Red Brand Chicken: A cautionary tale of bad faith and the EUIPO-EU General Court dynamic

On November 12, 2024, the European Union (EU) General Court’s Fourth Board of Appeal issued its decision in case R 1165/2020-4. This case highlights the vital relationship between the EU Intellectual Property Office (EUIPO) and the judicial mechanisms of the EU, particularly the role of the General Court.

The appeal structure ensures that decisions of the EUIPO, including those of its Boards of Appeal, are subject to judicial review by the General Court, providing a crucial layer of oversight. This mechanism guarantees that procedural and substantive standards are upheld, reinforcing legal certainty and fairness in the EU trademark system.

By addressing disputes through this framework, the General Court ensures the balance of interests between trademark proprietors and applicants, safeguarding the integrity of the EU’s intellectual property regime.

Overview of the case

On July 9, 2014, an application was filed before the EUIPO for a three-dimensional trademark (EUTM) identified as "Red Brand Chicken", intended for the following goods and services:

• Class 29: Poultry; poultry, not live; frozen meat; meat, preserved.
• Class 40: Freezing of foods; freezing of foods.

Source: EUIPO

The trademark application also included a claim to the colours red, white, orange, and blue. The application was subsequently published on September 4, 2014, and the trademark was registered on March 24, 2016.

On February 15, 2018, the Polish company Przedsiębiorstwo Drobiarskie filed an application for a declaration of invalidity of the registered EUTM. The grounds for invalidity were based on allegations of bad faith, as provided under Article 59(1)(b) of the EU Trade Mark Regulation (EUTMR). According to the applicant, the EUTM proprietors acted in bad faith when filing the application for registration.
 

Commercial relationship between the parties

The dispute stems from a prior commercial relationship between the parties that spanned the period from 2012 to 2014. During this collaboration, the parties developed and marketed injected chicken fillets for export markets.

While preliminary agreements, including a Service Agreement signed in 2013 and a non-signed draft agency agreement, outlined certain terms of their cooperation, the relationship lacked formalization as a joint venture.

The contested trademark, 'Red Brand Chicken', was allegedly used in connection with products developed during the cooperation. The applicant for invalidity claimed that the trademark was registered by the EUTM proprietors without proper authorisation and contrary to the spirit of the collaboration.

The applicant presented a range of evidence, including correspondence and contracts, to support its assertion that it had played a central role in the development of the products and the branding.
 

Decision of the Cancellation Division

On April 16, 2020, the Cancellation Division rendered its decision, declaring the contested EUTM invalid in its entirety. The key findings included:

1. Existence of bad faith: The division concluded that the EUTM proprietors had acted in bad faith at the time of filing the application. The evidence demonstrated that the trademark was closely tied to the collaboration between the parties and that the proprietors’ actions were contrary to the principles of good faith and fair dealing.
2. Role of the parties: The division found that the cancellation applicant was the principal party in the relationship and had played a significant role in the development of the products and the branding. The EUTM proprietors were deemed to have acted primarily as agents within the scope of this cooperation.
3. Invalidity of the trademark: Given the findings of bad faith, the Cancellation Division invalidated the EUTM in its entirety, including for goods and services for which no direct evidence of bad faith was provided.
    

Decision of the Second Board of Appeal

On March 16, 2022, the Second Board of Appeal confirmed the decision of the Cancellation Division, upholding the invalidation of the contested EUTM on the grounds of bad faith. The Board found sufficient evidence to support the cancellation applicant’s claims regarding the proprietors’ conduct at the time of the trademark filing.

However, following this decision, the EUTM proprietors brought the case before the EU’s General Court, initiating proceedings on May 25, 2022. This appeal led to a significant reassessment of the case.
 

General Court decision in Case T-312/22

On May 25, 2022, the EUTM proprietors filed an action before the General Court of the European Union, contesting the Second Board of Appeal’s decision of March 16, 2022. The case was registered as T-312/22.

The EUTM proprietors requested the annulment of the board’s decision and argued that the finding of bad faith was unfounded.

On September 6, 2023, the General Court delivered its judgment, annulling the decision of the Second Board of Appeal. The court ruled that the evidence provided was insufficient to substantiate the claim of bad faith. The key findings included:

1. Lack of evidence for bad faith: The General Court held that the evidence submitted by the cancellation applicant and relied upon by the Second Board of Appeal did not adequately demonstrate that the EUTM proprietors acted in bad faith at the time of filing the trademark application.
2. Nature of the relationship: The court emphasised that neither the cancellation applicant nor the EUIPO had established the existence of an equal partnership or an unwritten joint venture between the parties that would impose a fiduciary duty on the EUTM proprietors. The absence of a signed agency or partnership agreement further weakened the case for bad faith.
3. Ownership and contributions: The court found that the cancellation applicant had not provided sufficient proof of its contributions to the creation or ownership of the contested trademark. It noted that the EUTM proprietors had acquired the relevant copyrights for logo design and had initiated the trademark registration independently.
4. Insufficient legal basis: The General Court criticised the Second Board of Appeal for failing to identify a clear legal basis under EU or national law to substantiate its conclusions regarding the fiduciary obligations and mutual confidence between the parties.

The General Court annulled the Second Board of Appeal’s decision and ordered that the contested EUTM was to remain valid, overturning the previous findings of invalidity.
 

Conclusion of the Fourth Board of Appeal

Following the General Court's binding judgment in T-312/22, the case was reassigned to the Fourth Board of Appeal. On November 12, 2024, the Fourth Board issued its decision in compliance with the court's findings.

The board annulled the Cancellation Division’s decision and rejected the application for a declaration of invalidity, confirming the validity of the contested EUTM, "Red Brand Chicken," for all goods and services.

The Fourth Board’s decision brought the dispute to a final resolution, as the General Court’s judgment established that the evidence on record did not support allegations of bad faith against the EUTM proprietors.

This is a co-published article, originally published on WIPR. Read the full article here.