No bad faith if application was “commercially logical”

European Union

In Peeters Landbouwmachines BV v Office for Harmonisation in the Internal Market (OHIM) (Case T-33/11, February 14 2012), the General Court has upheld a decision of the First Board of Appeal of OHIM in which the latter had refused to cancel the registration of the mark BIGAB under Article 52(1)(b) of the Community Trademark Regulation (207/2009).

The relevant time period started in 1991, when the predecessor of AS Fors MW began use of the mark BIGAB for agricultural goods in certain parts of the European Union and in countries which later became members of the European Union. In 1996 Peeters Landbouwmachines BV began using the mark BIGA in the Benelux for similar goods. Neither company registered its trademark until, in 2006, Fors obtained the registration of BIGAB as a Community trademark (CTM) in Classes 6, 7, and 12 of the Nice Classification.

A few weeks after obtaining the registration, Fors sent Peeters a letter of formal notice demanding that it cease using the mark BIGA. Peeters filed an action for a declaration of invalidity of the BIGAB mark for all of the goods in respect of which it had been registered. Peeters alleged that Fors acted in bad faith at the time of filing the application for registration of the mark at issue, in that Fors’ sole objective in making that application was to prevent Peeters from continuing to market agricultural goods under the mark BIGA - despite the fact that Peeters had an earlier right over that mark.

The Cancellation Division of OHIM rejected the application for invalidity in its entirety. This decision was upheld by the First Board of Appeal, which held, among other things, that:

  • the CTM system is based on the ‘first-to-file’ principle;
  • ‘bad faith’ means "dishonesty which would fall short of the standards of acceptable commercial behaviour";
  • Peeters had not shown that Fors had been acting in bad faith;
  • the mark BIGAB had been used since 1991 (initially by Fors' predecessor, thereafter by Fors itself), whereas Peeters did not start using the sign BIGA until 1996;
  • Fors was free, therefore, to apply for registration of BIGAB as a CTM in order to strengthen its protection at European level; Peeters was free to do likewise but did not take the trouble to register the sign BIGA as a CTM, even though it had used it since 1996;
  • those findings were not called into question by Chocoladefabriken Lindt & Sprüngli (Case C-529/07), since Fors' main and prior intention was to protect its trademark rights "on a European scale", and not to prevent Peeters from using the mark BIGA;
  • it mattered little in that connection that Fors knew, or at least should have known, of Peeters' use of the sign BIGA at the time of filing the CTM application, and that Peeters was able to assert a degree of legal protection over the unregistered mark BIGA pursuant to Article 2.4(1)(f) of the Benelux Convention on Intellectual Property (Trademarks and Designs), because it had been established that, in any event, Fors had an earlier right.

Peeters appealed to the General Court, but the appeal was dismissed. The court reiterated the Lindt principle that the determination of bad faith is an overall assessment. The three factors highlighted in Lindt concerning the bad faith of a CTM applicant (ie, the applicant’s knowledge of the third-party use; the applicant’s intention of preventing that third party from continuing to use such a sign; and the degree of legal protection enjoyed by the third party’s sign) were not exhaustive, but merely examples of factors which could be part of the overall assessment.

In its overall assessment of the case at hand, the court also considered the following factors:

  • the origin of the sign at issue and its use since its creation; and
  • the commercial logic underlying the filing of the CTM application

The court found that, given the history and expansion of Fors' use, it was understandable that Fors sought registration of a CTM. Peeters did not demonstrate that the extent of protection in three classes was “artificial and not commercially logical” for Fors. In addition, Peeters had not proven that the sole purpose of Fors' registration was to prevent Peeters from using the mark BIGA. Having found that the CTM had not been filed in bad faith, the court explicitly stated that:

the fact that, a few weeks after successfully registering the mark at issue, [Fors] sent a letter of formal notice to [Peeters] demanding that they cease using the sign BIGA in their commercial relations is not an indication of bad faith, since such a request falls within the scope of the rights attaching to the registration of a mark as a CTM, referred to in Article 9 [of Regulation 207/2009].” 

This case shows that there can be a strong presumption against bad faith, particularly where the CTM proprietor was first to use the mark somewhere in the European Union. It can be difficult for cancellation applicants to meet the burden of proving bad faith; potential applicants for cancellation ought to consider this carefully.

Peter Gustav Olson, MAQS, Copenhagen

Unlock unlimited access to all WTR content