On 4 November 2022, an application was filed requesting for a declaration of invalidity against EUTM 5838727 “TESLA” (word mark) for all of the goods covered by the EUTM, which belong to classes 12 and 25, regarding accessories for vehicles and clothing, among others. The reason for this application was based on the grounds of bad faith under art.59.1.b EUTMR.

The applicant, the well-known electric vehicle company Tesla, Inc. argued that the registration of the trade mark is based on speculative strategies. The EUTM proprietor purpose is to file a multiplicity of applications for pre-existing trade marks in order to obtain financial gain. The EUTM proprietor of the trade mark is well known in the EUIPO and other European offices as a subject of several lawsuits from different companies.

The applicant argues that the EUTM proprietor owns several letterbox companies in various countries through which he files hundreds and thousands of trade mark applications in different Member States without even paying application fees. The purpose of this activity is simply obtaining the priority of the earlier right in the EUIPO in order to block the registration of legitimate trade marks through opposition proceedings, causing a delay in the registration procedures that increases the value of the registered trademark while economically damaging the applicant. This activity is called speculation.

The applicant claims that in 2006, the EUTM proprietor filed an application for the Tesla trade mark in the Austrian Office, immediately after several national newspapers published various reports about the famous Tesla cars. However, the EUTM proprietor did not pay the registration fees. Nevertheless, this strategy was enough to prevent the registration of the applicant’s trade mark in the EUIPO. Once he filed the application in 2007, two months later, an identical application was filed claiming a priority date of registration because of its previous application request in Austria. By means of this strategy, the EUTM proprietor was able to block the applicant’s EUTM applications, achieving a procedural delay of almost 15 years through various opposition proceedings.

The trade mark proprietor denies the above allegations and claims that his profession consists of creating trade marks in order to sell them to companies. He accuses the applicant of wanting to be above the European regulations by refusing to negotiate with him. He claims not having any record of the prior existence of the applicant’s trade mark, arguing that he created the Tesla trade mark before the publication of the above-mentioned newspaper reports. He also claims that the applicant intends to commit an action of fraud and that by his accusations is trying to undermine his reputation.

After examining the situation, the EUIPO Cancellation Division finds that the EUTM proprietor has acted in bad faith as it is established that the applicant was previously using the tesla trade mark, way before the EUTM proprietor had filled the application in Austria. Therefore, it’s not a coincidence that the EUTM proprietor filed the application just after the applicant’s trade mark started to be recognised in Europe, and that the fees for this application were not paid until the applicant filed the application for registration in the EUIPO. Furthermore, the EUTM proprietor has many applications filled but few registrations. This fact indicates to the Office that the EUTM proprietor is applying for trade marks in order to speculate with them by initiating opposition proceedings against legitimate trade marks. The Cancellation Division considers the arguments of the EUTM proprietor to be inconsistent, as he does not use the EUTM registration to carry out commercial activities in relation to any goods nor services, but rather to speculate on them. In these circumstances, it’s clear that  the owner’s intention was forcing the applicant to pay him an exorbitant price for a trade mark that the applicant was already effectively using beforehand.

In the light of all the above, the Cancellation Division upholds the invalidity of the trade marks in its entirety, pursuant to Art. 59(1)(b) EUTMR, because it concludes that the EUTM was filed in bad faith and that the EUTM proprietor has failed to put forward sufficiently convincing arguments or evidence to dispel this finding. It is also considered that the EUTM proprietor had prior knowledge of the existence of the applicant’s “TESLA” trade mark when it filed the previous application. Furthermore the contested trade mark had no practical use beyond speculation thus demonstrating the dishonest intentions of the EUTM proprietor.

Cancellation decision of the Cancellation Division of EUIPO of 17 December 2024 in case C 56 966.