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Top Finnish Court rules on bad faith as an absolute ground for refusal

The Finnish Supreme Administrative Court gave a decision on the interpretation of the Finnish Trade Marks Act in October 2017 (case KHO 2017:155) regarding an applicant's bad faith as a ground for refusal in opposition proceedings. Marjut Alhonnoro reports for Class 46.

Background in Finland

The provision on bad faith as a ground for refusal in Finland has recently been amended. According to paragraph 14.1, item 7 of the Finnish Trade Marks Act in force at the time the opposed application was filed, a trade mark shall not be registered if it is confusingly similar to a sign used by another party at the time of filing, if the applicant was aware of that use and had not used its mark before the other sign was taken into use.

The provision was amended in 2016 in order to harmonise the wording with the EU Trade Marks Directive 2008/95/EC ("trade mark shall not be registered, if it was filed in bad faith"), but the intention was not to change the prevailing legal state. Hence, also the earlier provision should be interpreted in accordance with the Directive and established EU case law.

Facts of the case

Now going into the case at hand, A had obtained a Finnish trade mark registration (number 254883) for the trademark Humsecgrid in classes 41, 42 and 45 in 2012. Kuopio Innovation Oy opposed the registration on the grounds that the application had been filed in bad faith, because A had in 2010 participated in a project called Humsecgrid (an abbreviation of Human Security Grid), and the trade mark Humsecgrid had been developed together with the project participants and used in connection with events organised within the project.

The Finnish Patent and Registration Office rejected the opposition filed by Kuopio Innovation Oy on the grounds that the opponent did not show that the mark Humsecgrid had been used as a trade mark for the services covered by the application when the application for registration number 254883 was made, wherefore the Office found that the provision on bad faith of the Finnish Trade Marks Act would not apply.

Kuopio Innovation Oy appealed the decision before the Finnish Market Court. The Market Court found that Kuopio Innovation Oy had used the mark HumanSecurityGrid before A applied for registration of the trade mark Humsecgrid, A had been aware of the common origin of the marks HumanSecurityGrid and Humsecgrid and of the fact that the parties were allowed to use the marks within the project, and the abbreviation Humsegrid is also confusingly similar to HumanSecurityGrid. Therefore, the Market Court concluded that A had been in bad faith when filing the application.

Supreme Administrative Court decision

A appealed the decision before the Finnish Supreme Administrative Court claiming that Kuopio Innovation Oy had no legitimate interest to oppose A's registration, because Kuopio Innovation Oy is a non-profit association, which cannot carry on a business or register trade marks. Furthermore, A claimed that in order to invoke the bad faith provision of the Finnish Trade Marks Act, Kuopio Innovation Oy should have used the mark before A's application to the extent that the mark would have become established in the market.

The Supreme Administrative Court rejected the appeal in its entirety and considered that in order to assess whether or not a trade mark applicant acted in bad faith, it is necessary to examine the intentions of the applicant such as they may be inferred from objective circumstances and from his specific actions, from his role or position and from the awareness he possessed of the use of the earlier sign, as stated by the General Court of the European Union (T-321/10, SA.PAR. v OHIM – Salini Costruttori (GRUPPO SALINI), paragraph 28).

With reference to the opponent's legitimate interest in the matter, the Supreme Administrative Court referred to the judgment of the CJEU (C-442/07, Verein Radetzky-Orden, paragraphs 16, 22, 24) and held that also a non-profit association can possess and use trade mark rights, so the fact that Kuopio Innovation Oy is a non-profit association is not relevant when assessing whether it has used the mark Human Security Grid as a trade mark.

Furthermore, the Supreme Administrative Court referred to a decision of the CJEU in case C-529/07 (Chocoladenfabriken Lindt & Sprüngli, paragraph 34), in which the CJEU stated that registration of a trade mark in bad faith is an absolute ground for refusal. Therefore, the opponent was entitled to oppose A's registration filed in bad faith regardless of whether the opposition was based on its own prior use or on the prior use of another party.

Interestingly, the Supreme Administrative Court here took a view opposite to that taken in 2010 in case KHO 2010:75, where the Court considered bad faith to be a relative ground for refusal that could only be invoked by a party basing its claims on its own prior use.

Finally, the Court also pointed out that bad faith can be invoked as a ground for refusal irrespective of whether the earlier mark had become established in the market; the purpose of the provision is to prevent bad faith registrations also in circumstances where the prior mark does not enjoy trade mark protection on the basis of a prior registration or established use. Consequently, the Supreme Administrative Court ruled that there are no grounds for changing the outcome of the Market Court ruling.

The decision can be found here (in Finnish only).

Blog post prepared by Marjut Alhonnoro of Roschier, Finland. Photo from the Supreme Administrative Court

Posted by: Blog Administrator @ 10.46
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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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