the EU if the climate neutrality that the trademark advertises has been achieved with offsetting measures or the statement has not been sufficiently verified by an independent, accredited certification body. Trademark owners who already only affix their “green trademark” or who only grant a license to affix their trademark if the product has first undergone an assessment procedure of their choice will also have to turn to an independent body for verification in the future. Without these steps, it will happen that a trademark is registered but can no longer be used.

In the absence of use, however, there is a risk of a revocation application under Section 49 (1) of the German Trademark Act (MarkenG) or Article 58 (1) (a) of the European Union Trademark Regulation (EUTMR). However, the trademarks could be attacked more quickly than with such an application for revocation with applications for cancellation pursuant to Section 49 (2) No. 2 MarkenG or Article 58 (1) (c) EUTMR. This is because if the trademark is used but its content is not sufficiently protected in accordance with the requirements of EmpCo and the Green Claims Directive, the trademarks are likely to deceive or mislead consumers. If you look at the examples of trademarks that have already been registered, which are neologisms but still convey a message because they contain, for example, “Re” as a reference to a possible recycling process in the value chain, it becomes clear that in the future they will also have to prove, among other things, that a recycling process has actually taken place, how it is designed, which parts of the products it relates to, why it differs from the rest of the industry and that third parties have certified all of this. If brand owners fail to do this, they may face consequences under competition law or even have their green trademarks canceled.

Certification marks and seals of quality

One possible alternative to regular trademarks could be so-called certification marks. This trademark category, which was introduced at European level with the amendment of EU trademark law in 2017 and in Germany in 2019, is primarily aimed at certifiers. A certification mark is not intended to identify products or services, but rather their inherent characteristics, such as environmental compatibility.

From a company's point of view, however, this brand category has several drawbacks, as it requires neutrality, a monitoring and control system and transparency from the owners. Certification marks only enjoy protection if they are used for the goods and services of third parties. This excludes the marking of one's own goods or services. In addition, owners must explain in the application how they intend to guarantee the certified characteristics, i.e. which monitoring system they have established. The certified characteristics as well as the testing and monitoring measures must then also be communicated transparently to consumers.

Companies that want to label their own products cannot benefit from certification marks anyway. However, the EmpCo and Green Claims Directives also pose a new challenge for certifiers who already use or want to use certification marks. On the one hand, the certification marks may now only be used with further information about what they are supposed to certify, in close proximity to the environmental claim itself. This will reduce the “eye-catcher” benefit of the certification mark at least a little. On the other hand, certifiers may also have to face the question of whether they can or should accredit themselves in the EU or whether they need to use the services of third-party accredited bodies, as only accredited certification allows certification marks to be used for environmental claims with legal certainty. It is therefore questionable whether certification marks are a real alternative to conventional trademarks.

What precautions need to be taken now?

The EmpCo Directive will become national law by 2026 at the latest. An exact date has not yet been set for the Green Claims Directive. The specific implementation of the directives, in particular market surveillance and the umbrella under which the new regulations will be put in Germany, have also not yet been determined. Nevertheless, trademark owners and companies that want to label their products with sustainability information should react now.

The first step is to analyze their own trademark portfolio for potentially relevant environmental claims or green trademarks. It is also worth reviewing planned or published marketing material from a competition law perspective. Processes can then be developed that enable all green trademarks and the associated information to be presented correctly and the necessary certification to be obtained. To do this, however, providers must first establish themselves on the market as accredited certification bodies.

Conclusion

The Green Claims and EmpCo Directives mean that the principles already established in Germany under competition law for the use of environmental claims in advertising have now become law and have even been made significantly stricter. Trademark owners in particular must now ask themselves whether the use of their “green trademarks” is up to the new requirements or whether they can no longer use their trademarks on their own, but only in conjunction with comprehensive additional information and independent certificates. Although it will be around two years before the directives are implemented, it is important to take stock now and take the necessary steps.