The Court of Justice of the European Union (CJEU) in Malaysia Dairy Industries Pte. Ltd v Ankenævnet for Patenter og Varemærker Case C-320/12, has ruled on a preliminary reference from the Danish courts as to whether or not an application for a trade mark with the actual knowledge or presumed knowledge that a conflicting mark was in use by a third party abroad amounted to bad faith.
In 1965, Yakult registered as a model or design a small plastic bottle for a milk drink that was later registered as a shape mark in Japan and several EU Member States. Since 1977, Malaysia Dairy Industries Pte. Ltd has sold a milk drink in a plastic bottle similar to that registered by Yakult. In 1980, Malaysia Dairy successfully applied to register its bottle in Malaysia and, in 1995, it successfully registered a shape mark for its plastic bottle in Denmark.
Yakult subsequently filed for revocation of Malaysia Dairy’s registration in Denmark on the basis that Malaysia Dairy knew, or at least ought to have known, of Yakult’s prior identical marks abroad, thereby meaning Malaysia Dairy’s application was in bad faith under a provision of Danish law derived from Article 4(4)(g) of the Trade Marks Directive (2008/95/EC) (the Directive).
The Danish Patent and Trade Mark Office rejected Yakult’s claims in 2005, holding that Malaysia Dairy’s mere knowledge of Yakult’s prior foreign marks did not, by itself, amount to bad
faith. This decision was reversed on appeal by the Danish Patents and Trade Marks Appeal Board, which cancelled the registration of Malaysia Dairy’s mark in 2006. The Appeal Board held that actual or constructive knowledge of a prior conflicting mark abroad is sufficient to amount to bad faith, even where the applicant has itself registered the mark abroad. Malaysia Dairy unsuccessfully appealed the Appeal Board’s decision to the Maritime and Commercial Court in 2009 and subsequently appealed to the Danish Supreme Court.
In the present case, the Danish Supreme Court stayed proceedings in order to refer the following questions to the CJEU for preliminary ruling:
- Whether or not the concept of bad faith, within the meaning of Article 4(4)(g) of the Directive, is a concept of EU law that must be given a uniform interpretation.
- If so, whether knowledge or presumed knowledge on the part of the applicant, of a conflicting mark in use abroad at the time that its application is filed, is sufficient to establish that the applicant was acting in bad faith, or whether it is necessary to take account of other subjective factors in relation to the applicant.
- Whether or not Article 4(4)(g) of the Directive must be interpreted as allowing Member States to introduce a specific protection of foreign marks, based on the fact that the applicant knew or should have known of a foreign mark.
Under Article 52(1)(b) of the Community Trade Mark (CTM) Regulation (207/2009/EC), it is an absolute ground that a CTM must be declared invalid where the applicant acted in bad faith when filing the trade mark application.
Under Article 4(4)(g) of the Directive, Member States have discretion as to whether or not to legislate that a trade mark shall not be registered (or if registered, shall be declared invalid) where a conflicting mark was in use abroad on the application filing date and is still in use there, provided the applicant was acting in bad faith at the time of making the application. The United Kingdom has not incorporated such a provision into its national law.
In relation to the first question, the CJEU commented that although the Directive contained no definition of the concept of bad faith, it equally made no express reference to the law of the Member States regarding the concept. As such, the meaning and scope of bad faith had to be determined in the light of the context and objective of the Directive. The CJEU held accordingly that the concept of bad faith within Article 4(4)(g) is an autonomous concept of EU law that must be given uniform interpretation in the European Union.
As to the second question, the CJEU determined that, given that the concept of bad faith appears in Article 52(1)(b) of the CTM Regulation and there is a need for coherent application of trade mark rules in the European Union, the concept of bad faith in the Directive should be interpreted in the same way as under the Regulation. The CJEU therefore determined that in order to establish bad faith, it is necessary to take into account all relevant factors at the time of filing the application. The applicant’s knowledge or presumed knowledge that a third party is using a conflicting mark is not, by itself, sufficient to amount to bad faith.
Regarding the third question, the CJEU noted that the Directive expressly prohibits Member States from introducing grounds of refusal or invalidity other than those set out within the Directive. As such, the CJEU held that Article 4(4)(g) of the Directive must be interpreted as meaning that it does not allow Member States to introduce a system of specific protection of foreign marks that differs from the system established by that provision, which is based on the fact that the applicant knew or should have known of a foreign mark.
Whilst the particulars of this case may not have direct consequence in the United Kingdom (on the basis that it has not incorporated Article 4(4)(g) of the Directive into national legislation), this case is useful in establishing that Member States do not have any latitude to legislate differently or tailor the grounds of refusal or invalidity as set out in the Directive.