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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