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24/05/2018 - Advocate general considers use of trademarks in calls for tenders - Richard Milchior

Advocate General considers use of trademarks in calls for tenders

Richard Milchior, partner and IP lawyer wrote an article for the World Trademark Review.

Advocate general Campos Sánchez-Bordona has given his opinion in VAR Srl vs. Iveco Orecchia SpA (Case n° C-14/17, February 28 2018). Even though trademark law is not at the centre of these proceedings, the entire case rests on a trademark issue.

Context:

An Italian public transportation authority used the trademark Iveco/FIAT while calling for tenders in a public procurement for provision of spare parts- new or second-hand or equivalent for Iveco buses and trolleybuses.

The issue concerns the moment where a certificate of equivalence had to be provided: was it at time of the tender, before the decision to award the contract to the winner, or afterwards?

The call for tenders stated that the spare parts could be equivalent to those manufactured by Iveco, as long as their quality was equivalent to those used to manufacture the vehicles and to the spare parts supplied by the vehicle’s manufacturer.

Two companies competed: Iveco orecchia and VAR. The second one won the call for tenders. Iveco challenged the decision in front of a first instance administrative court which satisfied its request. VAR appealed this decision in front of the Italian Council of State (Administrative Supreme Court) which had to face up issues. It referred two questions to the Court of Justice of the European Union for a preliminary ruling.

The Advocate general recalled Article 34 of directive 2004/17 on public procurement. He noted that the use of a trademark in the technical specifications, when this is admitted in exceptional circumstances, can be accepted only if such use specifies that products "equivalent" to those designated by the trademark are acceptable. This is indispensable to avoid creating unjustified barrier to entry.

During the hearing, was discussed how it would be possible to assess the quality of the products before the award of the contract if no proof of equivalence was given. It was said that it was useful to refer to supplementary guidelines to Regulation 416/2020 which include a rebuttable presumption of quality allowing the party receiving the spare parts to consider that the products are equivalent.

Finally, the Advocate General considered that member States may decide when they require that a certificate of equivalence must be submitted.

If the court follows his opinion, it will confirm first, that a trademark does not always serve to designate the origin of a product and, then, that a trademark cannot be used as a barrier to competition.

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    Richard Milchior