What You Need to Know
- Key takeaway #1Bad faith and the other grounds for invalidity set out in the EU Trademark Regulation operate independently and can be invoked simultaneously.
- Key takeaway #2There is bad faith where a trademark is registered with the actual intention of obtaining an exclusive right on a sign for purposes other than those falling within the functions of a trade mark, such as extending the protection for a technical function that was previously protected by a patent.
- Key takeaway #3As the applicant’s intention is assessed at the time of filing of the trademark, circumstances which are discovered after the filing and which negate the technical effect may not be taken into account to assess the applicant’s bad faith.
Background
The Court of Justice of the European Union (CJEU) recently delivered its judgment in the CeramTec case (C-17/24).
CeramTec develops ceramic products, including a pink-coloured hip-replacement implant. CeramTec obtained a European patent because the chromium oxide, which produces the pink colour, was thought to ensure the hardness of the ceramic balls of the implant. After the patent expired, CeramTec applied for the registration of three EU trademarks, pictured below:
| EUTM No. 010214195 (colour) | EUTM No. 010214112 (figurative) | EUTM No. 010214179 (3D) |
Upon registration of the trademarks, CeramTec initiated infringement proceedings against its competitor Coorstek, alleging that Coorstek copied the pink colour on similar products. Coorstek filed a counterclaim for cancellation of the trademarks, arguing that the trademarks were registered in bad faith because they were aimed at extending CeramTec’s monopoly on the technical solution that was no longer protected by a patent.
During those proceedings, it was discovered that the chromium oxide did in fact not have the technical effect as described in the patent. CeramTec then argued that the intention to protect a technical function with a trademark should be assessed under the absolute ground that prohibits the registration of a sign that consists of the shape of a good which is necessary to obtain a technical result, rather than under the provision that states that trademarks filed in bad faith can be declared invalid.
The case went all the way to the French Cour de Cassation, who raised three preliminary questions with the CJEU.
Ruling of the CJEU
Question 1: The Overlap Between the Functionality Exclusion and Bad Faith
With its first question, the French Supreme Court wanted to know whether, as CeramTec argued, there is a mutual exclusivity between (a) the absolute ground for invalidity now set out in Article 7(1)(e)(ii) of Regulation 2017/1001 (EUTMR) prohibiting the registration of a sign which consists exclusively of the shape of a good which is necessary to obtain a technical result and (b) the absolute ground for invalidity now set out in Article 59(1)(b) of the EUTMR prohibiting the registration of a sign that was applied for in bad faith.
The CJEU states that the two grounds are independent from each other and must not be examined in any order of priority. According to the CJEU, the grounds serve different purposes as the functionality exclusion specifically serves to prevent the use of a trademark to artificial extend the monopoly previously conferred by a patent, whereas the bad faith exclusion aims to ensure fair competition among economic operators more generally and to penalise an inherent defect in the trademark application rather than in the trademark itself.
Therefore, the CJEU decided that these invalidity grounds are not mutually exclusive and may be invoked and considered simultaneously.
Question 2: The Relevant Factors to Assess Bad Faith
The second question aimed to understand whether a finding of bad faith can be based solely on the applicant’s opinion that the trademark is suitable to protect a technical solution that was previously protected by a patent, irrespective of whether the sign effectively consists exclusively of a shape that is necessary to obtain a technical result.
The CJEU reiterates that bad faith requires a dishonest state of mind or intention with respect to the trademark application. The Court indicates that this will be the case if a trademark owner has filed the trademark 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 on a sign for purposes other than those falling within the functions of a trade mark.
As always when it comes to factual questions, the Court states that this intention must be determined by taking into account all objective circumstances of the case at the time of the trademark application. The CJEU clarifies that the applicant’s opinion that the trademark is suitable to protect a technical solution previously protected by a patent is a relevant factor to establish such dishonest state of mind or intention, but that it cannot be the only one. Other factors that should be considered are:
“[T]he 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.”
In other words, the applicant’s opinion that the trademark corresponds to a technical feature that was previously patented will not automatically imply bad faith, but it is a relevant factor. The CJEU clarifies that the circumstance that the sign does in reality not consist exclusively of a shape that is necessary to obtain a technical result, is irrelevant for the bad faith analysis.
Question 3: The Timing of the Assessment of Bad Faith
Finally, the Cour de Cassation asked whether bad faith is to be excluded when circumstances discovered after the filing of the application show that the trademark applied for does in fact not fulfil the technical function previously believed.
The CJEU’s answer is clear: while circumstances which arise after the filing may serve as indications of the applicant’s bad faith at the time of the application, circumstances which the parties only discovered after the filing but which already existed at the time of filing qualify as post factum evidence which cannot be taken into account to assess the applicant’s intention. This is consistent with the well-established principle according to which bad faith is assessed at the time of filing the application.
Hence, the circumstance that the applicant believed that the sign produced a technical effect and filed a trademark application to extend its former patent monopoly may be sufficient to qualify as bad faith. The fact that it is later discovered that the sign does not actually produce such technical effect is irrelevant to assess the applicant’s intention at the time of filing.
Application by the French Cour de Cassation
Applying the aforementioned ruling of the CJEU to the case at hand, the Cour de cassation issued a judgment in the CeramTec v. Coorstek case on 7 January 2026. The court confirmed that the circumstance that CeramTec believed the pink colour to fulfil a technical function at the time of the trademark application sufficed to establish bad faith, and that the later studies produced by CeramTec to prove the absence of a technical function were irrelevant to assess its bad faith. As the Cour de cassation sided with the Paris court of appeal and rejected CeramTec’s appeal in Cassation, the decision is final.
Conclusion
The CeramTec judgment is pivotal for businesses considering between patent and trademark protection. The judgment indicates that a party who tries to extend the protection of technical features of its product via trademarks after the patent expired, risks losing such trademarks. This risk remains even if it is later apparent that the features have no technical effect.
For further information, please contact:
Edward Taelman, Partner, Crowell & Moring
etaelman@crowell.com
