AG Biondi: extending patent rights through trade marks is not bad faith per se (but the “line is blurry”)

CeramTec, a manufacturer of ceramic products, developed a pink-coloured hip replacement implant and obtained a European Patent for the ceramic matrix composite used in this product in 1991. The patent expired on August 5, 2011.

On August 23, 2011, CeramTec applied to register three European Union trademarks (EUTMs), including the colour pink itself (Pantone 677 C), and a three-dimensional pink-coloured implant, as depicted on the right.

These EUTMs were registered in 2013 based on acquired distinctiveness. At the same time, subsequent analysis of CeramTec’s products revealed that chromium oxide did not have the technical effect initially assumed.

Shortly after registering the EUTMs, CeramTec initiated infringement proceedings in France against its competitor Coorstek. Coorstek responded by filing an invalidity request with the European Union Intellectual Property Office (EUIPO).

Coorstek argued that the EUTMs had been filed in bad faith to extend CeramTec’s monopoly after the patent’s expiry and that the pink colour resulted from chromium oxide present in the patented material. Coorstek later withdrew its application and instead filed a counterclaim for invalidation before the French EUTM court, citing Articles 7(1)(e)(ii) [signs which consist exclusively of the shape, which is necessary to obtain a technical result] and 52(1)(b) [application filed in bad faith] of Regulation No 207/2009.

In 2016, the court invalidated the EUTMs, a decision subsequently upheld by the Paris Appeal Court.

The Paris Appeal Court ruled that CeramTec had filed the trade marks in bad faith because both it and its competitors believed at the time that chromium oxide had a technical effect on the material’s resistance. The court found that CeramTec’s use of the pink colour was not arbitrary but rather aimed at prolonging its patent monopoly.

CeramTec appealed to the Cour de Cassation, arguing that Articles 7(1)(e)(ii) and 52(1)(b) are distinct grounds and cannot be applied together. It contended that Article 7(1)(e)(ii) would be inapplicable since chromium oxide was later found to have no technical effect.

The Cour de Cassation referred the matter to the CJEU for clarification due to differing interpretations of EU law among Member States (as the issue was also litigated in Germany), particularly regarding whether bad faith can be invoked alongside functionality claims under Article 7(1)(e)(ii). The Cour de Cassation inquired:

1. Whether the invalidity grounds under Art. 52(1)(a) [absolute grounds] and (b) [bad faith] of the (old) Regulation No 207/2009 are autonomous and exclusive.
2. If the answer to the first question is negative, whether the bad faith of the applicant should be assessed independently from Art. 7(1)(e)(ii) Regulation 207/2009.
3. Whether bad faith of an applicant is excluded when it is subsequently discovered that there was no link between the technical solution in question and the signs constituting the registered trade mark.

The AG was instructed by the CJEU only to answer Questions No 1 and 2. The AG briefly reminded, mentioning the third question, that the existence of bad faith is assessed at the date of the application, while subsequent events may be used to the extent that they clarify the applicant’s intent.

As to the first question, the AG answered that invalidity grounds under Art. 52(1)(a) [which refers to the absolute grounds under Art. 7(1)] and (b) are autonomous, but they are not exclusive.

The grounds are autonomous because they obey to different objectives: absolute grounds focus on a ‘defect’ in the trade mark, while bad faith focuses on the defects of the application and not of the trade mark as such (paras. 35-39).

The invalidity grounds under Art. 52(1)(a) and (b) are, however, not mutually exclusive. This means that they can be applied cumulatively (paras. 40-42).

By its second question, the French court essentially asked whether an application may be filed in bad faith because of the applicant’s intention to protect a functional trade mark, even if the trade mark itself does not fall under the functionality grounds of Art. 7(1)(e)(ii).

The AG opined that finding bad faith under Art. 52(1)(b) is independent of whether the trade mark is ultimately functional or not. This is because Art. 52(1)(b) analyses the applicant’s intentions and not whether the sign is registrable or not (para. 46). Conversely, and considering that the invalidity grounds are autonomous, the applicant’s intentions have no bearing on whether a sign is functional or not (para. 47).

That said, the sole fact of applying for a trade mark to protect features of appearance that had been previously protected by a patent does not per se constitute bad faith (para. 55). Other relevant factors will have to be considered by the national court to establish the real intentions of the applicant.

Among those, the AG suggested in particular: the nature of the mark in question, the origin of the protected sign and its use since its creation, the scope of the patent, and the chronology of events.

If, at the date of application, the applicant, its competitors, users and scientific community all believed that the registered sign covered the technical solution previously protected by a patent, and the applicant sought to maintain this belief through its trade mark, this would be evidence of bad faith (para. 57). More generally (unofficial translation from the official French version):

any action by the applicant that supports its intention to use the registration applied for purposes other than those pursued by the EU trade mark legislation, and in particular to prevent competitors from entering the market using the technical solution on which it held a monopoly by virtue of its patent, may be taken into account in such an assessment (para. 57).

Bad faith cannot be ruled simply because it was discovered, at a later stage, that the technical solution in question was non-existent [which indirectly provides a response to Question No 3]. The burden of proof to rebut the evidence supporting a dishonest intention lies with the trade mark holder (para. 58).

Our Kat readers surely remember that the EUIPO’s Fourth Board of Appeal (BoA) has considered a similar situation just a few weeks ago (R 12/2024-4). This case concerned the shape of Tetra Brik. Tetra’s competitor had filed a claim for invalidity, relying on Art. 7(1)(e)(ii) and Art. 52(1)(b) of Regulation (EU) 2017/1001, alleging that Tetra had sought protecting a technical result previously subject to a patent.

AG Biondi cited the Tetra case in his Opinion, unsurprisingly so considering the similarities between the two cases. However, the BoA was more straightforward in its ruling than the AG. After having found that the Tetra shape does not fall under Art. 7(1)(e)(ii), the BoA concluded that, if the contested mark is not necessary to obtain a technical result, bad faith shall be ruled out as well.

If the CJEU now supports the AG’s additional criteria for finding bad faith, this ruling could challenge our understanding of overlaps between trade marks and patents. If appealed to the General Court, the BoA’s findings in Tetra might also be reconsidered.