GC Rules BIGAB Mark Not Registered in Bad Faith

The background

Back in 2005, AS Fors filed a CTM application for the word mark BIGAB in relation to metal goods, machines and tools amongst other goods in Classes 6, 7 and 12. The mark was registered and in 2007 Peeters Landbouwmachines BV (PLBV) sought to invalidate the registration in its entirety. It alleged that AS Fors was acting in bad faith at the time of filing the application for the BIGAB mark. It claimed that AS Fors had the sole objective of preventing it from continuing to market agricultural goods under the mark BIGA. In 2009 the Cancellation Division of OHIM rejected the application for invalidity.

PLBV appealed the decision, which the Board of Appeal subsequently dismissed. It did so on the basis that PLBV had not adequately shown that AS Fors was acting in bad faith at the time of filing the application for the BIGAB mark, as provided for under Article 52(1)(b) CTMR. Case law has established that bad faith means 'dishonesty which would fall short of the standards of acceptable commercial behaviour'. The BIGAB mark had been used since 1991, initially by the predecessor of AS Fors, whereas PLBV had not started using the BIGA mark until some five years later in 1996. Further, the BIGAB mark was found to originate from the trade name of the business, namely 'Blidsberg Investment Group BIG AB'. Accordingly, the Board of Appeal found that AS Fors was free to apply for registration of that mark as a CTM in order to strengthen its protection at European level. Indeed, PLBV was free to do likewise but had not registered the BIGA mark as a CTM, even though it had used it since 1996.

The appeal to the General Court

PLBV appealed to the General Court requesting that the decision be annulled and an order issued to OHIM to invalidate the BIGAB registration. PLBV attempted to submit evidence in the form of extracts from websites and such like; however, the General Court found this to be inadmissible since it was not submitted prior to the decision of the Board of Appeal.

The Court held that the mere use by a third party of a non-registered mark does not, in itself, preclude an identical or similar mark from being registered as a Community trade mark for identical or similar goods or services. It is well known that the CTMR is fundamentally based on a ‘first to file’ system. The Court acknowledged, however, that under Article 52(1)(b) CTMR, a CTM is to be declared invalid where the applicant was acting in bad faith when it filed the application. The onus is on the party seeking the invalidity of the registration (in this case PLBV) to prove that bad faith existed at the time of filing.

In the earlier case of Chocoladefabriken Lindt & Sprüngli (Lindt) the Court of Justice of the European Union (CJEU) had ruled that the question whether the applicant had been acting in bad faith must be decided by means of an overall assessment in which all the factors relevant to the particular case are taken into account and, in particular, the following:

1. the fact that the applicant knows or must know that a third party is using, in at least one Member State, an identical or similar sign for identical or similar goods, which could give rise to confusion with the sign for which registration is sought;
2. the applicant's intention of preventing that third party from continuing to use such a sign;
3. the degree of legal protection enjoyed by the third party's sign and by the sign for which registration is sought.

Further, the CJEU held in the Lindt case that the intention of preventing certain goods from being marketed may, in certain circumstances, be indicative of bad faith on the part of the applicant. That is the case, in particular, where it subsequently becomes apparent that the applicant had the sign registered as a CTM with no intention of using it, his sole objective being to prevent a third party from entering the market.

That said, the General Court held that the Board of Appeal had correctly found that the examples provided in the Lindt case were only drawn from a number of factors which can be taken into account in order to decide whether there was bad faith at the time of filing the application. The list is therefore not exhaustive.

It was clear that the BIGAB mark had been in use since 1991, by AS Fors and its predecessor. PLBV however, had not started using the sign BIGA until 1996. Moreover, on the date of the BIGAB application, the BIGA sign had never been registered in the EU. All of this indicated that the BIGAB mark was neither created nor used by AS Fors with the deliberate intention of creating confusion or unfairly competing with PLBV. Therefore, it did not matter that AS Fors knew of (or should have known of) PLBV’s use of the BIGA mark at the time of filing of their application.

The Court noted that, for the purposes of determining whether AS Fors was acting in bad faith, consideration could be given to the extent of the reputation enjoyed by the BIGAB mark at the time the CTM was filed. At the time of filing, the BIGAB mark had already been used for approximately 14 years. Further, the fact that prior to the BIGAB application, the number of Member States in which AS Fors generated turnover from under the mark BIGAB had increased was a plausible incentive for filing the CTM.

The outcome

The Court therefore held that the Board of Appeal was correct to find that AS Fors had not acted in bad faith by seeking registration of the BIGAB mark. The action was therefore dismissed in its entirety. This case highlights the importance of the effect of the ‘first to file’ system. It also shows that a bad faith case needs to be based on clear substantiated evidence that there has been a wrongdoing or dishonesty which would fall short of the standards of acceptable commercial behaviour. This is an onerous test, even when a company trying to enforce it has a history of use of an identical or similar mark. In this case, the Board of Appeal and subsequently the General Court were not given any reason to believe there was any bad faith when the BIGAB application was filed. The action was therefore destined for failure.

Useful links

Full text of decision T-33/11