Trade mark invalidity, bad faith and branding strategies: the case of Alexander Wang

by Federica Pigozzo

New York-based designer Alexander Wang is unquestionably one of the brightest stars of the contemporary fashion landscape and the perfect example of a rapidly burgeoning career: after starting his own label in 2005, he went from showing his first full ready-to-wear collection in 2007 to being appointed Creative Director of the historic French house Balenciaga in 2012, with the hazardous task of replacing Nicolas Ghesquière in the role. His sporty and relaxed aesthetics quickly gained him the support of critics, journalists and celebrities, turning him into the symbol of modern American style.

Following his debut on the international fashion scene, Wang first registered his brand name as a Community Trade Mark (CTM) in 2007, in the context of a commercial strategy whose aim was to protect the label’s growing value as it entered the European market. The registration was made for leather goods (Class 18), clothing and footwear (Class 25)[1]. Nonetheless, when in 2012 he filed for a subsequent registration for a number of additional classes, his request was denied with regards to Class 3, which includes perfumes, cosmetics and hair products.

This failure was due to the fact that there was an already existing registration for the same class of goods: Etincelle Paris, an obscure, unrelated company based in the British Virgin Islands, had in fact successfully registered the “Alexander Wang” mark the previous year[2].

In order to get his name back, Wang filed a request for a declaration of invalidity against Etincelle’s CTM, claiming the company had acted in bad faith at the moment of the registration according to Article 52(1)(b) of the CTM Regulation (CTMR). Both the OHIM Cancellation Division[3] and more recently the Second Board of Appeals[4] upheld the request. As a result, the mark is now pending immediate cancellation.

What makes this case particularly interesting is the main argument the applicant presented to prove his position in front of the authorities.

As already disclosed, Article 52(1)(b) CTMR states that a Community Trade Mark must be declared invalid if its proprietor ‘was acting in bad faith when he filed the application for the trade mark’.

‘Bad faith’ is an extremely broad concept and it does not have a clear legal definition. However, the Regulation’s wording clarifies that it has to be considered as one of the absolute grounds for invalidity and has to be referred to the moment in time when the application for registration took place. Moreover, in his opinion on the Lindt Goldhase case[5], the Advocate General Sharpston affirmed that bad faith appears to be an ‘inherent defect in the application’[6]. Such defect is usually associated to a conduct which does not comply with the ‘accepted principles of ethical behaviour or honest commercial and business practices’[7] and can be evaluated through a comparison between the specific circumstances of the specific case and the aforementioned standards.

The assessment on the nature of the CTM proprietor’s behaviour can therefore be classified as an overall assessment that considers all the relevant factors[8]. In particular, some of the elements that can be taken into account are the fact that the applicant should have been aware of the existence of another similar or identical mark for similar of identical goods which could have generated confusion in the marketplace; the applicant’s intention of actively preventing the other party from using such mark; the degree of legal protection comparatively granted to the two signs in question[9].

In the case hereby examined, the Board of Appeal found the evidence gathered by Wang to be compelling enough to conclude that bad faith was indeed present at the moment of the application for the registration of the mark[10]. Specifically, bad faith was inferred from a series of circumstances for which Etincelle failed to provide a plausible explanation.

Firstly, at the time of the filing Alexander Wang was widely known not only in the United States but also across the European Union, as clearly indicated by the multitude of press articles submitted by the applicant. The prestigious prizes won by the designer, his appointment as Creative Director of a European-based business and his collaboration with European artists also contributed to the evaluation. In this sense, the facts provided allowed the Board to establish a presumption of knowledge of use of the earlier sign upon Etincelle[11].

Secondly, the configuration of the sign is unique as it originates from the combination of two names that, although common if singularly considered, become unusual when put together due to the multicultural nature of the resulting compound[12].

Finally, the CTM proprietor filed for the registration of other famous fashion designers’ names, including Isabel Marant, Giuseppe Zanotti, Giambattista Valli and Christoper Kane[13]. Although such conduct does not per se prove the proprietor’s bad faith in the case here considered, it nevertheless gives a strong indication of dishonest intentions.

In light of the above, it is clear that the commercial logic underlying the proprietor’s demeanour served as a leitmotiv in the analysis performed by the Board. In the same perspective, Alexander Wang’s decision to regain control of his brand name definitely plays an important role in the context of the company’s branding strategy.

In recent years, the designer and his team have indeed been working towards extending the label’s production with the intention of repositioning the brand within a more luxury-oriented market. Facts such as Wang’s decision not to renew his contract with Balenciaga, the release of his first jewellery collection, the increase of the brand’s European production[14], the dispute regarding the registration of several domain names that incorporated his mark[15] and lastly the battle over his name in relation to fragrances and cosmetics all point to the same conclusion. Thus, it is once again possible to observe how fashion brands can take advantage of the existing IP framework to build out their goodwill, re-balance competition in the marketplace and ultimately achieve a greater degree of brand loyalty, an extremely precious yet fleeting tool in a scenario characterised by over-saturation and erratic consumer behaviour.

 

Federica Pigozzo

Associate Editor, QMJIP

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[1] www.tmdn.org/tmview/get-detail?st13=WO500000000920691

[2] www.tmdn.org/tmview/get-detail?st13=EM500000010533891

[3] http://www.ie-forum.be/www.delex-backoffice.nl/uploads/file/IEFBE/IE-Forum_be%20BHIM%2015%20oktober%202014,%20IEFbe%201099%20(Alexander%20Wang%20tegen%20Etincelle).pdf

[4] http://oami.europa.eu/eSearch/#details/trademarks/010533891

[5] Case C-529/07, Chocoladefabriken Lindt & Sprungli AG v Franz Hauswirth GbbH

[6] Opinion of the Advocate General, 12 March 2009, case C-529/07, paragraph 41.

[7] Ibid, paragraph 60.

[8] Case C-529/07, paragraph 37.

[9] Ibid, paragraph 53.

[10] Good faith is in fact presumed until evidence to the contrary is provided by the cancellation applicant.

[11] Boards of Appeals decision, paragraph 73.

[12] Ibid, paragraph 85.

[13] Ibid, paragraph 86.

[14] See http://www.businessoffashion.com/articles/news-analysis/alexander-wang-increases-european-production

[15] See http://www.wipo.int/amc/en/domains/search/text.jsp?case=D2010-2134