The ECJ and the wide cir­cle of quasi-manufacturers

With the judgment of the ECJ of 7 July 2022, the term “manu­fac­tu­rer” in the Pro­duct Lia­bi­li­ty Direc­ti­ve has been refi­ned, lea­ding to a lar­ger cir­cle of lia­bi­li­ty sub­jects in the cour­se set by the ECJ to pro­tect con­su­mers. Accor­ding to the revi­sed defi­ni­ti­on, a com­pa­ny can alre­a­dy be lia­ble as a quasi-manufacturer if it mere­ly affi­xes its name or trade­mark to a pro­duct or has per­mit­ted the affi­xing of its name or trade­mark wit­hout clai­ming sepa­ra­te­ly to be the manu­fac­tu­rer. Thus, mere­ly affi­xing or appro­ving the affi­xing of a name or other iden­ti­fy­ing mark to a pro­duct can trig­ger strict pro­duct lia­bi­li­ty, even in cases whe­re the actu­al manu­fac­tu­rer has also been affixed.

In the pro­cee­dings, the Fin­nish Supre­me Court refer­red to the ECJ for a preli­mi­na­ry ruling the ques­ti­on of the ext­ent to which brand mar­kings on a pro­duct can give rise to manu­fac­tu­rer lia­bi­li­ty in the terms of the Pro­duct Lia­bi­li­ty Direc­ti­ve. The start­ing point was a cof­fee machi­ne of the brand Kon­in­kli­jke Phil­ips. The inju­red con­su­mer clai­med dama­ges from Kon­in­kli­jke Phil­ips. Howe­ver, the cof­fee machi­ne was actual­ly manu­fac­tu­red by the com­pa­ny Sae­co. In addi­ti­on to the com­pa­ny mark of Sae­co, the­re was also that of Kon­in­kli­jke Phil­ips on the finis­hed product.

The Pro­duct Lia­bi­li­ty Direc­ti­ve, which has been trans­po­sed into natio­nal law by the Ger­man Pro­duct Lia­bi­li­ty Act, pro­vi­des for two vari­ants that qua­li­fy a com­pa­ny as a manu­fac­tu­rer in the terms of the Act: First­ly, the term “manu­fac­tu­rer” in Artic­le 3(1), Alter­na­ti­ve 1 of the Pro­duct Lia­bi­li­ty Direc­ti­ve covers the com­pa­ny that actual­ly manu­fac­tures the end pro­duct, a basic mate­ri­al or a par­ti­al pro­duct. Second­ly, Artic­le 3(1), Alter­na­ti­ve  2 of the Pro­duct Lia­bi­li­ty Direc­ti­ve also encom­pas­ses the so-called “quasi-manufacturer”, who mere­ly claims to be the manu­fac­tu­rer by affi­xing its name, trade­mark or other distinc­ti­ve mark to the pro­duct, ther­eby indi­ca­ting respon­si­bi­li­ty. It is suf­fi­ci­ent for the com­pa­ny to cla­im to be the manu­fac­tu­rer by affi­xing its label, giving the con­su­mer the impres­si­on that it was invol­ved in the manu­fac­tu­ring pro­cess. In fact, howe­ver, this need not be the case. By using the claims on the pro­duct, the com­pa­ny is also using its name reco­gni­ti­on to make it more attrac­ti­ve to con­su­mers. Howe­ver, it also fol­lows that the com­pa­ny must be lia­ble for the pro­duct. Up to now, quasi-manufacturer sta­tus was denied if the actu­al manu­fac­tu­rer was cle­ar­ly iden­ti­fied and reco­g­nisable, e.g. through the wor­ding “pro­du­ced by”.

In the con­text of trade­mark licen­sing, this could mean that in the future that the licen­sor is always to be regard­ed as a quasi-manufacturer, sin­ce it is allo­wing its name to be affi­xed. At the same time, the ruling rai­ses the ques­ti­on of whe­ther all eco­no­mic ope­ra­tors who are requi­red by rele­vant EU law to affix a label on the pro­duct are now con­side­red quasi-manufacturers if their role as eco­no­mic ope­ra­tor is not suf­fi­ci­ent­ly desi­gna­ted on the pro­duct. This could be the case, for exam­p­le, with eco­no­mic ope­ra­tors such as an aut­ho­ri­sed repre­sen­ta­ti­ve or ful­fill­ment ser­vice pro­vi­der, who are obli­ged to pro­vi­de their name and address for the tracea­bi­li­ty of the pro­duct, due to the Con­su­mer Pro­duct Safe­ty and Mar­ket Sur­veil­lan­ce Regu­la­ti­on. This also appli­es in the case of group rela­ti­ons bet­ween a parent com­pa­ny and sub­si­dia­ry, so that the parent com­pa­ny, as the hol­der of the trade­mark rights, must regu­lar­ly expect a cla­im as a quasi-manufacturer.

If seve­ral com­pa­nies cla­im to be the manu­fac­tu­rer, the con­su­mer can deci­de which com­pa­ny to hold respon­si­ble as the manu­fac­tu­rer in pro­duct lia­bi­li­ty law. The con­su­mer can then demand full com­pen­sa­ti­on from that com­pa­ny on the basis of the joint and seve­ral lia­bi­li­ty in Artic­le 6 of the Pro­duct Lia­bi­li­ty Direc­ti­ve. It is not reasonable to expect the con­su­mer to deter­mi­ne the actu­al manu­fac­tu­rer. The term “manu­fac­tu­rer” should the­r­e­fo­re be con­side­red as broad­ly as pos­si­ble in order to pro­tect consumers. 

Sum­ma­ry

This ruling fur­ther con­so­li­da­tes the alre­a­dy strong cour­se set by the ECJ to pro­tect con­su­mers and will have con­sidera­ble con­se­quen­ces in prac­ti­ce, as it affects num­e­rous busi­ness models and eco­no­mic actors. Even an expli­cit dif­fe­ren­tia­ti­on based on the pro­duct, accor­ding to which it is clear which com­pa­ny actual­ly manu­fac­tu­red the pro­duct, leads to the assump­ti­on of quasi-manufactor sta­tus. In accordance with the ruling, any com­pa­ny that has affi­xed its trade­mark to a pro­duct or pack­a­ging can be held lia­ble under pro­duct lia­bi­li­ty law. The ECJ’s ruling is bin­ding for the mem­ber sta­tes and courts, so com­pa­nies are advi­sed to recon­sider and adapt their busi­ness models and to crea­te the best pos­si­ble rele­vant lia­bi­li­ty pro­vi­si­ons in their inter­nal con­trac­tu­al relationships.

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