What is the test of bad faith when registering a Trade Mark?

Release date: 26/1/2007

There is useful guidance from the Court of Appeal as to when a Trade Mark is registered in bad faith. In a 2005 case, an Applicant sought to register "CHINAWHITE" as a UK Trade Mark for beverages, when the Applicant knew of the opponents' use of "Chinawhite" as a name for its nightclub and of cocktails served there.

It is well known that a Trade Mark will not be registered if the Application is made in bad faith. Further, the Trade Mark will not be registered if the use of it in the UK is liable to be prevented by virtue of any rule of law protecting an unregistered Trade Mark in the course of trade (i.e. the law of passing off).

The facts of the case were that the Applicant tried to register the Trade Mark "Chinawhite" for beers, minerals and other non-alcoholic drinks, fruit juices, syrups etc in classes 32 and 33. The opponents said that the registration should be refused because the use of the "Chinawhite" Trade Mark by the Applicant could be prevented by virtue of a rule of law (i.e. passing off), and, further, that the Trade Mark should not be registered as it had been applied for in bad faith.

The opponents were a well known night club, Chinawhite, and this name had been used since 1998. The Applicant was aware of the Club's reputation when he made his Trade Mark Application in 1999. The night club had developed a house cocktail called Chinawhite which was sold exclusively at the Club and its recipe was subject to a Confidentiality Agreement.

In November 1998, the Manager had approached the Applicant with the cocktail to sample. Evidence was accepted that the Applicant knew that the drink was under sole proprietorship of Chinawhite's bar manager. The Applicant then went on to operate a company called Chinawhite Limited and filed Trade Mark Applications in the name.

The hearing concluded that the Application would not be prevented by virtue of the rule of law in this instance due to the facts of this case, however, it concluded that it has been made in bad faith and refused the application. Both parties cross appealed the decision.

However, the Court of Appeal upheld that the Application had been made in bad faith. The Court had very usefully set down a test for what constitutes "bad faith". The Applicant had argued that for it to be bad faith, the application should have been made dishonestly. The Judge in the case disagreed. He agreed that an application made dishonestly would be in bad faith. However, it did not follow that if there is no dishonesty that there would be no bad faith. The opponent contended that the test of bad faith was objective and the courts had to look at all the facts and then decide whether bad faith had been established.

The Judge in this case followed previous case law and concluded that the true test of bad faith, is a combination of both an objective and a subjective test. He agreed that bad faith is relevant to a mental state of the Applicant, however we must consider all the relevant circumstances and whether the knowledge of the Applicant would be considered an application in bad faith if made by other persons adopting proper standards. Therefore the key point from this case is that the Court does not consider dishonesty to be a pre-requisite of bad faith. The test is to consider both:

• The actual state of mind of the Applicant (subjective element of the test) and
• The surrounding circumstances in the context of what a reasonable person would have done in the same situation (the objective element)

If you have a concern that an individual is registering a Trade Mark in bad faith, please contact Pina Mazzotti on pina.mazzotti@harveyingram.com or call 0116 257 6166.