Could your trademark application be vulnerable?

How a successful opposition can be made on bad faith grounds

Thinking about registering a trademark in Australia?

A search of trademark databases will give you an indication of what trademarks are already pending or registered and whether they are similar to your trademark.

But it’s also it’s a good idea to consider the possibility of the trademark being opposed.

Under Section 27(1) of the Trade Marks Act an application can be filed by a person who claims to be the owner of the trademark and uses, or intends to use, the trademark for the goods/services nominated.

In Australia there is no investigation as to the ‘claim’ by the applicant to be the owner of the trademark however, a third party may oppose the application if they feel the applicant has filed in bad faith (amongst other grounds).

Once a trademark has been advertised as accepted in the Official Journal of Trade Marks, a third party can oppose an application for trademark registration. 

What is the definition of bad faith and what constitutes bad faith in Australia? 

In October 2006, Section 62A of the Australian Trade Marks Act 1995 (Cth) (“the Act”) was introduced. Section 62A specifies that the registration of a trademark may be opposed on the grounds that the application was made in “bad faith”.

Bad faith is defined as, “instances in which a person has deliberately set out to gain registration of a trade mark, or adopted a trade mark in bad faith”.

While this can appear to be vague, it highlights that if you want to oppose a trademark registration on the grounds of bad faith you must show dishonesty and deliberate intention for the bad faith grounds to apply.

Examples of bad faith in the Explanatory Memorandum to Section 62A include:

• “Persons who monitor new property developments, register the names of new developments as trademarks for a number of services and then threaten the property developers with trade mark infringement proceedings unless the developers buy, or obtain a licence to use the trademarks;
• Persons who have a history of applying for trademarks that are deliberate misspellings of other registered trademarks;
• Persons who identify trademarks used overseas but with no Australian use as yet who then apply to register the trademarks in Australia for the express purpose of selling them to the overseas owners.

What is required to prove ‘bad faith’ with a trademark registration opposition?

In a 2013 report compiled for the Intellectual Property Owners Association International Trademark Law and Practice Committee to provide background around Bad Faith trademark filings Dr. Elizabeth Houlihan of Houlihan2 in Melbourne provided answers to questions around Bad Faith trademarks in so far as the Australian position stands. This can be summed up as follows (reference footnote at bottom of blog post)

“To show that ‘bad faith’ exists there must be:

• “An element of intentional dishonesty; or
• A deliberate attempt to mislead the Registrar in some way by means of the application; or
• In circumstances where an Applicant claims that the application was not made in bad faith but, rather, as a result of its own ignorance or naivety, then the evidence would need to show that the circumstances were such that the “reasonable man” standing in the shoes of the Applicant, should be aware that he ought not to apply for Trade Mark Registration.” (See page 8 of the bad faith filings report)

The responsibility to show that ‘bad faith’ exists rests on the party making the allegation. Once sufficient evidence has been shown to demonstrate bad faith the responsibility to prove otherwise shifts to the trademark applicant.

Case law indicates that, “for Opponents, it is important to present sufficient evidence to establish bad faith on the balance of probabilities, assessed by reference to a “reasonable person” test, so that the onus then shifts to the Applicant.

For Applicants, it is important to respond to any evidence of “bad faith” or run the risk that silence may be construed as supporting the Opponent’s case.” 

What is required in Australia to prove that a trademark submission was not made in bad faith?

While a misunderstanding or ignorance of the law in some cases can negate bad faith, the Court will take into account what the Applicant should have known.

The Court applies the ‘reasonable person test’ where the Applicant will be asked whether they should have known that the trademark registration should not have been applied for.

Because this is a subjective test, it can be hard to prove bad faith existed without knowledge.

Bad faith exists when there is an element of deceit. It doesn’t exist due to incompetence or negligence.

Recent Australian bad faith trademark case

In June 2015, Hard Candy Fitness, LLC opposed a trademark application HARD CANDY in the name of Hard Candy (Australia) Pty Ltd.

Hard Candy Fitness, LLC successfully opposed the registration of HARD CANDY on the grounds that the trademark application by Hard Candy (Australia) Pty Ltd had been made in bad faith. This case attracted attention because Madonna was the Opponent.

“The Opponent is a global luxury fitness brand and owner of a group of fitness, health and lifestyle centres around the world operating under the name HARD CANDY FITNESS. The Opponent was founded by American musician, entertainer, actress, author, cultural icon and entrepreneur Madonna Louise Veronica Ciccone (Madonna) in partnership with Madonna’s agent, Guy Oseary, and Mark Mastrov of New Evolution Ventures, LLC.”

You can read the decision about this bad faith trademark case here.

*Footnote reference, page 8 of this link:

“In a 2013 report compiled for the Intellectual Property Owners Association International Trademark Law and Practice Committee to provide background around Bad Faith trademark filings Dr. Elizabeth Houlihan of Houlihan2 in Melbourne provided answers to questions around Bad Faith trademarks in so far as the Australian position stands.” 

BIO:

Quick Off the Mark® is a division of Mark My Words Trademark Services Pty Ltd (MMW). MMW was founded in 2011 and is headed by Jacqui Pryor, a registered trade marks attorney with more than 16 years experience.

In 2015 MMW acquired Quick Off the Mark®, which is a fast and affordable Australian trademark registration service. Quick Off the Mark® offers fixed fees that are affordable to help Australian businesses register their trademarks.

Disclaimer – The advice provided in this blog is general advice only. It has been prepared without taking into account your business objectives, legal situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, legal situation and needs.