Keeping Faith in Pelicans! (or OHIM Cancellation Guidelines: the

Pelican case)

PTMG - London - Spring 2014

The Savoy, London

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• Savoy Court is the only road in the UK where you can drive on

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• Previous guests include Sir Winston Churchill, Frank Sinatra, Christian Dior, Marilyn Monroe, Claude Monet, John Wayne, Katherine Hepburn and Miss Piggy.

• Kate Hudson and Katy Perry have both been in trouble for smoking in the ballroom.

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Keeping Faith in Pelicans!

The next 40 minutes……

A. A cross border introduction to re-filing trade

marks and bad faith:

- OHIM

- UK

- Germany

- France

B. Bad faith examples relevant to the pharmaceutical

industry

C. Bad faith…so what!

An introduction to bad faith….

A very English saying…….

“Don’t teach your grandmother to suck eggs!”

Teaching grandmother to suck eggs is an English saying meaning that a person is giving advice to someone else about a subject that they already know about (and probably more than the first person). "Egg sucking" removed the egg contents while preserving the shell intact. Two small holes were made on the ends of the egg, and the contents sucked out. The shell could then be painted or otherwise used for decorative purposes without it becoming rotten and smelling bad.

The OHIM Approach

Article 51(1)(b) CTMR:

Where the applicant was acting in bad faith when he filed the

application for the CTM it is liable to be declared invalid.

Bad faith is not defined and it is therefore left to the court to

interpret.

R 582/2003-4 (EAST SIDE MARIO’S):

Bad faith can be considered to mean “dishonesty which would fall

short of the standards of acceptable commercial behaviour”.

Old OHIM Guidelines (Part D, Section 2,

paragraph 4.3.3) – pre Pelican case:

‘Where a CTM owner makes repeated application for the same

mark with the effect of avoiding the consequences of revocation

for non-use the proprietor is acting in bad faith’.

OHIM Guidelines

The Guidelines have been drawn up to cover

the majority of current cases, and consequently

can be regarded only as general instructions.

These Guidelines are not, therefore,

legislative texts. The parties, and the Office,

must where necessary refer to Regulation No

40/94 on the Community trade mark, the

Regulation implementing that Regulation, the

Regulation on fees and the Regulation for

proceedings before the Boards of Appeal and,

finally, the interpretation of these texts handed

down by the Boards of Appeal and the Court of

Justice of the European Communities, including

the Court of First Instance of the European

Communities.

https://oami.europa.eu

The OHIM Approach

Pelicantravel.com v OHIM (T-136/11)

– Pelikan owned the earlier trade mark:

– Having failed to use the earlier trade mark, three

months before the expiry of 5 year grace period it

registered the later trade mark:

The OHIM Approach

Pelicantravel.com applied to invalidate the later mark

on grounds of bad faith arguing Pelikan was simply

attempting to get around the 5 year non-use provisions.

The General Court agreed that the marks were identical

(the differences being insignificant).

However, the General Court accepted that the reason

for the new application was genuine in that it had

decided to modernise the mark to celebrate its 125th

anniversary and consequently decided to file the

modernised version as a result.

The General Court ruled no bad faith (purpose was

modernisation not an attempt to circumvent 5 year

rules)

OHIM Guidelines – Post Pelican

OHIM Guidelines (Part D, Section 2, paragraph

3.3.2.1 (3(b)):

‘Where a CTM owner tries to artificially extend the grace period for

non-use by filing a repeat application of an earlier CTM’, this may be

taken into account to assess whether the proprietor acted in bad faith.

Possibly relevant factors indicating bad faith:

Identity/confusing similarity of signs;

Knowledge of use of an identical or confusingly similar sign;

Dishonest intention;

Artificially extending the grace period for non-use;

Existence of invalid national trade mark based on bad faith; and

Circumstances under which the contested sign was created.

OHIM Guidelines – Post Pelican

Factors unlikely to indicate bad faith

• Extending protection of a national mark by registering it

as a CTM (falls within normal commercial strategy)

• Applying for a long list of goods or services which exceed

the applicant’s current goods and services that it markets

• The mere fact that the differences between an earlier

CTM and repeat application are insignificant as not to be

noticeable to the average consumer

• Fact application is filed less than three months prior to

the expiry of an earlier identical CTM alone is not

sufficient.

The OHIM Approach

Decided based on overall assessment of all

relevant factors

Presumption of good faith until invalidity

applicant adduces evidence to the contrary.

Very difficult to prove bad faith

Burden falls to the party trying to prove

bad faith

Re-applying for the same mark within the 5

years does not necessarily constitute bad faith

Consider reasons on a case by case basis in

light of commercially acceptable practices in

sector concerned

Bad Faith: The UK Approach

Section 3(6): A trade mark shall not be

registered if or to the extent that the

application is made in bad faith.

No statutory definition of bad faith.

The law is generally the same as before OHIM.

Only difference is its interpretation.

Combined test (i) a reasonable and honest

person would consider the act dishonest

(objective); (ii) based on that standard, the

Defendant was aware that his act was

dishonest.

ECJ in Lindt (Chocolate Bunnies) questions this

approach

Bad Faith: The UK Approach

Main difference compared to OHIM:

– In the UK and Ireland, when applying for the

mark you must have a bona fide intention to

use the mark.

– Applications made without a ‘genuine

intention to use’ may constitute bad faith

(OXYFRESH (SRIS 0-095/99) and DEMON ALE

(SRIS 0-072/99)).

– This can include applying for a very wide

specification of goods and services (Mickey

Dees (nightclub) Trade Mark [1998] RPC 359)

Bad Faith: The German Approach

Section 8 (2) no. 10 of the German Trade Marks Act

(GTMA):“Excluded from registration are trade marks

(…) which have been applied for in bad faith”.

Bad faith may include:

– speculative purposes (applying without real

intention to use)

– without reasonable cause (applying when aware

third party has right)

– misuse the registration in a competitive wars

Bad Faith generally does not include:

– stockpiling

Bad Faith: The German Approach

Bundesgerichtshof (Federal Supreme Court),

Judgment of 3 November 1994, I ZR 71/92 –

“NEUTREX”

– Repeated applications are not unlawful as such. It must be

evaluated as to whether the applicant has a legitimate

interest in re-filing an application

Bundespatentgericht (Federal Patent Court), Decision

of 29 April 2010, 25 W (pat) 151/09 – “Maxitrol”

– Bad Faith present if application is being filed in the

expectation that the producer of special pharmaceutical

products will need the mark in future.

Bad Faith: The French Approach

“mauvaise foi”, literally translated as “bad faith”, is not

expressly defined by law.

Courts tend to use the notion of fraud defined as an act

(done “in bad faith”) with the intention of obtaining an

unfair or unlawful moral or material advantage or by

passing the Law and legal duties.

Whilst re-applying for the same French mark could be

deemed a fraud, reapplying for the same mark as a CTM

unlikely to be caught.

Bad Faith: The French Approach

Examples of Bad faith:

– Registration of a trade mark with the sole

intent to harm a competitor by artificially

preventing him from selling his products on

the French market (Cour de Cassation,

Commercial Chamber, February 26, 2008,

Nr 06-18123);

– Re-filing of a not exploited trademark

vulnerable to a non-use action in order to

artificially increase the length of the monopoly

(Tribunal de Grande Instance Paris

November 30, 2012);

France – Bad Faith

PIBD 1992 N°520 III-230) Laboratoires Biogalénique v.

Société Conseil de Recherche et d’applications

scientifiques

– SCRAS filed a first trade mark GINKEBRAL in 1981 for

pharmaceutical and medical goods (mark 1). SCRAS applied

for regulatory approval in 1987. SCRAS filed a second identical

GINKEBRAL mark in 1988 (mark 2)

– Court of Appeal ruled that pending regulatory approval is

legitimate reason for non-use (Mark 1 survives). However,

SCRAS applied for Mark 2 to artificially maintain its rights =

fraud (mark 2 falls)

Bad Faith?

Potential pharmaceutical filing strategies which could be

deemed bad faith:

– Pipeline

Scenario: To ensure you have ‘cleared’ marks in key jurisdictions

for when products come through the pipeline, you stockpile a

portfolio of marks to choose from ‘as and when’ each new product is

developed.

OHIM/France/Germany: Stockpiling itself is unlikely to be

deemed bad faith. No requirement to certify intention to use on

filing.

UK: Stockpiling may fall foul of the ‘intention to use’ requirements.

Would need to rely on argument that at time of filing you did intend

to use you just don’t know for what product it will be used on.

Bad Faith?

– Re-filing after 5 years to preserve the mark

Scenario: You have spent a considerable amount of time clearing

your mark globally and have just obtained regulatory name

approval. Your product is to be launched within 6 months but your

mark is now vulnerable to a non-use challenge. Do you re-file?

OHIM/UK/France/Germany:

– Danger re-filing will be deemed bad faith subject to opponent

proving your intent. However, subject to competition law

concerns, the only downside is loss of the later filed mark. Are

you any worse off than if you did not re-file in the first place?

For larger pharmaceutical companies, consider competition law.

– You can also rely on proper reasons for non-use to try and save

the earlier mark. However, you are left exposed if you don’t re-

file.

What happens if product launch is 2 years away?

Bad Faith?

– Variations

Scenario 1: Filing slight variations of marks to

increase your chances of getting one of them through

regulatory approval.

– Europe/France/Germany: unlikely to be deemed

bad faith.

– UK: legitimate reasons but genuine intent to use all

marks in series?

Scenario 2: You are using brand [X] to sell you

product and apply for slight variations to increase your

armoury against third parties.

– Europe/France/Germany/UK: Could be bad faith?

Can the other side prove Scenario 2 compared to

Scenario 1?

Bad Faith?

– Blocking Registrations

Scenario: You know your biggest competitor is

thinking of bringing its blockbuster US product to

Europe. You apply for its trade mark in Europe to stop

them using the mark in Europe.

OHIM/UK/France/Germany: Bad Faith!

Bad Faith…So What?

Competition Law

Trade Mark Bullying

PR Implications

Any Questions…..

Eifion Morris eifion.morris@shlegal.com

+44(0)20 7809 2347

With thanks to:

Christian Spintig (Germany)

Pascale-lambert (France)

Rob Jacob (UK)