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CJEU Ruling Reinforces: Mere Knowledge of Existing Trade Marks Isn’t Enough to Prove Bad Faith Applications

13.06.2024 | EN, News EN

In its judgment of 15 May 2024, in Case T-181/23, the CJEU dismissed the appeal against the decision of the EUIPO Board of Appeal and thus, the Court once again confirmed that the applicant’s mere knowledge of a third party’s earlier trade mark shall not be sufficient to establish that a bad faith trade mark application has taken place.

Facts of the case

Dermavita Company Sarl applied for a declaration of invalidity of the EU word mark JUVÉDERM (EUTM 005807169) registered for goods in Class 5 (Pharmaceutical products administered by injection for use in moisturising skin and reducing wrinkles).

According to the applicant, the trade mark was applied for in 2007 by the legal predecessor of Allergan Holdings France in bad faith. However, the application for cancellation was dismissed first by the EUIPO Cancellation Division and then by the Board of Appeal. In its view, the legal predecessor of the trade mark owner had honest business intentions, which were proven by the intensive use of the trade mark worldwide since 2000.

Consequently, the Dermavita Company Sarl brought an action seeking declaration of invalidity of that decision before the General Court. The applicant pointed out that the mark at issue had been previously used by it in the territory of Lebanon, a fact of which the legal predecessor of the proprietor must have been aware, given its presence on the market there at the date of the application to register the disputed trade mark. A ground for bad faith was also supposed to involve the unacceptable commercial practice of applying for registration of a number of new trade marks in order to overcome the effects of an unfavourable ruling by a Lebanese court in 2011, which confirmed that the JUVÉDERM trade mark had already been used by the applicant since 1999, i.e. one year earlier than by the legal predecessor of the disputed trade mark owner.

CJEU judgment

The CJEU dismissed the applicant’s appeal.

Firstly, it reminded that the intention of the applicant for a trade mark is a subjective factor, which should nevertheless be objectively assessed by the relevant administrative and judicial authorities. It also pointed out that a trade mark can be declared invalid on grounds of bad faith if it is apparent from adequate and consistent circumstantial evidence that the proprietor of an EU trade mark has applied for registration of the trade mark not with a purpose of fair competition but with the intention of infringing, in a manner incompatible with fair practice, the interests of third parties.

As  regards  the circumstances aimed at justifying bad faith, CJEU pointed out that, although the Lebanese court had found that the disputed mark had been previously used by the applicant, it did not follow from the judgment that the predecessor of the proprietor was aware of the earlier mark when filing the application. Indeed, the mere prior use of a mark does not establish that a third party automatically knows of such use.

Contrary to the applicant’s argument, knowledge of the earlier mark is neither confirmed by means of using the same combination of the words ‘juve’ and ‘derm’. Indeed, these terms, being an abbreviation of ‘juvenile’ and ‘dermatology’, are to some extent descriptive of the nature or purpose of the goods in question. They are widely used on the market to describe products intended for skin care.

Similarly, sending a cease-and-desist letter in respect of the JUVEDERM trade mark does not necessarily imply knowledge of the earlier trade mark if there are doubts as to whether the letter was served in the first place. Such doubts resulted from the fact that the letter was sent to the intermediary acting for the legal predecessor of the right owner who was absent at the time of service.

According to the CJEU, it cannot therefore be implied that the legal predecessor was aware of the applicant’s prior use of the mark. Indeed, such knowledge cannot be inferred from the mere presence of the proprietor’s company in Lebanon.

Moreover, the question as to whether the proprietor had or should have known of such use is only one of the relevant factors to be considered. However, the sole indicated circumstance as such is not sufficient to demonstrate bad faith on the applicant’s part.

The applicant’s allegation that the proprietor had engaged in unfair business practices by filing several trade marks to circumvent the legal consequences that might arise from the Lebanese litigation was also unfounded. Indeed, the proprietor had legitimate business interests and its activities were linked to the natural expansion of its activities in the market. The CJEU therefore rejected the allegation of unfair intention on the part of the disputed trade mark owner.

Summary

The judgment in question is in line with the existing case law according to which the mere knowledge by the applicant of a third party’s earlier trade mark will not be sufficient to establish that a trade mark application has been filed in bad faith (similarly, inter alia, the CJEU Judgment of 28 October 2020, in Case T-273/19).

Consequently, it appears that one of the reasons that led to the dismissal of the application was the applicant’s inaccurate argumentation, which was mainly since the legal predecessor knew about the earlier trade mark. In addition, the applicant had failed to point to any consistent circumstantial evidence to suggest the applicant’s unfair intention, which is an inherent and mandatory element of the bad faith trade mark application.

Full text of the judgment available at: https://curia.europa.eu/juris/document/document.jsf?text=&docid=286108&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=3121242

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