The matter at hand
The intervener in this matter, Mr Nadal Esteban, filed an application for the registration of an EU figurative mark consisting of the word elements ‘STYLO & KOTON’ in which the ‘O’s in ‘KOTON’ were replaced by flowers, for goods and services in classes 25, 35 and 39.
The appellant, Koton, filed a notice of opposition against this application on the basis of two earlier marks consisting of the word element ‘KOTON’ in which the ‘O’s were replaced by flowers and a flower was placed above the word element. The earlier marks did cover goods and services in classes 25 and 35 identical or similar to those of the application, but did not cover any services in class 39.
The Opposition Division upheld the opposition in so far as it related to classes 25 and 35 and rejected the opposition in relation to class 39. After the appeal against that decision was dismissed, the mark applied for was registered for the services in class 39. After that, Koton filed an application for a declaration of invalidity claiming Mr Esteban had filed the application in bad faith.
The Cancellation Division, the Second Board of Appeal and the General Court all rejected the application, taking the view that, notwithstanding the similarity of the signs at issue and the fact that the intervener had knowledge of the appellant’s earlier marks, there could be no bad faith within the meaning of Article 52(1)(b) of Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark, because there was no similarity of the goods or services.
Before the ECJ, Koton alleged infringement of Article 52(1)(b) of Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark, arguing that the existence of bad faith does not presuppose that the contested mark is registered for goods or services identical with, or similar to, those in respect of which an earlier mark is registered.
The judgment of the ECJ
The ECJ recalls that it follows from the usual meaning of ‘bad faith’ in everyday language as well as from the context and objectives of trade mark law that Article 52(1)(b) Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark applies “where it is apparent from relevant and consistent indicia that the proprietor of an EU trade mark has filed the application for registration of that mark not with the aim of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark” (paragraph 46). The ECJ furthermore recalls that although the intention of an applicant for a trade mark is a subjective factor, it is to be determined objectively on the basis of “an overall assessment, taking into account all the factual circumstances relevant to the particular case” (paragraph 47).
The ECJ continues that it does not follow from Chocoladefabriken Lindt & Sprüngli (C-529/07) that the existence of bad faith may only be established where there is use on the internal market of an identical or similar sign for identical or similar goods capable of being confused with the sign for which registration is sought. On the contrary, “there may be situations, which are unrelated to the situation which led to the judgment of 11 June 2009, Chocoladefabriken Lindt & Sprüngli (C‑529/07, EU:C:2009:361), where the application for registration of a trade mark is liable to be regarded as having been filed in bad faith notwithstanding the fact that, at the time of that application, there was no use by a third party on the internal market of an identical or similar sign for identical or similar goods” (paragraph 52).
Therefore “in the absence of any likelihood of confusion between the sign used by a third party and the contested mark, or if there has been no use, by a third party, of a sign identical with, or similar to, the contested mark, other factual circumstances may, depending on the circumstances, constitute relevant and consistent indicia establishing the bad faith of the applicant”.
The ECJ rules that the General Court thus conferred too restrictive a scope on Article 52(1)(b) of Trade Mark Regulation 207/2009Council Regulation [EC] No 207/2009 of 26 February 2009 on the Community trade mark by failing to take account of all the relevant factual circumstances, such as the fact that Mr Esteban applied for the registration of the mark not only for services in class 39, but also for goods and services corresponding to those in respect of which Koton had registered the trade marks. Furthermore, the General Court should have examined whether the application by Mr Esteban had “a commercial logic” in light of his activities (paragraph 62).
In light of these consideration, the ECJ annuls the judgment of the General Court.