The General Court of the EU has recently rendered an interesting judgment about the lawfulness of “reviving” an old trade mark (Case T-250/21, EU:T:2022:430, NEHERA).
In the early 1930s, Jan Nehera founded a company in Prostĕjov (now in the Czech Republic) under his name, which manufactured and sold ready-to-wear clothing for women, men and children under the brand name NEHERA, registered as a trade mark in Czechoslovakia in 1936. Thanks to modern management methods and intensive advertising, Nehera was very successful in Czechoslovakia and abroad. On the eve of World War II, the company employed almost 1,000 people and operated a network of more than 130 shops in Europe, the United States and Africa. During the war, the company was taken over by the German occupier, and eventually changed its name (no longer including the Nehera name) in 1946 when it was nationalised and ownership was transferred to the Czechoslovak state. Jan Nehera emigrated to Morocco, where he ran two shops, and died in 1958.
Mr Nehera was undoubtedly among the better known Czechoslovakian entrepreneurs in the clothing industry during the flourishing interwar period.
In 2006, Ladislav Zdút, a young Slovak advertising and marketing executive with no connection to the Nehera family, decided to “relaunch” the NEHERA brand. He registered a Czech trade mark and subsequently, in 2013, an EU trade mark. In 2014, he began presenting a womenswear collection at fashion shows under the NEHERA brand name. He invested substantial efforts, time and money in reviving the reputation of the NEHERA brand and in making known the forgotten history of Jan Nehera and his company. He does not hold himself out as the heir of or legal successor to Mr Nehera. By choosing the NEHERA brand, he simply wanted to “pay tribute” to the “symbol” embodied by Jan Nehera, a “great figure” in the “great days of the Czechoslovak textile industry of the 1930s”.
However, in 2019, three of Jan Nehera’s grandchildren filed an action before EUIPO seeking to have the NEHARA EU trade mark invalidated, claiming that it had been filed “in bad faith”. The Cancellation Division dismissed their action, but the Board of Appeal invalidated the trade mark on the grounds that Jan Nehera was “a celebrity” and that the old Czechoslovak trade mark still had “a certain surviving reputation” and retained “historical value”, of which Mr Zdút must have been aware as he referred to it in the story he built around the NEHERA brand.
The General Court, further to an action brought by Mr Zdút, sets aside the Board of Appeal’s decision in its entirety.
It is first recalled that bad faith must be assessed with reference to the filing date of the contested trade mark and that good faith is presumed until proven otherwise. Bad faith presupposes the presence of “a dishonest state of mind or intention”.
In this case, there is no evidence that Jan Nehera’s name was still famous in 2013 amongst a significant portion of the relevant public. Free-riding behaviour can only be found if the sign “actually and currently enjoys a certain reputation or a certain celebrity”.
While it is true that the new proprietor sought to “create an association” between, on the one hand, his business and, on the other hand, the old Czechoslovak trade mark and a formerly well-known businessman, the General Court does not see dishonest intent in doing so. On the contrary, the proprietor “revived” the old trade mark, which had been extinguished for several decades. By emphasising, in his messaging, this lengthy interruption and by not holding himself out as a descendant of Jan Nehera, the applicant did not create a “false inheritance relationship”, as the grandchildren wrongly alleged.
Contrary to what the Office found, the General Court recognises that Mr Zdút “made his own commercial efforts in order to revive the image of the former Czechoslovak trade mark and thus, at his own expense, to restore that reputation. In those circumstances, the mere fact of having referred, for the purposes of promoting the contested mark, to the historic image of Mr Jan Nehera and of the former Czechoslovak trade mark does not appear to be contrary to honest practices in industrial or commercial matters”.
The General Court censures the “broad” interpretation of the concept of bad faith by the Office. Establishing a “link” does not necessarily imply acting in bad faith. It is, under circumstances, permissible to “pay tribute” by making considerable efforts at one's own expense without being considered a free rider.
General Court of the EU, 6 July 2022, T-250/21, EU:T:2022:430, Ladislav Zdút v EUIPO - Isabel Nehera, Jean-Henri Nehera and Natacha Sehnal (NEHERA)