Malcolm ZoppiThu Dec 28 2023

What is the Bad Faith Principle in UK Trademarks? Understanding its Impact on Registration and Litigation

In the context of UK trade mark law, the concept of bad faith plays a critical role in the protection of intellectual property. Bad faith refers to dishonest intention or a lack of sincerity when filing a trade mark application with the intention to deceive or secure an unfair advantage. This principle is designed to […]

In the context of UK trade mark law, the concept of bad faith plays a critical role in the protection of intellectual property. Bad faith refers to dishonest intention or a lack of sincerity when filing a trade mark application with the intention to deceive or secure an unfair advantage. This principle is designed to preserve the integrity of the trade mark register and to ensure that the trade mark system isn’t misused. Understanding what constitutes bad faith can be complex, as it requires an assessment of the applicant’s intentions at the time of the application. Bad faith principle is extremely difficult to prove and a very complex area of law. 

The legal framework for identifying bad faith in the UK is informed by case law, with specific instances setting precedents for what is considered improper conduct. Trade mark registrations obtained in bad faith are susceptible to legal challenges which can lead to invalidation or refusal of the mark. 

Key Takeaways

  • Bad faith in trade marks refers to dishonest intent in the application process.
  • Legal challenges can invalidate registrations obtained in bad faith.
  • The principle protects fair competition and the integrity of the trade mark system.
  • Bad faith is complex and difficult to prove. 

Fundamentals of UK Trade Mark Law

Understanding the basics of UK Trade Mark Law is paramount if you’re considering protecting your brand in the UK. This legislation sets the framework for trade mark registration, protection, and enforcement.

Definition of a Trade Mark

A trade mark is a symbol, word, or combination that distinguishes your goods or services from those of others. In the UK, a trade mark can be anything that illustrates your brand identity, such as logos, slogans, and even unique packaging features. It’s crucial for these markers to be distinctive, capable of graphical representation, and not deceptive or against public policy.

The Trade Marks Act 1994

The Trade Marks Act 1994 is the primary legislation governing trade marks in the UK, encompassing the registration process and defining infringement. It stipulates that registered trade marks must be used within five years to avoid revocation and provides defences against infringement claims. The Act also outlines the grounds for bad faith applications, specifying that a mark may be refused registration or deemed invalid if applied for in bad faith.

Understanding Bad Faith in Trade Marks

When you engage with trade mark law in the UK, the term ‘bad faith’ is crucial, touching on both legal principles and trade mark applications. It’s centred around the notion of dishonesty and a departure from acceptable commercial standards.

Legal Concept of Bad Faith

Bad faith, a broad concept in trade mark law, involves dishonest intent or the lack of honest intentions in your actions. Bad faith is not simply a subjective state of mind—it’s considered in the context of what a reasonable person would deem below acceptable commercial behaviour. An action is generally carried out in bad faith when you, as the applicant or owner of a trade mark, act with deceit or a plan to mislead.

Bad Faith and Trade Mark Applications

In the realm of trade mark applications, bad faith plays a specific and pivotal role. A claim of bad faith can arise if you attempt to register a trade mark with dishonest intentions or in a manner that falls short of honest commercial practices. 

Bad Faith in the Registration Process

Bad faith during the trademark registration process is a severe concern as it involves the intentional deception or dishonest behaviour by an individual or entity attempting to register a trademark.

UKIPO and EU Examination

When you apply for a trademark registration in the UK, the UK Intellectual Property Office (UKIPO) conducts a thorough examination to ensure that your application does not contravene any laws or regulations, including those related to bad faith. Similarly, for European Union Trade Marks (EUTMs), the European Union Intellectual Property Office (EUIPO) performs an examination where the intention behind the application is scrutinised. If either office suspects that your trademark application is filed with bad faith, it might challenge the viability of your registration.

Opposition and Invalidation Chapters

After your trademark application is published, there may be an opposition period. This is when third parties can challenge your application on various grounds, including an allegation of bad faith. Should your registration succeed but later face accusations of bad faith, there could be an invalidation procedure. Both the UKIPO and EUIPO have established frameworks for managing opposition and invalidation proceedings. During these, the appointing person, typically a registrar or hearing officer, will assess whether the opposed registration, based on the specifications provided, was indeed registered with bad faith. If proven, the challenged trademark can be invalidated, removing the legal rights conferred by the registration.This is similar to the marriage concept – “speak now or forever hold your peace.”

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Specific Cases and Judicial Interpretation

In the realm of UK trademarks, the principle of bad faith plays a pivotal role and has been shaped significantly by landmark cases and judicial scrutiny. The following explanations explore key cases and how courts interpret bad faith within trademark law.

Key Bad Faith Cases

Your understanding of bad faith in UK trademark law should start with recognising the impactful cases that have set precedence. Notably, a series of disputes have served to refine the definition and application of bad faith. These cases have created case law that provides concrete examples aiding legal professionals and trademark owners to understand what constitutes bad faith.

SkyKick UK Ltd Precedence

A case that merits your attention is Sky v SkyKick, where Sky accused SkyKick of trademark infringement, claiming SkyKick’s use of the name was violating their UK and EU trademarks. Key to this dispute was whether Sky had acted in bad faith when registering trademark rights for a broader array of goods and services than they intended to use. The judgments provided in this case have significantly influenced subsequent decisions and how bad faith is assessed in the UK.

Bad faith is a subjective state—an intention incompatible with accepted standards of honest or ethical conduct—which is ascertainable from objective evidence, and which must be assessed case by case” – (Lindt case). The test was whether or not the applicant was acting knowingly in a manner incompatible with accepted standards of honest or ethical conduct:

  • bad faith requires at least, knowledge of the circumstances from which incompatibility with accepted standards of honest or ethical conduct may be deduced
  • whether the trade mark applicant possesses such knowledge is an issue which may be determined by reference to the common state of knowledge in the economic sector concerned, if direct evidence is lacking
  • an intention to prevent competitors from continuing to use unregistered signs which they have hitherto been entitled to use and to defend against competition from other such signs is indicative of bad faith (Lexis).

Interpretation by the Court of Justice of the European Union

When you delve into how bad faith is interpreted, it’s crucial to consider the role of the Court of Justice of the European Union (CJEU). While UK courts have jurisdiction over national matters, the interpretations by the CJEU, especially relating to EU trademarks, have a profound impact by setting broad principles which UK courts may take into consideration when evaluating bad faith. The General Court and Court of Appeal often refer to CJEU’s precedents to guide their judgments in complex trademark disputes.

Impact on Brand Owners and Third Parties

In the realm of UK trade mark law, bad faith can significantly influence your rights as a brand owner and presents a critical aspect for third parties to consider when interacting with registered marks.

Rights and Limitations of Brand Owners

As a brand owner, you are entitled to protect your trade marks from infringement and dilution. However, your conduct during trade mark applications is governed by the principle of good faith. If your application or use of a trade mark is perceived to be in bad faith—perhaps because you intend to block a competitor without a legitimate reason, or you apply for a similar mark with no intention to use it for the relevant goods and services—you risk facing an opposition or an invalidity action. Should evidence of bad faith be established, it can result in your registration being declared invalid, severely limiting your capacity to secure an injunction against others.

Third Party Challenges and Concerns

For third parties concerned with an existing trade mark, the bad faith doctrine offers a potential pathway to challenge. If you suspect a brand owner has registered their mark in bad faith—maybe you have noticed activities akin to blocking entry to the market or applications that are overly broad—you can raise an opposition. The burden rests on you to provide compelling evidence of bad faith. Bad faith is a very difficult concept to prove and you should always attempt to oppose a trade mark from being registered whilst it is published on the IPO journal or simply register the trade mark yourself, before others. 

Prominent Issues in Trade Mark Bad Faith

When considering the bad faith principle in UK trademarks, you need to be aware of specific challenges that can arise. These encompass the scope of goods and services covered, how commercial intentions are reflected in applications, and the use of names related to public figures.

Broad and Vague Specifications

In the realm of UK trademarks, specifications that are overly broad or vague can lead to allegations of bad faith. If you file for a trade mark without a clear indication of the relevant goods and services, or with a specification that excessively widens the scope, you might be accused of not having a genuine intent to use the mark in all the categories listed. This issue was notably discussed in a recent case, highlighting that such practices can be seen as a strategic move to prevent others from entering the market, even when there’s no commercial justification for the registration.

Expansion Plans and Commercial Strategy

The legitimacy of your expansion plans plays a crucial role in determining whether your trade mark application is made in bad faith. If you can demonstrate that your intentions to use the trade mark across various goods and services align with your legitimate commercial strategy, this can mitigate bad faith claims. However, lack of clarity or reasonable justification in your expansion plans may instead suggest a strategic move to monopolise markets beyond your commercial needs.

Celebrity and Personality Trade Marks

Applications by or related to celebrity football players and other public figures can be contentious when it comes to bad faith. If you seek to register a trade mark related to an individual’s personality, image, or likeness, without their consent, you risk infringing upon their right to publicity. Ensure that any trade mark registration aligns with the personality’s business strategy and does not exploit their fame without proper authorization. The principle of bad faith here guards against the misuse of a person’s attributes solely for financial gain without a genuine commercial purpose.

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Bad Faith Across Different Business Sectors

The principle of bad faith in UK trademarks affects various business sectors differently, particularly in how trademarks are applied for and enforced. The Technology and Software Industry and the sectors of Sports, Entertainment, and Merchandising face distinct challenges due to the broad nature of their goods and services, which can lead to unique bad faith scenarios.

Technology and Software Industry

In the Technology and Software Industry, companies like those in email migration or cloud storage services often have extensive portfolios of trademarks to protect their intellectual property. For example, consider a broadband provider acting in bad faith by seeking a trademark on common industry terms beyond their actual business scope, which might be viewed as a strategy to unfairly restrict competition. A landmark case is where Sky, a major broadcaster and telecoms company, litigated against SkyKick for infringing its UK and EU trademarks, an action countered on the basis that Sky’s marks were invalid due to their bad faith in overly broad applications.

Sports, Entertainment, and Merchandising

In Sports, Entertainment, and Merchandising, trademarks play a pivotal role. Imagine a scenario involving Arsenal, a celebrity football player, or a French international player, where merchandise could be at stake. Bad faith might be found where an unrelated party registers a trademark linked to a Brazilian national team or uses the name of a Barcelona player without permission, purely to capitalise on their fame and recognition by selling competing goods or services.

The misuse of trademarks can also occur in advertising. Think of a situation where iconic imagery related to freestyle footballers or skills like handball are used without proper authorisation in Nike adverts, which could potentially infringe on the trademarks of the actual right holders. Under the Trade Mark Directive in the EU and the corresponding laws in the UK, such actions may be considered to be bad faith applications, intended to profit from the established goodwill of recognised sports entities and their players.

Legal Remedies and Consequences of Bad Faith

In UK trade mark law, encountering bad faith in trade mark applications can lead to significant legal repercussions. If you’re involved in such a dispute, knowing the remedies and legal consequences can empower you to navigate the complexities of trademark infringement.

Future Perspectives on Bad Faith Legislation

In the evolving landscape of UK trade mark law, you’ll find that the directives and case law continue to shape the interpretation and application of the bad faith principle. With eyes on both domestic legislation and European Union precedents, the future of bad faith in trade marks is poised for further development.

Developments in EU and UK Trade Mark Law

The relationship between EU trademark law and UK legislation, particularly post-Brexit, is crucial in understanding future developments. The Trade Marks Act 1994 has been the cornerstone of UK trademark law, embodying the principles laid out in the EU Trade Mark Directive. However, after the UK’s exit from the EU, the courts in the UK will not be bound by future decisions of the Court of Justice of the European Union (CJEU). This divergence could lead to the UK developing its own jurisprudence on bad faith, while paying regard to past CJEU decisions as persuasive but not binding precedents.

The CJEU has played a pivotal role in clarifying the application of Article 4 of the directive, particularly concerning trademarks filed without the intention to use. With the UK’s Intellectual Property Office and courts referring to Section 3(6) of the Trade Marks Act 1994, which addresses the application for registration made in bad faith, the UK may start to see cases that shape its own standards for bad faith claims.

‘Use’ usually refers to the actual commercial utilisation of the trademark in the course of trade. This includes affixing the mark to goods or packaging, using it in advertising, and selling or importing goods under the mark. Although, in the case of One In A Million Ltd, it was found that dealing with the trade names amounted to sufficient ‘use’. 

Frequently Asked Questions

When navigating the complexities of trademark law in the UK, understanding the bad faith principle is imperative. This section addresses critical queries to clarify its application and implications.

How is bad faith determined in the context of UK trademark registrations?

In the UK, bad faith is assessed by considering the trademark applicant’s intentions at the time of their application. Evidence of dishonesty or conduct falling short of accepted commercial behaviours is indicative of bad faith. In the case of Lindt, it was found that “bad faith is seen as a subjective state—an intention incompatible with accepted standards of honest or ethical conduct—which is ascertainable from objective evidence, and which must be assessed case by case… Bad faith requires at least, knowledge of the circumstances from which incompatibility with accepted standards of honest or ethical conduct may be deduced.” (LexisNexis). 

Bad faith is very difficult to establish (rightfully so) and is usually relevant for competitors who use the other business’ trademarks against them in an anti-competitive manner. 

Can a registered trademark be invalidated on the grounds of bad faith after registration in the UK?

Yes, a trademark can be invalidated post-registration if there is compelling proof that it was registered in bad faith. This can be pursued through legal proceedings or a formal application to the IPO for a declaration of invalidity.

How much do complex intellectual property disputes cost?
Intellectual Property Enterprise Court (IPEC): In the IPEC, costs can range from £5,000 for smaller claims to £150,000 for more complex disputes. The typical cost of bringing a claim in the IPEC is between £50,000 and £200,000, and in some instances, it can be higher depending on the complexity of the case​​.

High Court: For cases heard in the High Court, the expenses can be substantially higher. It is not uncommon for costs in the High Court to exceed £500,000​​.

If I win an intellectual property dispute, how much of my costs can I recover?
The costs orders (the amount the losing party must pay to the winning side) are capped at £50,000. To recover damages, you will need to prove a loss of profits. 

Disclaimer: This document has been prepared for informational purposes only and should not be construed as legal or financial advice. You should always seek independent professional advice and not rely on the content of this document as every individual circumstance is unique. Additionally, this document is not intended to prejudge the legal, financial or tax position of any person.

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