Trade Mark Oppositions: "bad faith" filings

Section 62A of the Australian Trade Marks Act provides that the registration of a trade mark may be opposed on the ground that the application was made in "bad faith". This is a relatively new ground of opposition (applying to trade mark applications accepted on or after 23 October 2006) and we have this year seen the first substantive decisions from IP Australia on this ground.

In Hard Coffee Pty Limited v Hard Coffee Main Beach Pty Limited [2009] ATMO 26 (1 April 2009), Hard Coffee Pty Limited ("Hard Coffee") successfully opposed applications to register "HARDCOFFEE MAIN BEACH" and "HARDCOFFEE" in classes 30 and 43 for coffee related beverages and coffee shop services. Hard Coffee had sold one of its coffee shops to M.B Raymond & Co Pty Limited and the director of this company, Mr Raymond, was also the director of the applicant company, Hard Coffee Main Beach Pty Limited. The contract of sale between Hard Coffee and M.B Raymond & Co Pty Limited expressly stated that Hard Coffee retained ownership of the intellectual property in the HARD COFFEE name.

The hearing officer was of the view that the applications were filed "in the face of rights that Mr Raymond had previously acknowledged" and that, having signed the contract of sale, Mr Raymond had a responsibility not to file the applications. The hearing officer held that to demonstrate "bad faith", there would need to be:

• an element of intentional dishonesty; or
• a deliberate attempt to mislead the Registrar in some way by means of the application; or
• in circumstances where an applicant claims that the application was not made in bad faith but, rather, as a result of its own ignorance or naivety, then the evidence would need to show that the circumstances were such that the "reasonable man" standing in the shoes of the applicant, should be aware that he ought not to apply for trade mark registration.

The hearing officer emphasised that the onus of demonstrating "bad faith" falls squarely on the party making the allegation. If, however, the opponent submits sufficient evidence to establish bad faith on the balance of probabilities, the onus shifts to the applicant. In this opposition, the applicant did not file any evidence or submissions in response to the opponent's evidence in support of the opposition. This failure to file evidence in answer was considered by the hearing officer to strengthen the opponent's case of bad faith.

These decisions suggest that, for opponents, it is important to present sufficient evidence to establish bad faith on the balance of probabilities, assessed by reference to a "reasonable person" test, so that the onus then shifts to the applicant. For applicants, it is important to respond to any evidence of "bad faith" or run the risk that silence may be construed as supporting the opponent's case.

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