Trademark owner is liable for defect in branded product

A consumer can sue the trademark owner for a defect in the trademarked product, even if the product clearly states that another company is the producer. This is because the consumer may infer from the reference to the trademark on the product that the trademark owner is involved in the production process or assumes responsibility for it. This is how the Court of Justice ruled in July 2022 in the case Keskinäinen Vakuutusyhtiö Fennia v. Philips.

In a Finnish home, a coffee machine made in Romania by Saeco caught fire. The machine bore the marks "Philips" and "Saeco”. Philips was subsequently sued for damages, but raised the defense that it had had nothing to do with the manufacturing of the machine. However, the definition of 'manufacturer' in the Product Liability Directive (85/3740) is strict: any person who, by putting his name, trade mark or other distinguishing feature on the product, presents himself as its producer. Philips still thought that there was room for the defense that it did not present itself as such since there was clearly another manufacturer on the device. This argument does not hold water.

Of course, trademark owners tend to agree in the background that the licensee will be liable for defects. But this leaves consumers unaffected: they can choose what company to sue.

Maarten Haak