Partial bad-faith registration requires total cancellation

Following modifications to the Code of Civil Procedure, a new Metropolitan Appeal Court level has been created. These appellate courts have taken over a number of the appeal court functions of the Supreme Court.

In one of its first decisions, the Metropolitan Appeal Court has overturned, in part, a decision of the Metropolitan Court and upheld the Hungarian Patent Office's (HPO) initial ruling to cancel the Hungarian registration for the mark LN in Classes 9, 35 and 39 of the Nice Classification on the grounds that it was registered in bad faith (Case 8.Pf.20.014/2003). It refused to accept the lower court's reasoning that only the registration in Class 9 was in bad faith, stating that bad faith is an absolute ground for refusal, requiring cancellation of the entire registration.

The plaintiff, a German company that owns a German trademark registration for the mark LN, applied to the HPO to cancel the defendant Hungarian company's national registration of LN in Classes 9, 35 and 39. The plaintiff argued that the defendant had registered the mark in bad faith. It provided evidence that the manager and owner of the defendant firm had worked for a separate Hungarian company that had entered into business correspondence with the plaintiff with regard to the importation of its LN-marked goods into Hungary. This correspondence occurred prior to the defendant's application for registration. The HPO agreed with the plaintiff and cancelled the registration in all three international classes. The defendant appealed.

The Metropolitan Court allowed the appeal in part and refused to order the cancellation of the registration in respect of Classes 35 and 39. It reasoned that the defendant did have an intention to register the mark in bad faith but that this could only be established in relation to the Class 9 part of the registration. The plaintiff's evidence, said the court, proved only that the defendant had knowledge that the German LN mark covered the type of goods set out in that class heading. Both parties appealed, with the plaintiff requesting cancellation in all three classes and the defendant demanding the dismissal of the cancellation action in full.

The Metropolitan Appeal Court allowed the plaintiff's appeal and reinstated the HPO's decision to cancel the registration in all three classes. Evidence of bad faith is an absolute ground for refusal, said the court, and must be applied to the registration as a whole and not each separate element. Here, the evidence that the mark had been partly registered in bad faith was enough to demonstrate that the entire registration had been registered in bad faith.

Miklós Sóvári, Danubia, Budapest