Bulgarian courts open door to invalidating trade marks registered in bad faith based on earlier foreign rights
A Bulgarian court decision has resulted in a precedent-setting trade-mark dispute. The CMS team in Bulgaria, comprising Anna Tanova, Partner, and Maxim Hristov, Senior Associate, has secured a landmark victory for a food manufacturer in a precedent-setting trademark dispute before the Bulgarian courts. This successful outcome forms part of CMS's EU-wide enforcement efforts, led by Dr. Carsten Menebröcker, Partner and Global Co-Head of the CMS Intellectual Property Practice Group, and Claudia Böhmer, Counsel.
Despite the absence of prior registration or use of the senior mark in Bulgaria or the EU, the case resulted in the invalidation of a Bulgarian trade mark that had been registered in bad faith.
The dispute concerned a sign, which the claimant has used for decades in connection with rice products. The Bulgarian courts unanimously found that the defendant had acted in bad faith when filing for a national trademark that reproduced the essential elements of the claimant’s earlier mark.
Background: copying a long-standing international brand
The claimant demonstrated that it had been using the sign as an international brand for many years, providing evidence dating back to the mid-20th century and registrations in multiple jurisdictions worldwide.
In 2019, however, when the contested filing was made in Bulgaria, the mark had not been registered or used on the Bulgarian market and did not enjoy formal EU-wide protection.
The defendant applied for and obtained registration of an identical or highly similar combined mark for rice products. The claimant initiated proceedings, seeking a declaration that the filing had been made in bad faith, as well as the consequent invalidation of the registration.
Decisions of the Bulgarian courts
First instance: the Sofia City Court upheld the claim and found that the defendant had acted in bad faith when filing the application. The following was central to the court’s reasoning:
- High degree of similarity: expert evidence confirmed that the marks were visually, conceptually and phonetically highly similar with the earlier sign effectively incorporated into the later mark.
- Implausibility of independent creation: the court accepted that the mark could not have been created independently due to its distinctive composition and design.
- Commercial intent: the filing was deemed to be aimed at benefiting from the reputation of the earlier brand and at preventing the claimant from entering the market.
The court concluded that the defendant’s conduct departed from honest commercial practices and constituted bad faith within the meaning of the law.
Court of Appeal: the Sofia Court of Appeal confirmed the first-instance judgment in full regarding liability.
The appellate court clarified the following key legal issues:
No requirement for use in Bulgaria: the court explicitly held that the prior mark need not have been used in Bulgaria for the claimant to have standing. The judicial panel confirmed that a mark protected and used abroad may serve as the basis for invalidating a later Bulgarian mark filed in bad faith.
Bad faith inferred from objective circumstances: where marks are highly similar, knowledge of the earlier mark can be inferred without direct evidence linking a specific individual to the filing decision.
The court emphasised that bad faith exists where a party knowingly seeks to appropriate a sign used by another party to benefit from its commercial reputation or to prevent its expansion.
Supreme Court: the Supreme Court ultimately refused to admit the case for cassation review, thereby rendering the decisions final.
Key takeaways and the trade-mark practice
This case is particularly significant for Bulgaria for the following reasons:
- the principle of territoriality is not absolute: foreign marks – even if unregistered and unused locally – may be used to challenge later filings where bad faith is proven;
- local use of the earlier mark is not paramount in deciding whether a foreign trademark owner is entitled to seek protection against bad-faith filings in Bulgaria;
- the absence of direct evidence demonstrating a specific individual's subjective knowledge does not preclude a finding of bad faith.
Practical implications
The case confirms the robust protection regime against abusive trade-mark filings in Bulgaria. Brand owners have the following protections:
- enhanced ability to challenge opportunistic registrations, even in jurisdictions where their marks are not yet registered; and
- greater confidence in relying on global brand reputation and prior use abroad as part of their enforcement strategy.
For market entrants, the decision also serves as a warning against parasitic filings.
Conclusion
This ruling represents a milestone in Bulgarian trade-mark jurisprudence. By confirming that bad-faith filings cannot hide behind the territoriality principle, the courts have materially strengthened the position of legitimate brand owners and brought Bulgarian practice more closely into line with EU principles on unfair conduct in trade-mark registration.
For more information on these rulings and trade-mark law in Bulgaria and the EU, contact your CMS client partner or the CMS experts who contributed to this article.
