Opposition based on geographical indication rejected by Supreme Court

The Supreme Court of Estonia has issued its decision in a case involving an opposition against the registration of a mark based on a geographical indication (Case 3-2-1-1-09, February 25 2009).
On April 23 2002 OÜ Põltsamaa Meierei Juustutööstus (PMJ) applied for the registration of the figurative trademark PÕLTSAMAA KULDNE KERA (Estonian for 'Põltsamaa golden globe') for goods in Classes 16 and 29 of the Nice Classification.
On March 2 2004 Piimandusühistu E-Piim filed an opposition against the application. On September 1 2003 'Põltsamaa' had been registered as a geographical indication for cheese at the request of E-Piim (the application having been filed on May 30 2003). E-Piim claimed that the trademark applied for would confuse consumers as to the origin of the goods, as these did not originate from the town of Põltsamaa.
The Board of Appeal dismissed the opposition on the grounds that the application for the registration of the mark had been filed before the geographical indication was registered. Moreover, there was no evidence of bad faith on the part of PMJ, which would allow the board to disregard the priority date of the application.
E-Piim filed an action before the Harju County Court on December 29 2006. The court dismissed the case on the same grounds as the Board of Appeal. The court also ruled that although 'Põltsamaa' was registered as a geographical indication, there was no evidence that cheese produced in the Põltsamaa area had special characteristics or a particular reputation.
On appeal, the Tallinn District Court reached the same conclusion. E-Piim filed a cassation appeal before the Supreme Court.
The Supreme Court held as follows:
  • The courts have the authority to assess the circumstances surrounding the registration of a geographical indication, even where the registration itself has not been challenged. Therefore, the lower courts were entitled to rule that the registration of the geographical indication 'Põltsamaa' did not in itself prove that the geographical indication had special characteristics or a particular reputation.
  • There is a presumption of good faith on the part of the applicant. Therefore, the burden of proving bad faith lies with the opponent.
  • There must be evidence that consumers have been misled or are highly likely to be misled by the mark. In the present case, there was no evidence to this effect.
Consequently, even if the priority date of the geographical indication had preceded that of the trademark application, the opposition would still have failed since the court found that the requirements for the registration of the geographical indication (special characteristics or reputation) had not been met - notwithstanding the fact that there had been no request for the invalidation of the geographical indication itself.
On the same day, the Supreme Court issued another decision (Case 3-2-1-149-08) in a cassation appeal filed by E-Piim in a civil action against parties related to PMJ. This second case concerned the alleged infringement of the trademark EESTI KULDNE JUUST ('Estonian golden cheese').
The first instance court had ruled in favour of E-Piim and ordered that the defendants pay approximately €200,000 for lost profit. The second instance court had found that the claim was time barred, as E-Piim had waited too long to bring the action.
On appeal, the Supreme Court held that the claim was not time barred and remanded the case to the lower court, ruling that previous criminal proceedings had suspended the period of limitation. Although E-Piim was unsuccessful in the first case, it seems likely that it will be awarded damages in the second case. However, the Põltsamaa Case shows that the burden of proving bad faith is almost impossible to meet, even where the defendant is a known infringer.
Almar Sehver, AAA legal Services, Tallinn

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