important

• Whether an EU or national trade mark may be declared wholly or partially invalid on the ground that some or all of the terms in the specification of goods and services are lacking in sufficient clarity and precision to enable the competent authorities and third parties to determine on the basis of those terms alone the extent of the protection conferred by the trade mark;
• In case that answer to the question above is in the affirmative, whether a term like 'computer software' is too general to be considered 'sufficiently clear and precise';
• Whether it is bad faith simply to apply to register a trade mark without any intention to use it in relation to the specified goods or services;
• If so, whether it is possible to conclude that the applicant made the application partly in good faith and partly in bad faith if and to the extent that the applicant had an intention to use the trade mark in relation to some of the specified goods or services, but no intention to use the trade mark in relation to other specified goods or services;
• Whether section 32(3) of the UK Trade Marks Act 1994 is compatible with the EU Trade Mark Directive and its predecessors.

Kat friend Penelope Ng brings us a summary of a recent trademak case in Singapore in which bad faith was succesfully claimed.

Bad faith is often pleaded in trade mark opposition and invalidation cases. In Singapore, both the Registry and Courts have consistently made clear that the enquiry is fact-dependent and the evidentiary threshold is high because of the seriousness of the allegation.

As a result, a claim of bad faith is seldom successful. A rare instance of success is the recent case in Singapore before the Registry, Dentsply Sirony Inc. v Tomy Incorporated [2019] SGIPOS 13, where the applicant (for invalidation) managed to rely on its longstanding relationship and contractual agreements with the registered proprietor to show that the trade mark applications had been filed in bad faith.


                                                           Sadly for Othello, Iago knew all about bad faith

 Facts

Dentsply Sirona, Inc. (the "Applicant") instituted the invalidation proceedings against three trade marks, "MICROARCH", "SENTALLOY" and "BIOFORCE", registered in the name of Tomy Incorporated ("Tomy" or the "Proprietor"). These marks were filed in Class 10 (for orthodontic products) on 22 January 2013.

The parties had a longstanding relationship, dating back to 1967, when one of the Applicant's subsidiaries ("GAC") was appointed as a distributor of the Proprietor's orthodontic products. There were several agreements delineating the respective rights of the parties regarding distributorship in various territories as well as the use and ownership of trade marks. A brief summary follows:-

a) The 1986 Agreement carved out the parties' respective territories and provided that products would be advertised and sold under the trade marks "Tomy" or "Orth-Tomy". GAC had a right to use these marks and the option to register them. The 1986 Agreement did not deal with any of the impugned marks.

b) The 1998 Agreement carved out the parties' rights to sell and distribute the products in various territories and provided that:

(i) GAC could sell the products under its own trade marks and GAC owned all rights therein;

(ii) The "Tomy" and "Orth-Tomy" marks belonged to the Proprietor, and GAC was prohibited from acquiring registrations for them without approval, although it could use these marks in connection with products manufactured by the Proprietor; and

(iii) A list of marks (including "MICROARCH", "SENTALLOY" and "BIOFORCE") applied/registered in certain specified territories – set out in an exhibit – belonged to GAC, which granted a non-exclusive, royalty-free licence to the Proprietor to use them in connection with producing and selling the products until termination of the agreement.

c) The 2004 Agreement was largely similar to the 1998 Agreement, save that Singapore became a non-exclusive territory (previously, GAC had exclusive rights to sell and distribute the products in Singapore).

d) The 2012 Agreement did away with any division based on exclusive and non-exclusive territories. Instead, GAC had only a non-exclusive right to sell and distribute the products in all territories. More crucially, in relation to trade marks, the agreement provided that:

(i) GAC owned the rights to its own trade marks and the Proprietor could not claim any rights therein;

(ii) The Proprietor owned all rights to its Tomy trade marks, including "Tomy" and "Orth-Tomy", and GAC could not claim any rights therein; and

(iii) Marks applied/registered in certain specified territories, as set out in an exhibit, were the property of GAC and its affiliates.

Registrar's Findings

The relevant date for assessing the grounds of invalidation is 22 January 2013 (i.e., the date of application for registration of the impugned marks). The 2012 Agreement was subsisting and governed the relationship between the parties during this time.

It was disputed whether the trade marks "MICROARCH", "SENTALLOY" and "BIOFORCE" belonged to GAC in Singapore, since the list of marks in the exhibit annexed to the 2012 Agreement did not expressly include Singapore. Nevertheless, upon review of the 2012 Agreement in its totality, the IP Adjudicator was persuaded that the ownership rights of GAC's trade marks, including the impugned marks in Singapore, vested in GAC and its affiliates. The list of countries merely showed the countries in which applications/registrations for the marks had already been made or obtained.

                                                                                Sort of like bad faith

Eventually, with knowledge of the terms of the agreement between the parties as regards ownership of the impugned marks, the Proprietor's action in registering the marks that are the property of GAC and its affiliates (including the Applicant) was found to be "tantamount to hijacking of GAC's trade marks and it clearly falls outside the scope of acceptable commercial behaviour observed by reasonable and experienced persons", i.e., the registrations had been procured in bad faith. The registrations were declared invalid.

Even though the evidence showed that the Proprietor was the first to use the marks "BIOFORCE" and "SENTALLOY" in Singapore in 1993 (and notably this was prior to the 1998 Agreement), there was already a contractual relationship between the parties at the time.

Also, GAC had had registrations for "BIOFORCE" and "SENTALLOY" in the United States whereas the Proprietor did not have any registration for the said marks anywhere in the world. Further, the behaviour of the parties after the 1998 Agreement had come into existence was consistent with the terms delineating two categories of marks belonging to GAC, and the Proprietor, respectively.

Key Takeaways

Case law suggests that actual knowledge of a counter-party's rights, without more, does not automatically constitute bad faith. In this case, the pre-existing relationship between the parties was a crucial factor in finding that there was bad faith. This is reminiscent of the Singapore Registry's decision in USA Pro IP Limited v Montfort Services Sdn. Bhd. [2018] SGIPOS 4. In that case, prior negotiations and commercial dealings between the parties were also key factors considered. These underscore the fact-dependent nature of such bad faith claims.

The case is also a reminder to ensure that contracts set out clearly the intention of the parties as regards intellectual property, including:

• Use and ownership of parties' marks;

• Any prohibition against acquiring rights in these marks in any or all territories; and

• Whether any "list of marks" is exhaustive or intended to be amended from time to time.

The case is currently on appeal to the Singapore High Court.

When it comes to registering a trade mark, especially a three-dimensional shape, it is clear from the beginning that this will be an uphill battle. From the recent reappearance of the Rubik's cube (IPKat analysis here), to the KitKat and the London taxi, the list of rejections will certainly intimidate the casual onlooker.

Therefore, it came perhaps as no surprise when the UK Intellectual Property Office (UKIPO) rejected Jaguar Land Rover's application for the registration of 6 three-dimensional shapes of their cars (pictured) last month. The main arguments concerned the question of distinctiveness - inherent and acquired.

Background

Jaguar Land Rover (JLR) applied to register six 3D shape trade marks for their Land Rover Series 1, Series 2, Defender 90 and Defender 110 (the latter two including shapes with rear mounted spare wheels) in a range of classes of goods. Whilst initial queries were raised as to the viability of the registration, the applications were permitted to be published for opposition purposes. Ineos Industries (which had applied in the past to invalidate a (different) Land Rover registered design, and proven successful) opposed the trade mark applications, on the following grounds:

(i) the shapes were not capable of being registered;
(ii) lack of inherent distinctiveness/descriptive in nature;
(iii) the shapes had become customary in the established practice of trade of the goods;
(iv) the shapes resulted from the nature of the goods themselves and/or are necessary to achieve a technical result and/or give substantial value to the goods themselves;
(v) registration would be contrary to public policy; and
(vi) that the applications were filed in bad faith.

Whilst all of these grounds were covered in much detail in the UKIPO decision, only certain key points are focused on here, namely opposition grounds (ii), (iv) and (vi).

Lack of inherent distinctive character / descriptiveness - 

As set out under section 3(1) of the UK Trade Mark Act 1994 (TMA), signs devoid of distinctive character would not be capable of being registered. In London Taxi Corporation v Fraser-Nash, it was recalled that the registered shape:

"must be one that departs significantly... from the norm or customs of the sector for products of that kind". 

It was common ground that the sector in question was the passenger car sector, and would require assessment through the eyes of average consumers, who would pay a high degree of attention (due to a passenger car being an important financial purchase).

It was identified that the Defender designs had unusual aspects (“‘arrow shot' rear windows and alpine side windows”). However, the configuration of the shape as a whole was important. Even with some unusual elements, this would not necessarily mean that the shape as a whole would depart from the norms or customs of the sector. Consequently, the contested marks were found to be devoid of distinctive character in relation to passenger cars.

Since marks found to be descriptive would also be found to be devoid of any distinctive character, it was concluded that this ground of application would also be applicable. Notably, it was raised that registering the mark under 'apparatus for locomotion by air and/or water' would be free from objection under s3(1)(b) and (c), as set out in the past case of Jaguar Land Rover Ltd v OHIM regarding a different JLR product [however, this point does arise later, under different circumstances...]

Acquired distinctiveness - 

From Windsurfing Chiemsee, acquired distinctiveness is found if:

"the competent authority finds that the relevant class of persons, or a significant portion thereof, identify [the] goods as originating from a particular undertaking because of the trade mark".

Regarding the Land Rover Series 1 and 2, the car was last sold 44 years prior to the application, and relied on magazine and film appearances - the UKIPO found there was nothing persuasive about this and acquired distinctiveness was not found.

For the Defender 90 and 110 models, the decision revolved around whether the shape would accord with the essential function of a trade mark: "to guarantee the identity of origin of the marked goods or services to the consumer... by enabling him, without any possibility of confusion, to distinguish the goods or services from others which have another origin". A number of points were taken into account, such as how the shape was promoted alongside 'LAND ROVER' and 'DEFENDER', and how third parties had sold passenger cars in the UK based on the shapes of the Defender models but under different trade names without causing confusion. Even a survey of members of the public conducted by JLR did not demonstrate that the shapes had acquired distinctiveness, and as such, acquired distinctiveness could not be established.

Not exactly a Land Rover... but Kat approved

Substantial value -

It was raised as part of the proceedings that the "boxy 'slab-sided' shapes" were counter functional, not necessary to achieve a technical result, and not features that "consumers may be looking for in the products of competitors". But would it be found that this provides the aesthetic appeal that may result in being caught in the opposition ground? This was a point of uncertainty for the UKIPO. It was noted that this was a "difficult and developing area of the law", and without having heard the full arguments addressing the issue, the ground was to be left undecided.

Bad faith -

Despite the success of the other grounds of opposition, the question was also raised as to whether the trade mark application was made in bad faith in relation to certain goods and services, as JLR had no intention to use the marks. Referring to Arnold J (as he then was) in Sky Plc v Skykick UK Ltd in the High Court (the available relevant law at the time of application), even though there was no express requirement for intention to use a trade mark when registering it, such an application could constitute bad faith. As such, turning back to the particular point of ‘apparatus for locomotion by air and/or water’, it was found that it was “inherently very unlikely, if not wholly implausible” that the shape would be used for aircraft or boats. The lack of “a reasonable commercial rationale” for seeking an application thus meant that JLR applied to register these goods in bad faith.

Comment -

As set out initially, this was perhaps not an unexpected decision. However, there were a few interesting points made by the UKIPO to be noted.

When it comes to 3D TM applications for vehicles, the example from Jaguar Land Rover v OHIM of Land Rover's application for 'apparatus for locomotion by air and/or water' has typically arisen as an example of what may constitute a 'significant departure from the norms or customs of the sector' - this has been raised multiple times in case law. As Floyd LJ surmised in the London Taxi Court of Appeal case, “put crudely, the makers of the Range Rover could have registered the shape for a plane or a boat but not for a car.”

However, consideration that an application of this kind might be in bad faith has not considered as often as distinctiveness. Lots of things have happened since the Lindt chocolate rabbit case, and the CJEU decision in Sky is keenly awaited to also clarify this point (see IPKat analysis of AG Tanchev's recent Opinion here).

Finally, substantial value still remains somewhat an obscure concept. As Floyd LJ wondered in London Taxi: should one take into account or ignore the fact that consumers will recognise the shape? In the present judgment, there was examination of the wording of Hauck v Stokke (which said the target public's perception of the shape was a factor to be considered). It was also raised that since the prices of the Land Rovers were similar to competitor's products whilst lacking the benefits of modern automotive design, it could be attributed to the appeal of the 'iconic' shape to consumers. However, there was no engagement with Floyd LJ's question above (or to the case of London Taxi at all in relation to the substantial value points raised), thus leaving the matter undecided. It seems like we will have to wait a lot longer before substantial value will be properly addressed again...

To conclude, the event was a remarkable afternoon of discussions about EU trade mark law and practice. After this, one can only keenly await for the IP case law conference in Alicante on the 21-22 May 2020.