Can a trademark make a product appear more sustainable than it actually is? As environmental claims become increasingly valuable, trademark law is playing a growing role in addressing the risks of greenwashing.
Introduction
Words like “drought”, “global warming” and “climate crisis” have become increasingly common in our everyday lives in recent years. Even though industrialization and technological development have greatly benefited society, there is no denying their impact on climate change. People now perceive the climate crisis as a global threat and have become increasingly concerned about environmental risks at both individual and collective levels. As a result, governments and consumers alike have been compelled to take action and become more environmentally conscious.
According to recent studies, more than 90% of consumers are attracted to companies that are committed to sustainability and able to demonstrate their environmental efforts. It is also suggested that businesses failing to adopt sustainable strategies may face negative reactions from consumers in the coming years. Furthermore, surveys indicate that more than half of Gen Z and younger consumers are willing to pay more for environmentally responsible products. 1
The Dark Side of Green Marketing: Greenwashing
Even though this shift was initially considered a positive development for the environment, many companies have started to take advantage of consumers’ environmental sensitivity by using sustainability as a marketing strategy that may mislead consumers. The pursuit of a better environment faces a significant challenge: businesses’ desire for profitability. As a result, green marketing has given rise to the concept of greenwashing.
In the 1980s, Jay Westerveld came up with the term when he realized the inconsistency in the behaviors of hotels that encouraged their customers to use the same towel to help the environment while not even having a recycling plan.2
In essence, greenwashing is a practice where companies exploit consumers’ environmental awareness by providing misleading information, making their products, policies, or practices appear more environmentally friendly than they actually are.
This phenomenon raises an important question: how can trademark law address the increasing use of environmental terminology in branding?
Examination of Green Individual Marks under EUTMR3 Article 7
With the rapid popularity of the “green trend,” many companies have started using expressions such as “eco”, “green”, “bio” and “organic” in the trademarks of products introduced to the market. According to EUIPO’s report “Green EU Trade Marks”4, applications containing environmental terms jumped from under 1,600 in 1996 to nearly 16,000 in 2020. Today, marks containing at least one environmental term in their specification account for roughly 10 to 12 percent of all annual EU filings.
Under Article 7 of the EUTMR, green individual trademark applications may face several critical grounds for refusal.
1. Descriptiveness and Lack of Distinctiveness
Environmental terms often describe characteristics of goods rather than indicating their commercial origin.
In Dennree GmbH v EUIPO (T-641/21), the General Court held that “BioMarkt” was descriptive under Article 7(1)(c) EUTMR. The term would be perceived by the relevant public as merely indicating a sales outlet or supermarket offering products from organic farming.
Similarly, in Groschopp v EUIPO (T-253/22), the Court ruled that the phrase “Sustainability through quality” lacked distinctiveness under Article 7(1)(b) EUTMR. It was considered merely a promotional slogan that did not enable consumers to identify the commercial origin of the goods and services.
2. Deceptiveness
Trademark law also prevents the registration of signs that may mislead consumers.
In the case of “BIOSILK” (EUIPO Application No. 1570508), the application was rejected due to its deceptive nature under Article 7(1)(g) EUTMR. Consumers could perceive the sign as indicating that the goods were made of organic silk, although the products contained no silk. Therefore, the sign created a sufficiently serious risk of misleading the public.
These examples demonstrate that environmental terminology cannot automatically function as a trademark simply because it has commercial appeal.
The Paradox of Green Certification Marks
Certification marks serve a “trust function” for consumers, indicating that goods or services have been approved by the mark’s owner for a particular characteristic, such as quality or manufacturing process. Under Article 83(2) EUTMR, the owner of a certification mark is prohibited from using the mark for its own commercial goods or services, ensuring a duty of neutrality.
However, certification marks may also create greenwashing risks in practice.
First, certification standards may vary significantly between different certification bodies. Since each certification mark owner establishes its own regulations, there is no unified framework guaranteeing consistent environmental standards. To seek wider use and greater profit, certifiers might compromise their standards or set overly flexible rules.
Second, transparency remains a significant challenge. Average consumers often struggle to understand what an unfamiliar certification mark actually guarantees, particularly where sufficient data regarding supply chains and environmental performance is unavailable.
Third, companies increasingly use pseudo-certification marks to create an impression of credibility and environmental responsibility, making it difficult for consumers to distinguish between genuine certification schemes and misleading labels.
Finally, enforcement mechanisms are limited. Under Article 90(1) EUTMR, only the proprietor of an EU certification mark, or a person specifically authorised by the proprietor, is entitled to bring an action for infringement. Consequently, where the proprietor fails to monitor the market adequately or does not initiate legal proceedings, unauthorised uses of the certification mark may remain unnoticed and unaddressed. Since no other party has standing to initiate infringement proceedings, ineffective enforcement may ultimately undermine the credibility of certification marks.
Therefore, certification marks do not automatically eliminate greenwashing risks. Their effectiveness depends on transparency, reliable monitoring mechanisms, and consumer understanding.
Legislative Responses and Judicial Enforcement in the European Union
1. Proposal for a Green Claims Directive (GCD)5
Research conducted by the EU Commission found that 53% of green claims provide vague or misleading information, while 40% lack supporting evidence. The proposed GCD aims to ensure clear, science-based, and transparent environmental claims. One of the most significant aspects of the proposal is the prohibition of self-declared environmental labels. Companies would be required to obtain verification from accredited independent third parties before making certain environmental claims.
2. German Federal Supreme Court on “Climate Neutral” Claims
On 27 June 2024, the German Federal Supreme Court (BGH) ruled that advertising using an ambiguous environmental term such as “climate neutral” may be misleading under Section 5 of the German Unfair Competition Act (UWG) unless the specific meaning of the claim is clearly explained. The Court emphasized that a reduction of emissions in the production process cannot be regarded as equivalent to, or substituted by, mere compensation (offsetting).
Conclusion
The current situation demonstrates that green trademarks alone are insufficient to effectively serve the public interest and prevent greenwashing. While trademark law plays an important role in refusing descriptive, non-distinctive, or deceptive marks, it cannot address all challenges arising from misleading environmental claims.
Initiatives such as the Green Claims Directive, particularly through the prohibition of self-declared labels and the introduction of accredited third-party verification, will be crucial in preventing consumer deception and reducing greenwashing practices.
Although these regulatory developments are primarily driven by the European Union, their legal impact extends beyond European borders. Regardless of the specific jurisdiction, the regulation of green trademarks ultimately relies on fundamental principles of fair competition, good faith, transparency, and consumer protection.
1“Green Trademarks and the Risk of Greenwashing,” https://www.wipo.int/en/web/wipo-magazine/articles/green-trademarks-and-the-risk-of-greenwashing-42943.
2 Dincer Ozbey B, Yatagan Ozkan C,“Green Is the New Black: The Rise of Green Marks and Possible Solutions to Greenwashing”, (2023) 73 Annales de la Faculté de Droit d’Istanbul 157, p.184
3 Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade mark.
4The updated 2023 version of the report is available at https://www.euipo.europa.eu/en/publications/green-eu-trade-marks-2023-update.
5 Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on substantiation and communication of explicit environmental claims (Green Claims Directive).
