EU Court of Justice “cottoned” on to trademarks and bad faith

An applicant, holder of earlier semi-figurative trademarks KOTON designating the European Union territory, filed an opposition before the EUIPO against the application for registration of the trademark STYLO & KOTON filed-for in classes 25,35 and 39.  As for the earlier trademarks, the term KOTON included a cotton flower which both vowels were stylized.

The opposition was successful only in classes 25 and 35 which allowed the registration of the STYLO & KOTON trademark for the services of the class 39.

As a consequence, the applicant filed a cancellation action against the trademark for the services of the class 39 but also for the goods and services of the classes 25 and 35 on the basis of a filing in bad faith, according to Article 52(1)(b) of the European regulation No.207/2009 that was applicable at the time when the application was filed.

The cancellation division and then the EUIPO board of appeal having rejected the cancellation action, the applicant appealed to the General Court of the European Union which also reject the argument of a filing in bad faith.

The European regulation n°207/2009 of 26 February 2009 does not offer a definition of “bad faith” but strictly refers to a filing made by an applicant “of bad faith” (EUTMR, art.59(1)(b)).

The Court of Justice of the European Union (“CJEU”) has tried to define it, in particular in the Chocoladefabriken Lindt & Spüngli judgment of 11 June 2009 (ECJ, 11 June 2009, C-529/07, pt. 53) stating that the bad faith of the applicant must be assessed globally taking into account all the factors relevant to the circumstances of the case and existing at the time of filing, and in particular:

  • the fact that the applicant knows or must know that a third party uses, in at least one Member State, an identical or similar sign for an identical or similar product or service which creates a risk of confusion with the applied-for sign;
  • the intention of the applicant to prevent that third party from continuing to use such a sign;
  • the degree of legal protection enjoyed by the sign of the third party and the applied-for sign.

According to the General Court, the judgment of 11 June 2009, Chocoladefabriken Lindt & Sprüngli does not mean that the existence of bad faith can only be found in the hypothesis, which the Court was then questioned on, where there is use on the internal market of an identical or similar sign for identical or similar goods which are confusing with the applied-for sign. This is only a relevant factor among others to be considered (points 51-55).

By following this approach, the General Court refrained from taking into consideration, in its overall assessment, all the relevant factual circumstances as they arose at the time the application was filed. This, it should have been taken into account that the trademark owner had requested the registration of a sign bearing the stylized word ‘KOTON’ as an EU trademark not only for services in class 39, but also for goods and services in classes 25 and 35 which corresponded to those for which the applicant had registered trademarks bearing that stylized word (points. 59-60).

Moreover, the General Court raised, only for the sake of completeness, the fact that there had been commercial relations between the trademark owner and the applicant and that they had been broken by the applicant; it also refrained from examining whether the application for a trademark containing the stylized word “KOTON” for goods and services in classes 25, 35 and 39 presented a commercial logic with regard to the activities of the trademark owner (point 62).

As the EUCJ decided to cancel the judgment of the General Court and the decision of the Board of Appeal, it is for the EUIPO board having jurisdiction to take a new decision on the basis of an overall assessment which takes into account the application for the contested trademark as filed for goods and services not only in class 39, but also in classes 25 and 35.


Alexis Valot

Anne Messas
Attorney at law, partner


Read the decision here