Zenith CC&P Current Awareness

Opposing a Trade Mark on the Ground of ‘Bad Faith’: What does ‘Bad Faith’ mean?

18 November 2016

Paul Stephenson

The most common ground for a trade mark owner opposing the registration of a trade mark applied for registration by a competitor is that the applied for mark is too “similar” to the trade mark owner’s mark (or “sign” to use the correct terminology of the Trade Marks Act 1994 (“TMA”)) and/or the applied for trade mark is for the same or similar goods and/or services as those provided by the trade mark owner. This assertion is then combined with an allegation that the applied for mark will, when in use, be likely to lead to deception and confusion. The governing law here can be found in section 5(1)-(4) of the TMA.

What, however, is the position where the applied for trade mark is used or proposed to be used on goods that are (or arguably are) not similar. The trade mark owner may want to prevent the use and registration of that trade mark to prevent rights in his own mark from being “diluted” to use American trade mark terminology. The concept of dilution is explained pithily at paragraph 37 in the opinion of the Advocate General in Adidas v Fitnessworld [2004] E.T.M.R. 10:

“…if you allow Rolls Royce restaurants and Rolls Royce cafeterias, and Rolls Royce pants, and Rolls Royce candy, in 10 years you will not have the Rolls Royce mark any more…”.

The ground for objecting to the applied for mark under section 5(3) TMA in relation to non-similar goods or services depends on proof by the opponent that applicant for the identical/similar trade mark has “without due cause” taken “unfair advantage of, or [been] detrimental to , the distinctive character or repute of the earlier [opponent’s] trade mark”.

Section 3(6) TMA

The section allows for an opposition on the ground of bad faith but the circumstances where reliance could be placed on this section are limited. It would not apply to the Rolls Royce scenario posited in Adidas (above) unless there are some additional wholly exceptional facts. In other words, section 3(6) is not ordinarily a “further or in the alternative” provision to section 5(3).

So when can “bad faith” apply? 

In the UK the accepted description of “bad faith” is to “…apply an objective standard, namely acceptable commercial behaviour observed by reasonable and experienced persons in the particular commercial area…” (per Kerly’s Law of Trade Marks and Trade Names 15th ed. at 8-253). It follows from this description that to equiparate “bad faith” with “fraud” sets too high a benchmark even though official Registry letters adhere to this equivalence. The writer would argue that if the legislature had wanted to make ‘bad faith’ and ‘fraud’ synonyms, s. 3(6) would have used the word ‘fraud’.

The determination of whether there is ‘bad faith’ involves a consideration of “…the applicant’s intention at the time when he files the application for registration”. (BRUTT Trade Marks [2009] R.P.C. 19 AT [41]). Specific instances of ‘bad faith’ aside from questions as to true ownership of the marks are listed by Kerly at 8-279 as:

(a) Applications for “overly wide” specifications of goods and/or services;

(b) Issues concerning a bona fide intention of the part of the applicant to use the trade mark;

(c) When the mark applied for differs to the actual mark being used.

It will be noted that the examples propounded by Kerly represent alleged bad attributes of the applied for mark itself: the ‘bad faith’ does not deal with the complained relationship between that applied for mark and the Opponent’s trade mark.

By way of illustration, under the law pre-1994, NERIT was registered as a trade mark for cigarettes. The mark used was the unregistrable, being laudatory, MERIT. Although some use had been made of NERIT, such use – for apparently 1 million sticks of cigarettes –  was held not to be genuine use being use calculated only to protect the trade mark registration. NERIT was described as a “ghost mark” and consequently removed from the Register.

And the point is….

An Opponent who wishes to use ‘bad faith’ as a ground or one of the grounds for opposing another’s trade mark application should (depending, of course, on the circumstances) stand their ground if the Registrar asserts that ‘bad faith’ exists only if there is fraud. This, it is submitted, is wrong. A word of caution: modern practice is to demand a good deal of detail in the pleadings and this stricture is emphasized in ROYAL ENFIELD Trade Mark [2002] PRC 24 at [31]:

An allegation of bad faith “…should not be made unless it can be fully and properly pleaded and should not be upheld unless it can be distinctly proved and this will rarely be possible by a process of inference”.

Current Awareness

By the CC&P team