Green trademark: measuring sustainability through trademarks

Disclaimer: this is an automated translation from Italian. Go to the original article.

When discussing industrial property rights, measuring innovation often involves checking patents, which are an indicator of investment in research and development. Trademarks can also offer insights from a different perspective. While the granting of a patent certifies the innovative realization of a product or process, the registration of a trademark is normally associated with the launch of a new product or service on the market. Various studies by EUIPO (European Union Intellectual Property Office) have shown a correlation between the ownership of registered trademarks, the growth of SMEs and the company’s ability to employ staff. Other research has also shown that most trademark registrations are linked to development activities and that the filing occurs near the market launch.

Trademarks are distinctive signs that allow identifying the business origin of a product or service in the market. By nature, trademarks must have distinctive capacity (i.e., must be able to identify an entity), relate to specific product categories (with the identification of a list of products or services), and designate the relevant territory. In a 2019 study, the EUIPO analyzed the over 85,000 terms contained in the harmonized database of products and services and selected 904 that—in specific product categories—could indicate the "green" nature of a trademark. For example, "carbon monoxide detectors" would not be green if associated with medical devices, but could be in other contexts. The filter was then applied to the (millions of) trademarks registered at the EUIPO to uncover statistics and trends.

As a first general indication, green trademarks have consistently increased since 1996 (the first year of operation of the EUIPO) both in absolute terms and in proportion to the total number of trademarks filed. If in 1996 green trademarks accounted for less than 4% of filings, in 2020 they exceeded 11% and peaked in 2022 at 14.5%. Similarly, the commercial sectors related to environmental products and services have seen a steady growth in terms of both the number of people employed, the income generated, and the ratio to the gross domestic product. Although these data show simple correlations without any causality, the EUIPO study seems to highlight a link between green trademarks and economic growth.

Without particular surprises, the sectors most involved in the filing of green trademarks are the energy sectors. More specifically, between 2015 and 2020, the energy storage sector accounted for 42.9% of green trademarks, with 38% covered by electricity storage alone (various types of batteries). The second context in terms of the number of filings was that of pollution control (17.7%), with a prevalence for water purification products (11%), followed by the transport and energy production sectors (9.7% each). Completing the relevance list are climate change (6%), recycling (5.9%), environmental information (3.4%), waste management (2.9%), and agriculture. In 2022, energy storage gave up shares in favor of products and services in the fields of transport, pollution control, and clean energy production.

Geographically, it should be noted that trademark applications can be filed by companies located all over the world. Applicants are therefore not limited to the member countries of the European Union. Still, in the period 2015-2020, most of the green trademarks were filed by China (16,356), followed by Germany (12,003), United Kingdom (4,801), Italy (4,748) and United States (4,501). However, looking at the ratio between green trademarks and total filings, South Korea (25.4%), Cayman Islands (23.4%), China (22.6%), Turkey (20%), Hong Kong (14.1) and Taiwan (14.1%) stand out. Italy, which reached 13.1% of green trademarks compared to total filings in 2022, has been particularly active in the sectors of energy storage, air purification, and pollution in general.

The main challenge related to green trademarks – and their validity – concerns the need to create marks that have distinctive capacity and do not consist solely of generic terms. The most common trend is therefore to pair sustainable labels (such as "ECO") with existing distinctive signs with the aim of maintaining a unified branding strategy. However, these marketing initiatives must always consider the prohibition of misleading the public: the registration of trademarks that falsely suggest the possession of environmental characteristics may be refused or, where registered, declared null at a later time. At the same time, the application of the new European legislation on greenwashing will introduce stricter constraints precisely with the aim of limiting the registration and use of sustainability trademarks that lack sufficient underlying technical substance.