In a judgement of 20 January 2022, the Second Board of Appeal of EUIPO confirmed the decision of the Cancellation Decision that rejected an application for cancellation for bad faith trademark registration considering inter alia that the re-filing of the trademark does not amount to bad faith in the circumstances of the case.
Background
On 4 April 2017, Peace United Ltd (the “Applicant”) filed an application for the registration of an EU figurative trademark, depicted below, for certain services listed in Nice classes 35, 41, 43. The trademark was registered on 8 January 2018.
source: https://euipo.europa.eu/eSearchCLW/#basic/*/19%2F01%2F2022/21%2F01%2F2022/number/
The Applicant was also the owner of other similar EU trademarks that included the trademark BÂOLI, previously applied for. The classes of services were overlapping to some extent.
On 9 June 2020, 1906 Collins LLC (the “Cancellation Applicant”) filed an application for a declaration of invalidity on the grounds of article 59(1)(b) of Regulation 2017/1001 (“EUTMR”). It argued that (i) the contested trademark represents a repeat application of earlier EU trademarks made in bad faith, with the aim of artificially extending the grace period for non-use and that (ii) it was filed without any intention of being used, solely to damage the interests of third parties in a manner inconsistent with honest practices.
The Cancellation Division of EUIPO rejected the application in its entirety.
First, with respect to the allegation that the contested trademark represents a repeat application, it found that the earlier trademarks are not identical to the contested trademark and that the list of services is not identical as well. Also, the contested application was filed after the application for revocation of the earlier trademarks and there was no indication that filing a variation of earlier trademarks pursues an illegitimate objective in the circumstances of the case.
Second, as regards the lack of use of the, the Cancellation Division held, inter alia, that the mere lack of use cannot constitute sufficient proof of bad faith on the part of the Applicant at the time of the filing of the contested trademark. Also, it held that the Cancellation Applicant has not provided sufficient evidence to support the conclusion that the Applicant did not intend to use the contested trademark and that the Applicant intended to damage the interests of third parties in a manner inconsistent with honest practices.
Decision of the Second Board of Appeal
The Second Board of Appeal of EUIPO dismissed the appeal by its decision of 20 January 2022.
With respect to the claim that the contested trademark constitutes a repeat application made in bad-faith, the Cancellation Applicant relied on the decision rendered by the General Court in the Monopoly case to support this argument.
However, the Board of Appeal concluded that the circumstances are different in the case at hand, and these circumstances do not justify reaching a similar decision as in Monopoly.
More specifically, in Monopoly there was a clear admission on the part of the applicant, that it is more administratively efficient to oppose a later trademark on the basis of a recent trademark that was not subject to proof of use. The General Court considered that admission to prove that the applicant had intentionally sought to circumvent a fundamental rule of EU trademark law, namely that relating to proof of use, in order to derive an advantage therefrom (Case T-663/19, para. 72).
On the contrary, in the case at hand the parties were involved in an earlier commercial relationship and disputes resulting therefrom. Also, the signs at issue were not identical. From the overall assessment of the factual chronology of the case, the Board of Appeal concluded that the filing of the contested trademark does not appear to be devoid of commercial logic.
Moreover, the General Court rejected the argument of the Cancellation Applicant that the Applicant admitted in separate court proceedings having re-filed the trademark only as a blockage trademark. The General Court considered that the alleged admission merely sets out the facts and no fraudulent intent can be inferred from it.
Comment
The decision of the Board of Appeal is consistent with earlier case law on bad faith registration, including the judgement of the General Court in the Monopoly case T-663/19, specifically dealing with bad-faith in case of trademark re-filing.
The Concept of Bad Faith Registration
As discussed at length in an earlier post, bad faith is not a defined concept in the trademark legislation. The lack of any definition is intentional, as the judicial body is left with freedom to determine, depending on the proven facts of the case, which are the elements that converge towards bad faith registration.
All the relevant factors specific to a particular case should be examined to reach a conclusion of bad faith registration. Some factors were set in the case law, without other factors being excluded. Importantly, bad faith registration of a trademark must be understood in the context of trademark law, which is that of the course of trade. Also, the rules on trademarks are aimed, in particular, at contributing to the system of undistorted competition.
In this context, bad faith is a concept that will be flexibly and rather broadly assessed, to include for example, re-filing of identical trademarks if the intention was to circumvent requirements of proving genuine use, or lack of any intention to use the trademark in connection with the goods and services covered by that registration.
Therefore, re-filing may constitute a relevant factor to determine bad-faith registration on the part of the applicant if there is clear evidence that the re-file is made to circumvent trademark rules, such as the requirement of proving use.
Nevertheless, relying on existing case law is not sufficient. In the absence of an admission by the applicant, as in the Monopoly case, clear evidence to support the intention of the applicant in each particular case should be submitted to dispel the presumption of good faith of the applicant.
Bad Faith Registration in Cases of Repeat Applications
This is also a reminder of cases where a refile is considered as made in bad faith.
As such, repeated applications are not prohibited by trademark laws. Trademark owners may have an interest to file a repeat application of an earlier trademark if they want to expand the list of goods or services or the covered territories, due to the evolution of the business, or if they want to update/modernise their logo.
Nevertheless, repeat applications are not permitted if only made to circumvent the requirement of proving the use, or to avoid the consequences entailed by total or partial revocation of earlier trademarks for reasons of non-use, or for other reasons aiming at circumventing fundamental rules of trademark laws.
In terms of procedural aspects, EUIPO has taken at some point a more flexible approach in opposition procedures. As such, EUIPO allowed the request for proof of use in some cases where the trademark relied upon in opposition was still in the 5 years grace period. Such decisions were grounded on the interpretation of the term “earlier mark” to include earlier trademark registrations (not relied upon in the opposition) which were identical with the one used in opposition, registered for the same classes of products or services and for the same territory. In such cases EUIPO considered that the trademark used in opposition was a repeat refile made to avoid the requirement of proof of use (decisions in cases R 1785/2008-4 of 15 November 2011 of the Fourth Board of Appeal, Pathfinder and R 1260/2013-2 of 13 February 2014 of the Second Board of Appeal, Kabelplus). It basically meant that the bad faith when refiling was assessed in the opposition proceedings.
The General Court did not endorse this approach. It ruled that the requirement of proof of use only concerns the specific trademark relied upon in opposition (judgement in case T-736/15, Skylite). The General Court recognised that there could be bad faith in case of refiling, but it cannot be examined in the opposition proceedings. In subsequent cases the issue of bad faith refile was addressed in applications for invalidity for bad faith registration.
Cases where a refile was not considered in bad faith include situations where:
- the refile was meant to modernise the trademark, its look and feel (see Case T-136/11, Pelikan, Case R3201/2014-1, Buffalos),
- the refile was meant to cumulate classes of goods and services covered by several other earlier trademarks, to make the renewal process more efficient (Pelikan, supra) or to reflect the technological innovation in the market in comparison with the time of filing the earlier registration (Case R 351/2020-4, Hamilton).
On the other side of the bad faith spectrum in cases of repeat applications stands the decision in the Monopoly case, where bad faith was found because there was a clear admission on the part of the applicant that it is more administratively efficient to oppose a later trademark on the basis of a recent trademark that was not subject to proof of use.
One takeaway is that trademark owners should document their intent when filing and refiling their trademarks, and make sure there is a commercial logic behind the application, that could be proved if needed.
