• ALICANTE ABSTRACTS

    Known Bar to Use Does Not Render CTM “Immoral”

    a CTM is filed in the knowledge that some national laws prevent its use, is the resulting registration invalid as contravening public policy or morality?

    The scope of Article 7 (1) (f) CTMR may be of wider importance than at first appears. Invalidation on absolute grounds may be the only method available for competitors to challenge a threatening CTM, where, for example, they own no prior rights and the CTM is unarguably distinctive. Bad faith has already been defined as a narrow legal concept, applicable only to very restricted circumstances. Public policy and morality, therefore, are perhaps the last remaining basis on which distinctive filings of arguable legality might be attacked.

    The scope of this provision, therefore, needed to be determined.

    Sportwetten GmbH Gera v OHIM (Case T-140/02) The CFI plumbed the depths of Article 7 (1) (f) CTMR in September, in a case concerning a CTM application for INTERTOPS Logo of Intertops Sportwetten GmbH, for betting services in Class 42.

    Intertops Sportwetten had applied for its CTM despite being aware that, in Germany at least, local laws would prevent it from using its mark for betting services unless it obtained a license. For reasons not fully explained in the decision, Intertops had indicated that it would not obtain such a license. A 2002 Bundesgerichtshof judgment had ordered Intertops to refrain from advertising its services in Germany, but there was no suggestion that Intertops had intended to use its mark in Germany in the absence of a license at the time the application was filed.

    Sportwetten GmbH Gera owned a later German trade mark registration for INTERTOPS SPORTWETTEN, also for betting services. As Intertops’ CTM pre-dated Sportwetten’s German registration, however, Intertops appeared to be in a position to injunct Sportwetten GmbH’s use in Germany, even though Intertops itself could not use its CTM there because it did not hold the necessary licence.

    Consequently, Sportwetten GmbH applied for a declaration of invalidity on the grounds that Intertops Sportwetten applied for its CTM in the knowledge that its use in Germany, at least, was prohibited by law, and that, as a result, the mark was contrary to public policy or accepted principles of morality under Article 7 (1) (f).

    OHIM rejected the claim for invalidity on the grounds that availability for use in one or more member states was irrelevant to whether a mark itself was, by its own nature, contrary to public policy or accepted principles of morality.

     

    Sportwetten GmbH’s Appeal

    On appeal to the CFI, Sportwetten GmbH argued that national laws on the regulation of betting must be taken into account at the European level, and that the obtaining of a CTM when such rules acted to prevent use in one or more member states must result in a finding that a mark was contrary to public policy or accepted principles of morality.

    It further argued that restricting such a refusal to cases where a mark is contrary to fundamental societal standards (where, for example, it is insulting or blasphemous) was too narrow. It argued, in the alternative, that even on that narrow test the mark in question was objectionable, because of the importance of protecting citizens from exploitative gambling by ensuring proper regulation.

     

    The CFI’s Decision

    The CFI succinctly rejected the appeal. In its view, none of Sportwetten’s submissions were relevant because none suggested that the mark itself, as opposed to the filing of the application, was contrary to public policy or immoral. The fact that Intertops was prohibited from using the mark in Germany was irrelevant to the intrinsic qualities of the mark.

    The CFI noted that, if the application to invalidate were to fail, Intertops could injunct Sportwetten from using the later conflicting mark in Germany, even though Intertops could not use its CTM there. However, this too was irrelevant to the intrinsic qualities of the mark, and could not therefore be taken into account.

     

    Comment

    Sportwetten’s arguments were tinged with desperation. They turned on the filing of the application and not on the nature of the mark itself. Its argument was more closely aligned to bad faith, to which the facts and circumstances surrounding a filing are relevant. However, bad faith does not appear in Article 7, and following the CFI’s ruling in Case T-224/01 Durferrit v OHIM (NU-TRIDE) [2003] ECR II-1589, it should have been clear that Article 7 objections relate to inherent qualities of a mark and not to external circumstances.

    It is not surprising that the appeal failed. Nonetheless, there was a need for the CFI to confirm that Article 7 (1) (f) did not apply in a case like this one. There are innumerable circumstances in which a CTM filing might be of questionable propriety, but not clearly a case of bad faith. Examples might include where an applicant is aware of valid conflicting rights in E.U. countries, or has in the past undertaken not to use its mark in some or all E.U. countries, but has said nothing about filing. The dishonesty needed to support a bad faith claim in such cases might not exist. Hence, the extent to which “public policy and morality” could fill the gap needed to be assessed with certainty, and although the answer could perhaps have been predicted by reference to NU-TRIDE, it is helpful to have it confirmed.

    Public policy and morality objections are likely in future to be of even more limited scope than bad faith. Those seeking to challenge later CTMs that are unarguably distinctive may be driven back on negotiations, or waiting and watching until non-use provisions apply. An ounce of prevention is still worth a pound of cure, however, and if marks of interest are protected early it may be possible to avoid the injustice of an injunction in one member state at the hands of those who will not, or cannot, use there.