Article by Kerin Forstmanis and Emma Nelson
In the first substantive decision concerning the new 'bad faith' grounds of opposition under the Trade Marks Act 1995 (Cth) (TMA), the Australian Trade Marks Office has provided some guidance as to how oppositions made under this section will be considered, and the scope of evidence required to both establish and refute a claim of bad faith.1
Background
In September 2006, the TMA was amended to add s 62A as a new ground of opposition. The section provides that the registration of a trade mark may be opposed on the grounds that the application was made in bad faith. There is no guidance in the TMA or the Explanatory Memorandum as to the meaning of 'bad faith'.
Hard Coffee Pty Limited (the opponent) had been using the HARD COFFEE trade mark in connection with several Queensland coffee shops since 1996. In 2004 it sold one of these coffee shops to a company called MB Raymond & Co Pty Limited. The contract of sale expressly stated that the opponent retained ownership of the intellectual property in the HARD COFFEE name, and the purchaser was only given a limited licence to continue using the marks until the store signage was changed.
In September 2007 Hard Coffee Main Beach Pty Limited (the applicant) filed four trade mark applications for HARDCOFFEE and HARDCOFFEE MAIN BEACH. The evidence showed that the director of the trade mark applicant was also a director of the purchaser of the business at the relevant time, and had signed the contract of sale on behalf of the purchaser. The opponent opposed each application.
Decision
The Hearing Officer held that an application made in bad faith will involve 'an element of intentional dishonesty or a deliberate attempt to mislead the Registrar in some way by means of the application'.
The onus falls on the opponent to submit sufficient evidence to establish bad faith on the balance of probabilities. Where an applicant claims that the application was not made in bad faith but as a result of ignorance or naivety, it then becomes necessary to determine if the evidence shows that a 'reasonable man' standing in the shoes of the applicant should be aware that he ought not apply for the trade mark.
The Hearing Officer also noted that, for the purposes of s 62A, there is no formal requirement that the opponent's trade marks be similar. However, where the question of bad faith involves allegations that the opponent's trade marks and reputation are being appropriated, the Hearing Officer considered that the marks in issue would need to be assessed in a similar manner to section 44 of the TMA, that is, whether the marks are sufficiently similar to each other so as to result in deception or confusion.
In the present case, the Hearing Officer decided that the opponent had satisfied its onus to establish bad faith, shifting the onus to the applicant to provide evidence in answer. The applicant did not file any evidence or submissions in response. The Hearing Officer considered that the failure to do so strengthened the opponent's case of bad faith. Consequently, all four oppositions were successful.
Conclusion
The decision confirms that the onus is squarely on the opponent to prove some degree of dishonest or underhand dealing on the part of the applicant, when relying on section 62A in trade mark opposition proceedings. For trade mark applicants, the decision also highlights the need to be vigilant in responding to any evidence of 'bad faith', or run the risk that silence might be construed as supporting the opponent's case.
Footnotes
1 Hard Coffee Pty Limited v Hard Coffee Main Beach Pty Limited [2009] ATMO 26 (1 April 2009)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.