What is "Bad Faith"?

What is the meaning of bad faith and why does it matter? 

Common definitions of bad faith include “intent to deceive” or “violating basic standards of honesty in dealing with others” and “acting with dishonesty which falls below commercial standards”.

Bad faith is a ground of refusal for a UK trade mark application and also a ground of invalidation of a registered mark.  Before grant, bad faith can be raised be raised as a ground of objections in the UK either by the Examiner, or by a third party as a ground of opposition.  Whilst bad faith is not a ground of opposition in the EUIPO, it is a ground of invalidation against a European registered trade mark.

How to argue bad faith

There is no formal definition of bad faith and there is an assumption that an applicant has acted in good faith until the contrary has been proven.  Therefore, it is for the examiner or complainant, as the case may be, to make out a case for bad faith.  So how do you go about proving that someone has acted in bad faith? 

It is important to note that the relevant time for assessing bad faith, is at the date the application for registration is filed. 

The intention of the applicant at the time of filing is relevant.  It is not sufficient to know of a competitors’ mark, the applicant must also have been acting in a manner inconsistent with honest practices.

Indications of bad faith:

• Applying to register without an intention to use – solely with the purpose of blocking use of registration by a third party. The UK Trade Marks Act requires an applicant to confirm that the are using or have an intention to use the mark applied for, for the goods/services applied for, when filing the application.  Thus, filing the application without an intention to use the mark for the goods/services covered by the application indicates bad faith as is therefore a ground of refusal or invalidation.
• Filing an application for a broad range of goods and/or services, with no intention to use the mark for all of them – there is a fine line between bad faith and commercial caution to leave scope for natural business expansion though. Filing for broad terms does not indicate bad faith per se, if the applicant has a genuine intention to use the mark for goods within that broad definition.
• Registering a mark that the applicant knows is in use by a third party in order to exploit someone else’s goodwill. For example, if the application is filed for a mark owned by someone else, with whom the applicant already has a business relationship.
• Trade mark squatting – registering third party trade marks for the purpose of selling the registration to the trade mark owner for profit. An indication of trade mark squatting can be found where an applicant has a significant number of trade mark applications or registrations for marks owned by other parties.  Especially if there is no evidence of their trading in the goods or services covered.  This may include registering a mark well known abroad but not yet use or registered in UK yet.
• Filing a trade mark application with the sole purpose of circumventing the rules on proving genuine use – commonly known as evergreening. In the UK, and many jurisdictions, if a mark has not been put to genuine use within the jurisdiction for the goods/services covered by the registration for a period of five years following registration, the registration becomes susceptible to revocation for non-use.  Evergreening, relates to the practice of filing a new application for the same mark and the same/goods and services to start the five-year period when the mark is not open to attach for non-use again.

Where there is subjective dishonesty, the application will be refused, or the registration will be revoked.  In practice, it is often difficult to prove dishonesty. 

What does this mean in practice?

When applying for your own application it is important to keep records of your commercial decisions on adopting a new mark.  Also keep records of how you may change a mark either in stylisation or in terms of the goods/services you use it for.

Whilst filing for a broad range of goods where you currently use the mark for those goods/services is acceptable.  It is also acceptable to plan for further expansion, but it is advisable that this is for goods and services for which you genuinely consider you may use the mark in the short to medium term.

Repeatedly refiling for the same mark may be considered to be bad faith if it looks like the objective is to avoid the need to put the mark to genuine use.

What evidence may you need to raise a ground of bad faith?

It is not always easy to prove bad faith.  However, if you wish to rely on the ground of bad faith in opposition or invalidation proceedings it will not be sufficient to merely allege bad faith.  The UKIPO require you to at least make out a reasonable case for such a ground.  You should aim to first establish knowledge and then establish dishonest conduct. 

What isn’t bad faith?

It is not bad faith to:

1. Register a mark you are using for goods/services you are using or intend to use the mark for, even if you know that another party is using the same or a similar mark. Bad faith requires some element of dishonest or deceptive conduct.  Merely seeking to protect your legitimate trade mark rights does not constitute bad faith.
2. Strengthen your position by registering a mark for which you have already acquired goodwill through use, in order to sue a third party for trade mark infringement where you would previously have sued for passing off.
3. To register a mark in certain jurisdictions even if you are aware third parties have the mark registered in other jurisdictions, if you have a genuine intention to use the mark.

Once a reasonable case for bad faith has been made out by the examiner or complainant, it is then up to the applicant/right holder to rebut these points a provide a plausible good faith explanation.

If you have any questions about this or any other matter relating to trademarks, please contact one of our trademark attorney’s who would be happy to assist you.