Battle Over Pink: CJEU clarifies overlap of bad faith and other trade mark invalidity grounds

Background

The Claimant, CeramTec, was a German company specialising in technical ceramic components used, in particular, in hip and knee implants.

The Defendant, Coorstek, was an American company specialising in manufacturing advanced technical ceramics for medical purposes.

CeramTec held a European patent for a pink ceramic material used in hip and knee protheses which expired on 5 August 2011. The pink colour was produced by the use of chromium oxide, which was believed to contribute to the strength and hardness of the prosthetic parts.  On 23 August 2011, CeramTec filed three applications for EU trade marks: a colour mark, a shape mark and a figurative mark, all specifying the colour pink – specifically Pantone 677C. 

The trade marks were all registered on the basis of acquired distinctiveness, and designated the following goods in class 10:

"Ceramic parts for implants for osteosynthesis, articular surface replacement, bone spacer blocks; Hip joint balls, hip joint sockets and parts for knee joints; All of the aforesaid goods for sale to manufacturers of implants".

In 2013, CeramTec brought an infringement action in France against Coorstek for allegedly copying the pink colour in its medical ceramics. Coorstek then filed a counterclaim for a declaration of invalidity of the three marks. In 2021, the Cour d'Appel de Paris ruled that CeramTec had acted in bad faith, using trade mark law to extend its expired patent monopoly, and invalidated all three marks.

The court found that CeramTec’s intent was not to indicate trade origin, but to block competitors from using a material (chromium oxide) that caused the pink colour.  The evidence showed that at the date of filing the trade mark applications, CeramTec "was convinced that chromium oxide had the technical effect of ensuring the hardness and strength" of the prosthetic parts, and that CeramTec "had intended to extend its monopoly on the technical solution previously protected by the patent".  The Cour d'Appel held that this was bad faith.  This was so even though it was discovered during the course of the French proceedings that the chromium oxide in fact produced no technical result.

CeramTec appealed to the French Cour de Cassation, which referred three questions to the CJEU.  To understand the questions fully, a brief reference to the relevant provisions of EU Trade Mark Regulation 207/2009/EC (now 2017/1001) (EUTMR) is helpful:

• Article 52(1):  "[An EU] trade mark shall be declared invalid …:
  (a)      where the [EU] trade mark has been registered contrary to the provisions of Article 7;
  (b)      where the applicant was acting in bad faith when he filed the application for the trade mark."
• Article 7(1):  "The following shall not be registered: …
  (e)      signs which consist exclusively of: …
  (ii)      the shape of goods which is necessary to obtain a technical result".

Reference questions & CJEU's ruling

1. Are the absolute grounds for invalidity of a trade mark set out in Article 52(a) and (b) independent of each other or do they overlap?   

The CJEU limited its decision to Article 7(1)(e)(ii), rather than all of Article 7 as per the original question, as that was the only ground in issue in these proceedings. 

The court held that it is apparent from the wording of Article 52(1) that (a) and (b) are separate points, as they are separated by a semi-colon, reflecting the intention of the EU legislature to distinguish between them. Further, there is no wording in Article 52 indicating that the two grounds "must be examined in any order of priority in relation to each other". 

The context of the provision and its purpose both support a finding that the points are autonomous. While Article 52 "provides an exhaustive list of the absolute grounds for invalidity", the grounds were different in nature and while point (a) refers only to Article 7, which sets out an exhaustive list of grounds for invalidity, point (b) refers to "the concept of 'bad faith', which may apply in an indeterminate number of situations".

The court pointed out that the underlying purpose of Article 52(1)(a) is to censure a defect in the mark itself and in the case of Article 7(1)(e)(ii), the aim is to "prevent the trade mark right from granting … a monopoly on technical solutions or functional features of a product … That ground is thus intended to prevent the protection afforded by trade mark law from being extended, beyond signs which serve to distinguish a product or service from those offered by competitors, so as to form an obstacle preventing competitors from freely offering for sale products incorporating such technical solutions or functional characteristics in competition with the proprietor of the trade mark." 

On the other hand, the underlying purpose of Article 52(b) relates to a defect in the application for the mark and not in the mark itself, and it aims "to ensure that economic operators intending to use the EU trade mark system compete fairly". 

Therefore, the CJEU ruled that the absolute grounds for invalidity in Article 52(1)(a) and (b) are independent from each other; a finding of bad faith does not first require that the mark consists exclusively of a shape that is necessary for a technical result, or vice versa.

Turning to whether they are mutually exclusive, the CJEU held that that Article 52(1) contains no wording to suggest that (a) and (b) are mutually exclusive or to prevent a mark being analysed under both grounds. The grounds of invalidity under Article 52(1) are therefore not mutually exclusive, and while in practice a court may confine itself to analysing one ground and if it is well founded, decline to examine other grounds, nothing prevents it from analysing further grounds.

2. If they are not independent of each other, and they do overlap, can bad faith be judged only using Article 7(1)(e)(ii), where there has not been a finding that the mark consists exclusively of the shape of goods necessary to obtain a technical result?

The CJEU recalled the Koton case and set out the general considerations around bad faith, which presupposes the existence of a dishonest state of mind or intention with regard to the trade mark system.  It will be found where there are "relevant and consistent indicia that the proprietor of an EU trade mark has filed the application for registration of that mark not with the aim of engaging fairly in competition but with the intention of undermining, in a manner inconsistent with honest practices, the interests of third parties, or with the intention of obtaining, without even targeting a specific third party, an exclusive right for purposes other than those falling within the functions of a trade mark". 

The applicant's intention is a subjective factor which must be assessed objectively, by means of an overall assessment taking into account all the circumstances of the case.  In that assessment there is no need to disregard factual circumstances pointing to separate grounds for invalidity, whether or not those grounds are fully made out.  Case law already confirms this. 

Factors to be considered therefore include the applicant's opinion on the "suitability of that sign for expressing fully or partially the technical solution protected by that patent, irrespective of whether that sign consists exclusively of the shape of goods which is necessary to obtain a technical result".  However, that cannot be the only factor, and the assessment should also consider "the nature of the contested mark, the origin of the sign at issue and its use since its creation, the scope of the expired patent, the commercial rationale underlying the filing of the application for registration of the contested mark and the chronology of events characterising that filing". 

3. Does Article 52(1)(b) mean that "bad faith is to be ruled out where the applicant has applied for registration of a trade mark with the intention of protecting a technical solution and, after the application was made, it is discovered that there was no connection between the technical solution in question and the signs which constitute the trade mark applied for?"

The CJEU dealt with this question in short order.  The "relevant time for determining whether there was bad faith on the part of the applicant is the time of filing the application for registration."  Nothing which occurs after filing alters the applicant's intention at the time of filing.  Bad faith may not be assessed on the basis of circumstances arising after filing.

Refusal to re-open oral proceedings

Interestingly, CeramTec was dissatisfied with the Advocate General's opinion (which was handed down in February 2025) and applied to re-open the oral proceedings. There are various grounds on which oral proceedings can be re-opened, such as that new and decisive facts have been submitted or an argument has not been debated.  However, simply disagreeing with the Advocate General's opinion is not a ground to re-open the oral proceedings and the request was refused.

Key Takeaways

• Bad faith and the other grounds for invalidity (set out in Article 52(1)(a)) operate independently of each other and can both be considered.
• The applicant's intention at the time of filing a trade mark application is key. 
• Factors tending towards the refusal of a trade mark under Article 7 can support a finding that the applicant's intention was in bad faith even if those refusal grounds are not fully satisfied.

With huge thanks to Emily Neate, trainee solicitor, for her contribution to this article.