A trademark becomes the generic term of a product or service when, as a result of its owner’s actions or inaction, the average consumer would more or less automatically understand the name of the trademark to refer to the designated product or service.
As such, the owner of a trademark which has become the generic name of a particular product or service runs the risk of having the trademark cancelled.
For instance, that is why the trademark ‘Pina Colada’ was cancelled – because the courts held that the company which owned the trademark ‘acted passively as the use of the expression ‘pina colada’ became generalised to designate an alcoholic cocktail with fruit juice’.
In a preliminary ruling from the European Court of Justice on 6th March 2014 (Backaldrin Österreich The Kornspitz Company GmbH c/ Pfahnl Backmittel GmbH, aff. C-409/12) based on the interpretation of Article 12.2(a) of Directive 2008/95, the Court held that consumers merely understood ‘KORNSPITZ’ to mean small bread without being aware that it concerned a trademark or that it was made from a ready-to-use mixture. As such, the trademark lost its distinctive character and was no longer able to fulfil its essential purpose of indicating the commercial origin of the product.
Concerning the question of the owner’s passiveness and inaction, the Court held that the fact that the owner did not seek to encourage sellers to use the trademark more for the commercial use of the product for which it was originally registered ‘constituted his passiveness’ towards it.