Bad Faith Civil Claim under Art. 26, par. 3, item 4 of the Law on Marks and Geographical Indications
Art. 26, par. 3, i. 4 of LMGI
Decision on commercial case No. 2690/09, issued on 13.05.2010
By court panel:
Chair: Sv. Chorbadzhieva
Members: Lyudmila Tsolova
Veronika Nikolova
THE BURDEN OF PROOF IN CASES CONCERNING “BAD FAITH” AT THE APPLICATION PROCESS OF THE TRADEMARK DOES NOT LIE ENTIRELY WITH THE PLAINTIFF. FURTHERMORE, THE VERY LACK OF GOOD FAITH IS IN ITSELF A NEGATIVE FACT, THE ADDUCING OF WHICH REVERSES THE EVIDENTIAL LEGAL BURDEN.
Bojinov & Bojinov represents an Italian company in relation to a bad faith civil claim under Art. 26, par. 3, item 4 of the Law on Marks and Geographical Indications (LMGI). The Sofia City Court issued a favourable decision, which was subject to appeal before the Sofia Appellate Court.
The court of second instance upheld the judgement of the first court based on the following arguments.
The Sofia City Court established that the Defendant’s mark was identical to the Plaintiffs’ earlier marks and the goods covered by the compared marks were also identical. Based on the aforesaid, the Sofia City Court concluded that when filing the trademark application, the Defendant was aware of the existence of the plaintiff’s marks, and therefore such action contradicted the honest commercial practice and as such constituted an act of bad faith.
The intended purpose of Art. 12, par. 3, item 4 of the LMGI, is the imposition of a sanction on an applicant, who files a trademark application, despite the fact that he/she was aware that the sign was used by another party in the course of trade, and as such the action aimed to gain pecuniary and non-pecuniary benefits.
In view of the above, the Court concluded that a trademark application shall be considered as being filed in bad faith, if it is established that the applicant was aware that the use of the mark will cause harm to the owner of the earlier protected mark. The burden of proof rested with the defendant due to the fact that the lack of good faith is a negative fact. Moreover, the Plaintiff may not always present evidence concerning the exact date, on which the Defendant became aware of the Plaintiff’s mark. The very fact that the products bearing the Plaintiff’s mark were on the Bulgarian market, was sufficient prove to presume that the Defendant was aware of the existence of the earlier marks. The burden of overcoming the presumption of bad faith lied with the Defendant.
Since the Defendant as an applicant, was not a trader, but a physical person, it was concluded that by the act of registering the mark the Defendant’s aim was to dispose of it, as well as to prevent third parties from using the mark in the course of trade without his consent.
It was concluded that it appeared that the only purpose of the Defendant was to gain benefits, by forcing the Plaintiff to pay a licensee fee concerning the import and distribution of the Plaintiff’s goods bearing the mark for the territory of Bulgaria. Another option for the Plaintiff would have been the discontinuation of the use of the mark on the territory of Bulgaria. In both cases, the registration of the defendant’s mark lead to violation of the principle of “do no harm” (“neminem laede”).
Based on the above, the Sofia Appellate Court concluded that the Defendant acted in bad faith when filing the trademark application and confirmed the Judgement of the Sofia City Court.
The Judgement at present is subject to appeal before the Supreme Court of Cassation.
