Intellectual property law is a complex and constantly evolving field, in which trade mark protection plays a crucial role. And bad faith trade mark registration is among the issues that pose a significant threat to businesses and entrepreneurs. This article explores the contours of this concept, drawing on French legal texts and case law, and offers recommendations to help prevent and fight against trade marks made in bad faith.
Legal framework and definition
Bad faith in trade mark law is dealt with by several pieces of legislation in France. Article L711-1 of the Intellectual Property Code (IPC) states that ‘a trademark for goods or services is a sign used to distinguish the goods or services of a natural or legal person from those of other natural or legal persons’. However, Article L711-2 of the same IPC specifies that trade marks ‘applied for in bad faith’ cannot be validly registered, or are likely to be declared invalid if they have been registered.
Equivalent provisions obviously exist in Community law for European trade marks.
Let us also recall the principle of ‘fraus omnia corrumpit’, a Latin proverb meaning that fraud corrupts everything, and under which any act tainted by fraud may be subject to an action for invalidity.
Bad faith is characterised by the applicant’s deliberate intention to undermine the interests of a third party, or to obtain an exclusive right without any real intention of using the trade mark for the goods or services in question, or to obtain an exclusive right for purposes other than those falling within the functions of a trade mark.
Case law criteria
French case law has refined the criteria for determining whether a trade mark application has been filed in bad faith.
Intent to cause harm
It is necessary to show that the applicant was aware of the existence of an earlier trade mark, or of a sign used as a trade mark by a third party, and that he deliberately sought either (i) to deprive the third party of the possibility of obtaining a registration of his trade mark or to deprive him of the possibility of continuing to use his trade mark (e.g. so-called ‘blocking’ trade marks, filed solely to block a competitor’s access to the market), or (ii) to create confusion in the mind of the public (intention to mislead the public, to mislead consumers, mislead the authorities, etc.).
Lack of intention to use
A trade mark application made without any real intention of commercial exploitation may be considered to be in bad faith.
Contrary to what is traditionally required in Anglo-Saxon law, in French and EU law there is no obligation to prove actual use of a mark or even to declare an intention to use a mark, when applying for registration.
However, the intention to use the mark remains, in a way, inherent in the act of filing the application. It is assumed that the applicant of a French or European trade mark has the intention to exploit it commercially. Otherwise, why file a trade mark in the first place?
This is why European case law has specified that bad faith can be characterised by the absence of intent to use. This includes cases where the application or registration is solely intended to prevent a third party from using the sign, or to obtain an exclusive right for purposes other than those relating to the functions of a trade mark.
It has thus been ruled that a trade mark application with no intention of using it for the covered goods and services constitutes an act of bad faith if the applicant intends either to undermine the interests of third parties in a manner inconsistent with honest business practices, or to obtain an exclusive right for purposes other than those related to the functions of a trade mark.
It should be remembered that the most fundamental function of a trade mark is to act as ‘indicator of origin’ of the commercial provenance of goods and services, i.e. to guarantee the identity of the origin of the marked products or services to the consumer or end user by enabling him, without any possibility of confusion, to distinguish the products or services from others that have another origin. This function of guarantee of identity of the origin is often associated with the consubstantial function of guarantee of quality. As for the other functions attributed to a trade mark, we should mention communication, investment and advertising.
The reputation of the earlier trade mark
As we have seen above, knowledge of a third party’s earlier rights is a determining factor. For the application to be considered to be made in bad faith against the interests of a third party, the applicant must have deliberately disregarded that third party’s rights.
In this context, the reputation of pre-existing rights, for example of the earlier trade mark, will be an aggravating factor. In the case of an application that is identical or highly similar to a well-known trade mark or to a trade mark with a reputation, it will be easier to presume bad faith on the part of the applicant.
Relations between the parties
Similarly, to demonstrate the applicant’s knowledge (or rather ignorance) of a third party’s prior rights, reference will very often be made to the prior relations between the parties. And by relations, we mean business relationships in the broad sense, i.e. contractual relationships, but also pre-contractual relationships, or simple contextual or informal relations between the aggrieved rights holder and the dishonest applicant.
Moreover, fraudulent applications often stem from a breach of a contractual obligation, which is the case, for example, when a potential business partner takes the initiative to file an application for the trade mark it covets under licence, before the legitimate owner does so.
The chronology of events
Finally, and this is closely linked to the previous criteria, the chronology of events and the timing of the conflicting applications and uses are obviously analysed in detail by the courts.
An application filed shortly after the launch of a competing product or service, or shortly after a marketing or advertising campaign, may be considered suspicious.
In any event, and according to the formula established by case law, the assessment of bad faith or fraudulent intent is based on an overall analysis of all the relevant factors specific to the case.
Possible actions
In the event of a trade mark application made in bad faith, French law provides two possible courses of action to seek the invalidation of the disputed trade mark, as set out in Article L716-5 of the IPC.
The principal procedure consists of an application for trade mark cancellation filed with the French Patent and Trademark Office, the National Institute of Industrial Property (INPI) (see our article Trademark invalidation procedure before the French PTO). This administrative procedure is aimed exclusively at invalidating the fraudulent trade mark registration. However, it does not provide for any compensation mechanism.
Alternatively, the injured party may turn to the territorially competent judicial court (*), by bringing an action for invalidity, provided that the action is not aimed exclusively at cancelling the fraudulent trade mark registration. This will be the case when a related claim falling within the jurisdiction of the court is brought as well, or in the context of an additional action for unfair competition.
In practice, the jurisdiction of the court should therefore be preferred if the contested trade mark has already been used on the market. In this case, it will often be appropriate to apply to the court for an additional order prohibiting the use of the disputed sign, or an additional claim on the basis of unfair competition. And it is only in the context of these legal proceedings that the victim of the bad faith registration can seek damages.
It should be noted that Article L712-6 of the IPC also provides that ‘If a registration has been applied for in fraud of the rights of a third party or in violation of a legal or contractual obligation, the person who considers that they have a right to that mark may claim ownership in court’. In other words, it is also possible for the victim to seek a court order for the transfer of ownership of the fraudulently registered trade mark to them, which is particularly relevant when the fraudulent registration relates to a sign that is identical or highly similar to the prior rights that have been disregarded, and when the injured party does not or no longer has a trade mark of their own.
Preventive and probative recommendations
Regardless of the course of action taken, the injured party must demonstrate that the contested trade mark application was indeed made in bad faith. To do so, it is essential to gather solid evidence.
Here are a few recommendations.
Gather evidence of prior use
It is crucial to demonstrate that the prior trade mark or sign was in use before the disputed application. It must be evidenced that the trade mark or sign is associated with the manufacture and/or marketing of the products and/or services (marked packaging, labels, photographs, publicly available commercial documents, website screenshots, invoices, contracts, advertisements, etc.).
Demonstrating the reputation of the earlier trade mark
Where applicable, if the earlier trade mark is well known or has a reputation, it is necessary to be able to prove it. Evidence of reputation requires a certain degree of awareness of the trade mark among a significant portion of the public. Essentially, reputation can be established based on quantitative criteria. It is usual to take into account all relevant factors, particularly the market share held by the trade mark, the intensity, geographical extent and duration of its use, and the scale of the investments made to promote it.
Proving intent to cause harm
The burden of proof for bad faith lies with the party alleging fraudulent intent. It can be evidenced by objective, relevant, and consistent proofs, such as contractual relationships, communications between the parties (correspondence, discussions, cease and desist letters, attempts at negotiation, etc.), or behaviour revealing malicious intent.
Particular attention should also be paid to the context in which the disputed trade mark was filed and the chronology of events.
It should be noted that the courts may also consider elements subsequent to the contested application, such as the absence of use of the trade mark or behaviour revealing malicious intent. Indeed, the applicant’s intent at the time of filing the application is a subjective element. And the applicant’s intention may be revealed by their behaviour after the application has been filed. This will be the case, for example, if the applicant uses the mark to threaten or attack the victim or the legitimate owner of the sign, or to attempt to deceive the public or consumers, or in a dishonest manner in the broad sense.
Conclusion
Bad faith trade mark registration constitutes a serious infringement of the rights of owners of earlier marks and other signs legitimately used in the course of trade.
In France, the legal framework provides tools to fight against fraudulent applications or registrations. Case law has developed and refined several well-established criteria for characterising fraud with a relatively high degree of reliability, which make it possible to cancel bad faith registrations and, where appropriate, to obtain compensation for the damage suffered by the injured party.
Victims must act quickly and methodically to gather the necessary evidence and defend their interests. Caution and responsiveness are essential to effectively protect one’s rights in the field of intellectual property.
In all cases, a thorough analysis of the facts and circumstances will be required to determine whether there was fraudulent intent in the trade mark application. Thanks to its specific experience in this field, INSCRIPTA has solid expertise to support you and defend your interests if you are the victim of dishonest applications.
INSCRIPTA
* The courts of Bordeaux, Lille, Lyon, Marseille, Nanterre, Nancy, Paris, Rennes, Strasbourg, and Fort-de-France shall have exclusive jurisdiction to hear cases relating to literary and artistic property, designs and models, trade marks and geographical indications.
Image by Gerd Altmann under Pixabay licence.
