In more detail

Background

The applicant, HMV Brand Pte Ltd, is a British music and entertainment retailer, having a physical presence in Singapore up until 30 September 2015.

On 29 July 2019, slightly less than four years after the applicant closed its last retail store in Singapore, the proprietor applied to register the following trademark in Singapore: 

The proprietor sought to register the trademark in classes 9 and 25, which included, among others, goods such as "sound recording apparatus", "sound reproduction apparatus" and "CD players". 

The trademark examiner who examined the proprietor's trademark application in 2019 initially refused registration due to three earlier trademarks. These cited marks were owned at the time by Mermaid (Brands) Limited and were transferred to the applicant on 13 August 2020.

After receiving the citation objections in 2019, the proprietor applied to revoke the three earlier trademarks on grounds of non-use. The applications for revocation were successful, and the proprietor's trademark application proceeded to registration on 13 August 2020.

Application for invalidation of the proprietor's trademark

On 1 September 2021, the applicant filed the present claim, seeking to have the proprietor's trademark invalidated based on grounds of bad faith and four other grounds of invalidation.

In finding that the proprietor's trademark application was filed in bad faith, the Registrar did not engage in a discussion on the other grounds of invalidation, as such discussion would have been moot.

Relevant guiding principles in a claim of bad faith

Section 23(1) read with Section 7(6) of the Trade Marks Act provides that a trademark registration may be declared invalid if a trademark application was made in bad faith.

The Registrar consolidated the relevant guiding principles to be applied in assessing bad faith, including the following:

• Bad faith is to be determined as at the application date, where matters occurring after the application date that may assist in determining the applicant's state of mind as at the application date may be considered.
• The test for bad faith includes a subjective and objective element, where bad faith includes dishonesty and some dealings that fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced people in the particular area being examined.
• Bad faith requires a holistic assessment of whether the applicant knows that a third party is using a similar sign, whether the applicant intends to prevent that third party from using such sign and the degree of legal protection enjoyed by the third party's sign.
• The legal burden of proof to substantiate an action for invalidation of a trademark lies on the claimant. 

Findings of bad faith

The Registrar found that the proprietor's trademark was clearly registered in bad faith for the following reasons, among others:

• The proprietor's trademark is practically identical to the applicant's earlier trademarks in Singapore. The proprietor had no explanation for the almost-perfect resemblance and did not claim to have developed its mark independently. This led the Registrar to establish the nexus between the parties.
• The proprietor never used or carried on business with its trademark that was the subject of the present proceedings.
• The Registrar could not think of any legitimate reason why the proprietor should be entitled to register the exact image used by the applicant for years within Singapore and for decades abroad.
• Even if the proprietor subjectively believed that the applicant's departure from Singapore meant that it could make such a trademark application, reasonable and experienced traders in the field would disagree and consider the proprietor's actions as objectively falling far below the standards of acceptable commercial behaviour observed by the industry.
• While the three cited marks have been lost by the applicant to revocation actions, there remains goodwill among the Singapore public in connection with the applicant's earlier trademarks. While it is possible for goodwill to be extinguished completely, the Registrar found that not all goodwill was extinguished on the proprietor's trademark application date. 

In light of the above, the Registrar took the view that there was sufficient evidence establishing that the proprietor acted in bad faith.

Key takeaways

From the case, it is clear that even if an earlier trademark is revoked on grounds of non-use, there are instances where a subsequent application for a virtually identical trademark may be considered to be an application made in bad faith. The trademark registration procedure therefore involves a holistic assessment of factors and cannot be simply confined to a comparison against existing trademarks on the trademarks register, particularly as a registration may be invalidated (or a published application may be opposed) on the grounds of bad faith, among other grounds.

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For further information and to discuss what this might mean for you, please get in touch with your usual Baker McKenzie contact.

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