Bad faith trade mark filing

A fraudulent filing is an application for registration of a trade mark made in bad faith, for a purpose unrelated to the function of the sign, for instance to deprive a third party of a sign it uses or to appropriate its goodwill. Since the transposition of Directive (EU) 2015/2436, Article L. 711-2 of the French Intellectual Property Code lists the applicant’s bad faith among the absolute grounds for invalidity, and Article 59(1)(b) of Regulation (EU) 2017/1001 does the same for the European Union trade mark. French law adds the ownership claim action under Article L. 712-6 IPC.

Establishing bad faith

Bad faith is assessed at the filing date, globally, in the light of all the relevant factors. The Court of Justice of the European Union holds that it presupposes an intention to undermine, in a manner inconsistent with honest practices, the interests of a third party, or to obtain an exclusive right for purposes other than those falling within the functions of a trade mark. Knowledge of a third party’s earlier use of an identical or similar sign is an indicator, insufficient on its own. To it are added the intention to prevent that third party from continuing its business, the absence of any intention to use the sign, the commercial logic of the filing and the chronology of events, in particular a filing made the day after negotiations or a distribution relationship broke down.

Sanctions

Two routes are open to the victim. Invalidity removes the trade mark but awards nothing to the victim, who will have to file in its own right. The ownership claim action under Article L. 712-6 IPC allows a person who considers that it has a right in the trade mark to have ownership of the registration transferred to it, with its filing date. That action is time barred five years after publication of the application for registration, save where the applicant acted in bad faith, which in practice leaves it widely open in cases of fraud. The victim may also obtain damages on the basis of civil liability.

Common scenarios

Fraud is found in the filing by a former distributor, agent or employee of its partner’s sign, in the filing of a foreign trade mark not yet registered in France by a person who learned of a launch project, in blocking filings multiplied without any intention to use, and in successive filings of the same sign designed to circumvent the genuine use requirement. The filing by a third party of a well-known mark within the meaning of the Paris Convention falls under the same regime and may be challenged by the owner of that well-known mark without registration in France.

Key points

A bad faith filing is invalid and may be claimed by the person whose rights have been usurped. Proof rests on a body of evidence assessed at the filing date, mere knowledge of earlier use being insufficient. As soon as a trade mark project is shared with a partner, one should file before disclosing, and monitor the registers so as to react within the time limits.

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This glossary entry is general in scope and does not constitute legal advice.

Dhenne Avocats is a patent litigation firm. Matters outside that field, such as trade marks, designs, copyright and IT contracts, are handled by practitioners the firm works with regularly, and by the firm itself when they arise in a patent dispute.

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