Introduction
The crucial significance of bad faith in trademark cases has developed with a quantum leap in the last two decades. Consequently, an interesting body of law has emerged around the element of bad faith. In addition, the advent of digital technology has also contributed to the importance of bad faith because classical trademark pirates on the trademark registries and in the domain name space no longer have to attend international marketing shows or exhibitions. They can simply rely on a host of internet and website information to copy and pre-empt the owners of foreign marks.
Legal History and the Element of Bad Faith
Good faith ("bona fides") and bad faith ("mala fides") are significant legal concepts in jurisprudence and legal history. "Bad faith" was originally derived from the Twelve Tables ("Lex Duodecim Tabularum") of Ancient Rome. There was an emphasis on bad faith possession and corresponding punitive damages could be awarded in such cases [3] . Bad faith was also an important element in the acquisition of property in Roman law as reflected in the first Civil Code composed by Justinian. In the cases of usucapio, if the claimant acted in bad faith, that is if he knew that the physical object belonged to someone else, he could not acquire the ownership of it [4] . This fundamental legal principle was also highlighted in later years by Roman Law Scholars in Europe [5] .
It is interesting to note that Bodenhausen, the first Director-General of the World Intellectual Property Organisation, defined bad faith along very similar terms in intellectual property law. He stated in trade mark cases that: "bad faith will normally exist when the person who registers ... the conflicting mark knew of the ... (prior foreign) mark and presumably intended to profit from the possible confusion between that mark and the one he has registered ...[6]"
New Trademark Regulations in China
More recently, the element of bad faith in international trademark law has become particularly relevant in view of new trademark regulations in China.
The problem of trademarks registered in bad faith is particularly acute in the People's Republic of China. According to the State Industrial and Commercial Administration Bureau, there were 1826 cases of trademarks judged to be registered in bad faith in 2014 (a 127.4% year-on-year increase from 2013). Of these cases, 40% formed the basis of a gold rush by pirates to register trademarks with a certain reputation in respect of relevant goods and services. Moreover, these figures merely include cases where final judgment was granted - the number would be higher if it included cases that did not proceed to final judgment due to the lack of sufficient evidence.
This article examines the impact of recent cases interpreting the Trademark Law of the People's Republic of China中华人民共和国商标法 ("Trademark Law"), as well as the anticipated impact of the draft Anti-Unfair Competition Law of the People's Republic of China 中华人民共和国反不正当竞争法（修订草案送审稿）("AUCL"). It argues that these changes in the law are steps in the right direction. However, further reforms are needed to effectively tackle the issue of bad faith registrations in China. Five such reforms are proposed:
1. Recognising bad faith as an independent ground for the refusal, opposition, and revocation of a trademark
2. Incorporating an element of bad faith into Article 32 of the Trademark Law
3. Allowing for default judgment in trademark opposition and repeal proceedings
4. Reversing the balance of burden of proof in certain trademark cases
5. Establishing a blacklist of parties known to register trademarks in bad faith
The current AUCL dates back to 1993. In March 2016, the State Council Legislative Affairs Office released a draft modernising and developing the law in this area. The draft AUCL also has the potential to provide relief for victims of bad faith registrations.
International Trade Mark Law and the Element of Bad Faith
Predatory intent or bad faith refers to the intent of the defendant to trade upon the reputation of another trademark by adopting a similar mark [7].
As mentioned above, Bodenhausen pointed out that: "Bad faith will normally exist when the person who registers or uses the conflicting mark knew of the well-known mark and presumably intended to profit from the possible confusion between that mark and the one he has registered or used [8]." In the context of proceedings for the refusal of an application or for the cancellation of a registration of a trademark, bad faith is typically a significant factor in weighing the competing interests of the parties concerned [9].
Equally, during proceedings for injunctive relief the courts will, under the "balance of convenience test", usually examine not only such factors as the damage that may result from a likelihood of confusion or dilution but also the presence of bad faith. Judges are frequently confronted with the relevance of the element of "bad faith" in weighing the equities under the "balance of convenience test". What role should the factor of bad faith play in determining which of the two parties has the better right to the mark, that is, the owner of the well-known mark who wishes to extend their business under its mark to a particular jurisdiction, or the local "enterprising entrepreneur" who intercepted the owner by first using or registering a similar mark there?
Bad faith as a subjective state of mind will more often than not have to be inferred from the circumstantial evidence than be proven by direct evidence.
No hard and fast rules can be drawn in cases where only the element of bad faith is present [10], although in some jurisdictions the defendant's knowledge of a prior, foreign well-known mark alone may be sufficient to form the basis for relief [11]. The archetypical case of bad faith registration is one of registration of a foreign well-known trademark and thereafter trading intentionally upon the reputation of that trademark.
The significance of bad faith in weighing the competing interests of the parties concerned was eloquently described in the landmark Orkin decision in Canada [12]. Mr. Justice Morden JA concluded that: "The public are entitled to be protected from such deliberate deception and Orkin, which has laboured long and hard and made substantial expenditures to create the reputation which it now has ... is entitled to the protection of its names from misappropriation" [13].In the Ten-Ichi case in Hong Kong [14] the court expressed similar sentiments about the presence of bad faith: "All the plaintiffs wish to do is to exploit their legitimate business interests which have been accumulated over the years and which have achieved a high standard of international reputation. They therefore would be prevented from opening a restaurant here apparently on the basis that the defendants have quite deliberately stolen their name and their description; in my judgement, it defies common sense for me to say that the genuine interest of the plaintiff should be prejudiced in that way "[15].
The element of bad faith was also considered to be a significant factor in court decisions in jurisdictions such as the Benelux [16], Brazil [17], France [18], Germany [19], Hong Kong [20], India [21], Israel [22], Peru [23], Singapore [24], the United Kingdom [25], Venezuela [26] and Zimbabwe[27].
As Professor McCarthy [28] notes under the U.S. law, where there is hard evidence present of the defendant's intent to obtain a free ride on the coat tails of the plaintiff's reputation, courts will not refrain from highlighting the underlying equities as evidenced in the following dictum: "Where as [29] here it plainly appears that there is a purpose to reap where one has not sown, to gather where one has not planted, to build upon the work and reputation of another, the use of the advertising or trade name or distinguishing mark of another, is in its nature fraudulent and will be enjoined [30]."
How does one prove the presence of an intent to trade on the reputation of a famous or well-known mark? Since intent is a subjective state of mind it will more likely be inferred from circumstantial evidence than be shown by direct evidence [31].
Direct evidence may, nonetheless, be present in some instances by way of prior written or oral statements by the defendant or in the form of instructions given by the defendant to a designer or printer [32].
Such direct evidence is normally not readily available [33] so that intent is usually inferred from the conduct of the defendant. Circumstantial evidence on which the courts have tended to focus is the access which the defendant had to the famous or well-known mark or the substantial similarity between the well-known mark and defendant's mark [34]. In circumstances where the defendant knew or clearly must have known of the famous or well-known mark [35], and/or where there is a substantial similarity between the plaintiff's and defendant's respective marks [36], a wrongful intent should easily be inferred. The inference drawn from such circumstances is even more compelling when the defendant had the freedom to choose from a wide variety of other possible marks but "just happened" to choose a mark confusingly similar to plaintiff's mark" [37]. For instance, the adoption of a foreign language word in the local jurisdiction that happens to be identical to a foreign well-known mark will require some explanation [38]. Wrongful intent is also particularly apparent when the defendant's explanation of why he/she chose a mark that is very similar to the famous or well-known mark defies all credulity: the elaborate narratives one so often encounters in practice [39]. In essence, if the defendant's adoption of a mark similar to the famous or well-known mark is not merely "coincidental", predatory intent should be proven. Defendants do, however, often attempt to justify their choice as "coincidence". But, as Professor McCarthy has noted: "In cases where [the] defendant concocts an elaborately fantastic and strained scenario of how [they] "coincidentally" hit upon [their] symbol, judges are not amused when asked to swallow fantastic fabrications about coincidental, unknowing usage" [40].
The "coincidental" adoption by a defendant of inherently distinctive marks which are arbitrary, fanciful or coined such as, for example, LENOVO, XEROX or PEPSI, is almost always without credibility [41].The evidence may be equally compelling when it is shown that other truly distinctive elements, such as unique devices, original stylistic script and foreign language words, or unique colour combinations, design features and shapes were copied [42]. The same principle applies to marks which are not inherently distinctive but have acquired distinctiveness. For instance, one does not chance upon a bright idea in the middle of the night to adopt HUAWEI for cell phones or KENTUCKY FRIED CHICKEN for fast-food outlets. In this context Lord Denning's remark aptly applies: "The arm of coincidence may be long but it does not stretch to infinity" [43].
It is also possible that a mark may have become so famous or well-known in the local jurisdiction that it is not conceivable for the defendant to pretend that they had no knowledge of the mark [44]. It is equally possible that the intentional choice by a defendant to imitate a famous or well-known mark despite the legal risk involved can in itself testify "like a hundred witnesses as to the considerable reputation inherent in the mark in the eyes of the public" [45].
It is submitted that once the plaintiff has produced sufficient evidence to establish the fact that the defendant knew or clearly must have known of the famous or well-known mark and/or that there is a substantial similarity between the plaintiff's and the defendant's respective marks, the burden of proof should shift to the defendant to explain such apparent knowledge or similarity and justify the coincidence [46].
Similarly, if an intent to confuse the public by trading on the reputation of a well-known mark is established, an inference or a presumption of a likelihood of confusion may be appropriate [47].
It should further be noted that Article 6bis (3) of the Paris Convention mandates that no time limit shall be fixed, in other words no statute of limitation applies, when injunctive relief is sought for preventing the use of a mark in bad faith [48].
Domain Name registrations and bad faith
The widespread adoption of the World Wide Web in the mid-to-late nineties was accompanied by several factors that created what might fairly be described as a crisis for trademark owners. The first-come, first-served method of allocating domain names created an environment that highlighted the inability of infringement statutes and passing-off to effectively guard trade-mark owners against the new tort of cybersquatting [49].
The judicial and legislative response to cybersquatting has been to create measures to protect trademark holders from domain name registrations made in bad faith [50] . National legislations have similarly placed bad faith at the core of anti-cybersquatting measures [51].
Bad Faith under the China Trademark Law
The current China Trademark Law does not address "bad faith" directly, but instead, uses other similar or relevant terms, such as "deceptive", "negative influence", "fraudulent means", "improper means", etc. in different articles respectively. These include:
(1) Article 7, which requires that trademark application and use should follow "good faith principle".
(2) Article 10.1.8, which prohibits signs detrimental to socialist ethics or customs, or allowing other negative influences to be used in trademarks.
(3) Article 32 (formerly Article 31 of the 2001 Trademark Law) [52] , which provides that: applications for trademarks registration may not infringe upon another person's prior rights; and no applicant may register by improper means a trademark that is already in use by another person and has certain influence.
(4) Article 44.1 (formerly Article 41.1 of the 2001 Trademark Law), which renders invalid trademarks whose registration is obtained by: fraudulent means; or other improper means. The latest Provisions of the Supreme People's Court on Several Issues Concerning Trial of Administrative Cases Involving the Authorization and Determination of Trademark Rights (effective since March 1, 2017) clarifies "other improper means" of Art. 44.1 as "other means except fraudulent means, to disrupt trademark registration order, damage public interest, misappropriate public resources or seek unjust benefit." The China Trademark Office also announced the new Trademark Review and Trail Standards on January 4, 2017, which indicate that the following situation would fall under "other improper means" of Art. 44.1: 1) the registrant files a number of trademarks, which are the same or similar to another parties' trademark with high distinctiveness; 2) the registrant files a number of trademarks, which are the same or similar to another parties' trade name, company name, social organization or other entity name, or special name / package / trade dress of famous product; 3) the registrant files a large number of trademarks and obviously without true intent to use.
Fortnum & Mason Case [53]
Fortnum & Mason, an upmarket department store in London, sought to challenge a trademark registered by a Chinese individual on 25 October 2002 (the trademark received preliminary approval on 7 March 2004). The case came before the Trademark Review and Adjudication Board ("TRAB", or "the Board"), which gave its judgment on 17 October 2016. As the case was brought before the newest revision of the Trademark Law came into effect on May 1 2014, the claims were dealt with in accordance with the 2001 Trademark Law. Fortnum & Mason successfully relied on Articles 31 and 41.1 of the 2001 Trademark Law to have the disputed trademark revoked.
The Board held that the trademark application infringed upon Fortnum & Mason's prior copyright.
The Board first recited the elements needed to substantiate a finding of an infringement of prior copyright: (1) The trademark in question is identical or substantially similar to works in which someone else holds a prior copyright, (2) The person who applied for the registration of trademark in question has, or might have come into contact with the works in which someone else holds a prior copyright, (3) The person who applied for the registration of trademark in question was not licensed by holder of the copyright.
The relevant trademark device was Fortnum & Mason's clock logo ("the Fortnum Clock") in the United Kingdom, in which they claimed a prior copyright. As Fortnum & Mason had not submitted the blueprints and design of the clock logo as evidence, it could not be taken to have had a prior copyright earlier than 4 September 1964, when details of the Fortnum Clock was published in a newspaper. The graphics of the disputed trademark and the Fortnum Clock were identical, and the respondent did not submit evidence to prove that the disputed trademark was created independently. The Board held that it could be presumed that the respondent had known and copied the Fortnum Clock. In so deciding, the Board took into account the following: the originality and complexity of the Fortnum Clock; the fact that the graphic portion of the disputed trademark adopted by the respondent was almost identical to the appearance of the Fortnum Clock; the fact that part of the script element of the disputed trademark consisted of Fortnum & Mason's name.
The Board thus held that the respondent's act of registering the disputed trademark had indeed infringed upon Fortnum & Mason's prior right, and was accordingly in breach of Article 31 of the 2001 Trademark Law.
The Board also stated that the phrase "other improper means" in Article 41.1 of the 2001 Trademark Law refers to actions other than fraud, such as the disturbance of public order, harming public morals, or the improper use of public resources.
The Board found that the respondent had applied to register more than 40 trademarks, among which there were a number of famous trademarks such in British clothing brands, department stores, and French and Belgian foodstuffs (for example, Peter Rabbit, Godiva, and Harrods). The respondent could not explain the independent creation of these trademarks, and did not submit that he had used these trademarks.
The Board thus came to the conclusion that the respondent's acts had the obvious intention of copying, counterfeiting and imitating other well-known trademarks. This would not only lead to consumer confusion about the source of goods and services, but also upset the proper processes of trademark registration as well as undermine fair competition within the market. The Board held that the respondent's acts were accordingly in breach of Article 41.1 of the 2001 Trademark Law.
This section of the TRAB's decision is most significant. It is fully in accordance with the fundamental principles of international trademark law and its emphasis on the element of bad faith [54] . In fact, the Fortnum & Mason decision should be hailed as a landmark decision by the TRAB. This judgement has laid the groundwork for fully recognising and relying on the significance of the element of bad faith in international trademark cases [55].
Facebook Case
Liu Hongqun, the marketing director of the Zhongshan Pearl River Beer Company, applied to register three "face book" trademarks in multiple categories on 24 January 2011. Facebook was able to successfully rely on Article 41.1 of the 2001 Trademark Law to have the disputed trademark invalidated. An appeal to the Beijing High Court by Liu Hongqun was dismissed April 2016.
The Court appeared to take a principled approach to the interpretation of Article 41.1 by first reciting the legislative spirit of the Article, which was to implement the tenets of public order and good custom, maintain good order for trademark registration and administration and create a healthy market environment.
The Court noted that the applicant had registered the "face book" trademark in multiple product categories, and had even registered the trademarks of other famous brands such as that of Darlie toothpaste and OnePlus One Android smartphones. Thus, there was a distinguishable intention to copy and plagiarise others' famous trademarks, which impaired the fairness of market competition and violated the principles of public order and good custom. The applicant's wholesale registration of trademarks to obtain commercial interests for later resale to others (i.e: cyber-squatting) was held to violate the intrinsic value of the trademark, affect proper trademark registration procedures and even hamper the normal business of the honest operators in the goods economy. Accordingly, the Court ruled that the applicant's acts were in breach of Article 41.1 of the 2001 Trademark Law.
Once again, this decision has placed an appropriate emphasis on the significance of the presence of bad faith in trademark cases. Moreover, the court rooted its decision in the legislative spirit and intent of the Trademark Law. This judgement may very well constitute another milestone in the development of Chinese trademark law and its alignment with international trade mark norms.
Michael Jordan Case [56]
This case was part of the extensive litigation between Michael Jordan, the American basketball player, and Jordan Sports Co Ltd, a Chinese sporting goods company. The litigation has lasted for over 4 years, and involves protracted disputes over multiple trademarks owned by Jordan Sports Co Ltd.
In this case, Michael Jordan sought to invalidate a trademark using the Chinese transliteration of his name, "乔丹", which had been registered by Jordan Sports on 26 April 2007. On 31 October 2012, Michael Jordan submitted a request to TRAB to revoke the disputed trademark. The case was appealed multiple times and eventually came before the Supreme People's Court (the highest court in China) which gave its decision on 7 December 2016.
As with the Fortnum & Mason case, the claims were dealt with in accordance with the 2001 Trademark Law. Michael Jordan successfully relied on Article 31 of the 2001 Trademark Law to have the disputed trademark revoked, although he failed to prove his case on Articles 10.1.8 and 41.1 of the 2001 Trademark Law.
The Court first held that for the purposes of Article 31 of the 2001 Trademark Law, a person's name could by itself constitute a prior right, provided that (a) that name has a certain reputation is known to the general public and refers to a natural person and (b) that name has a stable correspondence with the natural person it refers to.
Applying these principles to the facts, the Court held that Michael Jordan enjoyed a prior right in the form of name-rights. He enjoyed such a right not only in his English name, but also its Chinese transliteration "乔丹".
The Court then focused on Jordan Sports' subjective knowledge, noting that the company knew that Michael Jordan's fame within China was long and wide-ranging. In spite of this, Jordan Sports had gone on to register a trademark using the name "乔丹".The court stated that this could easily lead to public confusion that the disputed trademark and Michael Jordan were linked, thus damaging Michael Jordan's name-rights. Jordan Sports had thus acted with subjective malice.
The Court also held that any information relating to Jordan Sports' large market share, its large business revenues, and the fact that Jordan Sports' own shoe box design had been admitted as a well-known trademark by the Trademark Office were all irrelevant to the Article 31 enquiry. Facts surrounding Jordan Sports' business conditions, the name of the company itself, as well as the circumstances surrounding the publicity, use, awards, and protection of the disputed trademark could not be used to legitimise the adoption of the disputed trademark by the defendant.
Accordingly, the Court held that the registration of the disputed trademark had been in violation of Article 31 of the 2001 Trademark Law. The trademark of the defendant was revoked and the issue was remitted back to TRAB for a re-hearing.
The Court held that there was no negative impact on the public interest and public order of China's political, economic, cultural, religious and ethnic groups. The Court also held that the registration of the disputed trademark did not constitute disturbing the registration order of the trademark, impairing the public interest, improperly taking up public resources or otherwise seeking improper interests. Accordingly, it did not fall within the "other improper means" limb of Article 41.1 of the 2001 Trademark Law. Michael Jordan did not provide evidence that the registration of the disputed trademark was registered by deception.
It is submitted that the Court missed an opportunity to deal with the significance of the element of bad faith. Having said this, it seems that the pleadings may not have involved the relevant arguments and evidence to opine on this important issue.
Further Recommendations
As analysed above, the recent cases interpreting the Trademark Law suggest that 44.1 of the Trademark Law show some promise as a route to the invalidation of trademarks registered in bad faith.
The Facebook and Fortnum & Mason [57] cases discussed above involved cases of clear trademark squatting. In finding that the actions of the respondents constituted registration by improper means, the relevant courts and tribunals in each case placed emphasis on the fact that the owners of the disputed trademarks had also registered large quantities of other trademarks in multiple product categories.
Proposed Solutions
The cases above illustrate the limited effectiveness of the existing provisions under Chinese law to protect good faith trademark owners against bad faith registrations. It is submitted that provisions which specifically refer to bad faith ought to be explicitly recognised in the law. This could be done in one of two ways:
First, bad faith could be recognised as an independent basis for the refusal, opposition, or revocation of trademarks. This has the benefit of clarity, and of aligning Chinese law with international practice where provisions targeting bad faith registrations are explicitly set out as independent provisions [58]. However, it would take some time for judicial interpretation to build up a body of case law on what constitutes bad faith in China.
Second, bad faith could be incorporated into Chinese law through an interpretation of Article 32 of the Trademark Law. Article 32 provides that applicants should not register in an improper manner a mark that is "already in use by another party and enjoys substantial influence". Since virtually all bad faith registrations involve marks that are already in use, this provision would clearly work to combat bad faith registration. Presently, using Article 32 in such a way may be precluded by an Opinion of the Supreme People's Court, which interpreted "use" (albeit in the context of cancelling a registered trademark which had not been used for three consecutive years) to refer only to actual use within mainland China [59]. Changing the law here might be accomplished by a new Opinion from the Supreme People's Court clarifying the issue, which would be easier to achieve than a legislative amendment to the Trademark Law by the National People's Congress.
The cases above are examples of trademark opposition or revocation proceedings that took years to come to a conclusion. In many cases, the disputes were appealed multiple times. It is notable that the successful claimants in the cases described above have the means to contest bad faith filings. Small and medium-sized enterprises may not have the access or resources to support a lengthy dispute resolution process or to afford legal representation.
Accordingly, proposals for reform here should focus on making the procedure for the opposition of trademarks easier and less expensive.
Default Judgments
One suggestion could be to allow for default judgments to be entered where the respondent to an application for trademark opposition or revocation fails to respond. This has the benefit of harmonising Chinese law with the large number of other jurisdictions (including civil law jurisdictions) that allow for such a procedure [60].
Blacklists
In order to effectively combat bad faith registration, the Trade Mark Office could consider the establishment of a blacklist of applicants who have registered trademarks in bad faith.
One possibility would be to harmonise the blacklist with existing legislation. The China State Industry for Industry and Commerce ("SAIC"), which also administers TRAB, has recently published its Interim Measures for the Administration of the List of Businesses Seriously Violating the Law and Becoming Discredited, which took effect on 1 April 2016 [61]. The interim measures set out circumstances in which a business could be blacklisted, including the following:
(1) A business has incurred administrative penalties regarding unfair competition more than three times within two years
(2) A business has incurred administrative penalties regarding trademark infringement more than twice within five years.
Thus, businesses that have had their trademarks successfully opposed or revoked more than a certain number of times in a certain number of years could be candidates for blacklisting.
The significance of being placed on a blacklist could vary. Possible suggested effects might include:
(1) A presumption reversing the burden of proof in trademark disputes to oppose or revoke trademarks registered by the blacklisted entity
(2) Additional scrutiny to be placed on blacklisted entities’ attempts to register trademarks
(3) Additional penalties to be imposed if a blacklisted entity has its trademark revoked or opposed for bad faith registration. It is of interest to note that this is exactly what the Roman Law rules on bad faith provided for in a related context 2,000 years ago [62] .
Such a blacklist could develop into a very useful tool for authorities who have to confront bad faith filings on a daily basis. It should be noted that, as elsewhere in trade mark cases, the 'whack-a-mole’ issue – when one shuts down a bad faith pirate in one area only to find that they pop in another spot under a different name - may surface in this context too. The possible answer to this problem would be to use the blacklists in conjunction with ‘notice and trackdown’ procedures to stop bad faith conduct at source [63].
Conclusion
Currently, the way in which courts and tribunals in many countries, including China, deal with the intentional trading upon the reputation of famous and foreign marks has become an important factor in the trading relation between nations. The international standards of fair play and comity between nations suggest upholding the equities when the circumstances of the case warrant it rather than strictly applying the principle of trade mark “territoriality”. The protection of the global trading system through the prevention of piracy and unfair exploitation of foreign marks is of great significance to contemporary commerce.
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[1]Research Fellow - Oxford Intellectual Property Research Centre, University of Oxford, Research Fellow – Peking University, Past President of the International Trademark Association, Principal Author of Famous and Well-Known Marks – an International Analysis.
[2]Partner at Kangxin Partners, P.C. Beijing office, member of the Professional Excellence Commission of the Fédération Internationale Des Conseils En Propriét Intellectuelle.
The authors would like to express their gratitude to Shang Hsuen Koh, an LLB student at King’s College, London and Jessie Li, an LLM student at Tsinghua University, for their tremendously helpful research and contribution to this article.
[3]George Mousourakis, Fundamentals of Roman Private Law (Springer Science & Business Media 2012) 146 notes that in cases of inaedificatio (when material belonging to one person was used to construct a building on another person’s land), the Twelve Tables awarded the former the remedy of double damages was available against landowners who ‘acted in bad faith (mala fide)’.
Similarly, in cases of the transfer of goods, Table VI provides in relevant part that: ‘When a person makes bond and conveyance, according as he specified with his tongue so shall be the law... It shall be sufficient to make good those faults that have been named by his tongue, while for those flaws that he has denied expressly, when questioned about them, vendor shall undergo a penalty of double damages’ (emphasis added). See AC Johnson et al (trs), Ancient Roman Statutes (University of Texas Press 1961) 10.
As noted by Professor Barry Nicholas, University of Oxford, this practice of punitive damages for acting in bad faith was firmly entrenched by the time of the Praetor’s Edict. JKBMM Nicholas, An Introduction to Roman Law (Clarendon Press 1962) 21.
[4]Digest 2 6 3; Institutes 2 6 2 – 3. See T Mommsen, P Krueger and A Watson (trs and eds), The Digest of Justinian (University of Pennsylvania Press 1985) 518 – 519; JAC Thomas, The Institutes of Justinian (North-Holland Publishing Company 1975) 97.
Similarly, in cases of specificatio (the original acquisition of property rights by in a movable good by transforming it into a new product), there is a strong case that property rights cannot be acquired when the creator of the new product acts in bad faith. See EG Lorenzen, ‘Specification in the Civil Law’ (1925-1926) 25 Yale LJ 29, 31.
[5Lorenzen (n 4) 32; DL Carey Miller, ‘Good Faith in Scots Property Law’ in ADM Forte (ed) Good Faith in Contract and Property Law (Hart Publishing 1999) 115.]
[6] GHC Bodenhausen, Guide to the Application of the Paris Convention for the Protection of Industrial Property - As Revised at Stockholm in 1967 (WIPO Publication 1968) 93.
See also the definition of bad faith in the accompanying text for n 7. See also the ground for refusal and cancellation on the basis of bad faith provided for in the: Council Directive (EC) 2015/2436 of 16 December 2015 to approximate the laws of the Member States relating to trade marks (Trade Mark Directive) [2015] OJ L336/1, art 3(2)(d); Commission Decision (Andean Community) No 486 Establishing the Common Industrial Property Regime (2000) 600 Gaceta Oficial del Acuerdo de Cartagena 63, art 172(d), WIPO (trs) WIPO Lex No CAN012; and WIPO, Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks (WIPO 2000) art 4.
[7]Frederick Mostert, Famous and Well-Known Marks – an International Analysis (INTA 2015) 1-48.
[8]Bodenhausen (n 6) 93.
[9]Mostert (n 7) 1-48.
[10] Mostert (n 7) 1-66.
[11]SA Wimpy (Pty) Ltd v Burger King Corporation, 1978 South African Patent Journal 166 (South African Registrar of Trade Marks), Steven Bigger (1979) 69 TMR 172 (note). See also discussion of Fromargeries Bel SA v Ivaldi, Enrique, La Ley (La Chambre fédérale de Buenos Aires, unreported) in ED Aracama Zorraquin, ‘La Piraterie des Marques en droit Argentin’ [1982] La Propriété Industrielle 339, 342-43.
[12]Orkin Exterminating Co Inc v Pestco Co of Canada Ltd, 1985 ONCA 157, (1985) 50 OR (2d) 726
[13ibid 448.]
[14Ten-Ichi Co Ltd v Jancar Ltd [1989] HKCFI 367, [1989] 2 HKC 330.]
[15] ibid [25]. Various Chilean cases have held that it is unfair competition for a junior user to register a mark that is well known abroad in order to prevent exports of goods bearing the legitimate (senior user’s) trademark into Chile. See eg: Decisions of the Comisión Preventiva Central 7 July 2000, Cases No. 146-00 and No. 259-00 (VIMAR); Decision of the Comisión Preventiva Central 11 August 2000, Case No. 244-00 (PICADILLY); Decision of the Comisión Preventiva Central 1 September 2000, Case No. 1136 (BIBI).
[16]Ben & Jerry case (1996) INTA Bulletin, 4. For a discussion of this case see C Gielen, ‘Ch 3 Benelux’ in Mostert, Famous and Well-Known Marks (n 5) s V, 3-BENELUX-17.
[17]Uno a Erre Italia Spa v the INPI AC (Judicial Register DJ-II, 19 March 1991 at 19304).
[18] Corona case (Bordeaux Court of Appeal, 28 February 1994); Aldi Marche case (Caen Court of Appeal, 4 January 1990).
[19]Dimple case (German Federal Supreme Court, 29 November 1984) [1985] GRUR 550, 17 IIC 271 (1986). In this case, the Federal Supreme Court of Germany was willing to extend the protection granted against the unauthorised used on non-competing goods, traditionally reserved for “famous” marks only, to “well-known marks” as well. In reaching this conclusion, the court placed emphasis on the fact that the defendant had acted contra bonos mores (against good morals) in the context of Section 1 of the German Act Against Unfair Competition. In particular, the court highlighted the fact that the defendant had acted intentionally in an attempt to unfairly associate its products with the prestigious products of the plaintiff.
[20]Re Omega [1995] JKCFI 300, [1995] 2 HKC 473, 478-479.
[21]NR Dongre v Whirlpool Corporation, Corporation (1995) AIR (Delhi) 300 (Delhi High Court), affed 1996 SCR (5) Supp 369.
[22]City Central Ltd v Chanel (French Société Anonyme) (1995) 26(5) District Court Reports 351 (Tel-Aviv–Jaffa District Court).
Reebok case (Peru Trademark Office, Judicial Decision No. 003040-
[23]Reebok case (Peru Trademark Office, Judicial Decision No. 003040-96 Indecopi/Osd, 8 May 1996).
[24]RH Macy & Co Inc v Trade Accents [1992] 2 SLR(R) 98 (SGHC).
[25]Harrods Ltd v R Harrod Ltd (1924) 41 RPC 74 (CA); John Walker & Sons Ltd v Henry Ost & Co Ltd [1970] 1 WLR 917 (Ch). Bad faith can also be found in the UK where the applicant seeks to register a mark that she/he has no intent to use (eg BETTY’S KITCHEN CORONATION STREET) [2001] RPC 825 (Trade Marks Registry)). This finds a parallel in the domain name cases where bad faith is found because the domain name registrant registers a domain name with no intent to use it, but instead intends to sell it on.
[26] Galerias Lafayette SA (Supreme Court of Justice, Venezuela, 10 March 1994).
[27]Marks and Spencer (Southern Rhodesia Ltd.) v Greaterman Stores (Rhodesia) Ltd (Parents Tribunal for the Federation of Rhodesia and Nyasaland, 16 August 1961), Patent and Trade Marks Journal 223 (1961). Finding lack of bona fides not upheld on appeal (High Court, Southern Rhodesia, 19 October 1961).
See also Miles Alexander “International Protection of Famous Trademarks in the United States,” (1995) INTA Annual Meeting 1995, 141 at 179, who indicates in relation to dilution cases in the United States that: ‘It is relatively clear that the deliberate adoption of a mark to trade upon the reputation and goodwill of another company will be seriously considered by the court as a relevant, if not determinative, factor in deciding the case.’
[28]J McCarthy, McCarthy on Trademarks and Unfair Competition (4th edn, Thomson Reuters 2003), s 23.110.
sic
[29]sic
[30]Aetna Casualty & Surety Co v Aetna Auto Finance Inc, 123 F 2d 582 (5th Cir 1941) 584, certiorari denied 315 US 824 (1942). See also Sarl Le Book Editions v Sté EPC Edition Presse Communication and Sté David Ken Production.s
[1999] ETMR 554 (Tribunal de Grande Instance de Paris (Third Chamber)), where unfair competition was found when the defendant had employed ‘doorstepping’, that is, by using a mark reminiscent of the plaintiff's mark and drawing attention to the benefits of his product over the plaintiff's product he ‘sought to take advantage of the success of the product published by the plaintiff, and to position itself within its “slipstream” with a view to capturing part of its client base.’ See further Cartier Inc v Deziner Wholesale LLC, 55 USPQ 2d 1131 (SDNY 2000) (infringement found where defendant used 1. ABC —TIER mark on boxes of novelty sunglasses in order to attract consumers' attention, capitalizing on the goodwill associated with the CARTIER name).
For a general discussion of the element of bad faith see also in general: James Carney, ‘Setting Sights on Trademark Piracy: The Need for Greater Protection Against Imitation of Foreign Trademarks’ (1991) 81 TMR 30 at 41, 55-56; McCarthy (n 28) s 23.104–23.106;
Editorial Board of the Trademark Reporter (eds), ‘World Trademark Symposium’ (1992) 82 TMR 829, 991; andFrederick Mostert, ‘Is Goodwill Territorial or International? Protection of the Reputation of a Famous Trade Mark which Has Not Been Used in the Local Jurisdiction’ (1989) 12 EIPR 440 at 446, 448.
[31]See in general, Carney (n 30) 41, 55-56; McCarthy (n 28), s 23.116.
[32]Mostert, Famous and Well-Known Marks (n 7), 1-56.
[33]This is not unlike the access and substantial similarity standards applied in copyright law. See, for example, Team Lotus Ventures Ltd's Application; v Opposition of Group Lotus Ltd [1999] ETMR 669 (Trade Marks Registry), a case where the applicant failed to register a TEAM LOTUS device mark both because it infringed the copyright of the opponent's TEAM LOTUS device marks and on bad faith grounds because the ‘striking similarity’ between the two sets of marks meant that it would be "incredible" to find that the applicant produced its mark as a result of coincidence.
[34]This standard, mentioned in the first edition of Mostert, Famous and Well-Known Marks (n 7), has now been adopted in the WIPO Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks (n 6) art 4(5)(c). See also McCarthy (n 28) s 23 115.
A compelling inference of knowledge on the part of the defendant is obvious where some prior business relationship existed between the plaintiff and the defendant, for example, where the defendant acted as licensee, franchisee, importer, distributor, agent or employee of the plaintiff. See C Gielen and L Wichers Hoeth, Merkenrecht (WEJ Tjeenk Willink 1992) 217.
[35]Carney (n 30) 55, McCarthy (n 28) s 23.119.
[36]ibid.
[37] McCarthy (n 28), s 23.115. In this respect the judge in the Orkin case, (n 12) 448, declared: ‘Bearing in mind that Pestco [defendant] has a virtually infinite range of names and symbols from which to choose, it is difficult to see the enjoining of it from using the name and logo of a well-established company in the same business as an unreasonable restraint on its freedom to carry on business as it sees fit’.
[38] In Apple Computer Inc v Apple Leasing Industries (Delhi High Court, 4 May 1991) 1992.
[39]In RH Macy & Co Inc v Trade Accents [1992] 2 SLR (R) 98 (SGHC) 589 for instance, the court described the defendant’s explanation as ‘elliptical’ as to why it adopted the uncommon “Macy’s” name and stated further: ‘The respondent’s explanation as to how they came to adopt the name Macy’s is desultory and unsatisfactory … it is clear that the respondents are attempting to obtain and take advantage of the applicant’s reputation.’ See also Hong Kong Caterers v Maxim’s Ltd [1983] HKLR (Hong Kong High Court) 290. A lack of any explanation may be equally compelling, see Re Omega [1995] HKCFI 300, [1995] 2 HKC 473, 478. See also Shields v. Zuccarini, 89 F 2d 634, (ED Pa 2000) (defendant's explanation that he selected the name of the senior user's cartoon as his domain name in order to run a site protesting the mutilation of animals in the senior user's cartoons rejected because until the case was brought he was running an advertising site from that domain name). Mr. Justice Jacob's obiter remarks in relation to bad faith in Nike (Ireland) Ltd v Network Management Ltd (1994) 16(12) EIPR D319 (Ch) are well worth mentioning here. He stated that: ‘James LJ, in a passing off case in the last century, used the memorable expression: “What would one man of the world think of another man of the world saying that?” ’
[40]McCarthy (n 28), s 23.116.
[41]The Peruvian Trademark office in the Reebok case (Peru Trademark Office, Judicial Decision No. 003040-96-Indecopi/Osd, 8 May 1996), for example, specifically commented on the uniqueness of the REEBOK word mark, stating: ‘The fact that the REEBOK name is a fancy word with no conceptual contents in any language, being, therefore an intellectual creation which in its own nature is a unique and individual action, which cannot be repeated in time.’
[42]In Re Reebok International Limited v Demitrios Tsikatos (1996) 86 TMR 923 (Greek Administrative Court, the use of a design very similar to the REEBOK STRIPECHECK design, together with the use of a name (REMICK) which was not overly similar to REEBOK was found to be more than coincidence. The applicant had come as close as he could to REEBOK and so was found to be acting in bad faith in order to take advantage of REEBOK’s wide reputation.
[43]Netherlands v Ian Humlum [2002] ETMR 98 (WIPO Arbitration and Mediation Center (Administrative Panel)).
[44]In Apple Computer Inc. v Apple Leasing Industries (1992) (1) Arbitration Law Reporter 93 (High Court of Delhi) 137, the court indicated that ‘In view of the advertisement, the defendant cannot be permitted to pretend as they appear to, that they did not know of Apple Computers’.
[45] City Central Ltd v Chanel (French Société Anonyme) (n 22). The court even indicated that proof of reputation along these lines could be so compelling that there would be no need for survey evidence to prove reputation. See also Hong Kong Caterers Ltd v. Maxim's Ltd (n 39), 297; McDonald's Corpn v. Joburgers Drive-Inn Restaurant (Pty) Ltd [1996] ZASCA 82, 1997 (I) SA 1(SCA) 46 at 48, 65.
[46] See Editorial Board of the Trademark Reporter (n 30); Peter Dirk Siemsen, ‘Ch 3 Brazil’ in Mostert, Famous and Well-Known Marks (n 7) s V, 3-BRAZIL-20. In Argentina, the similarity or identity of the plaintiff's and defendant's marks cannot be considered a coincidence when both parties are operative in the same market because there is a presumption that the defendant must have known of the plaintiff's mark (see Entrecop Corporation v Ifade SRL (Federal Court of Appeals of Buenos Aires, Room II, Case 22.438/96, 12 September 2000), and Cerigliani, Carlos Eduardo v Lorenzo, Roberto N SA and Gold's Gym Enterprises Inc v. Cerigliani, Carlos Eduardo (Federal Court of Appeal of Buenos Aires, Room III, Cases 20.477/95 and 15.190/85, 17 October 2000)).
[47]It is obvious than an intent to trade on the reputation of a well-known mark logically includes the motive to do so by confusing the public.
[48] WIPO (tr), Paris Convention for the Protection of Industrial Property (as amended on September 28, 1979) 828 UNTS 305.
[49]Mostert, Famous and Well-Known Marks (n 7) 2-127.
[50]The Internet Corporation for Assigned Names and Numbers (“ICANN”) provides in its Uniform Domain-Name Dispute Resolution Policy (“UDRP”) that an owner of trademark rights can successfully request the transfer or cancellation of a domain name if, amongst other things, the domain name has been registered and is being used in bad faith. See ICANN, UDRP (As Approved by ICANN on October 24 1999), <https://www.icann.org/resources/pages/policy-2012-02-25-en> accessed on 2 March 2017, para 4(a).
Similarly, the WIPO Joint Recommendation Concerning Provisions on the Protection of Well-Known Marks (n 5) art 6(1) provides that ‘A domain name shall be deemed to be in conflict with a well-known mark at least where that domain name, or an essential part thereof,
constitutes a reproduction, an imitation, a translation, or a transliteration of the well-known
mark, and the domain name has been registered or used in bad faith.’
[51]See, most notably, the United states Anticybersquatting Consumer Protection Act 15 USC s 1125(d) which reads in pertinent part: ‘(1)(A) A person shall be liable in a civil action by the owner of a mark […] if […] that person has a bad faith intent to profit from that mark’.
[52]The Trademark Law was amended in 2013 and some of its provisions were re-numbered.
[53]商评字［2013］第144794号重审第0000001255号.
[54] Mostert, Famous and Well-Known Marks (n 7) 147-1-74.
[55] ibid.
[56](2016)最高法行再27号.
[57](n 54).
[58]eg Trade Mark Directive (n 8) art 3(2)(d).
[59]最高人民法院印发《关于审理商标授权确权行政案件若干问题的意见》的通知 [现行有效], art 20.
[60]Jurisdictions where a default judgment, or similar mechanism for terminating the proceedings in the opposer’s favour in the absence of a response from the applicant for the opposed mark, is granted include: Australia, the Benelux, Canada, Croatia, Hong Kong, India, Iran, Kosovo, Malaysia, Montenegro, New Zealand, Nigeria, Poland, Singapore, Thailand and the United States. Jurisdictions where a default judgment, or similar mechanism for terminating the proceedings in the cancellation petitioner’s favour in the absence of a response from the owner of the registration, is granted: Benelux, Croatia, Indonesia, Iran, Georgia, Japan, Kosovo, Slovenia, Sweden, the United States. INTA, ‘Report on Default Judgments in Inter Partes Opposition and cancellation Proceedings’ (INTA 2013)
http://www.inta.org/PDF%20Library/INTA%20Report%20on%20Default%20Judgments%20in%20Opposition%20and
%20Cancellation%20Proceedings.pdf accessed 2 March 2017, 4.
[61]HD Wan, ‘SAIC to blacklist businesses for serious trademark and unfair competition law violations
’ <http://www.lexology.com/library/detail.aspx?g=369960af-6fb4-47b7-96e0-8375dc43aba1> accessed 2 March 2017.
[62]Johnson (n 3); Nicholas (n 3).
[63] Frederick Mostert and Martin Schwimmer, ‘Notice and Trackdown’ (2011) Intellectual Property Magazine <http://www.intellectualpropertymagazine.com/copyright/notice-and-trackdown-89281.htm> accessed 2 March 2017.
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