The Advocate General has advised the ECJ on the meaning of “bad faith” in the context of Article 5(1) (b) of the Community Trade Mark Regulation. Article 5(1) (b) provides that a Community trade mark (CTM) shall be declared invalid where the applicant was acting in bad faith when he filed the application for the trade mark.

The case involved a dispute in the Austrian courts between two chocolate manufacturers. One of them, Chocoladefabriken Lindt & Sprungli AG (Lindt), had been manufacturing and selling Easter chocolate bunnies since the 1950s. In June 2000 Lindt applied to register as a CTM the form of its bunny wrapped in gold foil and sporting a red ribbon with a bell around its neck. The bunny had the words “Lindt Goldhase” on its haunches. The CTM was granted in July 2001. Meanwhile one of Lindt’s competitors, Franz Hauswirth GmbH (Hauswirth), had been selling its own design chocolate bunnies since 1962; they were similarly covered in gold foil and usually decorated with a ribbon but without a bell. The Hauswirth name was affixed to the underside of the bunny. Lindt issued proceedings for trade mark infringement against Hauswirth in Austria. Hauswirth counterclaimed that Lindt had made its application in bad faith and its CTM should be declared invalid.

The Austrian Supreme Court applied to the ECJ for a preliminary ruling on what was meant by “bad faith” in the context of Article 5(1) (b).The AG decided that there was no simple test for determining whether a CTM had been applied for in bad faith. A national court must take into account all available evidence in determining whether or not the applicant was acting knowingly in a manner incompatible with accepted standards of honest or ethical conduct. In particular:

if the applicant had an intention to stop others using signs in competition where the others had been using such signs legitimately for many years their intention may be incompatible with such standards; and

such an intention would not necessarily be incompatible with such standards if the applicant already had greater legal rights than its competitors and the use by others of the same sign could be considered to derive unjustified benefit from the applicant’s sign.

This is the first reference to the ECJ on the meaning of “bad faith” and it will be interesting to see if the ECJ follows the AG’s opinion.

Click here to read a copy of the AG’s opinion in Chocoladefabriken Lindt &Sprungli AG v Franz Hauswirth GmbH.