1. In the “Da Vinci” case, the FCJ had to decide on the question of a claim for contractual penalties asserted by the owner of the EUTM 005631304 (“Da Vinci”). The plaintiff was the proprietor of altogether 12 registered German and EU trademarks, each bearing the name of famous artists. The trademarks were registered for a wide range of different goods and services. The plaintiff warned the defendant based on EUTM 005631304 (“Da Vinci”), because the defendant offered a salt lamp under the designation “Davinci” on the internet trading platform eBay. The defendant terminated all offers and auctions immediately after receipt of the warning letter and signed a cease and desist declaration subject to a penalty clause. Shortly thereafter, the plaintiff determined two offers by the defendant for one of the Davinci lamps in dispute, which had already ended. The offers could still be viewed on eBay by searching for the article numbers. Following the plaintiff’s request, the defendant had deleted these offers. Subsequently, the plaintiff requested the defendant to pay a contractual penalty, the payment of which the defendant refused. Each the Regional Court and the Higher Regional Court of Dusseldorf rejected the plaintiff’s claim. The FCJ also dismissed the appeal on points of law against the judgment on appeal in its decision of 23 October 2019.
2. In its decision, the First Civil Senate stated first that the question whether the assertion of a contractual penalty pursuant Sec. 339 sentence 2 German Civil Code (BGB) in conjunction with an agreement to cease and desist was abusive of the law, was governed by the general principles of good faith pursuant to Sec. 242 BGB. Furthermore, it was to be examined in the context of an overall assessment whether the behavior of the person issuing the warning before, during and after the warning justified the conclusion that the assertion of the contractual penalty claim was contrary to good faith (para. 6).
3. According to the First Civil Senate, it could be contrary to the principles of good faith if the owner of a trademark claimed only a formal legal position. In continuation of the “Classe E” decision (e.g. GRUR 2001, 242) and the “Goldbaer” decision (e.g. GRUR 2015, 1214), the First Civil Senate held that an abusive exploitation of a formal legal position must be assumed if a trademark owner cumulatively
the trademarks are essentially hoarded for the purpose to seek injunctive relief and damages from third parties who use identical or similar designations (para. 7)
4. The First Civil Senate considered these requirements to be fulfilled in the present case. In addition to the applicant’s trademark, the plaintiff has applied for further 11 trademarks covering a wide range of goods and services in various sectors. No concept of use of the marks was apparent (para. 9 et seq.).
In the “Classe E” decision (e.g. GRUR 2001, 242, 244), the First Civil Senate already stated that a general intention to use the trademark was a general requirement for protection of a trademark, which resulted from the nature of a trademark as a distinctive sign. The intention to use the mark must exist independently of the five-year grace period for use under Sec. 25 (1) German Trade Mark Act (MarkenG) or Art. 18 (1) EUTMR. The grace period for use was merely a rebuttable presumption of such an intention. What was required from the outset was a general willingness on the part of the trademark owner to use the trademark as a sign in the course of business by himself or to allow a third party to use it, either by way of a licensing or following an assignment. Thus, a general intention to use was also given, for example, by advertising agencies or brand designers who created brands in the context of an existing or potential consultancy service in order to make them available to their customers for their specific marketing needs.
In its decision of 23 October 2019 (para. 9), the First Civil Senate now specified that in such a case the trademark owner had an increased secondary burden of proof. He must describe the considerations behind the trademark application and must disclose the marketing efforts made and the successes achieved in each case within the bounds of reasonableness.
5. The plaintiff did not comply with this obligation. It was only in the appellate instance that the plaintiff submitted license agreements, which the Higher Regional Court of Dusseldorf rejected as inadmissible new submissions within the meaning of Sec. 531 (2) German Code of civil Procedure (ZPO). Contrary to the plaintiff’s arguments, the Court of First Instance was not obliged to make a reference in that regard. A judicial reference, the First Civil Senate continued, was regularly unnecessary if the party had already received the required information directly from the other party (para. 14). In its statement of defense, the defendant had already submitted substantiated arguments on the plaintiff’s lack of intention to use the trademark and its abuse of rights.
6. The FCJ also refused to refer the legal question to the ECJ under Art. 267 (3) TFEU, because the subject matter of the dispute was not claims arising from a EU trademark, but solely claims based on a cease and desist agreement between the parties within the meaning of Sec. 339 sentence 2 BGB. Such an agreement constituted an independent ground of guilt, even if it was concluded in response to a warning letter concerning an alleged infringement of an EU trademark (para. 15).
7. In this context, the ECJ also decided in the “Sky/SkyKick” case (C-371/18) on 29 January 2020 that a trademark application made without any intention to use the trademark in relation to the goods and services covered by the registration constituted bad faith within the meaning of Art. 59 (1) (b) EUTMR if, alternatively
8. The ECJ decision provides a wide scope for a wide range of applications. The reference for a preliminary ruling from the UK High Court of Justice was based on a dispute between the pay-tv provider Sky and the software service provider SkyKick. SkyKick defended itself against the alleged infringement of several of trademarks of Sky which were still in the grace period for use by means of a counterclaim for invalidity, arguing that Sky generally lacked the intention to use the its trademarks for the goods and services partially claimed by these trademarks, in particular for “computer software” and for various “internet services“.
9. There is no exact definition of the term “bad faith” in the context of Sec. 8 (2) No. 14 MarkenG or Art. 59 (1) (b) EUTMR. In the decision “Lindt & Spruengli/Franz Hauswirth” (e.g. GRUR 2009, 763), the ECJ stated that in order to determine whether the applicant of trademark is acting in bad faith it must be taken into consideration all the relevant factors specific to the particular case which pertained at the time of filing the application for registration of the sign as a trade mark, in particular:
10. However, the list of circumstantial evidence established by the ECJ is not exhaustive. As a further example of a trademark application in bad faith the European General Court also regarded the filing strategy of filing national trademark applications in succession without paying a filing fee and with the purpose of obtaining a blocking position in order to oppose EU trademark applications of identical or similar signs by third parties on the basis of the priority of the national trademark application (cf. EGC, judgment of 07 July 2016, T-82/14 – Copernicus-Trademarks Ltd/EUIPO, e.g. GRUR-Prax 2016, 373).
Thus, the catalogue of circumstantial evidence now established by the ECJ in the “Sky/SkyKick” decision (C-371/18) extends the application for a declaration of invalidity due to the applicant acting in bad faith in the event that the applicant of the trademark has no intention to use it.
