Securing protection for a trade mark is an important part of establishing and protecting a brand. A registered trade mark can be an extremely valuable asset for a business and can be used to prevent third parties from using an identical or similar mark to provide identical or similar goods and services. However, filing for a trade mark must be done in good faith and not as a means to block competitors or gain an unfair advantage. When an individual or company files for a trade mark in bad faith, it can lead to serious consequences, including cancellation or revocation of the trade mark, reputational damage, and legal costs.
Bad faith is a broad term and when determining whether there is bad faith, all factors of significance relevant to the case must be taken into account. Applicants for trade mark registration are presumed to act in good faith, until a challenging party, on the balance of probabilities, proves bad faith. When bad faith is established, this effectively cancels a trade mark, or reduces the goods and services it covers, opening the way for competitors to take advantage.
In Sky Ltd & Ors v Skykick, UK Ltd & Anor (Rev2)  EWCA Civ 1121 (26 July 2021), the issue was whether a broad trade mark application constituted bad faith filing. The court of first instance found that Sky had no intention to use their marks for all the broad categories of goods and services applied for and that Sky had used this as a deliberate strategy to seek broad protection without commercial intent or viability. However, the Appeal Court overturned this decision and held that specification of goods and services should not be limited. The court deemed that a trade mark applicant did not have to formulate a commercial strategy for using the mark in relation to every item in a list of goods or services.
In Lidl Great Britain Ltd and another v Tesco Stores Ltd and another  EWHC 873, Tesco counterclaimed that certain aspects of Lidl’s logo mark were filed in bad faith, which the High Court upheld on the grounds alleged by Tesco. Lidl failed to rebut the presumptions that the wordless mark was designed as a weapon to secure a wider monopoly, given that Lidl already had an existing mark with the same specification of goods and services, and that there was no intention of use. Lidl had also engaged in “evergreening,” which involves applying for goods and services already covered by previous registrations to avoid sanction for non-use.
Overall, bad faith in trade mark filing is a serious issue that can have significant consequences for a company's brand and reputation. It is important for businesses to ensure that they have a genuine intention to use their marks for the goods and services they are seeking protection for, and that their filing strategy is not intended to unfairly block competitors or secure an unwarranted advantage. Failure to do so may result in the cancellation or revocation of their trade mark protection, which could open the door for competitors to gain an advantage. This, of course, should be balanced with ensuring that any trade mark application is sufficiently broad to protect the trade mark owner in respect of all goods and services it currently uses, or has a genuine intention to use in the short to medium term future.
Thorntons specialist Trade Mark Agency can assist you with creating a trade mark strategy and applying to register your trade marks, including advising on the scope of the goods and services which should be covered within that application.