Judgment of the Court of Justice of June 19, 2025, (C-17/24)
1. Facts
CeramTec GmbH is a German company that manufactures ceramic components for medical prostheses. The company held a patent for a ceramic material colored with chromium oxide, which expired in August 2011. Shortly after the patent expired, CeramTec filed three EU trademark applications—a color trademark, a figurative trademark, and a three-dimensional trademark—all of which were linked to the Pantone 677C pink color characteristic of its products, as detailed below:
| Color Mark | Figurative trademark | Three-dimensional trademark |
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Coorstek Bioceramics LLC is a U.S. company that manufactures advanced technical ceramic medical components, particularly for hip and spinal prostheses:
CeramTec sued Coorstek Bioceramics LLC for trademark infringement and unfair competition, while Coorstek filed a counterclaim seeking to invalidate the trademarks on two grounds: that the mark consisted of a shape necessary to achieve a technical result, and that the applicant had acted in bad faith.
The Paris Court of Appeal invalidated the contested trademarks, finding that CeramTec had acted in bad faith when filing the application for registration, as it sought to extend the technical monopoly previously granted by the patent. CeramTec appealed to the Cour de cassation, which referred three questions to the Court of Justice for a preliminary ruling regarding the interpretation of the grounds for absolute invalidity set forth in Article 52(1) of Regulation 207/2009: (i) whether the grounds for invalidity are independent and mutually exclusive, (ii) whether bad faith can be established without proving functional equivalence, and (iii) whether facts occurring after the filing of the application can be considered to establish bad faith.
2. Statements
The Supreme Court concluded that the two grounds for absolute nullity are independent and not mutually exclusive. Each has a distinct nature and may be applied without depending on the other. The ground based on functional form protects the public interest by preventing perpetual technical monopolies, while bad faith sanctions unfair conduct in the competitive process.
The Supreme Court clarified that bad faith may be found even when the grounds for denial based on functional form do not apply. Factors relevant to determining bad faith include the nature of the contested trademark, the origin and use of the sign, the scope of the expired patent, commercial logic, and the chronology of events.
Thus, the Supreme Court held that bad faith must be assessed based on the applicant’s intent at the time the application was filed. Subsequent events may serve only as circumstantial evidence but cannot alter that intent if the applicant was unaware of them at the time. Consequently, only the factors that actually influenced the applicant’s intent on that date can serve as the basis for a finding of bad faith.
3. Comment
The ruling establishes that the grounds for absolute invalidity must be interpreted in light of the underlying spirit of the European trademark system, thereby preventing their use for purposes unrelated to their nature. The autonomy among the grounds for invalidity makes it possible to sanction strategic conduct that, although not strictly falling under Article 7(1)(e)(ii), violates the logic of the system. This prevents the applicant from asserting the absence of functional form as an argument to circumvent the finding of bad faith.
The fact that these grounds are not mutually exclusive allows both to serve as complementary mechanisms for safeguarding the public interest and fair competition. If a company attempts to prolong a technical monopoly after a patent expires, its trademarks may be subject to the bad faith ground, even if the owner subsequently proves that the sign is not purely functional.
The ruling provides courts and the EUIPO with greater flexibility when declaring invalidity, avoiding restrictive interpretations. For economic operators, it reinforces the obligation to act in good faith in legal transactions, reiterating that trademark registration should not be used to hinder competition.
Thus, a broad interpretation of the concept of bad faith is established, focusing the analysis on the applicant’s actual intent rather than solely on the configuration of the mark. However, it leaves open the issue of proof of such intent, which remains a subjective element that must be demonstrated through circumstantial evidence. The Court of Justice thus confirms the presumption of validity of the trademark and the requirement that the party alleging bad faith provide reasonable evidence to support that claim. It is then up to the applicant to demonstrate that the contested registration was part of a legitimate business strategy. Thus, even if the trademark fulfills its function as an indicator of origin, it may be invalidated if the intent behind its filing was dishonest.
Pamela Olivos, Associate, Trademark Practice Group