February 2008

The Austrian Supreme Court (OGH) has requested a new preliminary ruling from the European Court of Justice (ECJ) regarding the three?dimensional trade mark of a sitting golden chocolate rabbit (CTM 1.698.885).

These questions relate to a common practice in countries where mere prior use of trade marks does not confer any rights to the prior user at least as far as he cannot meet higher qualification with his use, namely acquired reputation to a sufficient extent. If someone then lateron registers this mark, that person can then stop the prior users irrespective how long this not qualified prior use has lasted. This is the idea of a mere registration system such as the Community Trade Mark System, which does not force Member States to acknowledge rights to prior users.

There were and are many different "golden rabbits" on the market since they are a favoured Easter present. The producers of those more similar to the CTM registration were warned off by the owner of the registration, sometimes even sued for infringement, and finally their sales stopped.

The owner itself intensively markets its "golden rabbits" at quite a higher price than that of competitors' products. This since 1994 also on the Austrian market on which it was already renowned since 2003 as it was in Germany. He sued an Austrian competitor for commercializing a very similar golden rabbit, which product he did not know prior to the sale forming the basis of a warning letter and for suing for infringement of his registered trade mark in 2003.

The defendant reacted by a counter-claim for invalidity of the CTM based on Art. 51 para 1 lit a (unregistrability) and lit b (bad faith application) of the CTM Regulation. The requesting Court apparently thinks that lit a is here not decisive because of the acquired distinctiveness or can be overcome because of registrable features, wherefore lit b (bad faith) is the decisive topic for the counter-claim.

The requesting Court is of the opinion that the concept of bad faith need to be interpreted by the ECJ. Nowhere in Community Law is a definition or explanation of "bad faith". Can a company, which protects its own renowned product lateron by a 3D mark, then use its mark to stop competitors who have marketed very similar products already before registration and the priority date but not intensively enough as to acquire own enforceable rights on their products? This query leads the OGH to require guidance from the ECJ as to the interpretation of the notion "bad faith" in Art. 51 para 1 lit b of the CTM Regulation by way of three questions, which are in short:

1. Is it bad faith to apply for a trade mark in order to prevent competitors from continuing using the sign of which the applicant had prior knowledge? (The counter-argument in the case is that this is not automatically so since the right to exclude others is the essence of trade mark right.)

2. If that is not so, is it bad faith under the same circumstances when the competitor has already acquired "valuable property rights"? (The case explains that "valuable property rights" are defined as being due to long-term use the sign and/or publicity for the sign without already having acquired reputation so as to enable opposition to the CTM.)

3. If either 1) or 2) is answered in the affirmative: Is bad faith excluded if the registered sign has already obtained a reputation? (Here, the case states that then the applicant by registering the sign as mark has only pursued the aim to make it easier for him to stop infringers whom he could sue anyway on the basis of the the acquired reputation.)

The fight about the "golden rabbits" has been intensively watched for years with heavy battles from both sides also in the media – this fight is now on its culmination point.

Dipl.-Ing. Helmut Sonn