EU judgment on bad faith in trade marks

If a competitor files a trade mark for a name you have been using, can you stop them even if you don’t actually have the trade mark yourself? A recent decision of the General Court affirms that you can.

If a trade mark is registered in bad faith, it can be rendered invalid. Bad faith occurs when there is a dishonest intention to exploit a trade mark, for example if the intention when filing is to block others from using the mark rather than to actually use it. Ultimately, the question as to whether a mark is filed in bad faith will turn on the specific facts of each case.

Decision

The offending mark, ‘AGATE’, was filed by UNIVERS. Shandong owns a Chinese figurative mark including the word element ‘Agate’ and had operated in the past using this mark in Bulgaria. The offending mark was registered for Class 12 (tyres), and Shandong had used its Agate mark for tyres as well.

The General Court found that UNIVERS had filed AGATE in bad faith.

Comment

Key to the court’s findings of bad faith were the following factors:

1. The speed in which UNIVERS sought to enforce its rights in AGATE against Shandong and their distributor, Omnifak. This cast doubt on the claim that they had no knowledge of Shandong’s use.
2. UNIVERS could offer no evidence of plans to use the mark, nor any commercial rationale for filing the mark.
3. UNIVERS and Shandong operated within a niche market and in very close proximity, which indicated that UNIVERS must have been aware of Shandong’s use.

This judgment concerning bad faith is helpful for brand owners because it illustrates that you can successfully intervene even when:

2017. you can only show relatively low use of the mark yourself. In this case, Shandong only sold 23,000 ‘Agate’ tyres in Bulgaria and only operated in Bulgaria between 2014 and 2017.
2018. the other side perform a trade mark search prior to filing where conflicting rights do not appear in their search report. In this case, the search undertaken by UNIVERS found no conflicting right in Europe or China. Albeit in this instance, the report was not unequivocal on worldwide use.
2019. you do not have registered rights, but you have earlier unregistered rights.

The key takeaway of the story is … don’t be discouraged from taking action. Courts don’t like it when people abuse the trade mark system to distort competition and this judgment is an example of this.

Written by Laura Gathercole, Paralegal