Use of another person’s mark in an unrelated field can amount to bad faith, particularly when there has been a previous business relationship between the two parties.
In the recent case of Hearst Communications, Inc v Toyota Motor Corporation Australia Ltd  ATMO 36 (4 May 2015), Hearst successfully opposed registration of Toyota's COSMOPOLITAN trade mark on the ground that Toyota’s application was filed in bad faith.
While several opposition grounds were pursued, the Hearings Officer decided against registration of the COSMOPOLITAN trade mark on the basis of bad faith (s 62A of the Act).
The Hearings Officer confirmed that ‘bad faith’ does not require (but it does include) dishonesty or fraud. Further, ‘bad faith’ also does not require a likelihood of deception or confusion.
The finding of bad faith in this case was as the result of various factors, including the business relationship between the parties.
ACP Magazines (a licensee of the Opponent’s COSMOPOLITAN mark) and the Applicant partnered for Australian advertising campaigns which commenced in October 2009, and which carried over into 2010.
The campaigns were aimed to highlight Toyota's ‘Yaris’ model car, and to build desirability among "fashion aware" consumers, namely late teen to 35 year old females - being a similar demographic for both Toyota’s ‘Yaris’ model of car and Cosmopolitan magazines.
These campaigns highlighted a close trade association between Cosmopolitan magazine and Toyota’s ‘Yaris’ car.
Toward the end of the last campaign, Toyota wrote to the editor of ACP, purportedly as a courtesy, indicating in the letter that Toyota intended to adopt COSMPOLITAN as the name of a new paint colour for the Yaris, and noted that it would apply to register the paint colour name COSMOPOLITAN as a trade mark. Toyota did not receive a response to that letter.
Toyota subsequently filed a trade application to register COSMPOLITAN for automotive paint, motor vehicles, and parts and accessories for motor vehicles.
In evidence, Toyota stated that its choice of the term COSMOPOLITAN was made because of its connotations with the colour pink and cocktails, but not due to association with Cosmopolitan magazine. Counsel for Toyota also argued that a lack of response from ACP indicated that the Opponent (or at least ACP) did not consider the proposed application to be made in bad faith.
The Hearings Officer found against Toyota, commenting that:
- The silence of Opponent did not excuse the applicant from the relevant consideration of whether “a reasonable man in the applicant’s shoes should have been aware that he ought not to apply for the trade mark registration”.
- The opposed application went beyond scope of registration as referred in Toyota’s letter to ACP, as it nominated not only paint for vehicles – but also vehicles themselves, and vehicle parts and accessories.
- Use of COSMOPOLITAN by Toyota was in relation to the colour of Toyota’s ‘Yaris’ model and no other models, which supported the inference of an association with the previous advertising campaigns and therefore with Cosmopolitan magazine.
- The letter from Toyota to ACP was an acknowledgement from Toyota that it was aware the application would be of concern. (Notably, the Hearings officer commented ‘I also have before me email correspondence making reference to the above letter. It is claimed as confidential and I will not mention its contents here although I note that it was a subject of some debate at the hearing.’)
While the Hearings Officer was not satisfied that the conduct of Toyota amounted to fraud or dishonesty, he was satisfied that it amounted to bad faith under section 62A of the Act, regarding all of the surrounding circumstances.
He stated that Toyota’s conduct in filing the offending COSMOPOLITAN application was such that a reasonable and experienced person in the field would view such conduct as falling short of acceptable commercial behaviour.
Accordingly, registration of Toyota’s COSMOPOLITAN application was refused.