Bad faith: ruling suggests UKIPO cannot raise at the application stage

A new ruling casts doubt on the UKIPO's ability to raise bad faith at the application stage ex officio and could mean that the UKIPO no longer objects to trade mark applications that contain the names of famous people.

What has happened?

• Any person may oppose a trade mark application or apply to invalidate a trade mark registration on the ground that it was applied for in bad faith. The Registrar of the UK IP Office (UKIPO) may also apply to the court to invalidate a registration on the grounds that it was applied for in bad faith. 
• It has been widely thought that the UKIPO may also refuse an application based on bad faith ex officio (bad faith being an absolute ground of objection). In practice, the UKIPO only does so where the mark applied for contains the name of a famous person (and, even then, only in certain circumstances) since proving bad faith in other scenarios requires evidence and is best dealt with in inter partes actions. 
• A recent decision by the Appointed Person has cast doubt on the UKIPO's ability to raise bad faith ex officio. In Appeal No. BL O/264/22 (Global Trade Mark Services Ltd), Mr Geoffrey Hobbs QC held that the UKIPO was wrong to refuse a number of trade mark applications on the ground that they contained the name of a famous person and had therefore been filed in bad faith. The UKIPO could not come to such a conclusion ex officio. 
• While decisions of the Appointed Person are not binding on the UKIPO or courts, they are of persuasive value to the UKIPO in similar cases. We wait to see if the UKIPO amends its practice of objecting to certain applications containing the names of famous people because of this decision. 
• If it does, it would effectively mean that bad faith would only be considered at the application stage if raised by a third party in opposition and that the UKIPO could only raise bad faith by way of application to the court to invalidate (post-registration). 
• Whether this will lead to an increase in speculative filings in the UK for marks containing the names of famous people remains to be seen. Well-known persons now have an even greater incentive to watch for conflicting UK applications as the UKIPO might not object to them of its own volition. 
• The decision also contains a useful discussion on the burden of proof in bad faith cases.

Want to know more?

Background 

In 2021, Global Trade Mark Services Ltd (GTSL) applied to register various trade marks consisting of the names of famous footballers with football crest devices for class 25 goods in the UK, including the one depicted below. 

The UKIPO refused the applications under section 3(6) of the UK Trade Marks Act 1994 on the grounds that they had been filed in bad faith. There is nothing in the Act stating that the UKIPO cannot raise bad faith ex officio at the application stage. Since it is an absolute ground of objection (pertaining to the intrinsic qualities of the mark applied for as opposed to any conflict with prior rights) it was widely considered that the UKIPO has the power to raise bad faith of its own volition. 

In practice, the UKIPO only does so where the mark applied for contains the name of a famous person (and, even then, only in certain circumstances) since proving bad faith in other scenarios almost always requires evidence and is best dealt with in an inter partes action. This is particularly so as the general rule is that it is for the party alleging bad faith to prove it (Pelikan). That would be difficult for the UKIPO.  

However, case law suggests that the burden of proof can sometimes be reversed such that there is a rebuttable presumption of bad faith. This occurs where the objective circumstances of a particular case suggest a lack of good faith. It is then for the trade mark applicant to provide a plausible explanation of the objectives and commercial logic pursued by the application to rebut that presumption (Hasbro). 

According to the UKIPO, the Moreira v EUIPO (Neymar) case establishes such a rebuttable presumption where the mark in question includes the name of a famous person. This is reflected in the UKIPO's Examination Guide, which provides that an application for a mark containing the name of a famous person may in certain circumstances be refused registration on the grounds of bad faith unless the applicant files a letter of consent from the famous person. In other words, there is a rebuttable presumption of bad faith. Since GTSL did not file a letter of consent or any plausible explanation for the applications (to rebut the presumption of bad faith), its applications were refused.

Appointed Person's Decision

GTSL filed an appeal to the Appointed Person, arguing that the UKIPO's ex officio refusal of the applications on the grounds of bad faith was not provided for in law. Mr Geoffrey Hobbs QC upheld the appeal, holding that:

• In refusing the applications ex officio, the UKIPO had, in effect, assessed the applications and their conflict with earlier unregistered rights in famous names, when such rights had not been asserted by relevant third parties. This approach was “legally deficient” and "procedurally unacceptable". It is for third parties to uphold and enforce their rights in their well-known names, not for the UKIPO to do so at the trade mark application stage.
• "The law of England does not confer any general ‘right to a name’ or general ‘right of personal portrayal". These could have been included as grounds of objection to the registration of a trade mark by the UK legislature (being specifically referenced in the Trade Marks Directive, from which UK law is derived) but were not. The UKIPO should not introduce such grounds under the guise of a bad faith objection. Whilst the Trade Marks Act 1905 and the Trade Marks Act 1938 contained provisions allowing the UKIPO to refuse applications containing the names of well-known persons, these provisions were not carried forward to the Trade Marks Act 1994. 
• In any event, the Neymar case does not provide support for the notion that bad faith should be presumed in a case involving a famous name. The Neymar case was not decided on that basis. Furthermore, it was an inter partes action not ex officio. "The Judgment of the General Court in the Neymar case does not endorse or legitimise either the adoption of an a priori approach to bad faith filing or the adoption of a rebuttable presumption of bad faith filing for the protection of famous names."
• "There can be no carve out or special exemption for the names of famous individuals from the legal considerations and requirements applicable to bad faith filing objections". In particular, there is no presumption that only a famous person may market their own character. 
• The Registrar has the power to apply to the court to invalidate a registration on the grounds of bad faith if they so wish. 

The appeal was therefore allowed. The applications in question will now be published for opposition purposes (assuming the UKIPO des not raise other grounds of objection). It will be interesting to see if the applications are opposed once published.

What does this mean for you?

• The decision casts doubt on the UKIPO's ability to raise bad faith ex officio at the application stage where the mark applied for contains the name of a famous person. 
• If followed, it would effectively mean the UKIPO no longer raises bad faith ex officio at the application stage. It could only raise bad faith by the Registrar of the UKIPO bringing an application to invalidate at court (post-registration). 
• A greater onus would therefore be on famous people to police their brands and oppose any conflicting applications. Whether there will be an increase in speculative applications by third parties for marks containing the names of famous people remains to be seen. 
• It is worth remembering that there are differences at national and EU level on when bad faith may be raised. For example, bad faith is not an absolute ground for refusal of an EUTM application. An EUTM can only be invalidated - once registered - on the grounds of bad faith. The position for EU member states as regards national marks is slightly different – they must provide a mechanism for national registrations to be invalidated on the basis of bad faith and have the option of further providing that bad faith may be raised at the opposition stage. 
• The case also contains a useful discussion on the law of bad faith in general and particularly the burden of proof.