EUIPO establishes bad faith in LA IRLANDESA trademark invalidity action based on objective circumstances.

Background and Cancellation Division's decision

The Irish Ministry for Jobs, Enterprise and Innovation and Ornua Co-operative Limited (formerly, the Irish Dairy Board Co-operative Limited) jointly filed an invalidity action against an EUTM for a LA IRLANDESA logo covering "Meat, fish, poultry and game; Meat extracts; Preserved, frozen, dried and cooked fruits and vegetables; Jellies, jams, compotes; Eggs; Milk and milk products; Edible oils and fats" in class 29, invoking that it was deceptive and had been filed in bad faith.

The Cancellation Division rejected the declaration of invalidity in its entirety ruling that:

• Regarding the alleged deceptiveness, the contested EUTM mark was not registered in breach of Article 7(1)(g) EUTMR. The contested sign had a clear geographical link to Ireland and, based on the presumed honest use, it displayed a clear message that the (food) goods covered in class 29 originate from Ireland. There was no serious risk that the consumer will be deceived.
• Regarding the alleged bad faith, no conclusions could be drawn to the fact that there was a commercial relationship between the owner and the second applicant. Also, although it chose a logo similar to the one used by the second applicant (on its KERRYGOLD's butter), this couldn't be seen as a proof of bad faith. It was only clear that it sought a reference to Ireland but this didn't show a bad commercial behaviour.

Grand Board’s findings

Following the appeal filed by the applicants, the Presidium of the Boards of Appeals considered it appropriate to refer the case to the Grand Board of Appeal to establish a harmonized approach of the Boards of Appeal in similar cases.

• The mark is deceptive
   

The contested EUTM constitutes a clear designation of a characteristic of the goods covered by it, namely their geographical origin: Ireland. Spanish-speaking consumers will believe that the goods bearing "LA IRLANDESA" are from Ireland. However, it was revealed that the mark was, either used on goods originating from countries other than Ireland (e.g. Danish salami or Dutch cheese), or on goods for which an Irish origin was not proven (e.g. milk).

The Grand Board concluded that there was a serious risk that consumers would be misled as to the origin of the goods bearing the contested EUTM: they will believe that these originate from Ireland when in fact they didn't. As the mark was already in used before its filing, there was sufficient serious indication that it was already used in a deceptive manner at the time of its filing.

• The mark was filed in bad faith

The Grand Board held that the mark has to be declared invalid also on the grounds of bad faith, in view of the intention of the owner to take advantage of the image of Irish products, despite the goods covered by its mark were not of Irish origin.

To arrive to such conclusion, the Grand Board applied, among others, the below well-known cases:

• C-529/07 Lindt Goldhase - which held that all factors relevant to the particular case should be taken into account, as well as the owner's intention when filing its mark (a subjective factor to be evaluated based on objective circumstances);
• T-257/11, COLOURBLIND - in which: (a) origin of the sign and its use since its creation; (b) commercial logic underlying the filing; and (c) chronology of events leading up to that filing were all taken into consideration; and
• R2445/2017-G Sandra Pabst - that cited objective circumstances to evaluate the owner's filing intentions, such as (a) its actions prior filing, (b) contractual, pre-contractual or post-contractual relationship between parties, and (c) existence of reciprocal duties or obligations.

In LA IRLANDESA, the objective circumstances taken into account to evaluate the owner's intention were in particular, the:

1. use of the contested EUTM by its owner in a deceptive manner (referring to goods of Irish origin when in fact they were not);
2. several final EUIPO and national decisions (establishing other "LA IRLANDESA" marks as being  deceptive); and
3. previous (and concluded long-lasting) business relationship with one of the (Irish) invalidity applicants. 

Also, the chronology of events evidenced that the contested EUTM originated from the contractual relationship between the parties and that the EUTM owner's motivation in filing the contested EUTM seems limited to the convenience of obtaining undue advantage. Indeed, the beginning of such relationship coincides with the EUTM owner filing a Spanish mark for "LA IRLANDESA" at a time when it bought Irish butter in bulk from the second invalidity applicant (it packed and sold it in the Canary Islands). This brand was therefore created to promote the sale of such Irish butter in Spain. That said, when the EUTM owner filed the contested EUTM, the goods sold under the "LA IRLANDESA" no longer had an Irish origin as the business relationship had been concluded by then.

Next steps

This EUIPO Grand Board of Appeal's decision was sought to establish a harmonized approach in similar cases where it has to be determined whether a mark was filed in bad faith. This decision further clarifies this concept and can be used to guide future cases where objective circumstances might be decisive when establishing bad faith, such as the deceptiveness of the mark and the business relationship with an applicant.

Authored by Paula Moreno