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Monday, 10 January 2005

SWEET SMELL OF SUCCESS FOR MCBRIDE IN BAD FAITH CASE


The IPKat brings tidings of a significant LCAP decision. The basic question was whether it counts as bad faith (and hence a ground for refusal/invalidation of a registration) to apply to register a 2-D depiction of a shape that the applicant intends to use in 3-D.

McBride applied to register a two-dimensional picture of its hexagonal liquid-filled air-freshener as a trade mark for various air-freshening products in Classes 3 and 5. The application was made on the UK Trade Mark Registry’s Form TM3, which instructs applicants to indicate if the mark that they are applying for is three-dimensional. McBride failed to indicate that this was the case. The form also contains a declaration that the applied-for mark is being used by the applicant for the goods or services stated or that there is a bona fide intention that the mark will be so used. This had been signed by McBride’s trade mark attorneys. Reckitt opposed the application, arguing that McBride had made it in bad faith under s.3(6) of the UK Trade Marks Act (TMA) 1994. Reckitt argued that McBride had made a materially false statement by saying that it had a bona fide intention to use the mark in Form TM3 since McBride had no intention to use the mark as depicted in two-dimensional form. Instead, McBride intended to use the mark in three-dimensional form. The hearing officer accepted Reckitt’s argument. McBride appealed, arguing that the hearing officer had taken an incorrect approach to the standard required for showing bad faith and had incorrectly proceeded on the basis that there is a sharp distinction between a two-dimensional mark and a three-dimensional mark.

McBride won the appeal and in this case there was no bad faith. Highlights of the LCAP’s decision are:

* Following the Court of Appeal’s decision in Harrison v Teton Valley the LCAP had to apply the “combined test” for bad faith i.e. that it must be established that the defendant’s conduct was dishonest by the ordinary standards of reasonable and honest people and that the defendant himself realised that, by those standards his conduct was dishonest. This is a mixed objective and subjective test.
* As the hearing officer had found, consumers would likely perceive the applied for mark as a 2-D rather than 3-D mark.
* The Hearing Officer had been right to reject McBride’s argument that there was no real difference between a two-dimensional mark and a three-dimensional mark. As the hearing officer pointed out, an application to register a three-dimensional mark must overcome hurdles concerning descriptiveness and functionality that a two-dimensional mark does not have to. The hearing officer did not find that McBride deliberately and conscientiously designated the marks as a two-dimensional mark to avoid such problems. Instead his observations on this subject were addressed to the materiality of the false statement and he was correct to say that a false statement that an applicant intended to use s two-dimensional mark when in reality he only intended to use a three-dimensional mark would be material.
* McBride’s appeal could be allowed since it was at least arguable that: (i) since the product was sold in packaging that contained a window through which one face of the container of the product and (ii) what the average consumer would see before removing the container from its packaging was substantially a two-dimensional image which corresponded quite closely to the mark applied for, the use made of the mark constituted use of the mark applied for “in a form differing in elements which do not alter the distinctive character of the mark in the form in which it was registered” under s.46(2) of the TMA 1994. If this was the case then what the applicant intended to do at the date of filing Form TM3 may have constituted use of the two-dimensional trade mark applied for, meaning that its statement that it intended to use the two-dimensional mark could be a true statement. This would be highly relevant to the issue of bad faith.
* In reaching his conclusion on bad faith, the Hearing Officer had not sufficiently considered the subjective state of mind of McBride. Following Harrison, for there to be bad faith under s.3(6), it is not enough for the applicant to have made a statement of intention to use the mark that turns out to have been incorrect. Instead it must be shown that he knowingly made a false statement (or possibly made a statement with reckless disregard for whether it was true or false). AN honest but mistaken statement that the applicant intends to use the mark is not considered bad faith. In this case there was no evidence from which it could be inferred that McBride knew that sale of the product would not constitute use of the mark applied for and therefore there was no evidence that it knew it was making a false statement on Form TM3. Likewise, no such inference could be properly drawn from McBride’s failure to file any evidence in response to Reckitt’s statement of case and evidence.

The IPKat notes that McBride was lucky in this case since they had used their mark in a form that was analogous to 2-D use. However the basic principle remains that, in the UK at least, it is an act of bad faith to apply for a 2-D mark if you know that your intention in to use the mark in 3-D form.

More air fresheners of note here and here

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