The European Court of Justice (ECJ) had provided guidance to the national Austrian court as to the factors to be considered when determining whether a registration applied for in the knowledge that other very similar marks were being used in the Community is to be considered as having been made in bad faith.
Article 51(1)(b) of the Community Trade Mark Regulation No 40/94 provides:
'A Community trade mark shall be declared invalid on application to ...[OHIM] or on the basis of a counterclaim in infringement proceedings...where the applicant was acting in bad faith when he filed the application for the trade mark.'
Regulation No 40/94 was repealed by Council Regulation (EC) No 207/2009 of 26 February 2009 which came into force on 13 April 2009. However, the relevant provisions are unchanged.
In Austria and Germany chocolate bunnies have been marketed since at least 1930 in various shapes and colours. Since the introduction of automated wrapping, industrially manufactured bunnies have become increasingly similar.
Lindt & Sprüngli (Lindt) has since the early 1950s produced a chocolate bunny with a shape very like that protected by the three-dimensional mark at issue. However Lindt has only marketed it in Austria since 1994.
The three-dimensional mark at issue (a gold coloured chocolate bunny, in a sitting position, wearing a red ribbon and a bell and with the words 'Lindt GOLDHASE' in brown lettering) was obtained by Lindt in 2000.
Franz Hauswirth has marketed chocolate bunnies in Austria since 1962 and a bunny in the form to which objection was taken since 1997. The Austrian court held that it was similar to the Lindt mark, noting that Franz Hauswirth affixes a label to the underside of the product only. It found that there was a likelihood of confusion.
After registration Lindt began to take trade mark infringement proceedings against manufacturers who, to its knowledge, were manufacturing products so similar to the bunny protected by that mark that there was a likelihood of confusion including against Franz Hauswirth. Franz Hauswirth counter-claimed for invalidity and the Austrian court sought the guidance of the ECJ. The ECJ was consulted on the issue of whether Lindt's application made in the knowledge of the marketing of the Franz Hauswirth bunny in Austria was made in bad faith (and so should be declared invalid).
It appears that for reasons of national law the referring court had found or Franz Hauswirth had conceded that it would not be able to rely on relative grounds to revoke Lindt's mark as its own "valuable right" and its "degree of legal protection" was not sufficient to amount to a prior right under the Community Trade Mark Regulation.
The ECJ concluded that "the fact that the applicant knows or must know that a third party has long been 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 is not sufficient, in itself, to permit the conclusion that the applicant was acting in bad faith"
However it further explained that whether the applicant is acting in bad faith, within the meaning of Article 51(1)(b) must be the subject of an overall assessment, taking into account all the factors relevant to the particular case. The factors specified in the questions referred for a preliminary ruling, which may be relevant are:
- the fact that the applicant knows 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.
In respect of the first factor a presumption of knowledge may arise from the duration of such use and other factors. The more that use is long-standing, the more probable it is that the applicant will, when filing the application for registration, have knowledge of it.
In the light of the rather peculiar facts of this case, the ECJ's guidance seems sensible. However perhaps most interesting and of wider application is the ECJ's comment that: "the intention to prevent a third party from marketing a product may, in certain circumstances, be an element of bad faith on the part of applicant... That is in particular the case when it becomes apparent, subsequently, that the applicant applied for registration of a sign as a Community trade mark without intending to use it, his sole objective being to prevent a third party from entering the market".
In the UK courts an established lack of intention to use the mark by the applicant when registering a mark has long been regarded as a ground for a bad faith objection. This judgment however is the first indication by the ECJ that lack of intention may also be a ground for bad faith under the Community Trade Mark Regulation. The distinction being that here such a lack of intention must be combined with a "sole objective" of preventing "a third party" from entering the market.
It could be argued that where a mark is registered without an intention to use it the objective of such a registration must be to prevent others from entering the market with that mark. However what remains unclear is whether such a registration must be targeted to hamper a particular third party for it to amount to bad faith under the Community Trade Mark Regulation.