No intention to use mark when filing equals bad faith

United Kingdom

In Ferrero SpA v Soldan Holding & Bonbonspezialitaten GmbH, David Kitchin - an appointed person of the UK Patent and Trademark Office - has upheld the hearing officer's decision to invalidate five of Ferrero SpA's KINDER trademark registrations on the grounds that Ferrero did not have any intention of using them at the time of application.

In April 1997 Soldan Holding & Bonbonspezialitaten GmbH, a German confectionary producer, brought invalidity actions against KINDER SNAPPY, KINDER TIME, two marks incorporating KINDER CUORDIFRUTTA and KINDER TONUS. Among other things, Soldan argued that the registrations had been filed in bad faith under Section 3(6) of the Trademarks Act 1994 as Ferrero did not have any intention of using the marks when it filed the applications. Soldan provided evidence that only six KINDER marks had been used in the United Kingdom since 1967 - none of which were the marks involved in the proceedings.

The hearing officer upheld Soldan's claims, concluding that as Ferrero had not used any of the marks that were the subject of the proceedings, nor over 50 of its other KINDER marks (out of 60 registered), Ferrero had no genuine intention to use these marks when they were filed.

On appeal, Kitchin affirmed the decision. He upheld Ferrero's argument that bad faith must be established at the date of the application. However, he also held that this did not exclude consideration of matters after the date of application that may assist in determining the state of mind of the applicant at the date of the application; for example, in this case, the large number of unused applications.

Kitchin rejected Ferrero's allegation that actual dishonesty, and not merely the absence of bona fide intention to use a mark at the filing date, constitutes bad faith. Section 32(3) of the Trademarks Act requires an applicant to state that either (i) the trademark is being used, or (ii) there is a bona fide intention to use it. In LABORATOIRE DE LA MER, the court stated that "if that statement is untrue then it seems fairly plain that the registration is vulnerable to an attack as one made in bad faith". Although Kitchin agreed that an allegation of bad faith "should not be made unless it can be fully and properly pleaded" (see ROYAL ENFIELD ([2002] RPC 24)), he stated that a proper pleading need not be overly full, as long as the allegation is clear and supported by evidence.

Kitchin also rejected the allegation that Section 32(3) of the Trademarks Act is ultra vires (ie, it has no legitimate basis) because there is no equivalent section in the Community Trademark Directive. Instead, he found, as did the court in DEMON ALE ([2000] RPC 345), that the eighth recital to the directive confirms that "it is essential to require that registered trademarks must actually be used".

Kitchin also dismissed the contention that applications made under the Trademarks Act 1938 without any bona fide intention to use the marks could not amount to bad faith under the 1994 act.

The transitional provisions contained in Schedule 3 of the 1994 act provide that, for the purposes of invalidity, Section 3(6) is deemed to have been in force at all material times and so a 1938 registration can be declared invalid if made in bad faith.

The court concluded that Ferrero had no bona fide intention, at the time of its application, to use the five marks in question and, as such, the applications were made in bad faith. The appeal was therefore dismissed.

While the case is a fairly extreme example - Ferrero had over 50 pending or registered KINDER marks sitting unused - it highlights the importance of balancing a safe broad registration offensive against the risk of an attack of invalidity for bad faith.

Emma Malcolm, Hammonds, London

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