Café del mar - nullity based on bad faith.

Background of the case

In 1978, the appellant and the interveners in the current legal proceedings, obtained a premise in Ibiza as to start a business (bar) in this same place named “Café del Mar”. In 1992, the intervener applied for the trademark registration for the first time Café del Mar. Afterwards, both parties created the legal entity and the intervener was named as Proxy-Holder as to act in the name and in representation of the legal entity. Among others, in 1999 he applied for an EUTM in Class 9, 25 and 42:

Subsequently, on May 6, 2014, the appellants along with Café del Mar S.C, filed before the EUIPO a nullity action pursuant article 59.1, b) (trademark application based on bad faith) and article 60.1, c) and 8.4 (nullity based on prior rights). The Cancellation Division uphold in its entirety the claim, as the bad faith was considered existing at the filing time. This decision was appealed by the intervener and following this, the Fifth Board of Appeal stated that the decision issued by the Cancellation Division was declared invalid. This resolution has been now appealed before the General Court.

The aforementioned Court lays down in its recent judgement the following considerations on the assessment of the bad faith:

• To consider the existence of bad faith, as it has already been defined in well-known case lase, the following condition is to be taken into consideration: the applicant of the mar knows or should know that a third party is using the sing with leads to confusion with the applied sign. This fact has been duly proved in the present case, since the intervener was a shareholder of the legal entities the parties had in common and was the Proxy-Holder. Therefore, he could not ignore the risk of damages that this behavior could entail.
• The intention of the applicant at the filing time, needs to be considered. The Court confirmed that the appellants have proven that the intervener, when applying for the mark at stake, behaved in a way not complying with the ethical behavior principles accepted in the loyal practice in trade and business, and thus there was bad faith. The benefits obtained out of the trademark were not share with the remaining shareholders that were part of the legal entity, and he was not entitled nor authorized to register the mark using his name, even though he had a Power of Attorney that allowed him to represent and act on behalf of the society.

Taking into consideration all the above, the Court upholds the absolute ground of nullity and declares invalid the appealed decision.

Judgement of the General Court (Fourth Board), matter T773/17 of July 12, 2019.