Trademark Applications Made in Bad Faith and the Assessment of Bad Faith in EU Law under the CP13 Common Practice
In European Union (“EU”) legislation relating to trademark law, the concept of bad faith in trademark applications is not explicitly defined, nor are its boundaries clearly established. Although EU case-law provides significant guidance on the concept, it has been observed that there are different interpretations in practice and there are challenges in regard to achieving uniformity, making it difficult to foresee the manner in which assessment of claims of bad faith are undertaken.
With this in mind, the CP13 Common Practice titled “Trademark Applications Made in Bad Faith” prepared within the scope of the Convergence Programs carried out before the European Union Intellectual Property Office (EUIPO), was published on 22 March 2024. The CP13 Common Practice aims to establish a common understanding of the assessment of bad faith in trademark applications and to provide guiding principles for practitioners. In this context, the concepts and terminology related to bad faith have been clarified, common evaluation methods have been developed for specific scenarios and common factors that may be taken into account in determining bad faith have been identified.
Nevertheless, the scope of CP13 has been deliberately kept limited. In particular, issues regarding the judicial or administrative proceedings in which bad faith may be invoked, as well as assessments relating to the merits of disputes have been excluded from the scope of the context.
In assessments conducted within the framework of CP13, it is emphasised that each case has its own unique circumstances and that the mandatory factor of bad faith is the applicant’s dishonest intention. This is regarded as an essential requirement that must be examined in every case where a bad faith claim is raised. In other words, in the absence of a dishonest intention, as a rule, the existence of bad faith cannot be established. However, since this subjective element is often not directly ascertainable, the assessment is based on objective and concrete criteria. In this context, not only the applicant’s declared intent but also the tangible indicators of this intent which are externally perceived, as well as the conditions and context of the application, should be considered together.
The applicant’s dishonest intention is not expected to manifest in the same way in every case. Within this framework, the Court of Justice of the European Union, in its rulings, has identified certain complementary factors that may assist in determining dishonest intention, which constitutes the mandatory factor of bad faith. These factors do not constitute a prerequisite for the existence of bad faith; they serve solely as a guiding tool in the assessment of bad faith. For this reason, these factors are referred to in doctrine and practice as non-mandatory factors.
In this framework, the complementary factors include: the applicant’s awareness or presumed reasonable awareness of the existence of earlier rights; the level of protection and reputation enjoyed by the third party’s rights; the similarity between the disputed trademark and the earlier rights; the goods and services covered by the application; any existing or past commercial or legal relationships between the parties; the origin and prior use of the trademark; whether the application is supported by an honest commercial rationale; speculative conduct aimed at obtaining financial gain and the applicant’s pattern of systematic or repeated applications or actions.
The CP13 Common Practice acknowledges that the concept of bad faith in trademark applications cannot be treated as a uniform phenomenon; rather, it may emerge in different forms. In this regard, bad faith is examined under two different facets in a non-exhaustive manner. The first of these is the misappropriation of the right/s of the third party. In such cases, the applicant is perceived to target a specific third party, attempting to unjustly exploit their trademark rights, commercial activities or well-known status in the market for their own benefit. In these applications, the main objective is not to engage in honest commercial activity, but rather to intrude on a third party’s rights or to gain an unfair advantage borne of those rights.
The second facet, namely the abuse of the trademark system, it is not necessary for the applicant to target a specific third party directly. Bad faith arises from applications made for purposes that are inconsistent with the fundamental functions of the trademark. Even if the application formally complies with the legal requirements, the use of the application in a manner contrary to the objectives of trademark law and the applicant’s strategy aimed at deriving unfair benefit from the trademark system, are decisive in establishing bad faith. In the CP13 text, registrations made for defensive purposes against potential disputes, repetitive applications and applications of a speculative nature are cited as examples within this scope.
Within the framework of the principles set out in CP13, a comparison of EU legislation with Turkish trademark law demonstrates that the fundamental elements of the concept of bad faith and the approach to assessment largely overlap in both systems. However it appears that in certain aspects, such as the extent of rejection/cancellation due to bad faith, specific differences continue to exist.
To conclude, the CP13 Common Practice serves as a guiding document aimed at fostering a more systematic, consistent and predictable understanding of the concept of bad faith, rather than directly determining which legal consequences may directly be the case in specific disputes. Although Turkish trademark law largely aligns with EU law in terms of the assessment of bad faith, the absence of a clear and structured guideline in practice adversely affects the consistency of decisions.
Therefore, it is our view that, a guideline to be prepared by the Turkish Patent and Trademark Office, similar to the CP13 Common Practice and which systematically sets out the criteria for assessment of bad faith, would not only promote consistency in practice but also encourage a more cautious and accurate assertion of claims to bad faith.