CHINA WHITE application not whiter than white

In Harrison v Teton Valley Trading Co, the Court of Appeal of England and Wales has upheld an opposition to the registration of CHINA WHITE for alcoholic beverages on the grounds that the application had been filed in bad faith.

Matt Rymer worked as a barman at a nightclub in London called Chinawhite. As part of his duties, he helped develop a signature cocktail called Chinawhite. He then approached an individual named Karl Harrison with the idea of marketing the drink and represented that he was the sole proprietor of the cocktail recipe and the name Chinawhite. Significantly, Harrison was aware, through his discussions with Rymer, that a derivative of the cocktail was to be sold at the Chinawhite club. Harrison took up Rymer's proposal and applied to register CHINA WHITE with the Trademark Registry for alcoholic beverages. Teton Valley Trading Co (TVT), the licensee of the Chinawhite club, opposed registration.

The Trademark Registry refused Harrison's application on the grounds that he had filed it in bad faith pursuant to Section 3(6) of the Trademarks Act 1994. This decision was subsequently upheld by Mr Justice Pumfrey on appeal to the Chancery Division of the High Court.

In the Court of Appeal, Harrison argued that both the hearing officer and the judge had wrongly construed the words 'bad faith' in Section 3(6) and submitted that the test for bad faith was subjective. Since Harrison had filed the application in the belief that Rymer was the true owner of the cocktail name and recipe, he had not acted in bad faith. The actions of Rymer (who had clearly acted in bad faith) were not relevant to this issue.

The court rejected this argument and instead approved the test applied by the hearing officer and Pumfrey on appeal. This was the 'combined test' formulated in Twinsectra Limited v Yardley, which combined both objective and subjective elements. According to the combined test, the relevant question was whether, having regard to the background facts, the filing of the trademark application in Harrison's own name amounted to dealings that fell short of standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined.

In this instance, the court upheld the finding of bad faith. Although the court accepted Harrison's evidence that he had believed Rymer's representations as to ownership of the name and recipe, it held that he had failed to make adequate further enquiries. In view of the facts known to Harrison, including his knowledge that the successful registration of the marks would have entitled him to prevent TVT from carrying on its business of selling its Chinawhite cocktails under that name, this failure to make enquiries was sufficient to establish bad faith.

Neither Pumfrey nor the Court of Appeal attempted to define bad faith for the purposes of Section 3(6). The words 'bad faith' had to be applied to the relevant facts of each case.

This case illustrates the importance of conducting adequate due diligence. Failure to investigate circumstances that would alert the attention of reasonable and experienced persons, in the particular commercial area being examined, may fall short of the standard required for Section 3(6).

Jeremy Dickerson, DLA LLP, London