EU Clarifies Bad Faith Trademark Filings with CP13 Common Practice

The concept of bad faith in trademark applications has long presented interpretive challenges within European Union (EU) trademark law. EU legislation does not explicitly define bad faith, nor does it clearly delineate its boundaries. Although case law from EU courts offers guidance, practical application has revealed divergent interpretations and difficulties in achieving uniformity, complicating the predictability of bad faith assessments.

To address these inconsistencies, the European Union Intellectual Property Office (EUIPO) published the CP13 Common Practice, titled “Trademark Applications Made in Bad Faith,” on March 22, 2024. Developed under the EUIPO’s Convergence Programs, CP13 seeks to establish a shared understanding of bad faith in trademark filings and to provide practitioners with guiding principles. The document clarifies terminology, develops common evaluation methods for specific scenarios, and identifies factors that may be considered when determining bad faith.

The scope of CP13 is intentionally limited. It does not address the judicial or administrative proceedings in which bad faith may be invoked, nor does it assess the merits of particular disputes. Instead, CP13 focuses on the principles and factors relevant to the assessment of bad faith itself, aiming to guide practitioners rather than dictate outcomes in individual cases.

A central principle of CP13 is that each case must be evaluated on its own unique circumstances, with the applicant’s dishonest intention serving as the mandatory element for a finding of bad faith. The guidelines emphasize that, in the absence of dishonest intent, bad faith cannot generally be established. However, as this subjective element is often not directly observable, the assessment relies on objective and concrete criteria. These include not only the applicant’s declared intent but also tangible indicators of intent that are externally perceived, as well as the broader context and conditions of the application.

The manifestation of dishonest intention may vary from case to case. The Court of Justice of the European Union (CJEU) has identified several complementary factors that can assist in determining whether bad faith is present. These factors are not prerequisites for a finding of bad faith but serve as useful tools in the assessment process. They are therefore referred to as non-mandatory factors in both doctrine and practice.

Among these complementary factors are: the applicant’s awareness or presumed reasonable awareness of the existence of earlier rights; the level of protection and reputation enjoyed by third-party rights; the similarity between the disputed trademark and 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.

CP13 recognizes that bad faith in trademark applications is not a uniform phenomenon and may arise in different forms. The guidelines examine bad faith under two primary, non-exhaustive facets. The first is the misappropriation of third-party rights. 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 personal benefit. Here, the main objective is not to engage in honest commercial activity, but to intrude on a third party’s rights or to gain an unfair advantage derived from those rights.

The second facet is the abuse of the trademark system, where it is not necessary for the applicant to target a specific third party directly. Bad faith may arise from applications made for purposes inconsistent with the fundamental functions of a trademark. Even if the application formally complies with legal requirements, the use of the application in a manner contrary to the objectives of trademark law, or a strategy aimed at deriving unfair benefit from the trademark system, can be decisive in establishing bad faith. CP13 cites examples such as registrations made for defensive purposes against potential disputes, repetitive applications, and applications of a speculative nature.

Within the framework of CP13, a comparison with Turkish trademark law reveals that the fundamental elements of the concept of bad faith and the approach to assessment largely overlap between the EU and Turkish systems. However, differences remain in certain aspects, such as the extent of rejection or cancellation due to bad faith.

In conclusion, the CP13 Common Practice serves as a guiding document aimed at fostering a more systematic, consistent, and predictable understanding of bad faith in trademark applications, rather than directly determining the legal consequences in specific disputes. While Turkish trademark law is largely aligned with EU law regarding the assessment of bad faith, the absence of a clear and structured guideline in Turkey has led to inconsistencies in decision-making.

The article suggests that the Turkish Patent and Trademark Office could benefit from preparing a guideline similar to CP13, systematically setting out the criteria for the assessment of bad faith. Such a guideline would promote consistency in practice and encourage more cautious and accurate assertions of bad faith claims.