Alicante Abstracts

Survival of the Fittest in GALAPAGOS Dispute

One might say that only the strong survive in OHIM disputes, and the Galapagos Islands’ sole coffee manufacturer proved it had what it takes when it succeeded in canceling a rival’s CTM registration for GALAPAGOS for coffee.

 

Strong Coffee

The action evolved from a claim by Productora de Café Galapagos PROCAFE S.A. (“Procafe”) that a CTM registration for GALAPAGOS of Compania de Elaborados de Café (“Elaborados”) had been filed in bad faith. Procafe was headquartered in Ecuador and had been using GALAPAGOS for coffee since 1994. It was the sole coffee producer in those islands, and had protected GALAPAGOS as a coffee trade mark in Ecuador, the U.S. and Bolivia.

Elaborados was also headquartered in Ecuador, less than 3 kilometers away from Procafe. The two companies belonged to the same trade associations. It may have seemed more than mere coincidence, therefore, when Elaborados began in

1997 to file trade mark applications for GALAPAGOS for coffee in Ecuador, Bolivia, Chile and other South American countries. In 2002, it secured a CTM. Procafe applied to invalidate the CTM for bad faith.

 

Nice Try

In its defence, Elaborados argued that it could not be regarded as having filed its CTM application in bad faith because there had been no contractual or pre-contractual relationship between it and Procafe.

It referred to the guidance laid down by OHIM’s Cancellation Division in its October 2000 decision BE NATURAL, that:

“Bad faith can be understood either as unfair practices involving lack of good faith on the part of the applicant towards the Office at the time of filing, or unfair practices based on acts infringing a third person’s rights. There is bad faith not only in cases where the applicant intentionally submits wrong or misleadingly insufficient information to the Office, but also in circumstances where he intends, through registration, to lay his hands on the trade mark of a third party with whom he had contractual or pre-contractual relations”

Elaborados’ weak argument was not destined to survive in the wild. OHIM’s Cancellation Division held that while a contractual or pre-contractual relationship might support a finding that a CTM had been filed in bad faith, such a relationship was not necessary if a finding of dishonest behaviour could be made based on other circumstances.

In this case, there was ample evidence that Elaborados had acted dishonestly. The fact that Elaborados was based less than 3 kilometers away from Procafe in Ecuador, was active in the same business sector and was a member of the same trade associations made it extremely unlikely that Elaborados could have been unaware of Procafe’s use of GALAPAGOS (since 1994) when Elaborados began filing its own applications in 1997. There was, moreover, evidence that Elaborados had not used the GALAPAGOS mark in any country, which further supported Procafe’s contention that the CTM had been filed in bad faith without any real commercial interest in the mark.

Procafe carried the day, and Elaborados’ CTM was invalidated on the basis of bad faith.

 

Comment

This decision represents an important step in the evolving guidance on bad faith. It confirms that knowledge of another’s rights in other countries can, even without any commercial dealings between the parties, result in a finding that a CTM application was made in bad faith.

The examples of behaviour constituting bad faith given in BE NATURAL and the decisions that followed in its wake were never intended to be fully comprehensive. The outcome in GALAPAGOS highlights OHIM’s commendable determination to be fair, rather than formulaic, in deciding whether a filing was made in bad faith. What emerges from this case is that a fact pattern need not fit into the moulds identified in previous cases in order to succeed. OHIM is alive to the infinite variety of guises in which dishonesty can appear.

Those contemplating filing an OHIM invalidation based on bad faith should be encouraged by this result. Although the outcome of a case can rarely be predicted with certainty, presenting a strong case with persuasive evidence at the outset offers the best chance of success.