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Further Guidance on the Issue of 'Bad Faith'

Further Guidance on the Issue of 'Bad Faith'

19/06/09

The ECJ has provided guidance in the above referenced case concerning the criteria relevant to determining 'bad faith'.  The reference to the ECJ was made during Austrian trade mark proceedings between Chocoladefabriken Lindt & Sprüngli AG v. Franz Hauswirth GmbH.  Chocoladefabriken Lindt & Sprüngli AG ("Lindt") claims that Franz Hauswirth GmbH ("Hauswirth") has infringed its Community registration protecting a 3D trade mark consisting of a foil covered chocolate 'bunny'.  In response Hauswirth claims that the registration is invalid, as Lindt had been acting in bad faith when the application for registration was filed.

The referring court queried whether an applicant has acted in bad faith where it knows at the time of filing a Community trade mark application that a competitor is using an identical/similar trade mark for identical/similar goods in at least one member state and files the application in order to be able to prevent that competitor from continuing to use the trade mark.  If not, would that applicant be acting in bad faith if he applied to register the trade mark in order to prevent a competitor from continuing to use the sign where, at the time of filing, he knows or must know that the competitor has already acquired unregistered rights to its mark.  In either case is bad faith excluded if, at the time of filing, the applicants' sign has already obtained a reputation with the public?

The court held;
(1) The issue of bad faith must be the subject of an overall assessment, taking into account all factors relevant to the particular case

(2) The fact that the applicant knows or must know that a third party has long been using an identical/similar trade mark for identical/similar goods in at least one member state, is not sufficient in itself to lead to the conclusion that the applicant was acting in bad faith.

(3) Consideration must also be given to the applicants intention at the filing date.  If that intention is to prevent a competitor from marketing its products, this may be an element of bad faith, as may the fact that the competitor enjoys unregistered rights in its trade mark.

(4) The nature of the mark may also be relevant.  If, as in this case,  the trade mark consists of the shape and presentation of the goods concerned, bad faith may be more easily established where the competitors freedom to choose the shape/presentation of the product is restricted by technical or
commercial factors.

(5) Consideration may be given to the scope of reputation enjoyed by the trade mark at the filing date to the extent that this may justify the applicants interest in pursuing formal protection.

The case will now be considered by the Austrian court.