Trademarks found invalid due to owner's bad faith when filing applications

In a final judgment, the Barcelona Commercial Court Number 1 has upheld an action filed by Marina Calafat SL against Calafat SA for a declaration of invalidity of two trademarks, and dismissed the counterclaim for trademark infringement brought by Calafat SA.

The background was as follows.

Marina Calafat SL provides real estate services, under that name, in the areas of Calafat and Marina Sant Jordi, residential estates located in L’Ametlla de Mar, Tarragona. It applied for a declaration of invalidity of two mixed Spanish marks registered by Calafat SA. The marks, which consisted of the name and logo of Marina Calafat SL, had been applied for by Calafat SA in the knowledge that such name and logo were being used by Marina Calafat SL.

Calafat SA opposed the claim, alleging the existence of preferred and exclusive rights to the term ‘Calafat’. Further, it filed a counterclaim against Marina Calafat SL requesting a declaration of infringement of other mixed trademarks owned by Calafat SA which contained the term ‘Calafat’, due to the use of this term by Marina Calafat SL as a company name and as a domain name.

The counterclaim was opposed by Marina Calafat SL, alleging non-infringement of the mixed marks invoked by Calafat SA mainly on the ground that Calafat SA had no exclusive rights to the term ‘Calafat’ taken in isolation (Article 5.1 of the Spanish Trademark Law). Such lack of rights was based on the status of the term ‘Calafat’ as a place name. As the term referred to a specific geographical location, it lacked distinctiveness.

The court’s considerations, as set forth in the judgment, were as follows.

With regard to the invalidity action, it had been proved that the sign on which the mixed Marina Calafat marks were based had been created by Marina Calafat SL and that Calafat SA had registered the marks in the knowledge that the sign was being used by Marina Calafat SL, with the sole purpose of obstructing Marina Calafat SL’s activities. This showed that Calafat SA had acted in bad faith when applying for the registration of the marks and, therefore, the marks were invalid.

As regards the infringement action, the court found that the mixed trademarks did not confer on Calafat SA any exclusive right to the term ‘Calafat’ considered in isolation. ‘Calafat’ is a descriptive term that lacks distinctiveness insofar as it refers to the geographical area in which the parties operate.

In this regard, the court referred to documents provided by Marina Calafat SL that proved not only that ‘Calafat’ designates a residential estate in L’Ametlla de Mar, but also that, before this residential estate was created, there were geographical landforms (eg, the Calafat Cove and the Calafat Tip) in this specific area that used the name Calafat.

The court thus upheld the invalidity claim brought by Marina Calafat SL and dismissed Calafat SA’s infringement counterclaim.

Antonia Torrente, Grau & Angulo, Barcelona