Invalidity on bad faith: historical mark imitation only under strict conditions | Hogan Lovells
Background
Following successful application in 2018, automotive designer Erwin Leo Himmel is the owner of the European Union figurative trademark, shown below left, protected for, among other things, automobiles and two-wheeled motor vehicles. Himmel is president of Hispano Suiza Automobilmanufaktur AG, founded in 2010, with which he intends to revive the legendary automobile brand Hispano Suiza, once one of the most renowned automobile manufacturers in the early 20th century with the sign shown below right.
The Swiss Trademark Office (the applicant) filed an application for invalidity against this younger registered trademark on the grounds of bad faith, lack of distinctive character, misleading character and depiction of the protected Swiss flag. Regarding bad faith, the applicant claims that the trademark owner is involved in a dispute with the legal successors of the historical company Hispano Suiza, and that the latter’s iconic logo was known to the trademark owner. The applicant also refers to an earlier EUIPO decision in which the EU word mark Hispano Suiza was also declared invalid because of bad faith. The applicant claims that the trademark application was made in order to exploit the reputation and fame of the earlier mark.
EUIPO Decision (6.6.2022, C 47 448)
The EUIPO decision rules to the detriment of the trademark owner. With regard to bad faith, the burden of proof was on the applicant. Bad faith may exist if a company has acquired a certain degree of legal protection through the use of a sign on the market, and a competitor subsequently (re)applies for this sign with the intention of competing unfairly with the original user of the sign. In this regard, the criteria established in the context of the ECJ’s Goldhase case law must be taken into account.
The decision rules that these conditions were met in this case and that the evidence filed proves that the historic mark Hispano Suiza has an extensive reputation for motor vehicles and aircraft engines. In this context, the EUIPO finds that the public was also aware of the figurative sign shown below on the right, which is deemed similar to the contested mark. Despite different stylization, both have the same elements. The fact that the historical mark
was generally used in trade with the additional word element “Hispano Suiza” is considered irrelevant here. Although word elements are generally more important, in the present case the graphic elements are seen as particularly important because of the reference to the geographical indication which can also be deduced from the flags. In the case of both signs, the EUIPO finds that elements could also be understood by the public as meaning ‘Hispanic-Swiss’. Thus, the contested mark could allude to the historical mark itself and its origin even without the word element “Hispano Suiza.” Moreover, the decision notes that consumers are accustomed to identifying cars by means of figurative elements and logos.
The intentions of the trademark owner at the time of filing the application were also taken into account, finding that, at the time of filing, the trademark owner intended to revive and use the once famous mark in order to give the new mark instant recognition and to build on its success. The decision states that it must have been clear to the trademark owner that the family of heirs did not agree with his use of the trademark, since they had already taken action against the planned use under unfair competition law before the trademark application was filed. Considering the aforementioned factors, no legitimate intention was found to support the trademark owner’s action when filing the trademark application.
With regard to the fact that no (new) goods and services had been offered under the historical trademark for a long time, the EUIPO rules that it was still known and enjoyed a certain residual legal protection and did not prevent the trademark from being declared invalid due to bad faith. It was found to have been applied for with the deliberate intention of taking advantage of the reputation of the historical trademark and gaining a direct commercial advantage.
Implications
The trademark owner’s assertion that its intention was merely to give new life to a once reputable trademark did not convince the EUIPO. At least where legal successors can continue to rely on residual legal protection attached to the historical trademark, the consent of the former right holders or their legal successors is required. Even if the applicant – unlike here – has no reason to doubt the consent, they should consider consulting with the right holders or their legal successors in advance and to obtain any consent in writing. In any case, in order not to expose himself to the accusation of free-riding and the danger of the absolute ground for refusal of registration of bad faith, the applicant should undertake not only insignificant own (economic) efforts for the (further) development of the trademark.
