You may be sitting pretty with a registered brand to die for in a particular product sector, but all bets will be off if “bad faith” was involved in filing the application in the first place.
Topic: Brands
Who: Wyeth v Knoll AG/LT Overseas v A1 Trading
When: May and June 2002: both reported March 2003
Where: High Court Chancery Division and Patent Office "Appointed Person"
What happened:
Two cases involving disputes over trademark registrations focused on the issue of "bad faith".
Whether an application to register a trademark has been made in "bad faith" can be crucial since any registration achieved as a result can be declared to be invalid. The concept often comes into play because of the general rule that the first party to get in and apply to register a mark in the UK will normally be able to beat off anyone else's subsequent application to register the same mark for the same products. It is also a key issue because with most brands consisting of words only and not logos, there will be no separate copyright protection for the brand name. This means that getting the mark on the register will be the most effective way of acquiring rights in the brand.
In the LT Overseas/A1 Trading case the brand name in question was DAAWAT and the products in question were various edible goods in Class 30 including biscuits, coffee and rice. LT Overseas was challenging an A1 application filed in the UK in September 1995 to register the DAAWAT mark. LT said the application had been filed by A1 in bad faith.
They said this was because A1 were well aware, at the time that they filed the papers, that LT had been using the exactly same mark for the same products in various countries outside Europe, including in particular India. A1 knew this because they had visited LT in New Delhi in 1993 to talk about buying rice from LT. In the course of those talks A1 had become aware of LT's plans to launch the DAAWAT brand in Europe. Without prior notice to LT, A1 then filed the papers in September 1995 and then subsequently offered to sell the application/registration to LT.
In their challenge to the registration, LT said the filing had been in bad faith because of A1's prior knowledge of LT's plans and with a clear intention of improving its bargaining position in on-going discussions with LT.
A1 defended on the basis that they had committed no breach of contract or any other illegal act, but the appointed person concurred with the first instance hearing officer by finding that there had been bad faith and ordering that the registration be declared invalid. It was not necessary, the appointed person said, for actual dishonesty to be necessarily proved. "Reprehensible conduct" would be sufficient to bring the bad faith provisions of the registration rules into play. Though A1's activities might be regarded as falling short of outright dishonesty, they could be characterised as "unacceptable commercial behaviour" and were therefore fairly held to be "unfair to the point of bad faith".
In the Wyeth/Knoll case, the bad faith allegation was based upon an argument that when it applied to register the logo trademark in issue, Knoll only intended to use that mark in connection with one type of pharmaceutical product. Despite this, it had applied to register the mark for a very wide range of pharmaceutical products, and since this contrasted with its actual intention to use, there was bad faith, it was said.
The court made short shrift of this submission, saying that although the precise meaning of "bad faith" would vary according to its linguistic content, it always involved a degree of dishonesty or at least something approaching very close to dishonesty. Since this has not been established in this case, the Wyeth challenge was thrown out and the Knoll registration survived.
Why this matters:
In a marketing services context, this issue can sometimes crop up where an agency devises a brand name for a pitch, but to protect its own position decides to apply in its own name, in advance of the pitch, to register that mark. Could such an application by an agency to register a mark which is only intended for use by a particular client be regarded as an application filed in "bad faith"?
These two cases shed some light on the issue.
