March 2009
The Battle of the Chocolate Bunnies
This month the Advocate General tried to shed some light on what amounts to a ‘bad faith’ trade mark application, in the Battle of the Bunnies case, Case C‑529/07 Chocoladefabriken Lindt & Sprüngli AG v Franz Hauswirth GmbH.
The whole thing started when Swiss chocolate maker, Lindt, applied for and successfully registered a three-dimensional Community trade mark (CTM) for a bunny wrapped in gold-coloured foil, with red and brown markings, wearing round its neck a red ribbon with a bell attached, and bearing on its haunch a design including the words ‘Lindt Goldhase’. The registration was granted on 6 July 2001.
Armed with a registered CTM, Lindt proceeded to try and monopolise the chocolate Easter bunny market, starting with one of their main competitors, Austrian-based Hauswirth. Both companies had been making chocolate Easter bunnies for over 40 years by the time OHIM awarded Lindt its monopoly. Lindt issued court proceedings against Hauswirth in Austria for trade mark infringement. Hauswirth counterclaimed claiming that Lindt had filed their CTM in bad faith since they new that other businesses sold similar chocolate bunnies and therefore Lindt’s CTM should be invalidated.
Hauswirth succeeded in the first instance in the Austrian Commercial Court, but Lindt appealed and were partly successful in the Austrian Higher Regional Court which held that the CTM was valid but Hauswirth had not infringed. Neither party were particularly happy with this outcome so they appealed to the Austrian Supreme Court which sought guidance from Europe. In particular, the Austrian Supreme Court asked the European Court of Justice to clarify whether an applicant has filed in bad faith if it is aware that other businesses are using similar marks in their business when it filed its application. Under European procedure, before the ECJ gives its judgment it first seeks an opinion from the Advocate General.
The Advocate General’s answer is vague in parts, but the gist of her analysis is that bad faith is a subjective test in that courts must look at what the parties’ intention are and whether they are acting with accepted standards of honest or ethical conduct. So the question perhaps for the Austrian Supreme Court is whether Lindt had an intention to prevent competitors from continuing to sell Easter bunnies which they had hitherto been entitled to sell.
We will have to wait to see what view the ECJ take on this.
Briffa’s Opinion
Whatever the outcome of this case, it is indicative of the sort of difficulties that arise when OHIM grants monopoly rights for what are fundamentally descriptive marks. While Lindt may have been able to establish significant goodwill in their particular Easter bunny in order to overcome OHIM’s objections, the reality is this trade mark should never have been granted in the first place.
It is unfortunate that one company could have been granted any kind of monopoly right in something as common as a chocolate Easter bunny. While Lindt no doubt have the resources to both overcome OHIM’s objections and to subsequently aggressively enforce their rights, this trade mark is likely to cause a significant headache for the courts while putting smaller manufacturers of Easter bunnies at serious risk. The ECJ and the Austria Supreme Court will be faced with unenviable task of trying to balance out whichever rights Lindt may have acquired through their significant use since the 1950s compared to the very real threat to the industry of granting this kind of monopoly.
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