Assessing the Impact of Greenwashing on Trademark Validity
Introduction
The economy in 21st century has seen a sudden shift in global perspective wherein brands and multinational companies (MNCs) have transitioned into being recognised as “eco-friendly” entities or rather being incorporated within, what is nowadays called, the “green economy”. This shift and the consumer demand for a sustainable economy have compelled brands to follow strategies and guidelines to incorporate terms like “Eco”, “Carbon-Free”, “Natural”, “Sustainable” etc in their brand names, logos and mottos with the help of Trademark registration. However, the compulsion and the growing competition in market has resulted in a snag of material misrepresentation by brands claiming themselves to be environmentally sustainable, a term popularly known as “Greenwashing”. This misrepresentation is not merely a PR issue within the Intellectual Property framework, rather a threat to the overall repute and validity of the brand’s trademark. When a product manufactured by the brand does not align with the environmental values that it claims to incorporate, such brand comes at a risk of getting its trademark cancelled or refused to be registered on various grounds of, inter alia, deceptiveness. It is thus necessary for the authorities to identify such misrepresentation by the brands and thereby take actions to safeguard consumer rights as well as for the interest of the public at large. Before diving into the principal matter of this article; greenwashing, it is essential to understand the background of “green” trademarks and the rationale behind such marks.
Marks Claiming to Be “Green”
Marks which are registered as trademarks specifically due to their association with environment, sustainability, etc with an aim to incorporate the use of environment-friendly products or services under their brand names are considered as “Green Trademarks”. Though not explicitly defined under the Trade Marks Act 1999, such trademarks have been duly recognised under the European Union Intellectual Property Office (EUIPO) by the name of “Green EU Trademarks” (Green EUTMs). The registration processes are somewhat similar but governed by a different set of guidelines for each country whether it be the Europe Union, India or China, among others. In India, there haven’t been many instances for refusal of such greenwashed marks on grounds of misrepresentation or deception. But under EUIPO several green trademarks have been refused on grounds of deceptive misrepresentation.
In the European Union, European Union Trademark Regulation (EUTMR) 2017/1001[1] primarily governs the green trademarks, strengthened by the Empowering Consumers for the Green Transition (EmpCo) Directive (EU) 2024/825[2] which has been directed to be imposed in its entirety till March 27, 2026 in order to ban unlawful use of terms like “eco-friendly” or “green” to protect brand reputation and to enable them to gain global recognition. For registration, standard path as prescribed by the EUTMR is followed. Registration process for green trademarks in India, though not explicitly mentioned in the Act, is done in consonance with the CCPA Guidelines for Prevention and Regulation of Greenwashing (2024)[3]. China, following its standard China National Intellectual Property Administration (CNIPA) guidelines, regulates and examines “green” trademarks based on the grounds mentioned in the China’s Trade Marks Law.
Outcome of Misrepresentation Of “Green” Trademarks
Having analysed the rationale behind green trademarks, it is now apt to throw light on the core idea of this article i.e., the concept of greenwashing. The term is directly associated to “whitewashing” resulting in a marketing tactic of concealing or exaggerating certain claims for benefit of the business. For simpler understanding, greenwashing is the idea of misrepresentation by brands resulting in false claims of utilising environmentally sustainable products, services etc to modify their brand’s image in a way that facilitates their reputation and increases their market value. Greenwashing is not merely a marketing fiasco, but also a phenomenon that, in legal context, could hamper the validity of their trademarks. There could be various comprehensions regarding the ways in which greenwashing takes a march. Nonetheless, it all sums up to three primary ways, each having significant impact on trademark validity:
- Deceptive Misrepresentation
Deception occurs when a brand falsely implicates that the products or services rendered by them possess environmentally sustainable characteristics rendering it “green” and suggesting eco-friendly mottos when in reality, they fall short of such claims and misdirect consumers and authorities responsible for granting them recognition. This results in violation of Section 9(2)(a) of the Trade Marks Act, 1999[4] which mentions that such marks having the tendency to deceive the public or cause confusion are liable to be refused or cancelled during examination or after registration, respectively. This can lead to insufficient grounds for registration of a mark under the Act and can thus be rendered invalid.
- Violation of CCPA Guidelines
The CCPA Guidelines of 2024, though a part of the Consumer Protection framework, also align with the Intellectual Property law to determine the legality of trademarks claimed under the “green” economy. These guidelines keep a check on the transparency, authenticity and validity of the environmental claims made by brands with regards to their marks. The main objective of the CCPA Greenwashing Guidelines 2024 is to protect environmental sustainability by preventing greenwashing and misleading claims and to safeguard consumer rights and trust. This is not to repress the companies’ efforts but to maintain transparency and integrity of such claims. CCPA mandates that brand must have verifiable evidence for using terms like “green”, “eco-friendly” etc. and for their marks having green claims, full disclosures in the form of QR codes or links shall be made publicly available for such transparency. Vague or unclear images like “Earth” logo to simply misdirect consumers into believing that the product is ecofriendly shall be punishable. Non-compliance and misleading advertisements as such shall result in fines as well as bans on such advertisements under the CCPA Guidelines.
- Corporate Environmental Responsibility (CER)
At times, the mandatory CER guidelines compel brands to misrepresent their marks like the use of green coloured products not in general but while specifically indicating eco-friendly character or incorporating “Earth” symbolic logos in their marks etc. this leads to false symbolic integration of a brand with environment thus leading to misrepresentation. This results in bad faith registration of such marks which compromises the validity of such a mark.
Jurisprudential Analysis: Eu And India
The EU, governed by the EmpCo Directive, is more stringent regarding the practice of greenwashing as compared to other jurisdictions as it mandates that all generic environmental claims having no justifiable proofs be banned and such marks be considered void ab initio. Some marks rejected under the EUIPO guidelines are- SOLAR (R 504/2023-5), as the mark suggested that products were solar- powered when they were not. Similarly, marks like GREEN COTTON and GREENWORLD were also rejected by the EUIPO as the term “green” is viewed as publici juris and cannot be monopolised as such by an industry. In addition to this, the recent mark OMV AG (T-38/24) has also faced refusal suggesting that any colour combinations, like “blue and green” in the present mark, which are merely “functional” for a brand and are not of distinctive character can be refused registration.
However, the Indian laws suggest interference of Consumer Protection Protocols along with the Trade Mark Act,1999 by using the CCPA Guidelines of 2024 for enforcement of such IP related issues as there haven’t been any specific instances for refusal of “green” trademarks. In India, misrepresentation at such a scale does not merely impact the market restrictions, but also has serious implications on the brand image, reputation etc as they are liable to be then rejected, cancelled or rectified if found legally invalid. A few apt examples and case studies that support this are- Hindustan Unilever Ltd. (HUL) faced serious implications when they claimed that their products such as Surf Excel Easy Wash are “100% natural” when in reality, they contained synthetic ingredients thus resulting in significant misrepresentation by the company. This resulted in a hefty fine imposed on the company by the Central Pollution Control Board. Similarly, Voltas Limited (2024-2025) faced regulatory action for branding air conditioners as “eco-friendly” with a 5-star energy rating when the actual energy efficiency was lower. This established that “eco-friendly” is a verifiable claim, not just “puffery”. In recent years, these inferences are not just limited to the corporate marketing laws but have also paved way for suggesting grounds of invalidity in case of trademark registrations under Section 9 of the Trade Marks Act, 1999.
Way Forward and Conclusion
There is a significant need for the brands and companies to shift from mere stage-play of deception of their association with the “green” economy to a more practical and legally valid approach. Simply imposing terms like “bio”, “eco”, “natural” etc, among others, for gaining superiority over other competitors and gaining brand recognition does not grant companies the adequate legal backing. Having validated evidence regarding their claims under the “green” economy is essential for the growing economy in order to safeguard consumer interest as well as the company repute. Heavily relying on generic terms for registration of a mark shifts the focus of authorities from validating the brand names and leads to serious misrepresentation and deception. Countries like India, that do not have specific guidelines or regulations regarding “green” trademarks should refer the EUIPO guidelines and other statutory mandates adopted by different countries to effectively manage such conundrums. Brands must also adopt transparency by not using symbolic or suggestive logos to deceive public and authorities. Greenwashing as a practice has not fully gained recognition but the growing economy has started getting seriously affected by such malpractices and thus, there is a stern need to regulate statutory procedures for protection from the same.
Author:– Daisy Banakhede, and Chahat paneri in case of any queries please contact/write back to us atsupport@ipandlegalfilings.com or IP & Legal Filing.
[1] Regulation 2017/1001, of the European Parliament and of the Council of 14 June 2017 on the European Union Trade Mark, 2017 O.J. (L 154) 1.
[2] Directive 2024/825, of the European Parliament and of the Council of 28 February 2024 amending Directives 2005/29/EC and 2011/83/EU, 2024 O.J. (L 825) 1.
[3] Centl. Consumer Prot. Auth., Guidelines for Prevention and Regulation of Greenwashing or Misleading Environmental Claims, 2024, F. No. CCPA/28/2023-CCPA (Reg) (India).
[4] The Trade Marks Act, 1999, § 9(2)(a) (India).
