• Bad Faith- Proposed Changes to the EU Trademark System

The European Commission is in the process of consulting stakeholders regarding proposed changes to EU law, including changes to the bad faith provisions.

Under the bad faith provisions trademark applications/registrations may be challenged on grounds that they were essentially filed dishonestly.

If the proposed law is given a broad interpretation then it seems that there might be a risk of a significant increase in bad faith cases and a substantial added burden on trademark applicants to perform global trademark clearance searching prior to filing any application.

The pre-amble to the regulation includes the following paragraph:

(12) It is appropriate to make the dishonest appropriation of trade marks more difficult by extending the possibilities to oppose European trade mark applications filed in bad faith.

This is followed by a proposed amendment to the grounds of refusal of a Trade Mark application in article 8(b):

…where the trade mark is liable to be confused with an earlier trade mark protected outside the Union, provided that, at the date of the application, the earlier trade mark was still in genuine use and the applicant was acting in bad faith.

It might therefore be hard for an applicant to refute an allegation of bad faith where it can be shown that there was an easily discoverable (more on this below) earlier mark, and he was aware of the earlier use.

For example it is well known that companies will monitor the Internet to assess the trading activity of competitors or potential competitors. Earlier marks, especially identical ones, are easily found for example by the Global Brand Database operated by WIPO.

TMVIEW also covers many registers and it would be likely many courts would consider responsible business owners could have those two free sources checked before choosing a mark.

The top European court has stated that “mere knowledge of a registration” does not constitute bad faith. However, it is an easy matter to follow such knowledge up with an Internet search to determine use – if such searching were shown that could be crucial.

It is likely that documented evidence of searching activity (registers and Internet) carried out professionally would persuade a court that the applicant had acted in good faith, such that registration would be allowed in the face of an arguable similarity with a mark that is used and registered outside the EU.

Another proposal means the possession of a company name is less likely to be a shield to a trademark infringement action. The flip side of that is maybe owners of company names outside the EU may be able to argue that third parties that file trademark applications that incorporate those names are acting in bad faith.

Other Changes

A very large number of other changes to the EU trademark system are proposed.

Other notable changes include a proposal to refuse registration of non-Latin script marks (e.g. Arabic, Chinese etc.) where the translation into any of the current 23 languages of the EU would be refused. This is very different to current European practice, but similar to the USA.

There many other proposed changes including changes in relation to intervening rights, counterfeiting provisions, official fees, and administrative procedures.

Summary

In summary we contend that it has always been good practice to search your intended markets and place of manufacture and that in future it may be more important than ever to search for use and registration of identical marks world-wide.

This, together with the increasing number of marks on the registers might make it very difficult to obtain a clear mark. It therefore might make commercial sense to obtain some clear marks now – for use in the medium to long term – even if your plans to use them will not mature for four to five years.

Otherwise you may find you will be faced with wanting to pay a competitor to buy registrations from their stock.