Bad faith is generally understood as a narrow legal concept that is a shade milder than malice and implies breach of faith or wilful failure to respond to one’s known obligation or duty. Bad judgment or negligence is not “bad faith”, which imports a dishonest purpose, or some moral obliquity and implies conscious doing of wrong. It is much more than a mistake of judgment and is synonymous with dishonesty.
Imputing bad faith in trade mark infringement disputes in India is a critical aspect that underscores the integrity of trademark law and the protection of brand identity. The concept on bad faith, though, not alien to trade marks law, it has, yet, not been defined in the Trade Marks Act, 1999 (“Act”). In fact, the only reference to bad faith is under Section 11(10)(ii) of the Act as one of the relative grounds for refusal of registration of mark. In spite of this, while analysing relative rights, tribunals and courts across various jurisdictions, including India, have evaluated intentions of the parties involved, as bad faith can significantly impact such disputes, particularly in assessing the legitimacy of the claims of a subsequent proprietor of a similar trade mark.
In Gromax Plasticulture Ltd v. Don & Low Nonwovens Ltd., Lindsay, J., defined “bad faith” to include some dealings which fall short of the standards of acceptable commercial behaviour deserved by reasonable and experienced men in the particular area being examined. In Surene Pty Ltd v Multiple Marketing Ltd, the Cancellation Division of EUIPO ruled that bad faith is the opposite of good faith i.e., unfair practices involving lack of good faith, based on acts infringing a third person’s rights, generally implying or involving, but not limited to, actual or constructive fraud, or a design to mislead or deceive another, or any other sinister motive. Conceptually, bad faith can be understood as a “dishonest intention”. The Hon’ble Delhi High Court, in the case of Manish Vij vs. Indira Chugh, defined bad faith as something that does not merely imply bad judgment but “the conscious doing of a wrong with a dishonest purpose.
While, in the absence of any statutory definition, bad faith elements are to be determined on a case-to-case basis, if we are to narrow it down to specific acts of wrongdoing, such acts would include, intention behind and prior knowledge before adoption of a trade mark, conditions under which the mark was adopted and subsequent use of the mark, commercial and financial aspect behind adoption of the mark, series of events that followed the adoption of the mark and the evidentiary findings. Discussed below and a few of such actions which amounts to bad faith.
Conscious Knowledge: There is a possibility that a subsequent proprietor of a trade mark, was aware of an earlier mark on which the subject mark is based or is derived from, such that use of the later mark is likely to be confused with that of an earlier mark. This knowledge can be established by numerous ways, including, if the parties have, in the past, engaged in or had business relationship, as a result of which the infringer was aware of the earlier mark. Another instance of ‘conscious knowledge’ could include cases where the earlier mark is widely used or known in the economic sector and is a popular name amongst the consumers, so much so that, the infringer ought to be aware of the use of the mark. For example, MRF, MAGGI, HONDA.
Competitive Relationship: If the trade channels and the target consumers of both the parties overlap or are vastly similar, as the registered proprietor of an original and earlier trade mark, it raises suspicions of bad faith. In the case of Volvo versus Volvo, the Hon’ble Delhi Court restrained defendants from using the brand VOLVO in connection with mixers, grinders, juicers, and their parts and ordered the defendant to withdraw application(s) filed to register the trade mark at the Registry citing dishonest and unfair exploitation of the plaintiff's well-known brand by the defendants. The Court noted that since the plaintiff coined the mark VOLVO in 1915 and use it since then, it had acquired a considerable amount of goodwill and reputation in the market. The defendant had no legitimate purpose to use it other than to capitalise on the plaintiff's well-established goodwill by leading customers to believe that mixers, grinders, and juicers marketed under the VOLVO brand are made and/or sold by the plaintiff, who is probably the manufacturer, and that they are likely to be of a much higher quality.
History of habitual infringement: Bad faith is easiest to establish if the party is a habitual infringer who has, in the past, caused multiple incidents of infringement without any valid and cogent explanation.
Mala fide intention viz-a-viz co-incidence: Infringing parties often claim that their mark was adopted independently without any reference to any earlier mark in a suit. While this may hold good in some cases, courts usually reject these arguments without a sound justification of adoption. In Suzuki Motors v. Suzuki India Limited, the Hon’ble Delhi High Court, rejected the defendant’s explanation for adopting the SUZUKI trade mark as an after-thought, stating that it is natural for parties who have copied a trademark to try and explain its conduct and the derivation of the adopted words. If a trade mark with a prior continuance and use element has been copied, even a plausible explanation cannot defend infringement, passing off, and unfair competition of an earlier trade mark. In Sterling Agro Industries Limited the court rejected the defendant’s arguments of rival marks being dissimilar and ruled that the defendant’s application to register the mark NOVYA, during the existence of the plaintiff’s registered mark, NOVA and coupled with adoption of identical packaging, suggested a deliberate attempt to exploit the plaintiff’s goodwill and mislead consumers.
Colloquially speaking, bad faith is an unfair practice by an infringer to profit from the goodwill and reputation of an earlier trade mark by confusing consumers about its source of origin. Since, unchecked bad faith adoption and use defeats the purpose of registration of a trade mark, whose primary purpose is to identify the source from which the respective goods/services originated, it is imperative that claims and evidence of bad faith are incorporated in infringement disputes, which will not only protection of rights in genuine trade marks but can also deter opportunistic behaviors that undermine fair competition.
Opmerkingen