• IN THE UK OFFICE

    Are Your Intentions (to Use) Honourable?

    Under UK trade mark law (1994 Trade Marks Act), an applicant for a trade mark registration must either use the mark applied for or have a bona fide intention to use the mark (Section 32(3)). If he does not, then his application can be opposed, or his subsequent registration can be invalidated, on the ground that the application was made in bad faith. Two recent UK Office decisions have confirmed this aspect of UK law.

    In the first case (Soldan Holding & Bonbonspezialitäten v Ferrero and Soremartec), Soldan had applied to invalidate five UK trade mark registrations (for the marks Kinder Snappy, Kinder Time, Kinder Courdifrutta, Kinder Time and Kinder Tonus) owned by Ferrero and Soremartec on the ground of bad faith (Section 3(6)).

    Soldan had brought the following facts to the Hearing Officer’s attention. During the period 1967 to 2001, Ferrero/Soremartec had filed 68 UK trade mark applications for trade marks consisting of or containing the word Kinder (German for children), including the five registrations that were under attack in this action. During this time, only six of these Kinder marks, namely Kinder Bueno, Kinder Chocolate, Kinder Joy, Kinder Maxi, Kinder Milk Slice and Kinder Surprise had been used by the trade mark proprietors in the UK. None of the trade marks that formed part of this action had ever been used in this country. They (Soldan) therefore argued that the registered proprietors did not have a real and effective intention to use the five trade marks in issue when they were filed, but rather they had simply filed a large number of trade marks incorporating the word Kinder in an effort to obtain a broad scope of protection.

    In their evidence in reply, Ferrero/Somartec did not answer the evidence and arguments put forward by Soldan in respect of the bad faith ground. No explanation of or attempt to justify their trade mark filing policy was put forward.

    The Hearing Officer found that “the sheer number of marks applied for and which apparently remain unused, and the period of time over which the applications had been made, raised a prima facie case requiring a response from the registered proprietors”. Since no response had been forthcoming, the Section 3(6), bad faith, ground succeeded and all five registrations were found invalid.

    Ferrero/Soremartec appealed to the Appointed Person (Mr Kitchin Q.C.) who rejected the appeal. In the Appointed Person’s view:

    • Although bad faith had to be established at the UK filing date, this did not mean that the Tribunal could not consider matters that occurred after that date. Such matters could assist in determining the state of mind of the applicant at the filing date.

    • In the UK, bad faith is not limited to cases involving actual dishonesty. It includes some dealings which fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the relevant area.

    • Under Section 32(3) of the 1994 Act, the applicant for registration had to state either that the mark applied for was in use (by the applicant or with his consent) in relation to the goods/services applied for or that he had a bona fide intention to use the mark. In the absence of such use/intention to use, a UK trade mark applicant made a materially false statement when filing a UK trade mark application. On this basis, such a UK trade mark application would be filed in bad faith. This approach is different to that of OHIM revealed in the Trillium case.

    • Section 32(3) is compatible with Community law. The eighth recital of the Trade Mark Harmonisation Directive expressly recognises the public interest in requiring that registered trade marks must actually be used.

     

    In the second case (Tesco Stores v Asda Stores), the mark at issue was Tesco We Sell for Less filed by the UK supermarket Tesco for a wide range of goods and services. The application was opposed by Asda, another large UK supermarket chain that is now owned by the US retail giant, Wal-Mart, on the basis that it had been filed in bad faith (Section 3(6) of the 1994 Trade Marks Act).

    The evidence showed that, on the day Wal-Mart had made an offer to buy Asda, they (Wal-Mart) had filed seven UK applications for slogans, such as Our People Make The Difference, Everyday Low Prices and We Sell For Less. The application for We Sell For Less was subsequently withdrawn. This slogan was however used by and closely associated with Wal-Mart in the US.

    As part of their campaign to counter the effectiveness of future Wal-Mart/Asda competition, Tesco launched a campaign accusing Wal-Mart of seeking “to buy up the English language”. As part of this campaign, Tesco filed a number of UK trade mark applications for marks, such as Tesco People Make The Difference, Tesco Everyday Low Prices and Tesco We Sell For Less. In a press release, they (Tesco) also informed the public that they had filed trade mark applications for some of Wal-Mart’s slogans “to ensure that they remain in the public domain”.

    Asda’s Section 3(6) opposition had two strands. In the first, they argued that, because of Wal-Mart’s registration and use of the slogan in the US and their application for the slogan in the UK, Tesco were aware of Wal-Mart’s/Asda’s interest in the trade mark applied for at the filing date. The application was therefore simply an attempt to prevent and/or restrict Wal-Mart’s/Asda’s right to register or use the mark in the UK.

    The Hearing Officer accepted that Tesco had filed their application for Tesco We Sell For Less knowing that the opponent (or their parent) owned an earlier UK trade mark application for We Sell For Less. However, in the absence of any use of the slogan by Wal-Mart/Asda in the UK and in view of the opponent’s withdrawal of their UK trade mark application for the slogan, he concluded that Tesco’s action did not amount to bad faith. Neither the opponent (nor their parent) would be deprived illegitimately of any rights by Tesco’s application.

    The second part of the bad faith objection was that Tesco had no bona fide intention to use the slogan Tesco We Sell For Less as a trade mark (emphasis added) at the date of application. The evidence showed that Tesco had put the slogan to use since the filing date, but that this use was in relation to a price cutting and/or price promotion programme. Tesco’s position was that they used the slogan “in relation to the promotion of their business”.

    The Hearing Officer concluded that, on the facts before him, Tesco had no intention to use the slogan as a trade mark. The bad faith (Section 3(6)) ground of opposition therefore succeeded.

     

    Comment

    The Soldan decision will send a shiver through the collective spines of many large corporations. In the writer’s experience it is, for example, common practice for a pharmaceutical company to file up to 20 to 30 applications for different marks every time a new drug reaches the later stages of development. Over a period of thirty years, this leads to literally hundreds of unused, but registered, trade marks. Are these registrations now vulnerable to invalidation on the ground of bad faith? If so, does this also apply to those registrations filed in the recent past that are not yet vulnerable to revocation for non-use? The uncertainty caused by the Soldan decision gives yet another reason for such large companies to prefer the CTM route to registration (where no intention to use is necessary) over the UK route.

    The writer believes that the Tesco decision was correct, but for the wrong reason. It is submitted that Tesco’s concerted campaign of filing UK trade mark applications for a series of slogans, previously coined and used by Wal-Mart in the US, is a clear case of bad faith, given that Tesco knew that Wal-Mart were buying Asda and therefore were extremely likely to introduce their slogans to the UK.

    On the other hand, the fact that Tesco uses their mark at present to promote their business rather than to designate specific goods (or services) does not mean that, in future, they will not begin to use the slogan as a trade mark or that, at the date of filing, they did not have both objectives in mind.