GC rules on bad faith and abuse of right in trade marks filing

By decision of 17 January 2024, the General Court (GC) ruled in a case concerning several national trade marks applications carried out with the aim of bypassing the six-month cooling-off period provided by Article 29(1) of Regulation No 207/2009. The applicant was considered in bad faith and the filing strategy deemed an abuse of right.

Facts

Mr Auer, personally and through linked companies (the applicant), filed several Austrian trade mark applications to register the word “ATHLET” in classes 3, 9 and 12 every 6 months between 2007 and 2010 without paying the fees. This was possible under Austrian law.

Athletic Cat

In 2010, the applicant finally filed an EU trade mark application claiming the Austrian priority of 2010. The trade mark was registered on 29 April 2014 with no. 009224692 (the contested trade mark).

On 2 February 2011, the company Heuver Banden Groothandel BV (the company) applied for registration of the Benelux word trade mark “ATHLETE” for Class 12. The Benelux priority was then claimed in the international registration before the WIPO, with extension of protection to the European Union.

In 2015 the company was contacted by the exclusive licensee of the disputed trade mark, also related to Mr. Auer, and was asked to provide information on the use of the ATHLETE trade mark and to submit a declaration of abstention from use thereof together with an acknowledgement of an indemnification obligation.

On December 23, 2015, the company obtained from the Landgericht Köln (Regional Court of Cologne, Germany) an interim injunction ordering the applicant to refrain from asserting to its customers that use of the ATHLETE trade mark constituted an infringement.

In 2016, the exclusive licensee of the contested trade mark filed an infringement proceeding before the Oberlandesgericht Hamburg (Higher Regional Court of Hamburg, Germany) against the distributors of products under the ATHLETE trade mark based on the contested registration.

Lastly, on 19 May 2019 the company applied to the EUIPO for a declaration of invalidity of the contested mark based on Article 52(1)(b) of Regulation 207/2009. By decision of 31 July 2019, the Cancellation Division of the EUIPO declared the invalidity of the contested trade mark on the grounds that the conduct of the applicant, at the time of filing the application for registration of said mark, was to be qualified as bad faith and, therefore, was contrary to Article 52(1)(b) of Regulation No. 207/2009.

The applicant appealed.

By decision of 8 August 2022 (R 2214/2019, decision available in German) the Board of Appeal of the EUIPO dismissed the appeal. The Board of Appeal noted that the Cancellation Division had rightly concluded that the applicant for the contested trade mark had acted in bad faith and used a dishonest strategy of blocking by repetitive and abusive filing of national trade mark applications. Such a strategy contravened the legitimate objectives resulting from the European Union's trade mark protection system.

The applicant appealed to the GC.

The decision

The GC stresses that the concept of bad faith is not defined, delimited or even described in any way in the EU legislation (T-250/21). Nevertheless, the case law of the Court of Justice of the European Union (CJEU) has provided several clarifications as to how the bad faith as referred to in Article 52(1)(b) of Regulation 207/2009 is to be interpreted (C-104/18, C-371/18).

As regards trade mark law, the absolute ground referred to in Article 52(1)(b) of Regulation No 207/2009 applies when it clearly results from the evidences that the trade mark’s holder has applied for registration of that trade mark not with the aim of fairly participating in the competitive process, but rather with the intention of damaging the interests of third parties or with the intention of obtaining an exclusive right for purposes other than those pertaining to the functions of a trade mark, in particular the essential function of indication of origin (C-104/18).

The assessment of bad faith must be conducted on a case by case basis, considering all the relevant factual circumstances at hand.

That said, a technique, consisting of the progressive registration of national trade marks for the same sign with the aim of bypassing the six-month cooling-off period under Article 29(1) of Regulation No 207/2009, cannot be evaluated as genuine and licit commercial conduct (T-627/21), since all the national trade mark applications were progressively rejected by the Austrian Patent Office for non-payment of the related registration fees.

Such a filing strategy may also amount to “abuse of right”. The notion refers to circumstances in which, despite formal compliance with the conditions laid down by the rules, the objective pursued is not achieved and the real aim is to obtain a totally different advantage circumventing the rules on priority.

Comment

This decision sheds light on the notion of bad faith as well as abuse of right. If the applicant for the contested trade mark wished to extend the protection of its sign by registering it as an EU trade mark, which would be part of a legitimate commercial strategy, that applicant would have had the opportunity to do so long before, without filing several successive applications for registration at national level.

Another case is the repeat filings of a trade mark, that are not prohibited per se, except when they are carried out only to avoid the consequences entailed by non-use of earlier trade marks.

We may also recall the abuse of trade mark process. In case R 2445/2017, the Grand Board of Appeal of the EUIPO ruled that a revocation action was filed with a fraudulent end aimed at obtaining an undue advantage and constituted an abuse of rights and process (in that case to put pressure on the negotiations for the purchase of the some trade marks belonging to the counterparty). The Grand Board qualified the notion of abuse of process as a “general procedural objection of a preliminary nature”, which prevents discussion of the merits of the case (i.e. assessment of genuine use of the mark).

Picture courtesy of Antonio D’Agostino