800 FLOWERS powers through against opposition

In Zockoll Group Limited v Controller of Patents, Designs and Trademarks, the Irish High Court has issued a ruling with significant implications for claims of bad faith in Irish oppositions (Case 2006 137 SP, October 17 2006). The decision stemmed from a determination of the Controller of Patents, Designs and Trademarks to uphold an opposition against an application for the trademark 800 FLOWERS where the opponent was a US company which traded very successfully in the United States under the trademark 1-800-FLOWERS.

The opponent, 1-800-FLOWERS Inc, had no registered rights in Ireland and there was limited evidence of customers with Irish addresses or of deliveries to Ireland. The controller (through the hearing officer) held that in the absence of satisfactory proof that 1-800-FLOWERS Inc's trademark was known to a substantial number of persons in Ireland, there was no likelihood of deception or confusion as required by the relevant provision of the Trademarks Act 1963 of Ireland under which this application was examined (now superseded by the Trademarks Act 1996). The court upheld this finding. Although this decision is based on an old law, it may be relevant to the current and comparable issue of likelihood of confusion where it is not clear whether the mark is known to a substantial number of persons in Ireland.

The controller upheld the opposition by way of his residual discretion under the Trademarks Act 1963 on the basis of bad faith because the registration of the mark would frustrate the legitimate expansion of 1-800-FLOWERS Inc's business in an unjustifiable manner. The reasoning was that the applicant, Zockoll Group Limited, knew of the existence of 1-800-FLOWERS Inc and its business as well as its plans to expand that business to the neighbouring jurisdiction of the United Kingdom, as a result of which the controller concluded that Zockoll Group could reasonably have assumed that 1-800-FLOWERS Inc would also seek to expand its operations into the Irish market. The court dismissed this ground of opposition on appeal. Given that bad faith is a ground of opposition under the current legislation, this decision has particular relevance both to the practice and legal principles applicable to bad faith.

The court held that an allegation of bad faith is a serious matter to the extent that "it is not sufficient or fair to an applicant to characterize its behaviour as bad faith in the course of submissions before the controller without giving formal, advance notice and particulars in good time to enable the charge to be defended" and more specifically that "an allegation suggesting fraud or bad faith is one which should only be dealt with if fully and formally pleaded and particularized, and notified to the applicant in advance". This would appear to indicate that where it is intended to rely on bad faith in an opposition, this ground must be specifically set out in the Notice of Opposition and there should be full particulars of the allegation submitted during the proceedings in sufficient time to enable a defence to be presented.

The court disagreed with the controller's conclusion that Zockoll Group could reasonably have assumed that 1-800-FLOWERS Inc would seek to expand its operations into Ireland on the basis of its knowledge of 1-800-FLOWERS Inc's plans to expand its business into the United Kingdom. The court also disagreed with the controller's conclusion that Zockoll Group should, in light of this knowledge, have refrained from applying to register the trademark. Instead, the court held that there was no clear evidence on the basis of which it could be safely concluded that 1-800-FLOWERS Inc intended to expand its business into Ireland or that the applicant should have accepted that such expansion was imminent. Further, the fact that Zockoll Group had secured the Irish telephone numbers which are the alpha-numeric equivalents of '1800 FLOWERS' and '1800 FLORISTS' (which the controller had intentionally excluded from his consideration to concentrate on the trademark aspects) was held to preclude any reasonable conclusion that 1-800-FLOWERS Inc could usefully expand its business into Ireland let alone that it was imminently about to do so.

In light of this decision, trademark practitioners and opponents must be far more specific in relation to allegations of bad faith from the outset in Irish oppositions.

The decision is to be welcomed as it rejected the introduction of a general principle whereby unjustifiable frustration of the legitimate expansion of businesses in neighbouring jurisdictions could result in refusal of applications in Ireland notwithstanding the lack of any rights in Ireland. However, the court did not state what the result would have been if there had been clear evidence that 1-800-FLOWERS Inc intended imminently to expand its business into Ireland, leaving that argument open for future cases.

Niamh Hall, FR Kelly & Co, Dublin and Belfast