Decision Draws Boundaries of Bad Faith

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Published in “Managing Intellectual Property”, 2010

Recently, a Romanian court issued an innovative decision retaining the defendant’s bad faith in filing a sign for registration as trade mark, even though the claimant had no previous rights over the respective sign, and has only scarcely used the sign before the registration by the other party.

In January 2008, Recolamp, a nonprofit association and the only organisation specialising in the management of lamps waste, authorised by the Romanian Ministry of Environment and Sustainable Development (the claimant) decided to conduct an ecologic campaign for education and information about recycling of electrical equipment.

Discussions were started with Roddia Concept (known at that time as Insight Solution Services), a company specialising in marketing, communication and events management (the defendant), in order for the latter to provide marketing services to the claimant as support in organising the campaign.

In response to the claimant’s request to theme the campaign around green issues, the defendant came up with several proposals for its name, such as Go Green!, Green.Ro and Zona verde (The Green Area).

The claimant refused all these suggestions and decided to go with its own creation – Ziua Verde (The Green Day), together with a recycling sign represented with plugs. It proceeded to the registration of the domain name ziuaverde.ro and started using the entire concept (together with the mark Ziua Verde) for identifying the campaign.

In May 2008, the defendant, without informing the claimant, filed for registration in its own name the trademark Ziua Verde, together with the recycling sign represented with plugs, for services in class 35.

It was only after the parties concluded in writing the services agreement they had already agreed upon that the claimant decided to register the sign as a trade mark and conducted a trade mark availability search.

During the negotiations regarding the assignment of the trade mark Ziua Verde, the claimant asserted his prior rights and proposed as price of the assignment the amount paid by the defendant as official fees for the registration of the trade mark. As expected, the parties did not reach an understanding.

After the failure of negotiations, the defendant, in its capacity as trade mark owner, sent a notification to the claimant, requesting it to cease the use of Ziua Verde trade mark on the website www.ziuaverde.ro.

As a consequence, the claimant suspended the use of its website, filed the trade mark Ziua Verde for registration in its own name for goods and services in classes 16, 35, 40 and 41 and in May 2009 filed with the Bucharest Tribunal the action in cancellation of the defendant’s trade mark as being registered in bad faith.

One year later, in April 2010, the court held the defendant’s bad faith upon filing the trademark Ziua Verde for registration and, therefore, cancelled the trade mark.

In supporting this decision, the court held that the defendant’s availability to assign the trade mark, together with the cease and desist letter sent to the claimant were evidence that the defendant’s intention was not to use the trade mark for its function (to distinguish its products/services from those of other undertakings), but to abusively prevent the claimant from using the respective sign.

The court dismissed the defendant’s arguments that it was under no contractual obligation as towards the claimant when it filed the trade mark application because the services agreement was concluded afterwards.

The court held that the lack of a written agreement at the moment of filing the trade mark application may not be used as argument, as the electronic correspondence between the parties before then proves the existence of their contractual relationships.

Moreover, considering the scope of the services agreement concluded between the parties, the defendant had no right to obtain other benefits except for the remuneration, and was not entitled to register the trade mark in its own name.

By issuing this decision, the Romanian courts have once again contributed to drawing the boundaries of bad faith. In this case, the defendant’s trade mark was cancelled, even though the claimant had no previous rights over the respective sign, which was created during the organisation of an ecologic campaign and was intended to be used as an identifier for this campaign.

The decision of the court is subject to appeal.

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