Trade mark invalidation based on bad faith in Singapore

Trade mark invalidation based on bad faith in Singapore

Trade mark invalidation based on bad faith in Singapore

Kovalkov Leonid v Tan Siew Keng, Angeline [2016] SGIPOS 10

This is a recent decision in relation to trade mark invalidation decided by the Intellectual Property Adjudicator (“Adjudicator”) at the Intellectual Property Office of Singapore (“IPOS”). 

Trade marks involved in the case

Kovalkov Leonid (“the Applicant”) had applied for declarations of invalidity against the following marks which are registered in the name of Tan Siew Keng, Angeline (“the Proprietor”):

(a) T0312074E

 (“the 2003 Mark”); and 

(b) T0615020C

(“the 2006 Mark”).

Both marks were registered in Class 12 in respect of “Brake pads for vehicles; brake shoes for vehicles; brake lining land vehicles; suspension parts for vehicles”. These marks are collectively referred to as “the Subject Marks”. 

The invalidity action raised by the Applicant was based on Section 7(6) of the Trade Marks Act (Cap 332, 2005 Rev Ed) (“the Act”) – A trade mark shall not be registered if or to the extent that the application is made in bad faith

The present case concerns parties who were business partners in the same company, EPL Distribution Pte Ltd (“EPL”) in Singapore. The company sold goods bearing the Subject Marks for their common good until their relationship broke down, sometime between 2006 and 2007. There were discussions between the parties in relation to the auction or transfer of the Subject Marks, however, those discussions fell through. 

Based on the facts and circumstances surrounding the Subject Marks, the Adjudicator held that the ground of invalidation based on Section 7(6) failed in relation to the 2003 Mark, but was successful in relation to the 2006 Mark. 

Trade mark filed in bad faith

Bad faith encompasses “not only actual dishonesty but also dealings which would be considered as commercially unacceptable” by a reasonable and experienced person in a particular trade, even though such dealings may otherwise involve “no breach of any duty, obligation, prohibition or requirement that is legally binding upon the registrant of the trade mark”. 

In this case, the events that occurred before and shortly after the date of application were also taken into account to provide insights into context in which the Subject Marks were registered. 

Trade mark ownership findings

In this case, both parties staked their claim of ownership of the Subject Marks on their creation of the marks. However, the Adjudicator concluded that:

  • Unlike copyright, trade mark ownership is not based on originality. 
  • A claim of ownership of a trade mark right is not based on who created or coined the trade mark. 
  • A registered trade mark is a property right obtained by registration and this property right is conferred upon the applicant for registration on the basis that the trade mark is being used or is intended to be used in the course of trade by the applicant, or with the applicant’s consent, in relation to those goods or services for which the trade mark is registered. 

The adjudicator’s findings on the application for invalidation of the subject marks:

(a) the 2003 Mark

Based on the circumstances before the Adjudicator, it was found that the act of registering the 2003 Mark in the sole name of the Proprietor (instead of registering in the name of EPL) was to avoid consequences or implications perceived to threaten the survival of EPL. The 2003 Mark was registered for EPL’s use with the consent of the Proprietor. In addition, the Applicant did not show that the registration of the 2003 Mark in the sole name of the Proprietor under the circumstances of the case was in bad faith. As such, the Adjudicator concluded that the application for invalidity in relation to the 2003 Mark failed. 

(b) the 2006 Mark 

The Adjudicator found that by that time of registering the 2006 Mark, the Proprietor had known that the JBNK mark had been in use by EPL and there was no longer any excuse for the mark not to be registered in the name of EPL. The JBNK mark had become EPL’s house brand and the goodwill in the mark undoubtedly belonged to EPL. However, except for the Proprietor’s husband, the 2006 Mark was registered without consultation or knowledge of the other directors and shareholders of EPL. Based on the circumstances, the Adjudicator ruled that the Proprietor had acted in a manner that fell short of the commercially acceptable standard that would be adopted by reasonable and experienced persons in the trade, and that thus the Proprietor had acted in bad faith. 

As the application for registration was found to have been made in bad faith, the application for invalidation of the 2006 Mark was successful. 

Lessons relating to trade mark applications made in bad faith

  1. Though the 2003 Mark was not invalidated and is still registered in the Proprietor’s name, it may be vulnerable to revocation for non-use, as there is no evidence that it has been used by the Proprietor nor any other entity other than EPL (which has not been a going concern for more that 5 consecutive years) with the Proprietor’s consent.
  2. The test for bad faith is to be conducted through the eyes of “reasonable and experienced persons in the trade” who understood “commercially acceptable standards”. Therefore, individuals who are not familiar or well-advised in a particular industry may inadvertently carry out tasks in bad faith, which may place their trade marks under jeopardy from third parties.
  3. For an applicant to succeed in invalidating a registered trade mark on the basis that the application was made in bad faith, the applicant should:
    (i) show that the conduct of the proprietor of the trade mark when applying for the registration of the trade mark fell short of the acceptable standards of commercial behaviour; and
    (ii) that the proprietor knew of facts which, to an ordinary honest person, would have made the latter realise that the proprietor was in breach of those standards.