How to protect a mark against an unfair competitor?

In a recent judgement of the Supreme Administrative Court of 25 June 2024, ref. no. II GSK 454/21, the court indicated the conditions for establishing bad faith of a trademark applicant. As stated by the court, the dishonesty of the applicant consists, in particular, in the use of the system of formal protection of marks which is contrary to the basic function of marks, i.e. the function of indicating the origin of the mark from a specific entrepreneur. In addition, the applicant acts in bad faith contrary to the interests of other participants in this system who use an identical or similar mark in trade for the same or similar goods.

Trademark protection and priority of use of a mark

Filing a trademark application in bad faith may include an application contrary to the interests of the holder of an earlier trademark or the priority of actual use of the mark. In the latter case, the situation of the right holder who, despite the lack of registration of its mark, was the first to use the mark on the market, with the effect of creating among clients and other market participants an association of the mark with the goods/services as an indication of its origin. In the Polish law, the protection status of a mark that is only used and is not the subject of subjective law is determined by the Act on Combating Unfair Competition.

The Act protects an entrepreneur's interest in benefiting from the fact of priority of the actual use of a mark. The benefit (interest) is expressed in the undisturbed exclusivity of the use of the mark as an indication of the origin of the goods/services from its enterprise. Significantly, the interest of an entrepreneur who was the first to use a mark deserves protection to a higher degree than actions aimed at intercepting the used mark and taking over its established position on the market ("Bad faith trademark application", Palestra 1-2/2022, Prof. Urszula Promińska, Ph.D.). Taking into account that the trademark is to be used to distinguish goods, the filing of a trademark application for a different purpose allows us to assume that it was done in bad faith, and any such actions should be assessed as contrary to objective values determining fairness in trade.

Trademark invalidation as part of a litigation strategy

At this point, however, a doubt arises as to whether, in the case of a collision between the right of trademark protection and the actual use of an identical/similar mark and a possible dispute, the courts will follow the argumentation developed in the doctrine. Relying only on the Industrial Property Law, it can be concluded that under this Act, the entity with the right of protection for a trademark will be entitled, while the mere use of a mark is generally not protected. An exception here is the status of the prior user regulated in Article 160 of the Industrial Property Law. Pursuant to this provision, a person who, while conducting local business activity in a small scale, used in good faith a mark subsequently registered as a trademark on behalf of another person, has the right to continue to use this mark free of charge to no greater extent than before. This entitlement therefore only applies to persons engaged in small, local business, but does not apply to larger-scale entrepreneurs.

In order to maximise the interests of the user of the mark, it is worth considering filing an application for invalidation of a registered trademark on the grounds of bad faith of the applicant or prior right. The decisive criterion for establishing bad faith will be the state of awareness of the right holder at the date of filing the disputed mark. According to a well-established line of case law, only bad faith existing on the date of filing the application for registration is a basis for its invalidation, as only then is there a negative registration condition.

Where to file a invalidation application?

When registering a trademark, there are difficulties with the examination of the obstacle in question by the Polish Patent Office, which is unable to determine ex officio the bad faith of the applicant. Therefore, the allegation of a bad faith application arises very often in proceedings for invalidation of a trademark. In order to strengthen our argumentation in the application for invalidation, it is also worth invoking the relative registration obstacles of Article 132(1) of the Industrial Property Law.

It should be borne in mind that since the amendment of the Civil Procedure Code and the introduction of the Intellectual Property Courts, invalidation of a trademark is also possible before a common court by way of a counterclaim in trademark infringement cases. Such a solution avoids conducting two parallel proceedings before the Polish Patent Office and the civil court, and is therefore both economically and practically advantageous.