Case C-529/07 Chocoladefabriken Lindt & Sprüngli v Franz Hauswirth GmbH (unreported). In a reference from the Austrian Supreme Court in which the good standing of the Lindt gold Easter bunny was at stake, the European Court of Justice (ECJ) was asked to rule on whether a Community trade mark (CTM) application was made in bad faith where the applicant knew that a third party was using an identical or similar sign. The ECJ held that, depending on the intention of the applicant, and the degree of recognition of the third party rights at the time of filing, such activity could constitute bad faith.

BACKGROUND

Lindt & Sprüngli, a Swiss company, has manufactured and sold its gold foil-wrapped chocolate Easter bunnies since the 1950s. In 1994, Lindt began to market the chocolate bunnies in Austria. In 2000, it obtained a CTM in class 30, in respect of a three-dimensional bunny bearing the words “Lindt GOLDHASE”, a representation of which is set out below left.

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Various other manufacturers also market foil-wrapped Easter bunnies. The defendant, an Austrian company called Franz Hauswirth, had done so since 1962. A representation of the Hauswirth bunny is set out above right.

Lindt brought infringement proceedings against Hauswirth, seeking an injunction to prevent Hauswirth marketing its bunny within the European Union. Hauswirth counterclaimed for a declaration of invalidity under Article 51(1)(b) of the Community Trade Mark Regulation (40/94/EC), stating that Lindt acted in bad faith when it applied for its trade mark, as it knew that others were marketing similar gold bunnies in the European Union at the time of its application.

The Austrian Supreme Court held that there was a likelihood of confusion but referred the following questions to the ECJ for guidance on whether an applicant for a CTM acted in bad faith:

  1. where he knows, at the time of application, that a competitor in at least one Member State is using a sign which is the same, or similar, and the applicant applies for the CTM in order to be able to prevent the competitor from using that sign;
  2. where all the circumstances in question 1 apply and, in addition, the applicant “knows or must know” that the competitor had already acquired a “valuable right” in his sign; and
  3. if the answer to either of the earlier questions is yes, is that bad faith overcome where the applicant’s sign has, at the time of filing, already acquired a reputation among the public?

DECISION

The ECJ held that the national court must take into consideration all the relevant factors which pertained at the time of filing the application, in particular:

  •  the fact that the applicant knew or must know that a third party is using, in at least one Member State, an identical or similar sign for an identical or similar product capable of being confused with the sign for which registration is sought;
  • the applicant’s intention to prevent that third party from continuing to use such a sign; and
  • the degree of legal protection enjoyed by the third party’s sign and by the sign for which registration is sought.

The court noted that the fact that an applicant “must know” that a third party was using an identical or similar mark within the European Union was not sufficient to establish bad faith. The applicant’s intention must also be taken into consideration. An applicant would be acting in bad faith if it was not intending to use the mark itself, but applied for registration in order to prevent a third party from doing so. Equally, if the applicant knew that the third party’s sign enjoyed some degree of legal protection, then an attempt to compete unfairly by taking advantage of CTM rights to prevent the third party from using its mark would constitute bad faith. That was not to say, however, that in such circumstances, and in particular when several producers were using, on the market, identical or similar signs for identical or similar products capable of being confused with the sign for which registration is sought the applicant’s registration of the sign might not be in pursuit of a legitimate objective. Further and significantly, the court went on to find that the extent of the reputation of the sign at the time of filing was a relevant factor and that, on the facts of a particular case, this might justify the applicant seeking wider protection for its mark.

COMMENT

Lindt is clearly not at risk of a finding that it applied for a mark which it did not intend to use, as its gold bunny had already been widely used within the European Union before the date on which it filed for CTM protection. The dispute will now be remitted back to the Austrian court to determine whether, on the facts, Hausfirth had a right in its Easter bunny which enjoyed legal protection under the European doctrine of unfair competition or otherwise at the date of filing of Lindt’s mark. If the court finds that it did have such a right, then Lindt risks losing its registration if it cannot establish that, in 2000, its reputation in the gold bunny mark was sufficient to overcome a charge of bad faith.