13 February 2020
ECJ’s « Sky » decision: a whistle in the wind?
Failing to force holders to restrict the goods/products designated by their trademarks, is the ECJ whistling in the wind? The British satellite and cable television operator Sky, who holds several eponymous trademarks, took legal action, in the United Kingdom, for infringement of those trademarks against the Cloud service provider SkyKick, who had registered the trademark “Skykick” and variations thereof. The startup counterclaimed that the registration of the trademarks relied on by Sky was wholly or partially invalid on the grounds that (i) the lists of goods and services in respect of which the trademarks were registered lacked clarity and precision and (ii) the applications for registration had been filed in bad faith. Indeed, the trademarks had been filed to protect “software”, “communication systems” and “television” services, when in reality only one activity was considered: the sale of a satellite pay-TV package. From a strategic point of view, the stakes of this case are essential since it deals with a major issue in trademark legislation. It is indeed important, when applying for a trademark, to have a forward-looking vision and to consider whether new products/services could be marketed under this sign. However, this logic must not lead to the monopolization of signs for a very broad list of goods and services when their owners have no intention of using the aforementioned signs for all of them. The High Court of Justice (England and Wales), before which the proceedings were brought, decided to stay the proceedings and to refer a number of questions to the European Court of Justice (ECJ) for a preliminary ruling. Lack of clarity and precision of goods and services for which the trademark is registered: an absolute ground for invalidity? As a reminder, in 2012, the ECJ delivered a resounding judgment in which it ruled that an applicant for a trademark must designate the goods and services for which protection is sought with sufficient clarity and precision, failing which the application must be dismissed. SkyKick attempted to extend this logic to registered trademarks, but the Court held that a trademark of the European Union or a national trademark “cannot be declared wholly or partially invalid on the ground that terms used to designate the goods and services in respect of which that trade mark was registered lack clarity and precision“, since this requirement is not part of the exhaustive list of absolute grounds for invalidity provided for in the texts. Overly broad range of good and services at the time of application: ground for invalidity based on bad faith? While a trademark may be declared invalid if the applicant was acting in bad faith when submitting the application, this notion is not defined by the texts. The European judges had already had the occasion to offer some possible interpretations, holding that bad faith is established when it is apparent from relevant and concordant indicia that the proprietor of a trademark has filed the application for registration 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 in particular, an exclusive right for purposes other than those falling within the functions of a trademark, in particular the essential function of indication of origin (see our TAoMA News of November 4, 2019). With regard, more specifically, to the registration of a trademark without any intention of using it for the goods and services covered by the registration, the ECJ considered that it is likely to constitute an act of bad faith, which may affect all of the goods and services covered by the registration or only some of them. However, such bad faith can only be established if there are objective indications that the applicant intended to harm the interests of third parties in a manner contrary to honest practices or to obtain an exclusive right for purposes other than those falling within the functions of a trademark at the time of filing. Finally, the ECJ declares that EU law does not preclude a provision of national law from requiring an applicant for registration of a trademark to state that this trademark is used in connection with the registered goods and services, or that he has a bona fide intention to do so, n so far as the infringement of such an obligation does not constitute, in itself, a ground for invalidity of a trade mark already registered. Although this decision is a first step towards cleaning up the registers of European offices, which are cluttered with unused trademarks, it does not mark the 180° shift that some had expected and endorses a kind of status quo of the current trademark system under EU law, leaving a heavy burden on third parties to challenge the good faith of an owner. If the recent Trademark Package – and its implementation into French law – does not directly address this issue, the single fee for trademark registration (the cost of which did not vary between one and three classes) it introduced could be an incentive for applicants to think twice before registering their trademarks for too many goods and services. Date and reference: European Court of justice, January 29th 2020, decision C‑371/18 Read the decision on Curia Synthia TIENTCHEU TCHEUKO Trainee-Lawyer Anita DELAAGE Lawyer  ECJ, june 19th 2012, C-307/10 « Chartered Institute of Patent Attorneys » known as IP Translator decision  ECJ, september 12th 2019, C-104/18 « Koton Mağazacilik Tekstil Sanayi ve Ticaret/EUIPO »
04 November 2019
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 Lawyer Anne Messas Attorney at law, partner Read the decision here