In its latest ruling (I ZB 6/25 of the 11th of September 2025), the Federal Court of Justice (BGH) has provided important clarifications on the requirements for bad faith in a trademark application, which are of great practical relevance for all companies and brand strategists.
At the heart of the proceedings was the cancellation action against the German word mark “Testa Rossa” (registered in 2013) of an entrepreneur from the toy and model car industry, which was challenged by a well-known Italian sports car manufacturer (owner of earlier “Testarossa” trademarks) on the grounds of bad faith registration.
The most important findings for practice:
1. Intent to obstruct is a mandatory prerequisite:
For a trademark application to be considered made in bad faith, the applicant must have had the intent to cause damage or obstruction with regard to third-party interests. However, it is sufficient for this intent to be directed at third-party interests in general; a reference to a specific third party is not required.
2. High hurdles for proving bad faith (burden of proof)
The burden of proof or determination that a trademark was registered in bad faith lies with the party requesting cancellation.
- The plaintiff in the cancellation action must present conclusive and consistent objective circumstantial evidence that refutes the presumption of good faith on the part of the trademark owner.
- Only when such circumstantial evidence is presented does the trademark owner have to respond: They must provide plausible explanations for the objectives and economic rationale behind the application.
3. Licensing intention is not an “inappropriate” application
The application for a trademark for speculative purposes may constitute bad faith, in particular the hoarding of a large number of trademarks without any serious intention to use them in order to overwhelm third parties with claims.
However, the planned use of the trademark by way of licensing by the applicant does not constitute inappropriate use.
- The Federal Court of Justice clarifies that even if a trademark is licensed, it is still used in accordance with its main function – the function of indicating origin.
- At the time of application, the applicant does not need to know or specify how they will use the trademark, as they have a five-year grace period for use.
4. Relative grounds for refusal are not sufficient
The mere fact that a sign is highly similar or identical to a well-known earlier trademark, or that the applicant wishes to profit from the reputation of another’s trademark (“free riding”), is not sufficient in itself to establish bad faith.
Conclusion:
The decision strengthens legal certainty for trademark applicants who may wish to develop future licensing transactions or new business areas. It emphasises that the assumption of bad faith in trademark law requires a subjective element (intent to obstruct) and places high demands on the evidence, which lies primarily with the requester. This shifts the burden of proof for the assumption of bad faith significantly to the side of the earlier trademark owner. This obviously also applies to well-known trademarks.