Court provides guidance on bad faith trade marks

A UK trade mark application will be rejected if it is shown to have been made in bad faith; an EU trade mark can be declared invalid on bad faith grounds.

In the UK, bad faith can arise simply by an applicant having no intention to use a mark. In terms of the question of bad faith for EU marks, the Court of Justice of the European Union recently provided guidance on relevant factors to be considered in a case involving EU trade mark VENMO.

The dispute arose as Hub Culture Ltd (Hub), which established a global digital currency called VEN ion 2007, accepted that Venmo Inc.'s (a subsidiary of Paypal Inc. established in 2009) (Venmo) use of the sign VENMO may lead to confusion in the US market. Hub contacted Venmo in 2010 to raise the possibility of a commercial resolution, but subsequently applied for an EU trade mark for VENMO, without informing Venmo.

The mark was registered and Venmo, when it became aware of the registration, brought proceedings for the cancellation of the mark on the grounds of bad faith and was successful. It is for an applicant to prove bad faith circumstances, and to show that the proprietor of a mark was aware of the third party's rights who may be restricted by the registration. The court, on hearing evidence, considered the commercial logic for the registration which included a review of the fact Hub had never used the mark and did not intend to.

If you have any questions on the above, please do not hesitate to contact the team at McDaniel & Co. on 0191 281 4000 or legal@mcdanielslaw.com.