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General Court: Bad Faith between FS competitors

In Case T-227/09 the applicant, Feng Shen Technology Co. Ltd, was a Taiwanese company which made and distributed various articles, including zip fasteners. The applicant held, inter alia, several registered Taiwanese trade marks, such as the mark illustrated on the right.

In 2000, the applicant entered into business relations with the intervener, Mr Jarosław Majtczak, who carried out business activities in Poland under the name ‘PHUBerotex’. In the course of an exchange of emails with the applicant, the intervener referred to the applicant's catalogue for zip fasteners. The invoices issued by the applicant in the course of its business relations with the intervener bore the earlier Taiwanese mark, together with the symbol ®.  The business relations between the applicant and the intervener ended in January 2005.

On 7 June 2005, the intervener filed an application for registration of the CTM  on the right, which was registered in  2006. On 29 September and 2 October 2006, at the request of the intervener, the Polish customs authorities seized consignments of zip fasteners bearing the earlier Taiwanese marks.

The applicant filed an application for a declaration of invalidity on the ground that the intervener was acting in bad faith when he filed the application for the trade mark.

In the contested decision, the Fourth Board of Appeal (BoA) of OHIM dismissed the appeal, confirming the Cancellation Division decision. It noted, first, that there is no legal definition of the concept of bad faith and that it is, in general, behaviour which is contrary to honest commercial practice.

Next, the BoA considered that an applicant may have acted in bad faith where he applied for a trade mark while knowing, as a result of direct relations with a third party, that that party was using, in good faith and in regular manner, an identical mark for similar goods or services outside of the territory of the European Union; the burden of proving the existence of bad faith is on the applicant for cancellation.

  The Office held that the applicant had not adduced, in the present case, evidence of such bad faith. In this regard, it put forward the six considerations : 

 1.the earlier Taiwanese marks and the contested mark are not similar on the visual level and the applicant had not proved that it had used the earlier Taiwanese marks before the filing date of the contested mark

 2. the applicant merely manufactured zip fasteners for the intervener, in accordance with specifications provided by the intervener 

3.the intervener had started to market zip fasteners himself under the sign corresponding to the contested mark in Poland in 2000, affixing the sign now protected as a Community trade mark in Poland

4. the applicant had not shown that it had attempted to market zip fasteners itself in the EU during the period between 2000 and 2005

5.the applicant had not shown any interest in protecting a sign comprising the group of capital letters ‘FS’ in the EU before the filing date of the contested mark

6.the intervener was not, as a matter of law, required to inform the applicant beforehand of his intention to apply for registration of the contested mark

According to the governing case-law (Case C-529/07 ‘Lindt Goldhase’) the Court observed that the applicant’s bad faith within the meaning of that provision must be assessed as a whole, taking account of all the factors in the particular case. The GC reviewed the reasoning of the Office and found that it did not correctly take into consideration the relevant factors.

In particular, the BoA erred in finding that there was no identity or similarity between the contested mark and the earlier Taiwanese mark without carrying out an overall analysis of all the relevant factors, and, in particular, without examining the phonetic and conceptual similarities between those two marks. In the present case, such an analysis was necessary all the more so because the seizure of goods bearing the earlier Taiwanese marks by the Polish customs authorities at the request of the holder of the contested mark suggests that those two marks are in fact sufficiently similar to create a likelihood of confusion.

Further, the finding of the Board of Appeal as regards the actual use of the contested mark, which was disputed by the applicant and which is relevant to the assessment of the intervener’s intention is not substantiated by the evidence in the file.

Consequently, the Board of Appeal could not correctly find that the intervener was not acting in bad faith and dismiss the application for invalidity lodged by the applicant on the basis of those considerations.

Posted by: Laetitia Lagarde @ 15.55
Tags: bad faith,
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MARQUES does not guarantee the accuracy of the information in this blog. The views are those of the individual contributors and do not necessarily reflect those of MARQUES. Seek professional advice before action on any information included here.

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