Pollo Tropical CTM Not Applied For in Bad Faith 

Background to the proceedings

By way of background, having first started its commercial activities in 1991, Carrols Corp (the applicant) operates a chain of restaurants in the US under the name ‘Pollo Tropical’. The intervener is the proprietor of a Spanish national trade mark registration for the sign ‘Pollo Tropical CHICKEN ON THE GRILL’, which was applied for in June 1994, some two months after the applicant had applied for a US trade mark registration of an identical sign. Both parties hold registrations for this sign, albeit in different territories.

In April 2004, the intervener registered the mark as a CTM in Classes 25, 41 and 43. The applicant sought a declaration of invalidity, relying on its previously mentioned US mark and its earlier UK trade mark registrations: ‘Pollo Tropical CHICKEN ON THE GRILL’ (registered in Class 42 covering food and drink) and ‘POLLO TROPICAL’ (also registered in Class 42 covering food and drink).

The proceedings

Cancellation Division

The applicant argued that 1) there existed a likelihood of confusion between the mark and the UK registrations and 2) the intervener’s application had been made in bad faith as it was aware of the well-known character of the applicant’s US mark. The Cancellation Division dismissed the request on the basis that 1) in relation to a likelihood of confusion, the applicant had not (upon request) shown any genuine proof of use in respect of the UK registrations and 2) in relation to bad faith, the Mark and the Spanish national registration were linked by a ‘commercial trajectory’ and so, the two-month difference in time between the date of the US and Spanish national trade mark registrations was too short a period to hold that there had been bad faith. The Division also added that bad faith was neither proven by the intervener’s offering for sale of the mark to the applicant at a fixed price nor by the fact that the two marks were identical and related to the “same scope of application”.

First Board of Appeal

Despite the applicant’s appeal, the decision of the Cancellation Division was upheld, with the First Board of Appeal similarly holding that no evidence had been produced showing the applicant’s use of the UK registrations and that none of the presented factors established that the intervener’s application for the mark had been made in bad faith.

Decision of the General Court

The applicant made a further appeal to the General Court, relying on the single plea in law that the application was made in bad faith. In consideration of the parties’ submissions (and in dismissing the action), the General Court held the following:

1. No sufficient evidence had been given as to the well-known character of the applicant’s US mark which may have led to the conclusion that the intervener had knowledge of the applicant’s commercial activities and therefore made the application in bad faith;
2. No evidence was produced to show that the intervener had no intention to use the mark, which may have given rise to the conclusion that he only sought its registration for the purpose of preventing the applicant marketing its services;
3. No prior relationship between the parties was made out on the evidence presented which might have explained the intervener’s purported bad faith;
4. The offering for sale of the mark by the intervener to the applicant did not give rise to a conclusion that the intervener was acting in bad faith at the time of the application; and
5. The identical nature of the marks and goods/services was not of itself, sufficient to prove bad faith.

Useful links

Full text of decision T-291/09