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A recent trademark decision in Hungary clarified ‘against the public order’ as an absolute ground for refusal. Dr Judit Lantos and Dr Ildiko Komor Hennel of Sár and Partners – Danubia Patent & Law Office report on how the case proceeded
The Budapest-Capital Regional Court has recently issued an interesting decision about a rarely used prohibitive stipulation of the Trademark Act. Essentially, the court ruled that a trademark application for the word mark ‘Police’ for certain commercial services is not against the public order. This decision clearly interprets the notion of “being against public policy or order” and draws attention to the importance of procedural questions and details emerging in a case.

Police is a prominent luxury brand whose trademark is widely known and used, primarily for eyewear. An international trademark application for the word mark ‘Police’ was filed in Hungary in class 35, which covers goods and services such as eyewear and optical products, perfumery and beauty articles, leather goods, and clothing and footwear. The international trademark designated several countries, including Hungary.

The Hungarian Intellectual Property Office (HIPO) issued a provisional refusal based on Article 3(1)(a) of the Hungarian Trademark Act, which states that a mark may not enjoy trademark protection if it is against the public order. This section fully corresponds to EU trademark law, in which it is stipulated that trademarks that are contrary to public policy or accepted principles of morality will not be registered, as they form an absolute ground for refusal.

The trademark applicant only learned about this unfavourable development when it received the final refusal from the World IP Organization (WIPO). In response, the applicant filed a very detailed appeal against the refusal but in spite of all reasoning and evidence, HIPO rejected the trademark application.

The applicant filed an appeal against the unfavorable decision at the Budapest-Capital Regional Court. In its petition, the applicant referred to the fact that it did not receive the provisional refusal from HIPO, as well as it submitted a defence on the merits. The Budapest-Capital Regional Court did not accept the fact that the provisional refusal was not received by the applicant and upheld the decision rejecting the trademark application.

At this stage of the proceeding, the case was transferred to our offices, Sár and Partners and Danubia Patent & Law Office, from a competing law firm.

The case was brought to the Court of Appeal, which accepted the applicant’s arguments and ordered HIPO to carry out the examination procedure once again, now in possession of the reply of the applicant. Key evidence was a declaration from WIPO that stated that the agency had sent the provisional refusal to the applicant, but no record existed of the applicant receiving it, because delivery records were only kept for six months, which had since elapsed. This was important because the rules stipulate that the burden of proof lies with the sender in confirming delivery, rather than the applicant in confirming receipt.

The Court of Appeal accepted these arguments and annulled the decision of HIPO and the first instance Budapest-Capital Regional Court. The case was sent back to HIPO for re-examination. But in its new decision, HIPO again established the existence of being against the public order and rejected the trademark application.

HIPO did not accept several arguments to the contrary, including that the same trademark was registered in several countries, it enjoys a good reputation and has been intensively used for decades. According to HIPO, the question of good reputation has no relevance when deciding the question of public order.

On appeal, the applicant drew the attention of the court to the difference between its activities and those of the Hungarian police. The applicant also pointed out that ‘police’ is an English word and not used to describe Hungarian security organisations. The applicant also referred to the fact that it has received trademark protection in several countries, including where English is the official language, and that ‘police’ has also been used in different contexts, such as in the case of the famous band, Police. Also, the applicant stated that it has been using the ‘Police’ for a long time, uncontested, while consumers have become familiar with its products and brand.

The fact that both the domain name owned by the applicant, policelifestyle.com, and the domain of the Hungarian state defence organisation, police.hu, contain ‘Police’ made it very challenging for the applicant to form a defence strategy against the public order argument of HIPO.

But the Budapest-Capital Regional Court accepted the arguments of the applicant and obliged HIPO to register the trademark. Even though HIPO examined the use of the designation with regard to being against the public order, the Budapest-Capital Regional Court made a clear standpoint that it is the designation itself that should be capable of, per se or implicitly, being against the public order by its direct meaning or by way of association.

Since the Trademark Act does not provide a definition for the notion of “public order”, this excluding ground for registration should be applied in the narrowest possible terms and only if the mark’s meaning hinders the applicant in a specially reasoned case to have an exclusive right to have trademark protection for the designation.

It also has to be taken into account that the designation has been widely used and has a good reputation. According to the court, the use of ‘Rendőrség’, the name of Hungary’s civil law enforcement agency, could be against the public order since it is generally accepted that one may not use the name of state bodies for commercial purposes.

But in this case, ‘Police’ is not the same as ‘Rendőrség’. The court also took the fact into consideration that if in other countries, especially where the name of the state defence body is the same as the designation, the designation is not considered against the public order, this cannot be otherwise in Hungary.

As this absolute ground of refusal was dismissed, HIPO continued the registration procedure of the trademark and issued its final statement granting protection.

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