In a recent decision of the EUIPO, a trade mark registration by cycle brand Ritchey for their mark was cancelled on the basis it was held to have been filed for in bad faith as it breached a coexistence agreement with the Union Cycliste Internationale (UCI), the sport’s governing body, relating to their rainbow stripes logo.
The concept of bad faith in EU trade mark law is not precisely defined in the legislation and case law interpretation allows some flexibility albeit it is always a serious accusation and one that to apply requires there to have been conduct which departs from accepted standards of ethical behaviour or honest commercial and business practices. In leading guidance in KOTON (C-104/18) the Court of Justice of the EU clarified bad faith can apply if the applicant for the trade mark acts in a way that is not objectively honest to abuse either (i) the rights of a third party or (ii) the trade mark system generally. Recent high profile cases such as LIDL v TESCO and SKYKICK have looked at the potential for bad faith by abuse of the trade mark system generally (for example repeat filings), whereas this case is one that falls into the first category and whilst naturally very fact specific this decision adds to understanding of situations in which bad faith can be held.
In this case (EUIPO Cancellation Case No. C27481 issued on 16/11/2023), Ritchey had been using versions of the WCS mark with the rainbow stripes on bikes for many years. In 2010 they had ended up in a coexistence agreement with the UCI. Crucially for this case, in that agreement Ritchey agreed that it could use the rainbow stripes only when used in relation to WCS and only in a certain way. The agreement also stated that the form of use may be updated. However, for an updated logo to be viable, both parties would have to agree to the modifications. The agreement also stated the agreement may be amended from time to time and also that the parties declared that a spirit of goodwill and constructive co-operation will govern their relations under this agreement. There was no provision for the registration of a trade mark in the agreement.
Days before filing the trade mark application, Ritchey had emailed the UCI asking for approval of a new version of the mark (inter alia claiming the need to file this to combat counterfeits of their product). The UCI did not agree. Ritchey filed their EUTM. Interestingly, in their legal argument Ritchey claimed that they had signed up to the agreement without legal advice.
In a detailed decision looking at all the pleaded circumstances, the EUIPO held that this knowledge of the UCI rights and the clear agreement wording to act in good faith and obligation not to file outside the agreed forms meant the filing was in breach. This meant that, in the circumstances, the trade mark filing was in bad faith and should be cancelled.
This decision provides another useful factual example of what can constitute bad faith in trade mark law. For comment on other examples of bad faith see our articles on: filing a trade mark with the purpose to cause difficulty for or provide a tool that could be used to extract monies from another party (ETHICA DIAMOND and MCVEGAN); using wide specifications in a trade mark (SKYKICK); trade mark trolls (GLEISSNER); and “evergreening” (LIDL v TESCO).
This case is also a cautionary tale to make sure proper advice is taken before entering into formal settlement or coexistence agreements. Stobbs has a great deal of experience in contentious matters at the UK and EUIPO (including for sports clients and governing bodies) and in settlement agreements and commercial contracts.