Filing designs in bad faith does not make them invalid

In a recent judgement, the General Court of the EU considered whether a design application filed in bad faith would automatically render it invalid. Koen de Winder explains the arguments and the reasoning behind the General Court’s decision.

A design registration protects the appearance of a product or a part thereof – in this case, the design of a scooter. A design is eligible for protection if it is new and has an individual character. This means that the design may not be identical to an existing design and it must make a different general impression on the informed user than any existing designs. 

Design registrations can be challenged on the basis of the grounds set out by the European Designs Regulation and may be declared invalid. If so, that annulment will have retroactive effect to the moment of registration. In other words, the design registration will be deemed never to have existed.

Origin of the dispute

Multimox Holding BV registered a Community Design for its scooter at EUIPO in 2006.

In 2016, Asian Gear BV (which is also a major actor in the Dutch scooter market) submitted a request for the annulment of that Community Design right on the basis of a previously registered Chinese design right. That dispute ultimately came before the General Court of the European Union, which handed down its decision on 22 September 2021.

Bad faith and design law

The concept of 'bad faith' is an autonomous concept in the EU. This means that this concept must be uniformly interpreted throughout the entire EU. Nevertheless, the concept of 'bad faith' is not defined, delimited or even described in legislation. Generally, bad faith presumes the presence of an unfair state of mind or intention.

In this case, Asian Gear sought to argue before the General Court that EUIPO’s Board of Appeal had failed to take into account that Multimox was acting in bad faith during the handling of the application for a declaration of invalidity. However, the General Court disagreed, holding that it is irrelevant whether the holder of a design filed the application in bad faith.

The General Court’s interpretation is not new. That the bad faith argument is irrelevant has already been discussed in established case law, as the question is not whether one of the designs in question has been copied from the other, but whether these designs produce the same overall impression. Therefore, in the light of the examination of applicable grounds for invalidity, it must be held that a statement as to the conduct of the holder of the disputed design is not relevant. In addition, it follows from established case law that bad faith cannot be invoked as a legal ground in invalidity proceedings. 

As a result, the General Court concluded that the existence (or not) of bad faith in Multimox’s actions could not result in a different outcome. This case is not about the conduct of the holder, but about the novelty of the disputed design. Furthermore, the concept of bad faith is not mentioned as a ground for invalidity in the European Design Regulation. The application for a declaration of invalidity was thereby rejected.

Bad faith and trademark law

From a trademark law perspective, the concept of 'bad faith' is approached differently. Whereas bad faith does not constitute a ground for invalidity in design law, a trademark registration may be declared invalid if it is filed in bad faith.

In trademark terms, bad faith is considered to exist when it appears that the holder of a trademark registration did not file the application for registration of that trademark in order to participate in the competition in a fair manner. In other words, the application was made with the intention to harm the interests of third parties in a manner that is not in accordance with fair practice, or with the intention to obtain an exclusive right for purposes other than those covered by the functions of a trademark, in particular the essential function of indication of origin. 

Nonetheless, bad faith is usually difficult to prove, as it requires the malicious intent of the other party to be demonstrated. The chances of success of an invalidity action and the grounds that must be put forward in proceedings vary from case to case. (For more on this topic, read our recent article ‘Trademark squatting and the doctrine of bad faith’.)

If you have any questions about challenging bad faith applications, speak to your Novagraaf attorney or get in touch below.

Koen de Winder works in Novagraaf’s Knowledge Centre and is based in Amsterdam.