German Federal Court of Justice Clarifies Standards for Bad Faith Trademark Applications – BGH “Testa Rossa” (I ZB 6/25)
In its decision of 11 September 2025 (Case No. I ZB 6/25), the German Federal Court of Justice (Bundesgerichtshof – BGH) dismissed Ferrari’s appeal against the German word mark “Testa Rossa” and clarified the requirements for finding a bad faith trademark application under Section 8(2) No. 14 of the German Trade Mark Act (MarkenG) (formerly Section 8(2) No. 10 MarkenG). The ruling provides important guidance on the burden of proof, the subjective element of the offence and the interplay with relative grounds for refusal.
Background of the “Testa Rossa” Case
Ferrari, the well-known Italian manufacturer of sports cars and Formula 1 vehicles, had used the mark “Testa Rossa” as early as the 1950s for a front-engine racing car and produced the “Testarossa” series from 1984 to 1991 with more than 7,000 units built. The trademark owner – chairman of a toy and model car company with roughly 50 years of activity in the scale-model industry – had applied for the German word mark “Testa Rossa” (No. 30 2013 070 212) on 27 December 2013; it was registered on 2 March 2015 for a broad range of goods in classes 7, 8, 12, 18, 21 and 28, including bicycles, electric shavers, household appliances and toys.
Ferrari first filed an opposition in 2015 and subsequently, on 28 February 2017, a cancellation request based on bad faith. The German Patent and Trade Mark Office (DPMA) rejected the cancellation request in 2021, and the Federal Patent Court (Bundespatentgericht – BPatG) confirmed that decision on 15 January 2025. The BGH has now dismissed Ferrari’s further appeal (Rechtsbeschwerde) at the applicant’s expense.
The Three Key Holdings of the BGH
1. Intent to Harm or Obstruct Third Party Interests Is Required
An intent to damage or obstruct third-party interests on the part of the applicant is a mandatory element of a bad faith trademark application; however, a reference to a specific third party is not required. The BGH confirms that this subjective element must be assessed on the basis of the objective circumstances of the case and aligns its approach with the CJEU case law in Chocoladefabriken Lindt & Sprüngli (C-529/07), Koton (C-104/18), Sky (C-371/18) and CeramTec (C-17/24).
2. The Cancellation Applicant Bears the Burden of Proof
A party challenging the registration of a trademark in cancellation proceedings on the ground of bad faith bears the burden of demonstrating and proving the coherent and consistent indicia required to establish this absolute ground for refusal. There is a presumption of good faith on the part of the trademark owner. Only once the applicant has presented circumstances capable of rebutting that presumption does the trademark owner have a secondary burden of pleading – in particular, to provide plausible explanations regarding the objectives and economic rationale of the application.
3. A Relative Ground for Refusal Is Not Sufficient on Its Own
The mere existence of a relative ground for refusal is not sufficient to establish bad faith. However, aspects that may contribute to a relative ground for refusal can be relevant to the overall assessment of bad faith. In particular, the application for a sign that is highly similar or identical to a well-known mark may – as part of the overall balancing exercise – indicate bad faith where further circumstances support that conclusion.
The Three Case Groups of Bad Faith Applications
The BGH reaffirms and systematises the three non-exhaustive case groups developed by German case law:
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Disturbance of a protectable prior user’s acquired position (schutzwürdiger Besitzstand)
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Use of the mark’s blocking effect as a means of competitive warfare (Wettbewerbskampf)
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Application for speculative purposes (Spekulationsmarke) – hoarding of marks without a genuine intention to use
For a speculative mark, three conditions must be met cumulatively: a large number of registrations for very diverse goods and services, absence of a serious intention to use, and a clear abusive intent to obstruct third parties – for example by launching injunction and damages claims. In the present case, the BGH found that the trademark owner could not be denied a general intention to use, in particular through a licensing business model. Licensing is consistent with the essential origin function of the mark and therefore not abusive.
Well-Known Marks and “Free-Riding”
Ferrari argued that the applicant was free-riding on the reputation of the “Testarossa” mark. The BGH held that the mere existence of an earlier – even well-known – mark is insufficient to establish bad faith as an absolute ground; otherwise, the boundary between absolute and relative grounds for refusal would be blurred. The Court distinguished the case from the General Court’s “Simca” decision, emphasising that Ferrari’s “Testarossa” figurative marks remained in genuine use for “automobiles and parts thereof”, as confirmed by the final judgments of the Düsseldorf Higher Regional Court of 24 February 2022 following the CJEU preliminary ruling in joined cases C-720/18 and C-721/18.
Grace Period and Absence of Concrete Business Plans
The BGH stresses that, at the time of filing, the applicant need not know or specify exactly how the mark will be used – a five-year grace period applies. The absence of a concrete business field at the filing date does not in itself establish bad faith; rather, coherent and consistent objective indicia of a dishonest intention are required, in line with the CJEU’s Sky ruling (C-371/18).
Practical Consequences for Applicants and Trademark Owners
Conclusion: High Threshold for Cancellation on Grounds of Bad Faith
The “Testa Rossa” decision consolidates a trademark-owner-friendly line of authority: the presumption of good faith is strong, and a cancellation action will fail absent coherent indicia of an intent to obstruct at the filing date. At the same time, the door remains open: where earlier well-known marks are at stake, relative-ground considerations may contribute to a finding of bad faith within the overall assessment, provided that further incriminating circumstances are present. Owners of earlier (including well-known) marks should therefore primarily pursue opposition or infringement proceedings based on relative grounds and reserve bad faith cancellation actions for cases with a clear and robust evidentiary basis.
