In a further decision dated June 11, 2009 (C-529/07), the court had to review the criteria relevant to determining whether an applicant is “acting in bad faith” when filing an application for a Community trademark.

Lindt & Sprüngli has produced a chocolate bunny since the early 1950s with a shape very much like the one protected by the three-dimensional mark at issue. Since 1994, Lindt & Sprüngli has marketed it in Austria. In 2000, Lindt & Sprüngli obtained the three-dimensional Community trademark at issue, representing a gold-colored chocolate bunny, in a sitting position, wearing a red ribbon and a bell and with the words “Lindt GOLDHASE” in brown lettering. The defendant and cross-claimant, against whom Lindt & Sprüngli initiated the proceedings, has marketed similar looking chocolate bunnies since the early 1960s.

In the proceedings, the defendant claimed that Lindt & Sprüngli was acting in bad faith when it filed its application for registration of the mark, because it was aware that a competitor in (at least) one member state is using the same sign, or one so similar as to be capable of being confused with it, for the same or similar goods or services, and it applied for the trademark in order to be able to prevent that competitor from continuing to use the sign. The Austrian Supreme Court decided to stay the proceedings and to refer certain questions regarding bad faith to the Court of Justice for a preliminary ruling.

The Court of Justice stated that the national court must take into consideration all the relevant factors specific to the particular case at the time of filing the application for registration of the sign as a Community trademark. In particular, the court has to consider whether the applicant knew or must have known 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. Such presumption of knowledge by the applicant may arise inter alia from general knowledge in the economic sector concerned of such use. The more such use is long-standing, the more probable it is that the applicant will, when filing the application for registration, have knowledge of it. However, this fact is not sufficient, in itself, to permit the conclusion that the applicant was acting in bad faith. Consequently, according to the court, consideration must also be given to the applicant’s intention at the time when he files the application for registration.

Bad faith will be likely if it becomes apparent, subsequently, that the applicant applied for registration of a sign as a Community trademark without intending to use it, his sole objective being to prevent a third party from entering the market. However, even 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 in question, it cannot be excluded that the applicant’s registration of the sign may be in pursuit of a legitimate objective. That may in particular be the case, where the applicant knows, when filing the application for registration, that a newcomer in the market is trying to take advantage of that sign by copying its presentation, and the applicant seeks to register the sign with a view to preventing use of that presentation.

Further, in a case where the sign for which registration is sought consists of the entire shape and presentation of a product, the fact that the applicant is acting in bad faith might more readily be established where the competitors’ freedom to choose the shape of a product and its presentation is restricted by technical or commercial factors, so that the trademark proprietor is able to prevent his competitors not merely from using an identical or similar sign, but also from marketing comparable products. Moreover, a significant reputation enjoyed by a sign at the time when the application as a Community trademark is filed can justify the applicant’s interest in ensuring a wider legal protection for the sign.

Please click here to view images.