• IN THE REGISTRY

    A Case of Bad Faith

    A US firm, Anchor Industries, designed a marquee with a novel shaped roof. From about 1990 they began selling this marquee in the UK under the trade mark Century. About three years later they introduced a similar product under the trade mark New Century. They registered the trade mark Century for Class 22 goods, including marquees, in 1995.

    Anchor’s UK sales of Century and New Century marquees were not significant, ranging from about £10,000 to £40,000 per annum. One of the biggest customers for both Century and New Century marquees in this small, niche market was William Leith, a Scottish company involved in the manufacture, sale and hire of marquees. William Leith was apparently so impressed by Anchor’s products that in 1994 they requested a licence to manufacture marquees to Anchor’s design in the UK. This request was declined, however.

    Two years later, Anchor became aware that William Leith were using the trade mark New Century on a range of marquees that had no connection with Anchor. Their solicitors therefore wrote to William Leith requiring that they stop using New Century without permission. William Leith did not reply to this letter and no further action was taken by Anchor against William Leith’s unlicensed use.

    The letter did prompt one legal step, however, namely the filing of a UK trade mark application by William Leith for a device mark incorporating the name William Leith and the phrase New Century Marquees. This application, which covered inter alia marquees and the hiring of marquees, was published for opposition and Anchor duly opposed.

    The grounds of opposition under the 1994 Act were Section 5(2)(b), based on Anchor’s prior UK trade mark registration for the trade mark Century, Section 5(4)(a), based on Anchor’s alleged reputation in the trade marks Century and New Century acquired by use, and Section 3(6), based on the allegation that the application was filed in bad faith.

    The opposition failed under Section 5(2)(b) because the Hearing Officer found that the mark applied for and the earlier registered mark Century were not confusingly similar. The opposition also failed under Section 5(4)(a) on the basis that Anchor had not established an actionable goodwill under the trade mark New Century at the date of William Leith’s application. The Hearing Officer did accept, however, that Anchor’s trade mark New Century was confusingly similar to William Leith’s mark and that, if an actionable goodwill in that mark had been established, then the Section 5(4)(a) ground of opposition would have succeeded.

    That left Section 3(6) and the allegation of bad faith. On this ground, the Hearing Officer found for the opponent and refused the application. The crucial facts when considering this ground were that William Leith

    • Was aware that New Century was Anchor’s trade mark in the USA,

    • Knew that Anchor had started to trade in the UK under the New Century mark,

    • Should have been aware that Anchor could be expected to expand that trade, and

    • Had previously proposed a licence arrangement with Anchor.

     

    Following an earlier English Court decision on the question of bad faith (Gromax Plasticulture Ltd vs Don & Low Nonwovens Ltd, 1999 RPC 367), the Hearing Officer decided that William Leith’s trade mark application “fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced men...” . He also found that combining the mark (New Century) with the applicant’s own name was not an answer to the primary criticism of unacceptable commercial behaviour.

     

    Comment

    This is a somewhat unusual case where an opposition based on the allegation that the application was filed in bad faith succeeded. In normal circumstances, such a ground of opposition is extremely difficult to sustain. Unless the mark in question is an invented word or a distinctive device or the opponent, as in the above case, can establish that the applicant knew of the mark and of the opponent’s ownership of the mark at the date of application, then an action based on bad faith is, almost certainly, doomed to failure. Whilst this position may be understandable for marks which are ordinary dictionary words or phrases, it is believed that it is unjustifiable for unusual phrases that are protected as marks outside the UK but not, as yet, in the UK. For example, in the writer’s view, if a mark such as Canyon River Blues is used in the US for clothing, it should be possible to prevent a third party registering the same mark for the same goods in the UK on the basis of a bad faith argument. In such a case, if the Hearing Officer accepts that the mark is unusual and distinctive, then the burden of proof should shift to the applicant to show how he derived such a mark. If the explanation is unconvincing, the application should be refused under Section 3(6).