Appeal of (Decision of Mr Allan James acting on behalf of the Registrar of Trade Marks) BL O/442/17 to the Appointed Person, 18 December 2017 Geoffrey Hobbs QC, acting as Appointed Person (AP), has upheld the Hearing Officer’s decision dismissing the appeal brought by a UK trade mark applicant against the successful opposition of its application under section 3(6) Trade Marks Act 1994, ie refusal of registration on grounds of bad faith, finding—among other things—that the application (one of hundreds made by the applicant for common first names, albeit before various registries), was ‘part of a systematic abuse of the trade mark registration system’. Legal context Under the Trade Marks Act 1994 (Act), one of the absolute grounds for refusal of registration is where an application is made in bad faith (section 3(6)). The same provision is included under Article 59(1)(b) of the EU Trade Mark Regulation (EU) 2017/1001. Additionally for a UK mark, pursuant to section 32(3) of the Act, a declaration is required that ‘the trade mark is being used, by the applicant or with his consent, in relation to those goods or services, or that he has a bona fide intention that it should be so used’ (Statutory Declaration). This declaration is not required under the EU law. Facts On 27 January 2016, CKL Holdings NV (CKL) sought to register ALEXANDER as a UK trade mark in Classes 18, 20 and 25. As part of the application, CKL gave the required Statutory Declaration. Paper Stack Ltd (PSL) filed an opposition on 7 July 2016 (one of four oppositions such that by the time it was considered, the application was only for mirrors and pictures frames in Class 20). PSL asserted bad faith under section 3(6) of the Act. PSL also argued the mark was devoid of distinctive character under section 3(1)(b) of the Act, but this ground failed and was not considered by the Appointed Person (AP). PSL argued that CKL had made its application in bad faith because it has no bona fide intention to use the mark, principally arguing that: The application of CKL for ALEXANDER was one of hundreds in various territories (mostly the EU) for common first names; There was no commercial logic in CKL applying to register ALEXANDER—it seemed to be to stop third parties from registering genuine marks or entering the market; and CKL’s conduct and filing activity of this mark (and generally) fell well below accepted standards of ethical behaviour or honest commercial and business practices. Evidence filed in support included the following: Designers/producers already exist in the market with the forename ALEXANDER in relation to the same goods for which the application was made. CKL has hundreds of registrations and/or applications for other common first names and has used them to seek to oppose full name applications which incorporate the mark, including ALEXANDER, eg ALEXANDER SMITH. The sole director of CKL, Michael Gleissner, owns over 1200 UK companies, including for example EUPIO International Ltd. CKL has registrations for other more distinctive marks, such as EUIPO and TESLA (Benelux marks) and BAIDU (an international registration), and other companies controlled by Mr Gleissner have applied for, eg THE HOME DEPOT, THE LEARNING CHANNEL, and PAN AM. Instances of Gleissner-owned companies being found to have registered domain names (comprising trade marks) in bad faith, seeking to acquire domain names by asserting trade mark rights and a Trademarks manager of one such company listing as one of his responsibilities: ‘manipulating trademarks to reverse hijack domain names through UDRP’. CKL did not file any evidence to counter the evidence provided but as part of CKL’s (i) counterstatement to the opposition; and (ii) written submissions filed in response to the above evidence, denying bad faith, it asserted that: It had acted lawfully: it did intend to use its UK marks as a badge of origin. Intention can only be assessed after 5 years of registration as part of a revocation action. As inferred by the AP, CKL was arguing that it was entitled to the mark for 5 years notwithstanding section 3(6). Good faith is presumed unless the contrary being proven. The applicant only has eight UK trade mark applications all aimed at protecting its brands and all being used as a badge of origin. This could not be painted as attempting to deceive the Registry or any third party. There is no requirement to demonstrate intent to use immediately before or after registration, when a mark is pending, or when it is being opposed. On 19 September 2017, Allan James, for the UK registry, found that the application was made in bad faith. Analysis In conducting the appeal, the AP considered that the Hearing Officer had to determine three key questions: What objective had CKL been accused of pursuing in filing the application? Did the nature of the objective mean that the application could not be considered legitimately filed? Was it made out that the application was filed with that objective? (1) CKL’s objective The AP pointed to the evidence noted above and agreed the objective was for CKL to be ‘part of a systematic abuse of the trade mark registration system’. (2) Did the nature of the objective mean that the application could not be considered legitimately filed? The AP considered the applicant’s assertions that: (i) the focus should be on whether the mark is registrable for the relevant goods and services and the bad faith assessment must permit parties to act in their own self-interest; and (ii) the Statutory Declaration should not be regarded as necessitating an intention on the part of the applicant to use the mark until after the first 5 years of registration, ie the non-use period required to bring a revocation action. Self-interest versus bad faith? The AP stressed the rationale of section 3(6), as it being to prevent abuse. As such it provides an absolute objection to a proposed application made in bad faith. The effect of this, if made out, is that the application is deemed not validly made. It is not necessary to consider whether the mark is registrable or not. There is clearly a spectrum of behaviour from acting in one’s own self-interest that is allowed, to acting in bad faith. The AP confirmed that the applicant moves from the territory of self-interest into the territory of bad faith where it applies for a trade mark either in a manner or for a purpose that is improper. The improper behaviour need not be against the party bringing the opposition as long as it is argued clearly and is shown to be well-founded. Statutory declaration The AP accepted that the Statutory Declaration does not mean that there is a higher bar than the bad faith test in section 3(6). Nevertheless, he went on to say that the Statutory Declaration can be falsely given where there is no bona fide intention to use the mark and that can be ‘indicative or symptomatic’ of an application being made in relation to goods or services in an improper manner or for an improper purpose which justifies refusal of the application. The AP agreed that on these facts, the applicant’s objective was not a basis upon which an application could be legitimately made. (3) Was it made out that the application was filed with that objective? Turning to the final question, the AP noted that an overall assessment must be made that considers all relevant factors, including the applicant’s intention at the time of filing. He agreed that the Hearing Officer could draw inferences from proven facts as long as it was a rational approach and not mere speculation. In terms of assessing intention, he referred to a recent Supreme Court authority (Ivey v Genting Casinos (UK) Ltd (t/a Crockfords)  UKSC 67) which in his view accords with the judgments of the Court of Justice of the European Union (CJEU) in relation to assessing objections to applications on bad faith grounds. The approach is that when assessing intention and whether a dishonest state of mind exists, even though mental state is subjective, assessed objectively, ie viewed by ordinary standards, is the objective dishonest? It is therefore irrelevant that the applicant judges by a different standard because the test is an objective one. The AP was satisfied that the Hearing Officer’s decision was reached by reference to evidence and facts and should be upheld, ie that the opponent had, on the face of it, made out a case which the applicant had failed to refute; namely that the application was part of a strategy of blocking third-party owners or future owners of trade names incorporating the mark to gain financially. The AP also referred to further observations filed for the Registrar on appeal, which reinforced his view: Collectively, legal entities controlled by Mr Gleissner which use the appellant’s email address accounted for 5 per cent of all active UK IPO cases, ie 97 contested cases; and At one point the figures were 8 per cent of all contested UK cases; and Mr Gleissner’s companies rarely file evidence and yet nearly 20 per cent of contested decisions for November 2017 involved one of Mr Gleissner’s companies communicating with the same email address. Practical significance The AP has identified three parts to the bad faith analysis that it is useful to have in mind if seeking to argue bad faith: first, procedural fairness requiring identification of the objective; secondly, the moral question, calling for a review of the nature of the objective; and, thirdly, looking at whether the presumption of innocence is overcome based on an overall assessment. With the Statutory Declaration requirement under the UK law but with no equivalent provision under the EU law, the question that has been considered as length is whether the UK and EU positons are entirely the same. It is clear from the AP’s decision that he accepts that the Statutory Declaration does not make the test more onerous. Nevertheless, as per the established principles cited in the decision, bad faith is a difficult argument to make. What seems key is identifying an improper purpose or an improper manner of application so as to cross the line from legitimate self-interest to bad faith. This case emphasizes that one does not need to show improper behaviour against the opponent personally and further the importance of thorough investigations, including looking at companies controlled by the same director as the applicant (if applicable). If evidence relating to activities of companies controlled by the same director as the applicant can be found, this behaviour can be attributed to the applicant as happened here. © The Author(s) 2018. Published by Oxford University Press. All rights reserved. This article is published and distributed under the terms of the Oxford University Press, Standard Journals Publication Model (https://academic.oup.com/journals/pages/about_us/legal/notices)
Journal of Intellectual Property Law & Practice – Oxford University Press
Published: May 9, 2018
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