Deception and bad faith in trademark applications

Facts
Decisions
Comment

Facts

An application was filed to register the mark VÁSÁRHELYI TERV (ie, PLAN VÁSÁRHELYI) in Classes 41, 42 and 44. Two observations were filed against the application.

The first observer stated that the applicant had applied for the registration in bad faith, as its intention was not to differentiate its services, but rather to prohibit the observer and the General Directorate of Water Management from using the term 'Vásárhelyi'.

The second observer stated that the applied-for term was part of a characteristic expression used in respect of state plans and investments. As a result, the applicant's use of the term would deceive consumers.

Decisions

The Hungarian Intellectual Property Office (HIPO) rejected the application. It held that the application was deceptive as in 2003 the government had launched a flood protection programme entitled the 'Development of the Vásárhelyi Terv' in respect of the Tisza Valley. This programme was named after the famous engineer Pál Vásárhelyi. The term 'Vásárhelyi Terv' has been used repeatedly since 2003 in different legal acts and become known to the public. The applicant's bad faith was evidenced by the fact that he had acquired the mark VÁSÁRHELYI before filing this application.

The applicant requested a review by the Metropolitan Tribunal, which was rejected. The tribunal held that the HIPO had been right to refuse protection considering the numerous legal acts in which the term 'Vásárhelyi Terv' appears and the likelihood that consumers would believe that the mark was linked to state activity. As a result, the applied-for mark would be misleading for consumers. Moreover, the fact that use of the term was widespread, of which the applicant had been aware, was proof that it had acted in bad faith. From the warning letters written by the applicant to the state authorities, it was evident that his goal was to hinder the use of his family name. In conformity with case law, a trademark's fundamental purpose is distinction of the owner's services. If the goal of a trademark application is to hinder others from using a term, this constitutes bad faith.

The applicant filed an appeal with the Metropolitan Court of Appeal, but this was also rejected (8. Pkf. 26.253/2017).

Comment

Deception is prohibited in both Hungarian and EU law – not only in trademark law, but also more generally in commercial and civil law. As regards good faith and bad faith, concepts which have been around since ancient Roman times (bona fide and mala fide, respectively), the prohibition of the latter also exists in both EU law (eg, Gold Bunny (C-569/08)) and Hungarian statute and case law.

Both prohibitions (deception and bad faith) have a moral element, as demonstrated in the present case.

Pál Vásárhelyi was a leading person in flood protection planning in Hungary in the 19th century. As the 'right hand man' of Count István Széchenyi, he was head of a team which undertook flood protection planning with respect to the Lower Danube (now in Serbia, the last 100km before Belgrade) and the river Tisza and its tributaries. He was also a member of the Hungarian Academy of Sciences and the author of various scientific books on water economy.

It is no accident that the Hungarian authorities chose his name as a symbol for flood protection – today, the term 'Vásárhelyi Terv' is widely known among the public.

For further information on this topic please contact Alexander Vida at Danubia Patent & Law Office LLC by telephone (+36 1 411 8700) or email (vida@danubia.hu). The Danubia Patent & Law Office LLC website can be accessed at www.danubia.hu.