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Bad Faith Trademark Application is Superman Workout’s Kryptonite

Tuesday, 27 August 2013

A successful appeal decision in the recent ‘Superman’ case has highlighted a number of issues relating to bad faith trademark applications. DC Comics, the owner of the trademark Superman and its associated logos, appealed against the decision of the Registrar of Trade Marks in Australia to accept the trademark of Chequot Pty Ltd, owner of the Superman Workout trademark.

Although it was held that the Superman Workout trademark was not deceptively similar to the Superman trademark, as they both relate to different subject matters and the use of the word ‘Superman’ by Chequot was merely descriptive; the use of Superman Workout with its BG device closely resembling the S device of Superman was in bad faith.

Bad Faith in Trademark Applications

Although this case was argued in Australia it does draw attention to an important but relatively discrete area of trademark law. In order to arrive at a decision of bad faith regarding the application by Chequot, several principles were raised.

According to Justice Bennett, the burden of proof lies on the party alleging bad faith while the standard of proof is a balance of probabilities. The first consideration therefore is that bad faith is a serious allegation which requires cogent evidence to be proved. Furthermore, bad faith has two elements: a subjective element relating to the applicant and an objective element relating to the decision maker.

The subjective element refers to the prior knowledge of the applicant while the objective element considers the extent to which the prior knowledge of the applicant constitutes unacceptable behaviour. Bad faith requires no proof of dishonesty or fraud and the circumstances surrounding each case are relevant; therefore, it is difficult to establish a fixed set of rules with which bad faith can be determined. However, unfair use alone may constitute bad faith.

Why was the Superman Workout Application in Bad Faith?

The application for Superman Workout and its associated logo was found to be made in bad faith because the words and marks used were sufficient to constitute a reference to Superman. The logo bore a striking resemblance to the Superman logo and the inclusion of Superman in its name suggested an intention to derive benefits associated with Superman.

Bad Faith is an Unusual Ground for Opposing Trademarks

This case does not stand out just for its high profile character but because, as a general rule, bad faith is a rare ground of trademark opposition due to its imprecise limits.

According to Attorney General Eleanor Sharpston opining on the 2009 Lindt case which was referred to the ECJ, it is difficult to define bad faith but easier to recognise it. As such, the entire facts of each case must be considered before arriving at a decision. Most importantly however, is the intention of the applicant at the time the application is made. Prior knowledge of the existence of a trademark alone is not sufficient to constitute bad faith because an application for registration could be made for legitimate reasons. However, where it is designed to exclude competition, bad faith may be inferred.

For more information about trademarks or protecting your intellectual property rights please contact James Crichton via e-mail or by telephone on 0207 611 4848.