Knowledge of similar trade marks used abroad does not always mean application is in 'bad faith', rules CJEU

Out-Law News | 01 Jul 2013 | 2:42 pm | 2 min. read

Businesses that apply for trade mark protection in an EU member state when they know that a confusingly similar trade mark applies elsewhere cannot automatically be said to be acting in 'bad faith' by filing their trade mark application, an EU court has ruled.

The Court of Justice of the European Union (CJEU) said that that fact may only be considered as part of an "overall assessment" into whether the trade mark applicant has acted in bad faith on a case-by-case basis.

Under EU trade mark laws, trade marks cannot be registered or face being invalidated if they are "liable to be confused with a mark which was in use abroad on the filing date of the application and which is still in use there, provided that at the date of the application the applicant was acting in bad faith".

The CJEU had been asked to rule on a number of legal questions based around the concept of 'bad faith' applications by the Supreme Court in Denmark. The Danish court is tasked with resolving a dispute between dairy produce companies Yakult and Malaysia Dairy over the registration of Malaysia Dairy's plastic bottle as a three-dimensional trade mark in Denmark.

Yakult has argued that Malaysia Dairy acted in bad faith by filing its trade mark application in the country when it knew, or at least ought to have known, at the time that Yakult already held trade mark rights in Japan and a number of other EU countries for its plastic milk drink bottles.

The CJEU said, though, that a business cannot automatically be said to be acting in bad faith if it files for trade mark protection when they know another company already owns rights for similar marks in another country.

"In order to determine the existence of bad faith, it is necessary to carry out an overall assessment, taking into account all the factors relevant to the particular case which pertained at the time of filing the application for registration, such as ... whether the applicant knew or should have known that a third party was using an identical or similar sign for an identical or similar product," the CJEU said in its judgment.

"However, the fact that the applicant knows or should know that a third party is using such a sign is not sufficient, in itself, to permit the conclusion that that applicant is acting in bad faith. Consideration must, in addition, be given to the applicant’s intention at the time when he files the application for registration of a mark, a subjective factor which must be determined by reference to the objective circumstances of the particular case," it ruled.

"Prior to this decision the position under Danish law was that actual or presumed knowledge of a trade mark in use abroad was sufficient to establish that an applicant for registration of a trade mark in Denmark was acting in bad faith," said trade mark law specialist Robert Graham of Pinsent Masons, the law firm behind Out-Law.com. "The concept of bad faith was determined and applied differently among member states and the CJEU therefore held that bad faith, as defined in Article 4(4)(g) of the Trade Mark Directive, is to be of uniform interpretation and application in the EU. Accordingly the CJEU held that member states are not permitted to introduce differing systems of protection for foreign registered trade marks." 

"The ruling of the CJEU therefore provides an element of conformity as to the application of the 'bad faith' concept for trade mark applicants in EU member states. In holding that prior knowledge of an earlier foreign trade mark is only one element to be considered when determining whether bad faith exists the court has taken a pragmatic approach. Rather than imposing a ‘one size fits all’ definition, the courts and tribunals of member states will be required to consider the objective circumstances of the applicant’s registration on a case by case basis," Graham said.