A recent cancellation of a European Union trademark confirmed by the EUIPO is a striking example of the problem of trademark registration in bad faith and abusive trademark registration within the European Union. The canceled trademark ATHLET, originally registered in Austria on January 4, 2010, was canceled at the request of a wholesaler. Despite the original priority claim of the earlier trademark, the business model behind this application could be classified as unfair.

For years, trade marks in Austria and Germany had been registered either in their own names or via affiliated companies – often without paying the application fees. Priority claims from earlier applications and strategic transfers between companies resulted in numerous applications for a declaration of invalidity due to trademark applications filed in bad faith. This led to complaints before the EUIPO and actions before the European Court of Justice (ECJ).

Previous decisions in trademark law

The question of trademark registration in bad faith was already discussed in the 2016 ECJ judgment (ECJ, judgment of July 7, 2016 – T-82/14). This case concerned the improperly registered trademark LUCEO. When a third party attempted to register the EU trade mark LUCEA LED, the original applicant invoked its priority claim. This approach of targeted trademark protection corresponded to the current case of the ATHLET trademark.

Decision of the EGC

The EGC found that the trademark was not registered with the aim of participating in fair competition. Rather, the registration only served to harm third-party interests and to use an abusive trademark registration as a source of income. According to the EGC, such actions are considered inadmissible and violate the principles of fair trade. The gradual registration of trademarks in the manner described was merely designed to create a blocking position for other users.

The court made it clear that this business model was based on an abusive concept. Although the provisions of EU law on trademark registration and protection were formally complied with, the purpose of this approach was unfair according to the ECJ. The applicant was not pursuing a serious interest in the actual use of the trademark, but was solely aiming to create a blockade under trademark law in order to collect financial claims from third parties.

Case law in Germany often agrees with this view. Trade mark applications in bad faith are typically established if the applicant already knows at the time of application that a third party is using the sign, or if the application is made without a serious interest in use. So-called “speculative trademarks” are also considered to be abusive trademark registrations if numerous trademarks are applied for without a concrete intention to use them. Such trademarks are often used to enforce claims for injunctive relief or damages against third parties (BGH GRUR 2001, 242 f. – Class E).

Systematic trademark applications and their consequences

The EGC also emphasized that the possibility of registering trademarks without paying the application fee in advance – as is possible in Germany and partly also in Austria – facilitates this abusive trademark registration. Due to the low costs, numerous applications can be filed at the same time, creating a considerable blocking effect on the market. Even the subsequent transfer of such trademarks to other companies has no legal effect with regard to invalidity: the decisive factor is the original bad faith intention of the applicant.

Overall, these cases show that trademark applications in bad faith and abusive trademark registrations are not only legally problematic, but also impair market transparency and legal certainty. Trademark law is therefore increasingly called upon to recognize such practices and punish them accordingly in order to protect fair competition.

Trademark law as a protective instrument for fair competition

The decisions of the General Court and the resulting measures taken by the EUIPO illustrate how important it is to recognize and combat bad faith trademark applications and abusive trademark registrations at an early stage. These practices jeopardize fair competition and lead to uncertainty in the market, which is particularly burdensome for creative companies and start-ups. Law firms that specialize in trademark and competition law can offer decisive support here by informing their clients about the risks of such registration strategies at an early stage and taking preventative measures. This ensures fair access to trademark rights and strengthens trust in trademark protection.