Bad faith in registering a trademark when there was a pre-existing relationship and the registrant "hijacked" the mark

The issue of bad faith in connection with trademark prosecution is a vexing one that continues to challenge practitioners in various jurisdictions. Kat friend Shawn Poon reports on a recent example, this time from Singapore.

In this invalidation action before the Intellectual Property Office of Singapore ("IPOS"), two marks registered on behalf of Navin Trading Pte Ltd viz no. 40201606062U

and no. 40201606064Y

were invalidated on the grounds that they were registered in bad faith.

The applicant for invalidity ("Applicant") had used its “SHREE” and “SHREE GOLD” marks in relation to Indian provision goods (e.g. edible oils, foodstuff such as pickles, dates, honey, flour, spices and powders) and prayer items that were sold in Malaysia. Subsequently, on or about 2010, it started selling these goods in Singapore through various Singapore middlemen (including Sri Murugan Manufacturing, which began the purchase of SHREE and SHREE GOLD products originating from the Applicant for sale in Singapore, from around May 2012).

Mr Boss, a director/shareholder of the registered proprietor of the trademarks, was formerly a sales manager in Sri Murugan Manufacturing and he arranged for the purchase of SHREE and SHREE GOLD products from the Applicant. He also knew the Applicant personally, as he contacted the Applicant to place orders for the products. He therefore had knowledge of the Applicant’s business, the goods it sold in Singapore, and the “SHREE” and “SHREE GOLD” marks under which the goods were sold.

On 4 April 2016, Mr Boss contacted the Applicant, requesting photographs of the Applicant’s products, saying that they would assist in promoting these products in Singapore. In response, the Applicant sent Mr Boss pictures of some of the products. On that same day, the registered proprietor applied to register the two marks in Singapore.

In July 2016, Mr Boss represented to the Applicant that he had registered “SHRI GOLD” in Singapore (which was untrue). The Registrar took this false representation as one factor pointing towards bad faith. On 5 April 2017, prior to the commencement of the invalidation actions, the Applicant’s solicitors wrote to the registered proprietor demanding that it voluntarily cancel the marks. No response was received.

The Registrar held that it was “quite clear” that the registered marks had been registered in bad faith, on the basis of the following:

(a) The Applicant had first use of its trade marks “SHREE” and “SHREE GOLD” in Singapore since 2010 and 2012, respectively;

(b) The registered proprietors registered the marks with full knowledge of the Applicant’s trademarks “SHREE” and “SHREE GOLD” (as Mr Boss had purchased the Applicant’s SHREE and SHREE GOLD products as a sales manager, and had requested the Applicant to send him photos of the Applicant’s products on the same day that the proprietors registered the marks);

(c) Mr Boss’s actions (falsely claiming that he registered “SHRI GOLD” instead of “SHREE GOLD”) after the fact suggested that he knew his actions were not above board;

(d) The silence of the registered proprietor in response to the demand letter sent by the Applicant’s solicitors.

In the author’s view, this is a straightforward case of bad faith. Bad faith is an absolute ground of refusal under Section 7(6) of Singapore’s Trade Marks Act. Under Singapore law, bad faith embraces—

...not only actual dishonesty but also dealings which would be considered as commercially unacceptable by reasonable and experienced persons in a particular trade, even though such dealings may otherwise involve no breach of any duty, obligation, prohibition or requirement that is legally binding upon the registrant of the trade mark (Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR (R) 1073).

In Singapore, the test for bad faith is a combined test, which encompasses both a subjective and objective element. The court or tribunal will have to determine what the defendant knew (the subjective element) and to determine whether his actions to register the mark with such knowledge would be regarded as being in bad faith by persons adopting proper standards (the objective element) (Valentino Globe v Pacific Rim Industries [2010] 2 SLR 1203, Wing Joo Loong Ginseng Hong (Singapore) Co Pte Ltd v Qinghai Xinyuan Foreign Trade Co Ltd [2009] 2 SLR (R) 814).

One established category of bad faith under Singapore law is where there was a pre-existing relationship between the parties (e.g. where the trade mark applicant/proprietor was a distributor or agent of the opposer/invalidator such as in Nautical Concept v Jeffery Mark Richard [2007] 1 SLR (R) 1071), and the trade mark applicant/proprietor with full knowledge of the other party’s rights to the mark proceeds to “hijack” the mark by registering it. Such actions have been judged to fall short of the acceptable commercial standards and constitute bad faith.

This case falls within such a category. The registered proprietor had actual knowledge of the Applicant’s trade marks and their use in Singapore, and with such knowledge it proceeded to register these marks in Singapore. In this sense it is in line with the various authorities, such as the Nautical Concept v Jeffery Mark Richard case.

The picture in the lower middle is by CyberGhostface, taken from Charles and Mary Lamb, "Tales from Shakespeare", and is in the public domain.