Autonomous rules rule OK as pan-European bad faith emerges

Merpel never did like
 drinking out of bottles

Soon we'll have to stop complaining about the length of time consumed in referring questions to the Court of Justice of the European Union (CJEU) for a preliminary ruling in litigation heard before Europe's national and regional courts: Case C‑320/12 Malaysia Dairy Industries Pte. Ltd v Ankenævnet for Patenter og Varemærker, a reference from Højesteret (Denmark), has been considered, pondered over and duly ruled upon by the CJEU in two days short of a year. Well done, says the IPKat, this is surely a step in the right direction.

What was this case all about, you may wonder. Well, back in 1965, Yakult registered a plastic bottle for a milk drink as a model or design. The same bottle was subsequently registered as a trade mark in Japan and a number of other countries, including Member States of the European Union. Malaysia Dairy has since 1977 produced and marketed a milk drink in a plastic bottle not unlike that of Yakult. Following an application filed in 1980, Malaysia Dairy registered its own plastic bottle in various countries, including Malaysia. Yakult was not happy and, in 1993, Malaysia Dairy and Yakult entered into a settlement agreement which laid down their rights and mutual obligations concerning the use and registration of their respective bottles in a number of countries.

Following an application for registration filed in 1995, Malaysia Dairy registered its plastic bottle as a three‑dimensional trade mark in Denmark. In October 2000 Yakult challenged that registration, relying on the fact that Malaysia Dairy knew or should have known of the existence, abroad, of identical earlier marks owned by Yakult. In June 2005 the Patent- og Varemærkestyrelsen (that's the Danish Patent and Trade Mark Office, for the benefit of non-Danish speakers) rejected Yakult’s challenge: since Malaysia Dairy had a mark registered in Malaysia the registration of which it subsequently applied for in Denmark, the mere fact that, at the time that it applied for registration, it knew of Yakult's own foreign trade marks could not be counted as bad faith.

Yakult appealed to the Appeal Board, which, in October 2006, cancelled the registration Malaysia Dairy's mark: the Danish law must be interpreted as meaning that actual or presumed knowledge of a mark in use abroad for the purposes of that provision is sufficient to establish that the person filing the application for registration of a trade mark is acting in bad faith, even if it can be assumed that the applicant had acquired at an earlier point in time a registration of the mark applied for in another country.

Now it was Malaysia Dairy's turn to appeal, which it did before the Sø- og Handelsretten (Maritime and Commercial Court) which, in October 2009, confirmed the decision of the Appeal Board:, after all, it was not disputed that Malaysia Dairy knew of Yakult’s earlier mark at the time that it applied for registration in Denmark. Malaysia Dairy then appealed to the Højesteret (Supreme Court), which decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘1. Is the concept of bad faith in Article 4(4)(g) of Directive 2008/95 [that's the Directive on the approximation of national trade mark laws] … an expression of a legal standard which may be filled out in accordance with national law, or is it a concept of European Union law which must be given a uniform interpretation throughout the European Union?

2. If the concept of bad faith in Article 4(4)(g) of Directive 2008/95 is a concept of European Union law, must the concept be understood as meaning that it may suffice that the applicant knew or should have known of the foreign mark at the time of filing the application, or is there a further requirement concerning the applicant’s subjective position in order for registration to be denied?

3. Can a Member State choose to introduce a specific protection of foreign marks which, in relation to the requirement of bad faith, differs from Article 4(4)(g) of Directive 2008/95, for example by laying down a special requirement that the applicant knew or should have known of the foreign mark?’

Today the CJEU ruled as follows:

"1. Article 4(4)(g) of Directive 2008/95 ... must be interpreted as meaning that the concept of ‘bad faith’, within the meaning of that provision, is an autonomous concept of European Union law which must be given a uniform interpretation in the European Union.

2. Article 4(4)(g) of Directive 2008/95 must be interpreted as meaning that, in order to permit the conclusion that the person making the application for registration of a trade mark is acting in bad faith within the meaning of that provision, it is necessary to take into consideration all the relevant factors specific to the particular case which pertained at the time of filing the application for registration [Well that's a relief!]. The fact that the person making that application knows or should know that a third party is using a mark abroad at the time of filing his application which is liable to be confused with the mark whose registration has been applied for is not sufficient, in itself, to permit the conclusion that the person making that application is acting in bad faith within the meaning of that provision [The fact that it's not a pe se rule does not of course mean that it does not continue to be a relevant factor.  The effect of this is that the autonomous rule that exists throughout the EU will mean that (i) since prior knowledge of another's earlier mark does not lead automatically lead to a bad faith finding and (ii) each country's tribunals must weigh up all the relevant facts as they see fit, we have the conclusion that the law is consistent but, most likely, its application to each factual situation is quite likely to differ].

3. Article 4(4)(g) of Directive 2008/95 must be interpreted as meaning that it does not allow Member States to introduce a system of specific protection of foreign marks which differs from the system established by that provision and which is based on the fact that the person making the application for registration of a mark knew or should have known of a foreign mark".

The IPKat thinks this must be right. It would be hard to support a proposition that would lead to the conclusion that a national, regional or Community trade mark application had been made in bad faith simply because the applicant knew of another business that had previously registered the same mark in, let's say, Vanuatu -- but if the earlier mark had been registered in, for example, the United States, the situation could well be different: flexibility in the exercise of one's common sense is surely to preferred to a one-size-fits-all rule.  Merpel's not so sure. Might this ruling not become the basis of a brand-poacher's charter, she mewses.

Milk bottles here
Chocolate milk and men's health here
Milk shake here, here and here