In trade mark cases, bad faith claims are notoriously difficult to prove. However, in a recent case heard in the Intellectual Property Enterprise Court of England and Wales, Frost Products Ltd v F C Frost Ltd, Mr Justice Vos provided useful guidelines for where bad faith comes into play.
In this case, the judge found in the defendant’s favour not only confirming that the claimant’s Community Trade Mark (CTM) was invalid on the basis of the defendant’s earlier unregistered rights, but also because the claimant acted in bad faith in filing its CTM. He stated that “bad faith” generally implied or involved, but was not limited to, actual or constructive fraud. It could be a design to mislead or deceive another, or involve any other sinister motive. Bad faith also included unfair practices that involved a lack of any honest intention. Factors taken into account in considering whether the claimant acted in bad faith included:
- whether the applicant knew that a third party was using the sign in a member state, which could be inferred from length of use;
- the applicant’s intention when the application was made, including whether the applicant intended to prevent a third party marketing a product, and whether the applicant actually intended to use the CTM itself; and
- the extent to which the third party enjoyed a reputation in its own sign at the date of the application.
Although the claimant had an earlier registered right to the FROST mark covering washroom products, the defendant had been using the sign FROST for drainage and washroom products in the UK since 1971. It also became clear from the evidence that the claimant must have known about the defendant’s business and its unregistered rights, but deliberately had turned a blind eye; it was also clear that the claimant intended to aggressively expand its business into the UK and Europe once it had secured registered protection for its mark, and that it filed the CTM with the intention of preventing the defendant from using its own mark in the UK.
This case emphasises that having an earlier registered trade mark is not necessarily enough to challenge a later filed trade mark but that the knowledge and dishonest intention of the applicant may well result in the loss of registered rights.