Understanding Bad Faith and Trade Mark Application
Due to their value and importance, trade mark disputes are commonplace and specialist lawyers are usually required to represent the opposing parties.
In this article Stuart Southall of KANGS details what happens when trade marks are registered in Bad Faith and how this can lead to disputes over intellectual property rights.
Trade marks are an important and valuable commercial asset. They are fundamental to any business as they are what garners ‘public awareness’ of your business, whether that be goods, or services or both.
A successful trade mark has the potential to establish considerable goodwill and reputation, enabling a business to be immediately recognisable. A well-known example is the ‘Golden Arches’ displayed by a global fast food chain. Even if you do not consume their products, most people associate it with Mc Donalds and know its offerings. Similarly, the silhouette of Michael Jordan on an item of clothing is instantly identified with Nike.
Trade Mark Classification
Trade marks are designated in classes. Most systems, including the UK, follow the NICE classification system for trade marks. This allows for uniformity across most jurisdictions, a particularly helpful function when you used to be able to file a Community Trade Mark designating the UK as a ‘domestic’ Mark or you are making a Madrid Protocol Application.
Trade Marks can have the effect of creating monopolistic rights. Registered correctly, you can prevent competitors, in the course of trade, using a Mark that looks similar to, or is identical to, your Mark and is used for similar or identical goods and/or services.
The Historical ‘Broad-brush’ Approach to an Application
Until the decision handed down in Skykick UK Ltd & Another-v-Sky Ltd & Others [2024] UKSC36, when applying for trade mark protection, it was common practice for many trade mark owners to “throw everything in” in terms of specification protection.
This was thought to assist them in strengthening their brand because, in registration terms, the registration is prima facie evidence that the owner has goodwill and reputation in your brand, and that the unauthorised use of a similar or identical Mark would cause you damage, and that the resulting ‘monopoly’ would be as effective as possible during the 10-year registration period.
Whilst a broad brush of specification protection is good in theory, in practice it is now becoming subject to high profile challenges in both UK and International Courts.
Use, Enforcement and Vulnerability
As a trade mark owner, there is an obligation to ensure that your Mark is both used in the first five years of registration and reasonable steps are taken to protect them. This can often mean that where the Trade Mark owner identifies that a competitor is using a Mark, that could be reasonably construed as being similar or identical to the goods or services protected by the registration, they can send a “cease and desist” letter.
The real issue is what is claimed to be “protected by” the registration. Key and core goods and/or services are likely to be accepted, but this is not always the case. A notable example is McDonalds losing the registration relating to Chicken Big Macs following its dispute with Supermac. The “throw everything in” approach is where Trade Mark owners may encounter difficulties because they must prove that the Mark was validly registered in respect of all claimed specifications. If they cannot do so, it may be alleged that the Trade Mark owner has registered their Mark in ‘bad faith’ which can make the Mark vulnerable and open to being cancelled or revoked.
The Supreme Court affirmed this position in Skykick. It found that SKY Limited had registered a number of its Marks in classes in bad faith.
Bad Faith Applications
Bad Faith applications are not solely the remit of the English Courts. In Skykick, the Supreme Court ruled that Article 67(1) of the Withdrawal Agreement expressly provides that the provisions regarding jurisdiction of EU trade mark regulations are to continue to apply to proceedings that were instituted before the end of the transition period. Accordingly, in those proceedings the UK Courts retains jurisdiction as an EU Trade Mark Court, while the EU (and the EUIPO) continue to deal with such matters. Whilst the UK is inevitably moving away from the EU in terms of “sovereignty”, there will be an overlap and uniformity.
Despite Brexit, the European Courts (and EUIPO) often find in parallel with the UK Courts on matters. The EUIPO Cancellation Department has recently made its own decision of bad faith in respect of TESLA, where it found a ‘trade mark troll’ had deliberately sought to benefit from TESLA as a result of:
- the intent and timing of filing;
- a patten of speculative filings;
- procedural tactics and a lack of genuine activity;
- knowledge of TESLAs prior use and reputation; and
- deviation from honest practice.
The EUIPO Cancellation Department relied on the UK Supreme Court decision in SkyKick when making its decision. The conclusion from these two decisions is that trade mark filing strategies will need to change in order to prevent unfair monopolies and bad faith practices from occurring.
How We Can Help You
Owning a registered trade mark, particularly one that is widely recognised, can potentially yield substantial financial rewards. However, the effort required to nurture and maintain it, ensuring its protection from competitors is often largely misunderstood.
The team at KANGS enjoys a wealth of experience gained from assisting clients involved in trade mark issues of every nature including trade mark and intellectual property disputes.
If we can be of assistance, will be delighted to hear from you. Contact us today and speak to one of our experienced solicitors using the details below:
Tel: 0333 370 4333
Email: info@kangssolicitors.co.uk
We provide initial no obligation discussion at our three offices in London, Birmingham, and Manchester. Alternatively, discussions can be held through video conferencing or telephone.
Top ranked by leading legal directories Chambers UK and the Legal 500.
